Eastern Province Cement Co. - Aljazira Capital
Eastern Province Cement Co. Investment Update
September 2015
Eastern Cement; Fuel allocation of the proposed new production line is the most prominent growth; and data indicates the stock is undervalued. We remain ‘Overweight’ with a lower PT Despite local demand slowdown; precast concrete sales led to better performance in 2Q2015: EPCC’s net profit rebounded in 2Q2015 after a dismal performance in 1Q2015. Eastern Cement Company posted net income of SAR 92.7mn; indicating an increase of 13.4%YoY and 9.4%QoQ. We believe the improvement of the top line revenues was mainly associated to higher sales of precast concrete, where the revenue of precast concrete sales was at SAR 57.5mn, as compared to SAR 30.3mn in the comparison period and SAR 48.5mn in Q1-2015. Moreover, the company registered slight volumetric sales growth in cement dispatches, as sales in Q2-2015 stood at 816 thousand tonne vs 813 thousand tonne in Q2-2014 on the back of construction slowdown in Ramadan. In the other hand, EPCC’s sales selling price shows stability as compared to the sales prices decline in the most sector companies. As the average price per tonne is at around SAR240, as compared to SAR241.0 in the comparison period and SAR241.7 in FY2014. Gross profit stood at SAR 107.5mn depicting an increase of 13.8%YoY, and a fall of 0.9%QoQ. Where QoQ margin was mainly impacted due to lower profit margin from precast concrete sales. Operating Profit for Q2-2015 stood at SAR 92.0mn depicting an increase of 13.6% YoY, and 2.2% QoQ; where the company has noticeably reduced its managerial expenses (SG & A) to SAR 15.28mn, as compared to SAR 18.3mn in Q1-2015. Modest sales growth, however signs of improvement on top line revenues to compensate the slight growth in cement sales: During January–July 2015, Eastern Cement’s sales rose by 3.4%YoY to 1.67MT from 1.61MT in 2014. Eastern Cement Company accounts for ~5.7% of the market in the Saudi cement industry. We expect sales growth to be moderate in the future, given the current situation of domestic demand. During the same period, industry-wide clinker inventory increased by 15.1% to 21.89MT from 19.10MT in July-2014, as compared to 82.6% unhealthy increase in Eastern clinker inventory, which indicates to higher clinker production-to-sales ratio. We expect the company’s sales in 2015 to continue its growth trajectory due to expected higher operating utilization rate and improvement in precast concrete sales; however, the growth story is estimated to be muted in the short-term due to lower than expected cement sales. Security challenges threaten production in Yemen: Security concerns in Yemen have hit manufacturing activity in the country. Arabian Yemen Cement company. had previously reported disruptions in fuel and raw material supplies for clinker production. EPCC has a 31.58% stake in Arabian Yemen Cement company, which has a cement production capacity of 1.5Mt/ year. EPCC confirmed that supply challenges had been addressed and that production had returned to the normal level. However, persisting political uncertainty in Yemen would have a negative impact on the company’s valuation due to added risks. The company reported net losses of SAR 8.8mn in 1H2015 at its share of its associates in Yemen due to current political scenario.
Please read Disclaimer on the back
‘Overweight ’
Recommendation Previous Target Price (SAR)
66.50
Current Price* (SAR)
38.20
New Target Price (SAR)
51.80
Upside / (Downside)
34.1% *prices as of 6th of September 2015
Key Financials FY14
FY15E
FY16E
845.1 2.0% 373.5* 20.3% 4.34
925.3 9.5% 297.9 -20.3% 3.46
967.5 4.6% 322.3 8.2% 3.75
SARmn (unless specified) Revenues Growth % Net Income Growth % EPS
Source: Company reports, Aljazira Capital *2014 Non-recurring income of SAR 80mn
Key Ratios SARmn (unless specified)
FY14
FY15E
FY16E
Gross Margin EBITDA Margin Net Margin P/E P/B ROE ROA Dividend Yield
41.7% 47.4% 44.2% 12.93x 2.14x
39.6% 44.0% 32.2% 11.0x 1.40x
40.2% 44.5% 33.3% 10.2x 1.36x
16.5%
12.7%
13.4%
14.7%
11.3%
11.9%
4.5%
6.6%
6.6%
Source: Company reports, Aljazira Capital
Shareholders Pattern Holding
Shareholders Pattern Public Pension Agency Public Investment Fund Public
10.65% 10.0% 79.35% Source: Company reports, Aljazira Capital
Key Sector Data SARmn (unless specified) Market Cap(bn) YTD% 52 week (High) 52 week (Low) Share Outstanding (mn)
3.27 - 31.5% 65.50 36.60 86.0 Source: Bloomberg, Aljazira Capital
Our estimates and valuation: Based on the lower than expected sales growth and the added risk of the company’s subsidiary in Yemen, we adjust our valuation and reduce our 12-month price to SAR51.80/share; indicating a potential upside of 34.1% over current market price of SAR38.20/share (as of 6th SEP 2015). We therefore remain ‘Overweight’ for the stock. The company is trading at an attractive PE multiple of 11.1x for FY15E and 10.2x for FY16E, with an expected dividend yield of about 6.6%. Valuation Metrics: we adjusted some valuation methodology to reduce the sensitivity of our valuation to terminal value with the
Analyst
Jassim Al-Jubran
1
+966 11 2256248 [email protected]
© All rights reserved
following key assumptions; 1. Terminal growth rate is taken at 2.8% from 3.0%. 2. Risk free rate is taken at 3.3% from 2.84%. 3. KSA total market risk premium is taken at 13.8% from Bloomberg from 12.09%.
Eastern Province Cement Co. Investment Update
September 2015
Please read Disclaimer on the back
Expansions projects improve growth prospects, but uncertainties persist EPCC has announced plans to build a fourth production line with a capacity of 3.2mn tonnes per annum (mtpa) or 10,000 tonnes per day (tpd) to capitalize on the rising demand for cement in the region. As the company’s existing plants are operating at over 90% utilization (~91% in 2014), the company would be required to expand its production capacity to support future growth. However, fuel allocation challenges have dented the company’s expansion plan. The government earlier rejected fuel allocation for the new production line, and the company is yet to receive approval. The success of the expansion plan hinges on fuel allocation by the government. Plant location to boost sales growth Eastern Province Cement company (EPCC) operates a cement plant in the Eastern Province (165 km north of Dammam), which has improved the company’s connectivity with demand centres such as Dammam, Al-Khobar, Al-Jubail, and Riyadh City. Owing to the plant’s proximity to Bahrain, EPCC is one of the two companies currently exporting cement to the country. EPCC exported about 4% of its production in 2014. As the plant is located about 70 km from the Jubail Industrial Port, EPCC can easily export cement to other countries. Huge investment plans by the government, upcoming infrastructure projects, introduction of mortgage laws, and Ministry of Housing initiatives are expected to boost cement demand in the region. Strong balance sheet to help EPCC sustain growth; data indicates the stock is undervalued In 2014, EPCC’s cement sales increased 2.0% YoY on increased sales of precast concrete. However, higher marketing and general and administrative expenses led to a 1.3% decline in operating profit to SAR 294.4mn, with the net profit margin at 34.8%. A debt-free balance sheet provides the company flexibility to expand in this capital-intensive industry. The management announced a dividend of SAR 2.5 per share for FY14, resulting in a dividend yield of 5.6%. Based on our forecast estimates, EPCC is trading at a PE multiple of 11.1x for FY15E and 10.2x for FY16E. The one-year mean P/E multiple for the cement sector stands at about 14–15x, which indicates that EPCC is undervalued. The projected dividend yield for FY15E is 6.6%, which makes it a strong investment case.
2
© All rights reserved
RESEARCH DIVISION
AGM - Head of Research
Abdullah Alawi +966 11 2256250 [email protected]
Analyst
Sultan Al Kadi
+966 11 2256115 [email protected]
+966 11 2256374 [email protected]
General manager - brokerage services and sales
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment Centers & ADC
Ala’a Al-Yousef
brokerage
Brokerage
+966 11 2256000 [email protected]
Luay Jawad Al-Motawa
Abdullah Q. Al-Misbani
+966 11 2256277 [email protected]
+966 12 6618400 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
AGM - Head of Institutional Brokerage
Central Region
Abdullah Al-Rahit
Samer Al- Joauni
Sultan Ibrahim AL-Mutawa
+966 16 3617547 [email protected]
+966 1 225 6352 [email protected]
Jassim Al-Jubran +966 11 2256248 [email protected]
BROKERAGE AND INVESTMENT CENTERS DIVISION RESEARCH DIVISION
Talha Nazar
Analyst
+966 11 2256364 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Senior Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Asset Management | Brokerage | Corporate Finance | Custody | Advisory Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia، Tel: 011 2256000 - Fax: 011 2256068
Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37
September 2015
Eastern Cement; Fuel allocation of the proposed new production line is the most prominent growth; and data indicates the stock is undervalued. We remain ‘Overweight’ with a lower PT Despite local demand slowdown; precast concrete sales led to better performance in 2Q2015: EPCC’s net profit rebounded in 2Q2015 after a dismal performance in 1Q2015. Eastern Cement Company posted net income of SAR 92.7mn; indicating an increase of 13.4%YoY and 9.4%QoQ. We believe the improvement of the top line revenues was mainly associated to higher sales of precast concrete, where the revenue of precast concrete sales was at SAR 57.5mn, as compared to SAR 30.3mn in the comparison period and SAR 48.5mn in Q1-2015. Moreover, the company registered slight volumetric sales growth in cement dispatches, as sales in Q2-2015 stood at 816 thousand tonne vs 813 thousand tonne in Q2-2014 on the back of construction slowdown in Ramadan. In the other hand, EPCC’s sales selling price shows stability as compared to the sales prices decline in the most sector companies. As the average price per tonne is at around SAR240, as compared to SAR241.0 in the comparison period and SAR241.7 in FY2014. Gross profit stood at SAR 107.5mn depicting an increase of 13.8%YoY, and a fall of 0.9%QoQ. Where QoQ margin was mainly impacted due to lower profit margin from precast concrete sales. Operating Profit for Q2-2015 stood at SAR 92.0mn depicting an increase of 13.6% YoY, and 2.2% QoQ; where the company has noticeably reduced its managerial expenses (SG & A) to SAR 15.28mn, as compared to SAR 18.3mn in Q1-2015. Modest sales growth, however signs of improvement on top line revenues to compensate the slight growth in cement sales: During January–July 2015, Eastern Cement’s sales rose by 3.4%YoY to 1.67MT from 1.61MT in 2014. Eastern Cement Company accounts for ~5.7% of the market in the Saudi cement industry. We expect sales growth to be moderate in the future, given the current situation of domestic demand. During the same period, industry-wide clinker inventory increased by 15.1% to 21.89MT from 19.10MT in July-2014, as compared to 82.6% unhealthy increase in Eastern clinker inventory, which indicates to higher clinker production-to-sales ratio. We expect the company’s sales in 2015 to continue its growth trajectory due to expected higher operating utilization rate and improvement in precast concrete sales; however, the growth story is estimated to be muted in the short-term due to lower than expected cement sales. Security challenges threaten production in Yemen: Security concerns in Yemen have hit manufacturing activity in the country. Arabian Yemen Cement company. had previously reported disruptions in fuel and raw material supplies for clinker production. EPCC has a 31.58% stake in Arabian Yemen Cement company, which has a cement production capacity of 1.5Mt/ year. EPCC confirmed that supply challenges had been addressed and that production had returned to the normal level. However, persisting political uncertainty in Yemen would have a negative impact on the company’s valuation due to added risks. The company reported net losses of SAR 8.8mn in 1H2015 at its share of its associates in Yemen due to current political scenario.
Please read Disclaimer on the back
‘Overweight ’
Recommendation Previous Target Price (SAR)
66.50
Current Price* (SAR)
38.20
New Target Price (SAR)
51.80
Upside / (Downside)
34.1% *prices as of 6th of September 2015
Key Financials FY14
FY15E
FY16E
845.1 2.0% 373.5* 20.3% 4.34
925.3 9.5% 297.9 -20.3% 3.46
967.5 4.6% 322.3 8.2% 3.75
SARmn (unless specified) Revenues Growth % Net Income Growth % EPS
Source: Company reports, Aljazira Capital *2014 Non-recurring income of SAR 80mn
Key Ratios SARmn (unless specified)
FY14
FY15E
FY16E
Gross Margin EBITDA Margin Net Margin P/E P/B ROE ROA Dividend Yield
41.7% 47.4% 44.2% 12.93x 2.14x
39.6% 44.0% 32.2% 11.0x 1.40x
40.2% 44.5% 33.3% 10.2x 1.36x
16.5%
12.7%
13.4%
14.7%
11.3%
11.9%
4.5%
6.6%
6.6%
Source: Company reports, Aljazira Capital
Shareholders Pattern Holding
Shareholders Pattern Public Pension Agency Public Investment Fund Public
10.65% 10.0% 79.35% Source: Company reports, Aljazira Capital
Key Sector Data SARmn (unless specified) Market Cap(bn) YTD% 52 week (High) 52 week (Low) Share Outstanding (mn)
3.27 - 31.5% 65.50 36.60 86.0 Source: Bloomberg, Aljazira Capital
Our estimates and valuation: Based on the lower than expected sales growth and the added risk of the company’s subsidiary in Yemen, we adjust our valuation and reduce our 12-month price to SAR51.80/share; indicating a potential upside of 34.1% over current market price of SAR38.20/share (as of 6th SEP 2015). We therefore remain ‘Overweight’ for the stock. The company is trading at an attractive PE multiple of 11.1x for FY15E and 10.2x for FY16E, with an expected dividend yield of about 6.6%. Valuation Metrics: we adjusted some valuation methodology to reduce the sensitivity of our valuation to terminal value with the
Analyst
Jassim Al-Jubran
1
+966 11 2256248 [email protected]
© All rights reserved
following key assumptions; 1. Terminal growth rate is taken at 2.8% from 3.0%. 2. Risk free rate is taken at 3.3% from 2.84%. 3. KSA total market risk premium is taken at 13.8% from Bloomberg from 12.09%.
Eastern Province Cement Co. Investment Update
September 2015
Please read Disclaimer on the back
Expansions projects improve growth prospects, but uncertainties persist EPCC has announced plans to build a fourth production line with a capacity of 3.2mn tonnes per annum (mtpa) or 10,000 tonnes per day (tpd) to capitalize on the rising demand for cement in the region. As the company’s existing plants are operating at over 90% utilization (~91% in 2014), the company would be required to expand its production capacity to support future growth. However, fuel allocation challenges have dented the company’s expansion plan. The government earlier rejected fuel allocation for the new production line, and the company is yet to receive approval. The success of the expansion plan hinges on fuel allocation by the government. Plant location to boost sales growth Eastern Province Cement company (EPCC) operates a cement plant in the Eastern Province (165 km north of Dammam), which has improved the company’s connectivity with demand centres such as Dammam, Al-Khobar, Al-Jubail, and Riyadh City. Owing to the plant’s proximity to Bahrain, EPCC is one of the two companies currently exporting cement to the country. EPCC exported about 4% of its production in 2014. As the plant is located about 70 km from the Jubail Industrial Port, EPCC can easily export cement to other countries. Huge investment plans by the government, upcoming infrastructure projects, introduction of mortgage laws, and Ministry of Housing initiatives are expected to boost cement demand in the region. Strong balance sheet to help EPCC sustain growth; data indicates the stock is undervalued In 2014, EPCC’s cement sales increased 2.0% YoY on increased sales of precast concrete. However, higher marketing and general and administrative expenses led to a 1.3% decline in operating profit to SAR 294.4mn, with the net profit margin at 34.8%. A debt-free balance sheet provides the company flexibility to expand in this capital-intensive industry. The management announced a dividend of SAR 2.5 per share for FY14, resulting in a dividend yield of 5.6%. Based on our forecast estimates, EPCC is trading at a PE multiple of 11.1x for FY15E and 10.2x for FY16E. The one-year mean P/E multiple for the cement sector stands at about 14–15x, which indicates that EPCC is undervalued. The projected dividend yield for FY15E is 6.6%, which makes it a strong investment case.
2
© All rights reserved
RESEARCH DIVISION
AGM - Head of Research
Abdullah Alawi +966 11 2256250 [email protected]
Analyst
Sultan Al Kadi
+966 11 2256115 [email protected]
+966 11 2256374 [email protected]
General manager - brokerage services and sales
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment Centers & ADC
Ala’a Al-Yousef
brokerage
Brokerage
+966 11 2256000 [email protected]
Luay Jawad Al-Motawa
Abdullah Q. Al-Misbani
+966 11 2256277 [email protected]
+966 12 6618400 [email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
AGM - Head of Institutional Brokerage
Central Region
Abdullah Al-Rahit
Samer Al- Joauni
Sultan Ibrahim AL-Mutawa
+966 16 3617547 [email protected]
+966 1 225 6352 [email protected]
Jassim Al-Jubran +966 11 2256248 [email protected]
BROKERAGE AND INVESTMENT CENTERS DIVISION RESEARCH DIVISION
Talha Nazar
Analyst
+966 11 2256364 [email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1.
RATING TERMINOLOGY
Senior Analyst
2. 3. 4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels over next twelve months. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve months. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve months. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company.
Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Asset Management | Brokerage | Corporate Finance | Custody | Advisory Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia، Tel: 011 2256000 - Fax: 011 2256068
Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37
