NCBC SaudiFactbook 2012

MAY 2012
www.ncbc.com
Equity Research
Farouk Miah, CFA
Tariq Al-Alaiwat
Iyad Ghulam
Mahmood Akbar
Production
Martin K Arokiaraj
International Client Contact
f.miah@ncbc.com
t.alalaiwat@ncbc.com
i.ghulam@ncbc.com
m.akbar@ncbc.com
m.raj@ncbc.com
a.dakkak@ncbc.com
Asma Dakkak
Please refer to last page for important disclaimer
Saudi Factbook 2012
A Guide to the Kingdom
SAUDI FACTBOOK - 2012 NCB CAPITAL
MAY 2012
Contents
EXECUTIVE SUMMARY 3
NCBC RECOMMENDATIONS 4
KSA - ECONOMY AND NATION 7
SAUDI STOCK MARKET 14
Saudi Arabia: Strongest regional market 17
Continued strong earnings growth in 2012E 19
INDUSTRIES & COMPANIES 22
Banking & Financials 24
Petrochemicals 40
Cement 59
Retail 75
Energy & Utilities 88
Agriculture & Food 93
Telecom 110
Insurance 120
Multi Investment 155
Industrial Investment 165
Building & Construction 182
Real Estate 201
Transport 212
Media & Publishing 219
Hotels & Tourism 225
APPENDIX 229

The Saudi economy maintains a positive outlook, enhancing the
investment case for the TAS. Strong GDP growth expected in
2012 is combined with low debt levels, strong reserves and
continued government infrastructure spending, making the Saudi
economy resilient to any global slowdown. Despite the good
market performance in 1Q12, the TAS remains at a discount to
historic valuations with good earnings growth supporting upside
potential of the market.
Saudi Economy remains in an enviable position
Through a combination of higher than expected income from petrochemical
sales, continued infrastructure spending and a buoyant domestic economy, GDP
expanded by 6.8% in 2011, the fastest rate in eight years. Going forward, the
economic outlook remains encouraging, even though growth may see some
moderation in 2012 due to oil prices retreating somewhat. The MF expects
economic growth to marginally slow down to 6.0% in 2012.
With SR270bn of construction contracts awarded in 2011, more than double the
value in 2010 and surpassing the previous high of SR207bn in 2009, this should
support growth in the coming years as these projects are executed. We expect
ongoing infrastructure spending by the government to continue to drive the
domestic economy in 2012.
Saudi market profitability to exceed SR100bn for the first time
Due to strong growth from the domestically focused and defensive sectors such
as Cement, Telecoms, Retail and Banks, coupled with high absolute profits from
the Petrochemical sector, we believe profitability for the listed companies should
exceed SR100bn for the first time in 2012. We expect net income of the listed
companies to grow by 18% YoY in 2012 to SR112bn. The listed Saudi Banking
sector, accounting for 29% of the free float weight of the TAS, is expected to
record YoY profit growth of 10%, equivalent to net income of SR28bn
TAS well positioned to grow, although risks exist
We believe the Saudi market is well positioned to grow both in the short and
medium-to-long term. The TAS is currently trading at 15.2x trailing P/E, below
its historic average of 17.5x and the 20.0x valuation for similar frontier and
emerging markets. This compelling valuation coupled with the good profit growth
expectations for the market and limited correlation with other mainstream
emerging market economies, we believe, leads to a compelling investment case
for the TAS.
However, we note that the continued global economic uncertainty poses a risk to
the Saudi Arabian economy. While progress has been made towards resolving
the Eurozone debt crisis, a permanent solution still remains elusive. Similarly,
growth concerns in the US and emerging economies continues to weigh on
global sentiment. All these factors have a potential to hold back Saudi Arabia's
growth momentum with lower oil demand and prices the key initial trigger.

MAY 2012
EXECUTVE SUMMARY
Saudi Arabia remains on growth track
3
EXECUTIVE SUMMARY NCB CAPITAL
MAY 2012
NCBC Recommendations
Exhibit 1: Summary of stock coverage
Stock Current Rating PT (SR) Comments
Al Rajhi (1120.
SE)
Overweight 90.2 Al Rajhi's loan book is likely to grow faster than industry peers benefitting from its
large deposit base. Although the bank's margins are contracting due to current low
interest rates, the bank will benefit from its lower cost of funds in the long run which
will support NSCI.
Arab National
(1080.SE)
Neutral 32.9 We believe ANB's lower loan growth and compressed margins is likely to keep its
total operating income growth muted. However, its improved asset quality is a key
positive which is likely to offset the muted total operating income.
AlBilad
(1140. SE)
Neutral 21.4 Albilad's retail focus would enable a faster growth in its net loans and increase its
NSCI for 2012. In addition, strong non-interest income and improved asset quality
is likely to add to bottom-line. However, operating costs remains a concern for its
profitability.
BJAZ
(1020. SE)
Neutral 19.6 BJAZ's top-line is likely to benefit from both strong loan growth and fee income
aided by strong brokerage revenue from increasing trading volumes on the
Tadawul. However, we believe the potential gains from the surge in market activity
have been priced-in.
.
Saudi
Fransi
(1050. SE)
Overweight 38.3 BSF's retail focus is likely to grow its loan books as well as maintain NIMs. This will
keep its NSCI strong. Although the retail focus will increase operating costs, we
believe strong top-line growth and better asset quality will offset the impact of that
on the bottom-line.
Riyad Bank
(1010. SE)
Overweight 33.2 RBL's strong corporate and retail presence is likely to benefit the bank to expand
its credit portfolio and improving its asset quality. n addition, the bank's aim to
maintain margins is likely to enable the bank to post double digit net earnings
growth from 2013.
SABB
(1060. SE)
Overweight 40.5 We expect SABB's total operating income in 2012 to be driven by loan volumes
and strong fee income. In addition, stable operating expenses and lower provision
charges will enable it to marginal growth in net income.
SAIB
(1030. SE)
Neutral 18.2 SAB's diversification strategy to grow retail loans will benefit the bank in long term.
However, stiff competition from established players may pressurize its net interest
margins in the near term..
Samba
(1090.SE)
Overweight 60.6 The bank's ability to post relatively strong profitability despite having a conservative
approach keeps us positive on the stock. As the high-yielding corporate bonds
mature, Samba will refocus on expanding its loan book and therefore maintain
profitability.
Saudi Hollandi
(1040.SE)
Overweight 32.2 SHB is likely to grow its loan books benefitting from its microfinance initiative. This
is also likely to improve its bottom-line. However, we are concerned about SHB's
reliance on Tier II subordinated debt for capital adequacy. Considering stringent
laws of Basel III, the bank might need to increase its equity which would limit future
dividend payouts.
SABIC
(2010.SE)
Overweight 124.5 SABIC benefits from its diversified product mix, an integrated production flow, wide
geographical reach and continued feedstock cost advantage at its facilities in Saudi
Arabia. At current levels, we believe the stock offers an attractive investment
opportunity considering the earnings growth potential and the company's sustained
focus on expansion in different product lines and geographies.
Sipchem
(2310.SE)
Overweight 26.7 n 2011, Sipchem's operational efficiency improved as all of its plants (Phase 1 and
2) were operating at their designed capacities, thereby offering full benefits of an
integrated product flow. Resultant improvement in profitability is expected to drive
the company's earnings in 2012E.
4
MAY 2012
SAFCO
(2020.SE)
Overweight 212.7 The company's high margins, low capex requirements and short cash conversion
cycle result in high free cash flows and thereby high dividend payments. We
believe continued strength in demand for fertilizers and the SAFCO 5 project would
remain attractive in the long run.
NIC (Tasnee)
(2060.SE)
Neutral 36.7 Tasnee is the only titanium dioxide (TiO2) pigment producer in the Middle East and
is monetizing its low-cost feedstock advantage through its petrochemicals
business. Continued rise in TiO2 prices could support 2012E earnings growth;
however, petrochemical prices are likely to remain weak. Any positive earnings
surprises due to higher-than-expected selling prices in the titanium dioxide
business and positive news flow related to the ongoing petrochemical projects are
key stock price catalysts.
Sahara
(2260.SE)
Neutral 18.5 Sahara's 2012E performance is expected to be driven by the full-year contribution
from its Al Waha plant, which commenced operations in April 2011. Furthermore,
three new start-ups producing acrylates, caustic soda, ethylene dichloride and
superabsorbent polymers are likely to support the company's 2013E earnings.
However, poor earnings from the Al Waha project in 2H11 raises concerns over
Sahara's operational ability.
Yansab
(2290.SE)
Neutral 48.2 We are optimistic on the company's future earnings growth due to its low cost
structure and growing demand from emerging economies. However, we believe the
current valuation of stock factors in all positives associated with the company and
offers limited upside potential. Moreover, continued uncertainty over economic
conditions in Europe (the key end market) weigh heavily on Yansab's near-term
earnings outlook.
Saudi Kayan
(2350.SE)
Neutral 18.7 A diversified product mix and strong links with SABIC are key positives for the
stock. However, poor performance in 4Q11 indicates Saudi Kayan is facing some
technical issues and is not able to manage the integrated product flow as
anticipated earlier. In our opinion, the company's ability to ramp up production at
full capacity is imperative for growth in future earnings.
Petrochem
(2002.SE)
Underweight 19.7 The company is scheduled to commence operations in 2Q12 and would be
entering into ethylene and propylene derivatives through a JV with Chevron
Phillips. However, prevailing demand and weakness in pricing are likely to restrict
earnings growth in 2012E. Any update on the project commencement would be a
key catalyst for the stock price.
Yamamah
Cement
(3020.SE)
Neutral 55.8 Strong demand in Riyadh and the ability to sell in different regions are the main
advantages. However, high utilization rate and declining stock level are the key
negatives.
Eastern Cement
(3080.SE)
Neutral 59.1 Shifting focus to domestic market due to export, but limitation on exports remains
key downside. Still focused on Eastern region for sales.
Yanbu Cement
(3060.SE)
Neutral 75.2 Demand shift from Central to the western region is key advantage. The company is
located close to the region's main projects. n addition, it has a new line of 3mn
tons
Saudi Cement
(3030.SE)
Neutral 82.7 Based in the Eastern region, away from most of the key demand centers. However,
Its high stock level, excess capacity and re-operating its old lines are positives.
Southern
Cement
(3050.SE)
Neutral 99.5 Well positioned for Jizan Economic City in the South. New facility near Makkah with
1.5mn tons should also help. High stock level and excess capacity supports the
outlook.
Qassim Cement
(3040.SE)
Neutral 81.4 Lowest cost cement producer in the country with very low inventory levels. Lack of
capacity expansion plans could limit growth.
Jarir
(4190.SE)
Neutral 152.0 Plans to almost double number of stores, coupled with a 50% IT market share,
provide strong platform for the stock. Low liquidity and declining price of laptops a
concern. Store openings the key catalyst for the stock. Valuation is somewhat
stretched at 14.2x 2012e P/E.
5
MAY 2012
Al-Hokair
(4240.SE)
Neutral 68.0 Al Hokair is undergoing aggressive international expansion in former Soviet Union
countries such as Kazakhstan and Azerbaijan. We believe this comes with
increased risks vs. its Saudi business. We believe the valuation is not attractive at
11.2x 2013e P/E.
Al-Othaim
(4001.SE)
Overweight 115.0 Al Othaim is the number two food retailer in the KSA. It is well positioned to
increase share as market shifts to organized retailing. Entrance of foreign players
and rising COGS are key risks. Store expansion is key catalyst for the stock.
Ongoing RE acquisition is holding back the stock.
Savola
(2050.SE)
Overweight 39.1 Food retail business is expanding aggressively with margins expected to increase
as buying power strengthens. Food business continues to take market share and
expand geographically across the region. Move to a holding company may unlock
value.
Almarai
(2280.SE)
Neutral 60.4 Geographic expansion of the bakery and juice businesses and the start of
operations at the new poultry venture are key drivers for the stock. Our concerns
are on the pace of progress at poultry, as well as the returns which can be gained
on this SR4bn investment.
Saudi Telecom
Co.
(7010.SE)
Overweight 50.2 Key positives of the stock include its dominance in DSL and its higher and more
secure ARPU levels. Key concerns on the stock are focused on the limited
information available on its international operations as well as FX exposure through
its international investments.
Mobily
(7020.SE)
Overweight 75.5 Key positives of the stock include its dominance in wireless internet access and its
focused strategy. Key concerns on the stock are focused on its declining ARPU
levels and acquisition costs of new customers.
Zain KSA
(7030.SE)
Neutral 7.0 Key positives of the stock include its attractive and innovative packages and
increasing market share. Key concerns on the stock are focused on its high debt
levels and the financing of this as well as ownership concerns.
Saudi Electricity
(5110.SE)
Neutral 15.3 The new tariff structure on industrial, commercial and government customers came
into effect on July 1, 2010. This had a significant impact on the company's
profitability, which we believe the market has already priced into the stock. Going
forward, the key risks include rising cost of energy purchased from independent
producers as well as an increase in depreciation expense.
Dar Al Arkan
(4300.SE)
Neutral 10.8 Dar Al Arkan is currently developing a number of capital-intensive projects;
however, banks and financial institutions could be reluctant to lend to the company
due to allegations of a crisis on its website. Furthermore, investors' perception,
which has been impacted by weak earnings and lack of transparency over the last
few years, could improve if management provides further insight into its land bank.
The stock outperformed the TASI index, reflecting the limited upside potential.
Taiba
(4090.SE)
Overweight 27.6 With a portfolio of prime assets, expected revenue growth and improvement in
margins, we believe Taiba's fundamentals, including its status as one of the holiest
cities for Muslims, makes the stock an attractive play in the hospitality sector.
Al-Akaria
(4020.SE)
Neutral 27.3 Good earnings visibility, future growth potential and a large land bank are positives;
however, these are partially offset by a low ROE and risk of excess office supply in
Riyadh.
Source: NCBC Research
6

Global economic growth slowed in 2011 as the Euro zone
continued to struggle with the sovereign debt crisis and the pace of
the US recovery remained muted. Saudi Arabia withstood global
headwinds in 2011 and posted its highest rate of economic growth
since 2003 at 6.8%. Although due to the high base effect GDP
growth is expected to slow to 6.0% in 2012 (MF), the Saudi
economy remains in a strong position.
Real non-oil GDP increased 7.7% in 2011, outpacing the 4.3% growth in real oil
GDP. Manufacturing (15.0%), construction (11.6%), and Transport &
Telecommunications (10.1%) were the leaders in the non-oil economy.
Moreover, King Abdullah announced a SR500bn social spending package,
which included a two-month basic salary bonus to all public sector workers, rise
in housing loans and increase in healthcare spending. This helped in boosting
domestic consumption, which expanded by 10.7% (in current prices) in 2011, up
from the 8.1% growth recorded in 2010.
A sustained increase in government spending since 2009 has also helped boost
non-oil GDP in the Kingdom. Most of the increase in expenditure has been
aimed at improving human and physical infrastructure. After increasing 23% in
2011, the government is set to increase expenditure by around 19% in 2012
(over the budgeted figure for 2011). Expectations of stable oil prices around the
US$100/bbl level is likely to help the Kingdom support its fiscal position even as
it funds more non-oil expansion.
Exhibit 2:Real GDP - CAGR (2008-13E) Exhibit 3: Annual change in real GDP
% %

Source: MF, NCBC Research Source: MF, NCBC Research

n 2011, Saudi Arabia benefited from increased oil output as production was
increased to fill the gap caused by the unrest in Libya. Production peaked at
close to 9.9mn bpd in August 2011 before decreasing towards the end-2011.The
increase in oil production and relatively sustained strength in oil prices helped
increase GDP growth and strengthen government balances further. According to
the MF, the fiscal surplus grew to 15.2% of the GDP in 2011 from 6.6% in 2010.
The impact of higher oil prices and production was also evident in export
earnings, with goods and services exports increasing 36.7% in 2011 (MF).
mports grew at a slower pace 9.8%.
0%
3%
6%
9%
12%
Brazil China ndia Japan Russia KSA UK US
-9%
-6%
-3%
0%
3%
6%
9%
World Japan UK US KSA
2008 2009 2010 2011E 2012E 2013F
MAY 2012
ECONOMY AND NATON
KSA's economy to sustain growth momentum
7
ECONOMY AND NATON NCB CAPTAL
MAY 2012

Separately, inflation remained relatively elevated in 2011 due to rising food
inflation and higher domestic rents. The rent related component of the
Consumer Price ndex (CP) increased 7.8%, followed by food price inflation
(5.2%). As a result, overall CP rose 5.0%. However, in 2012, lowering of global
food prices since the high of 1Q11 is set to ease domestic inflation, especially
with a high base effect also coming into play; the MF expects domestic inflation
to moderate to around 4.8% in 2012.
Exhibit 4: Saudi Arabia macroeconomic indicators
Units as indicated
Indicator 2007 2008 2009 2010 2011 2012E 2013E
Real GDP growth (%) 2.0 4.2 0.1 4.6 6.8 6.0 4.1
Hydrocarbon (%) (3.6) 4.2 (7.8) 2.4 4.3 4.7 0.0
Non-hydrocarbon (%) 4.6 4.3 3.5 5.5 7.7 6.5 5.6
nflation (%) 4.1 9.9 5.1 5.4 5.0 4.8 4.4
Current account balance
(% of GDP)
24.3 27.8 5.6 14.8 24.4 27.9 22.7
Fiscal balance (% of GDP) 15.8 34.4 (4.6) 6.6 15.2 16.6 10.1
ource: MF(Regional Economic Outlook MENA region, April 2012); NCBC Research

Exhibit 5: Shares of oil and non-oil sector in total GDP Exhibit 6: Shares in total non-oil GDP
% %

Source: Central Department of Statistics & nformation, NCBC Research (2011 data is
provisional)
Source: Central Department of Statistics & nformation, NCBC Research (2011 data is
provisional)

Government continues to be proactive in stimulating growth
As in previous years, the Saudi Arabian government continued its expansionary
fiscal policy in 2011 to promote growth, and improve human and physical
infrastructure. Actual expenditure (SR804bn) during 2011 was 39% higher than
the budgeted figure (SR580bn).A large part of this increase can be attributed to
King Abdullah's SR500bn social spending package announced during the first
half of the year. The package was primarily intended to address income levels
and social welfare issues like healthcare and housing (especially for low income
individuals). SR250bn has been allocated for housing alone; the money will be
spent over the next few years in constructing 500,000 new housing units.
Encouragingly, despite this fiscal expansion, Saudi Arabia's budget registered a
surplus of SR306bn as high oil revenues more than offset higher spending. At
the same time, the Kingdom managed to reduce overall gross debt significantly.
Thus, while major global economies are grappling with failing fiscal health, the
Kingdom continues to consolidate finances with a rise in fiscal surplus, declining
debt burden, and higher foreign reserves (according to MF data, gross official
reserves increased to US$537bn in 2011 from US$443.7bn in 2010).
Meanwhile, in order to support liquidity and maintain low cost for borrowers, the
Saudi Arabian Monetary Agency (SAMA) maintained a stable monetary policy by
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011P
Non-oil GDP Oil GDP
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009 2010 2011
Government services Private services
Construction Electricity , Gas and Water
Manufacturing (non- oil) Agr icul ture
8
MAY 2012

keeping its benchmark interest rate, reverse repo, at 0.25%.This is not surprising
given that SAMA has to match US Federal Reserve's policy as the riyal is
pegged to the US dollar.
Exhibit 7: Fiscal balance and gross debt
As % of GDP

Source: MF (Regional Economic Outlook MENA region, April 2012); NCBC Research

Resilient financial sector
Banking sector fundamentals remain sound
Saudi Arabian banks have continued to exhibit strong liquidity measure, hence,
it is poised to support stronger demand for loans in 2012. The Saudi banking
sector has among the lowest loan-to-deposit ratios in the Gulf, and is minimally
exposed to real estate. Domestic banks have strong financial ratios, with NPLs
at 3% (of total loans), capital adequacy ratio of 17.3% (of the risk-weighted
assets), and return on assets at 1.9%.
Bank loan growth, to the private sector, rose to around 11.0% in 2011 compared
to 4.8% in 2010. Although credit growth is picking up gradually from negative
levels in 2009, the pace of growth is likely to accelerate as the economy
strengthens.
KSA successfully launches project sukuk
The Saudi Arabian sukuk market has grown significantly in recent years, and
has the potential to become a major source of funding for the corporate sector.
Leading blue chip names, notably Saudi Electricity Co. and Saudi Basic
ndustries Corp. (SABC), have repeatedly tapped the market to raise fresh
funds.
The sukuk market gained further momentum in 2011 after witnessing strong
growth in 2010, with six new issuances worth US$4.1bn. n September 2011, the
Kingdom successfully launched the world's first project sukuk, which was worth
SR3.7bn, for Saudi Aramco Total Refining and Petrochemical Company
(SATORP), a joint venture between Saudi Aramco and Total (a leading
multinational energy company).The momentum in the sukuk markets has
continued in 2012 with the Saudi Arabian General Authority for Civil Aviation
(GACA) launching the Kingdom's first ever sovereign guaranteed sukuk worth
SR15bn in January. The Saudi Arabian Stock Exchange, Tadawul, currently has
a secondary trading platform for sukuk with eight listed issuances as of
December 2011. The Kingdom is looking at the possibility of financing various
infrastructure projects through sukuk issuance.
TASI has strong start to 2012, although some set-backs recently
n line with its global peers, Saudi Arabia's equity market faced the fallout of the
Eurozone sovereign debt crisis in 2011 with the benchmark TAS declining
3.5%. However, the index performed better than several of its key global and
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2007 2008 2009 2010 2011 2012E 2013F
Gross debt Fiscal balance
9
MAY 2012

GCC peers due to its relatively strong economic and structural fundamentals.
For example, the Abu Dhabi All Shares ndex fell 12.0%, German DAX 30
declined 17.0%, and Nikkei 225 was down 12.0% in 2011.
The equity market in Saudi Arabia has made a strong start in 2012, although of
late some this has been negated. We believe much of the reason behind the
good start is due to local factors such as the Makkah and Madinah
compensation monies from compulsory purchase orders being redirected into
the equity markets. This, alongside investors moving assets out of real estate in
to equities as well as improving global sentiment in 1Q12 aided the strong
performance in this period. The YTD peak occurred on April 3rd when the
market was up 23%. However since then, the market has been down for five
weeks with it stabilizing at around the 7,200 level at the beginning of May. This
correction can be attributed to the renewed fears over Europe due to the
outcome of the Greek and French elections, concerns over the economic
slowdown in China and the normal summer lull which occurs in Saudi Arabia.
Exhibit 8: TASI performance in 2011 Exhibit 9: TASI performance in 2012 (YTD return)
%

%

Source: Bloomberg, NCBC Research Source: Bloomberg, NCBC Research

Significant expansion in TASI volumes/value traded
YoY, there has been a significant increase in the volumes and average daily
value traded. YTD, the average value traded has averaged SR10.7bn, more
than double the SR4.4bn recorded in 2011 and compared to the SR3bn in 2010.
The total value of shares traded peaked at SR21.6bn in March 2012, the highest
since March 2007. Off the back of the points mentioned above, there has been a
renewed level of interest in the local equity markets from local retail investors,
leading to this increase in activity.

Government budgets for surplus in 2012
The government's primary focus over the past few years has been to boost
infrastructure to foster a strong diversified economy. Government support has
become more pronounced over the last couple of years as it has undertaken
stimulus measures due to falling oil prices and continued with its long-term
diversification agenda at the same time. Figures from the recently announced
budget for 2012 indicate that the government has allocated a total of SR265bn,
or 38.4%, of total expenditure for new and ongoing projects. Apart from
budgetary outlays, continued commitment to the five economic cities also
reflects the government's objective to boost industrial and employment in the
economy.
The 2012 budget continues to focus on improving human and physical
infrastructure, with budgeted expenditure set to increase 19.0% to SR690bn
compared to the budgeted figure of SR580bn for 2011. However, this figure is
-25%
-20%
-15%
-10%
-5%
0%
5%
Jan-
11
Feb-
11
Mar-
11
Apr -
11
May-
11
Jun-
11
Jul-11 Aug-
11
Sep-
11
Oct-
11
Nov-
11
Dec-
11
-5%
0%
5%
10%
15%
20%
25%
30%
Jan-12 Jan-12 Jan-12 Feb-12 Feb-12 Mar-12 Mar-12 Apr -12 Apr -12 May-12
10
MAY 2012

lower than the actual outlay of SR804bn in 2011.As in the previous years, the
budget statement identified health, education and transport as the priority
sectors. Education and training have received 24.4%, or SR168.6bn, of total
budgetary spending. Allocations to transportation, telecommunications and
health increased to SR121.7bn or 17.6% of total budgeted spending.
nterestingly, for the first time since 2008, the government has budgeted for
surplus in 2012. The budget estimates revenues at SR702bn and a surplus of
SR12bn, the first projected surplus since 2008.
nflation expected to remain manageable
While inflation remained elevated in 2011 due to rising prices of food and
housing related items, it has shown signs of moderation in recent months. n
addition, the government has been providing price subsidies on a range of basic
goods such as food and electricity to hold back inflation.
However, the new Nitaqat labor quota system introduced in November 2011,
poses wage-push inflation risks. Under the system, firms are required to hire
relatively expensive local workers to improve their Nitaqat ranking. This is in
addition to the already increased minimum wages to SR3,000 for public sector
employees.
Monetary policy will also put upward pressure on inflation as SAMA is expected
to keep interest rates low, in line with US Federal Reserve's discount rate to
maintain the Riyal dollar peg.
Exhibit 10: KSA CPI, housing and food inflation
%

Source: SAMA, NCBC Research

However, KSA's economy remains exposed to challenges
Strong growth in the non-oil sector has been instrumental in providing support to
the overall economy for the last couple of years. While this trend is encouraging,
the Kingdom's economy is still reliant on crude oil exports. This exposes the
economy to the risk of adverse oil price movement. Oil and related sectors
continue to contribute around 90% of total government revenues. Therefore,
even though the Kingdom continues to enjoy an overall fiscal surplus, non-oil
fiscal deficit (as share of non-oil GDP) has surged to 75.1% in 2011 from 20.0%
in 2002.
-5%
0%
5%
10%
15%
20%
25%
Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12
General ndex Food Housing
11
MAY 2012

Exhibit 11: Share: Oil and non-oil in total revenues (%) Exhibit 12: Non-oil fiscal deficit (% of non-oil GDP)
% %

Source: SAMA; MF (2011 and 2012 figures), NCBC Research Source: MF(Regional Economic Outlook MENA region, April 2012); NCBC Research

Although oil prices look to remain stable in 2012, ongoing concerns over the
health of the global economy may lead to unexpected pricing pressure. On the
other hand, although beneficial to the Saudi Arabian economy in the short-term,
a steady increase in oil prices may pose risks to global growth, which, in turn,
could adversely impact KSA's economy in the medium term.
Bank credit remains subdued
Total credit growth rose to 10.5% in 2011, after increasing 5.2% in 2010. Even
though growth has picked up, it is well below the peak of around 30.0% during
200408. This trend could be due to the stringent lending norms adopted by
banks. Banks have been reluctant to restart lending, and have been focusing on
building up their capital adequacy levels. ntroduction of salary caps by the
central bank has also discouraged lending. Currently, total monthly loan
repayments cannot exceed 30% of the borrower's monthly salary.
However, lending is expected to pick up in 2012 as business confidence revives
and the economy continues to grow. SAMA's role in ensuring stable liquidity in
the banking system has also helped to support confidence.
Exhibit 13: Credit to private and public sector
SR bn

Source: SAMA, NCBC Research

Economic outlook remains encouraging; global risks persist
Despite strong global headwinds, the growth of the Saudi Arabian economy in
2011 was the fastest since 2003. Much of this growth is ascribed to an increase
in oil production and continued high prices. Going forward, the outlook remains
encouraging; even though growth may see some moderation in 2012 as
government spending reduces and oil prices stabilize. The MF expects
economic growth to marginally slowdown to 6.0% in 2012. This GDP growth,
0%
20%
40%
60%
80%
100%
2007 2008 2009 2010 2011E 2012E
Oil revenue Non-oi l revenue
0%
20%
40%
60%
80%
100%
2006 2007 2008 2009 2010 2011E
-2%
0%
2%
4%
6%
8%
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12%
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16%
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0
100
200
300
400
500
600
700
800
900
1Q- 09 2Q- 09 3Q- 09 4Q- 09 1Q- 10 2Q- 10 3Q- 10 4Q- 10 1Q- 11 2Q- 11 3Q- 11 4Q- 11
Public Sector Private Sector Credit growth - RHS
12
MAY 2012

coupled with ongoing government initiatives should leads to a strong outlook for
the Saudi economy.
However, global economic and geo-political risks continue to weigh on the
economic sentiment. Risks from the European sovereign debt crisis continue
with the recent results of the French and Greek elections bringing doubt upon
the current austerity driven solution. Similarly, in the US, while growth
momentum has picked up in recent months, it has not been enough to bring
down high unemployment levels, which continues to be above the 8% mark.
Even in emerging markets, tight monetary policy over 2010-11 to tame inflation
has led to a deceleration in growth. All this global uncertainty has the potential to
adversely impact economic growth in the Kingdom, primarily through the impact
of lower hydrocarbon prices.

13

The TAS has seen a substantial increase in activity YTD with
average daily value traded up 139% YoY to SR10.7bn.The index
was up 23% at its peak, although has fallen back somewhat, and is
now up 13% as of May 9, 2012 at around the 7,200 level. Despite
the strong start to the year, the market remains attractive at 15.2x
trailing P/E against the average of 17.5x. With the growth in market
earnings remaining strong in the coming years, we believe there is
a compelling investment case for the local market.
The Saudi market has outperformed the majority of regional peers in 2012 YTD.
n fact, all GCC markets, except Qatar's DSM, are trading at higher levels in
2012 YTD. The good growth in earnings across the region in 1Q12 has helped in
keeping investor sentiment high. The TAS was up 12.5% as of 9 May 2012,
second only to Dubai, which rose 13.8% during the same period. Qatar,
however, is down 2.1% YTD.
Exhibit 14: TASI performance
TAS ndex levels for from 2009 until 2012 YTD
Source: Bloomberg, NCBC Research

Saudi market takes center stage
Among regional markets, we believe the Saudi market offers a compelling value
proposition largely due to its strong macroeconomic fundamentals. The Kingdom
has the largest and most diverse economy with a strong outlook with the market
also the largest in terms of market capitalization and liquidity. Short-term factors
such as reasonable valuations, recommencement of margin lending by banks
investors moving out of Real Estate, have been aiding the TAS's positive
momentum YTD in 2012. The index reached a three-and-a-half year high at
7930.6 on April 4, 2012. We believe the rise in volumes YTD also indicate an
improvement in investor confidence in the Kingdom. Volumes are trading at
substantially elevated levels compared to the previous three years; average
daily value traded reached a five-year high of SR21.6bn on March 19, 2012.
TAS's current share in GCC value traded increased to around 90% during 1Q
12 from 83% in 2011 and 58% in 2008.
Aggregate market earnings grew 22% to SR95bn (USD25bn) in 2011, led by the
petrochemical sector (net income up 37.5%). We expect market earnings to
grow by 18% in 2012e, exceeding the SR100bn level for the first time. With the
TAS trading at 15.2x earnings versus an average of 17.5x in the last three
3,000
4,000
5,000
6,000
7,000
8,000
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TASI ends the
year down 3.1%
03April2012: TASI touches 7,930
June 2009: Saad/Al Gosaibi
troubles emerge, impacting Saudi
as well as regional markets
25 Nov 2009: Dubai
World debt
standstill drives the
market down
TASI ends the year up 27.5%, but down
4% from its peak in November
26 April 2010: 13% rise
YTD, but Euro/Greece
reverse the trend
MAY 2012
KSA STOCK MARKET
Significant increase in market activity
14
KSA STOCK MARKET NCB CAPTAL
MAY 2012

years, the market looks far from expensive. We believe the combination of an
inexpensive valuation and steady earnings growth provides a positive outlook for
the TAS.
Exhibit 15: 2011 GCC market performance Exhibit 16: 2012 YTD GCC market performance
2011 performance of GCC markets 2012 YTD performance of GCC markets
Source:Bloomberg, NCBC Research Source: Bloomberg, NCBC Research
2012 YTD to 17 April 2012

The key risk to our positive outlook on the TAS is the pace of recovery of the
global economy. f this is much slower than expected, this in turn could lead to a
slowdown in oil demand and subsequently oil prices. Furthermore, the economy
also remains vulnerable to the challenges of inflationary pressures especially
given the recent upward trend in housing-related inflation and elevated global
food prices
TAS marginally lower in 2011
TAS's performance (down 3.1% YoY) was mixed relative to the developed and
emerging markets in 2011. Within the emerging markets it outperformed Brazil,
China and ndia; however it underperformed compared to markets such as
Russia and South Africa. Ongoing concerns on the pace of the global recovery
in general and the debt issues in Europe in particular were the main points of
concern in 2011.
From a global perspective, stock markets have generally moved up in 1Q12 on
positive US economic data and an improvement in liquidity in Europe. At the end
of 1Q12, trading in five of the seven GCC indices was higher versus the start of
2012.
Exhibit 17: 2011 performance vs global peers Exhibit 18: 1Q12 performance vs global peers
2011 global market performance 1Q12 global market performance
2012 YTD to 17 April

-25%
-20%
-15%
-10%
-5%
0%
5%
Bahrain Dubai Kuwait Oman Abu Dhabi TAS Qatar
-5%
0%
5%
10%
15%
20%
25%
Dubai TAS Kuwait Oman Bahrain Abu Dhabi Qatar
-25%
-20%
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-5%
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15
MAY 2012

Sector performance in 2011: Slowdown in petrochemicals and
banking; cement and retail strong
The TAS was down 3.1% in 2011 with mixed results across sectors. Major
sectors, including petrochemicals, banking and telecom (combined share of
65.1% of TAS's free float weighted market capitalization), witnessed a
correction in 2011 after two consecutive years of gains. However, this was offset
by significant growth in retail (3.1% of free float) and cement (8.1% of free float).
Both sectors are highly defensive and largely focused on demand from domestic
consumers. Hence, they were relatively resilient to global economic issues and
benefited from an increase in consumer spending and strong underlying
economic growth in Saudi Arabia. A high dividend yield also fueled the rally in
cement stocks.
Exhibit 19: TASI performance in 2011
Units as stated
Index No. of Daily turnover Mkt cap Free float Change Valuation
Index value companies (SR mn) (SR mn) Wt (%) YTD (%) P/BV P/E TTM
TAS 6,417.7 149 5,653 1,270,028 100.0 (3.1) 1.8 13.6
Banking/Financial 14,581.8 11 281 309,291 29.8 (12.7) 1.7 12.5
Petrochemicals 6,232.9 14 1,339 467,058 28.7 (4.4) 2.2 11.3
Cement 5,336.1 10 157 60,101 8.1 36.0 3.0 13.8
Telecom/T 1,668.6 5 125 114,015 7.0 (13.1) 1.7 11.1
Agri/Food 5,812.7 14 551 52,625 5.7 3.4 2.8 21.3
Real Estate 2,705.2 8 264 43,167 4.4 (1.9) 0.9 22.2
ndustrial nv 5,515.9 13 308 41,601 3.6 8.8 1.5 27.6
Retail 6,475.2 10 226 22,986 3.1 31.5 4.0 15.5
Construction 3,264.1 15 390 23,274 2.7 (1.7) 1.8 29.0
nsurance 996.6 31 1,430 25,140 2.1 9.3 2.8 48.9
Energy/Utilities 4,976.3 2 46 59,356 2.1 (0.8) 1.1 23.3
Multi-investment 2,756.4 7 299 38,419 1.1 20.7 1.3 45.2
Transport 2,882.2 4 133 6,607 0.9 (9.9) 0.9 25.4
Media/Publishing 2,149.0 3 43 3,836 0.5 47.3 1.7 32.2
Hotels/Tourism 6,005.9 2 59 2,553 0.3 23.0 1.5 17.1
Source: Zawya, Reuters, NCBC Research
Prices as of 31 Dec 2011

n 2012 YTD, the market reached a high of up 23% in early April, although since
this date it has been under pressure and is currently up around 13%. The strong
start to 1Q12 has been across the board, but amongst the large-cap sectors it
has been led by banks and telecoms. Many of the speculative sectors and
companies also performed very strongly in 1Q12, a potential sign of concern.
Exhibit 20: 2011 sector performance Exhibit 21: 2012 YTD sector performance
2011 sector performance 2012 YTD sector performance
2012 YTD to 17 April
-13%-13%
-10%
-4%
-3%
-2%-1.7%-1%
3%
9% 9%
21%
23%
31%
36%
47%
-25%
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16
MAY 2012

Saudi Arabia: Strongest regional market
n terms of sector diversity, market capitalization, market turnover and liquidity,
the Saudi stock market is the biggest in the region. The market is mostly driven
by individual investors, with retail investors accounting for around 95.0% of the
turnover in April 2012. By April 2012, institutional trading (either mutual funds or
swap trades) accounted for 5% of the total trading on the market as opposed to
6.6% a year earlier. However, potential plans to provide greater access to
qualified foreign investors and rising liquidity levels offers attractive proposition
for greater participation of institutional investors.
KSA accounts for 54% of GCC market capitalisation and 90%
of the turnover
n terms of market capitalization, the Saudi stock market is the largest in GCC,
with a share of about 53.9% at the end of 1Q12. t was followed by Kuwait and
Qatar at 14% and 13.4% respectively.
Exhibit 22: GCC market capitalization: Saudi Arabia constitutes nearly 54% of the
region
n USD bn

Source: NCBC Research, Reuters

Over the past few years, the Kingdom accounted for around 70% of the total
value traded in GCC. However, 2012 YTD, its share has increased to around
90%. This discrepancy in Saudi Arabia's share compared to the GCC may be
ascribed to the fact that other regional markets, such as Kuwait, are seeing
heavy trading in stocks that trade below par value
Exhibit 23: GCC turnover: TASI comprises around 90% of the GCC turnover
% of GCC turnover

0
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1,000
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17
MAY 2012

Highest liquidity and turnover
For 2011, the average turnover to market capitalization ratio for the Saudi
market was 86%, from 60% in 2010. This is still significantly higher than other
GCC markets, where the ratio ranges from 2% (Bahrain) to 36% (Abu Dhabi)
during the same period.
Exhibit 24: Turnover to market capitalization ratio
Yearly market turnover/market capitalization in %
Saudi Kuwait Abu Dhabi Dubai Qatar Oman Bahrain
2008 124 70 58 89 43 36 7
2009 117 75 28 124 34 37 3
2010 60 41 13 54 17 18 2
2011 86 25 36 18 18 10 2

Nominal price highly correlated to performance in 2012
The TAS has seen sharp gains YTD in 2012. The index added 22.1% in 1Q12,
mostly driven by stocks with low nominal prices. Additionally, we believe most
large-cap stocks have underperformed the TAS during the same period.
As per our analysis, there exists an inverse relationship between the nominal
stock price and stock performance YTD. Therefore, stocks with nominal values
up to SR15 are the best performers YTD in 2012 (up 67% on average), while
stocks with nominal values above SR90 rose only 5%, on an average, during the
same period. On an average, stocks with a nominal price above SR35/share
have underperformed the TAS on YTD basis and vice-versa.
We believe this bias towards low nominal stocks is likely to exist as long as the
current trend of high local retail investor participation in the stock market
prevails.
Exhibit 25: % of total turnover Exhibit 26: YTD %performance relative to the TASI
% of turnover (LHS), number of stocks 2012 YTD sector performance
2012 YTD to 24 March

18
41
26
42
12
7
0%
5%
10%
15%
20%
25%
30%
35%
40%
SR 0-15 SR 15-25 SR 25-35 SR 35-65 SR 65-90 SR 90+
0
5
10
15
20
25
30
35
40
45
% of Turnover YTD # of Stocks
0%
10%
20%
30%
40%
50%
60%
70%
80%
SR 0-15 SR 15-25 SR 25-35 SR 35-65 SR 65-90 SR 90+
Avg YTD % performance TAS YTD %
18
MAY 2012

Continued strong earnings growth in 2012E
Strong earnings growth in 2011
n 2011, earnings for the entire Saudi market grew by 22% YoY to SR94.8bn.
Market net income growth was mainly due to the 38% growth in Petrochemicals
earnings, driven by a rebound in prices as well as new production coming on
stream. Banks' earnings were good with a 17% growth due largely to lower YoY
provisioning. Earnings in the telecom sector were flat, mostly due to FX losses in
3Q11 from STC and continued losses at Zain KSA. Cement net income
increased by 25% YoY due to strong demand and prices.
2012E could continue to see earnings growth
Most of the major sectors should see continued earnings expansion in 2012E.
The Petrochemicals sector is expected to see growth of 18% in net income
despite a weaker demand and price outlook. We believe the prevailing cost
advantage, proximity to Asian markets and the full year contribution from Saudi
Kayan and Sahara's Al Waha plants are key positives for the sector in 2012. The
Banking sector may continue to witness a growth in earnings due to decreasing
provisions and an increase in non-interest income we expect net income
growth of 10%. The Retail sector will benefit from ongoing store expansions and
fiscal support packages this should lead to a 19% increase in net income.
Exhibit 27: Aggregate market earnings - 2012E could grow further
n SR bn


Petrochemicals a key contributor again
As was the case in 2010 and 2011, the Petrochemical sector will likely be the
main driver of earnings growth for the market . The Petrochemicals sector is
expected to see growth of 18% in net income despite a weaker demand and
price outlook. We believe the prevailing cost advantage, proximity to Asian
markets and the full year contribution from Saudi Kayan and Sahara's Al Waha
plants are key positives for the sector in 2012
Progress in Banking sector profitability key
The Banks sector (listed banks) has been on a declining earnings trend for the
past four years after sector earnings peaked in 2006. Since then, declining
brokerage income, and rising impairments for investments and credit provisions
have resulted in weaker net income from 2007-2010. Total deposits are
expected to grow at a CAGR of 13.2% (2011-2015E). Sector loan growth is
expected to grow at a CAGR of 19.6% through 2015E driven by improved
economic activity and corporate sector lending. We expect government funding
to the private sector of approximately SR85bn to complement, rather than crowd
out, bank lending. Growth in short term loans (which account for 75% in
-
20
40
60
80
100
120
2009A 2010A 2011A 2012E
Banks Petrochems Telecoms Utilities Cement Other
19
MAY 2012

corporate loans) is expected to come with increased economic activity and long
term loans to be driven by increased expenditure on infrastructure projects.
Exhibit 28: Loan to total deposits of KSA banks
n SRmn, unless otherwise stated

Source: NCBC Research, Reuters NB: The above estimates are not inclusive of the actual reported 1Q11 numbers

TAS trading below its 17.5x historical average
On a valuation basis, the TAS remains attractive and is currently trading at
around 15.2x trailing P/E against its historic three year average of 17.5x and five
year average of over 18x.
Exhibit 29: TASI at 15.2x is below its historical 17.5x PE multiple
TAS index levels (LHS), Price to Earnings multiples (RHS)

Source: NCBC Research, Bloomberg

The TAS positioned to grow in the short-medium term
We believe the Saudi market is well positioned to grow both in the short and
medium-to-long term. The TAS is currently trading at 15.2x trailing P/E, below
its historic average of 17.5x and the 20x and above valuation for similar frontier
and emerging markets. This compelling valuation coupled with the good profit
growth expectations for the market and limited correlation with other
mainstream emerging market economies, we believe, leads to a compelling
investment case for the TAS.
However, we note that the continued global uncertainty poses a risk to the Saudi
Arabian economy. While progress has been made towards resolving the
Eurozone debt crisis, a permanent solution still remains elusive. Similarly,
growth concerns in the US and emerging economies continue to weigh on global
sentiment. All these factors have a potential to derail Saudi Arabia's growth
momentum with lower oil prices the key initial trigger.
Sector valuations range from 13x45x
On a sector level, P/E ranges from 13x for the telecom sector to 45x for the
multi- investment sector. Most of the major sectors currently trade at below their
0%
10%
20%
30%
40%
50%
60%
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RBL BJAZ SBC Saudi
Hollandi
Saudi
Fransi
SABB Arab
National
SAMBA Al Rajhi AL Bilad
2011A 2012F 2013F
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2
TAS (LHS) TTM P/E ( RHS) Average P/E (RHS)
20
MAY 2012

historical average P/E levels; given the good growth outlook for earnings, we
believe this indicates a good entry point for many of these sectors. Additionally,
we note the following.
x The Petrochemical sector is trading at a P/E of 13x versus its historical
average of 23x. With our expectations of 18% earnings growth for the sector,
we believe this will be one of the stronger performers again in 2012E, helping
to drive the entire market to strong returns.
x Banking/financials is trading at a P/E of 13.8x, below its historical average of
15.5x. We believe the Banking sector will continue to witness a growth in
earnings due to decreasing provisions and an increase in non-interest
income we expect net income growth of 10% in 2012.
x Telecom/T is trading at a P/E of 12.5x. We maintain an overweight rating on
two of the three main stocks in the sector: Mobily and Saudi Telecom
Company.
x The retail sector is trading at a P/E of 15.7x, below its historical average.
Exhibit 30: Sector P/Es versus historical P/Es
Price to Earnings multiples

* Average P/E for the nsurance sector is not meaningful

Market supported by strong dividend yields
Strong dividend yields for most stocks in 2012E add to our positive outlook for
the Saudi market. Among the stocks under our coverage, the top 15 dividend
yielding companies have 2012E yields ranging from 4.38.4%. Six of the top ten
stocks are cement companies with a stable dividend outlook due to their strong
cash flows. The remaining four stocks, besides offering lucrative yields, are fairly
attractive from a valuation perspective within their respective sectors (telecom,
banking and petrochemicals), thus providing potential upside from the current
price levels.
Exhibit 31: Dividend yields expected for 2012E
%


-
5
10
15
20
25
30
35
40
45
50
T
e
l
e
c
o
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B
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t
M
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d
i
a
TTM PE Average PE
0
1
2
3
4
5
6
7
8
Mobily STC Sipchem Riyad Bank Eastern
Cement
Qassim
Cement
SAFCO Southern
Cement
Saudi
Cement
Yamamah
Cement
21
MAY 2012
Industries & Companies
Sector Page No.
Banking & Financials 24
Petrochemicals 40
Cement 59
Retail 75
Energy & Utilities 88
Agriculture & Food 93
Telecom 110
Insurance 120
Multi Investment 155
Industrial Investment 165
Building & Construction 182
Real Estate 201
Transport 212
Media & Publishing 219
Hotels & Tourism 225
Please note that our estimates for the companies under coverage have not
been updated post the 1Q12 results
MAY 2012
Banking & Financials
Ticker Company Page No.
1120 Al Rajhi 28
1090 SAMBA 29
1050 Banque Saudi Fransi 30
1010 RIBL 31
1060 SABB 32
1040 Saudi Hollandi 33
1080 Arab National 34
1030 Saudi Investment 35
1140 Al Bilad 36
1020 BJAZ 37
1150 Al Inma Bank 38

The Saudi banking sector has remained one of the strongest in
terms of profitability, asset quality and capital adequacy in the
GCC. ts strong fundamentals and underpenetrated market offers
significant growth potential.
We are confident of the sector's ability to improve earnings in the medium-term.
We expect the growth in credit to continue in 2012 as banks focus on retail
lending. n 2011, loan books grew 11.6% YoY to SR855bn, while customer
deposits increased 10.7% YoY to SR1,147bn. Total banking assets of the 12
main domestic banks grew 9.2% YoY to SR1,505bn. However, contraction in
NMs resulted in only 1.5% YoY growth in NSC. Nonetheless, strong growth in
non-interest income kept total operating income growth at reasonable levels of
4.6% YoY. Furthermore, decline in provisions by 39% enabled bottom-line
growth of 18.4% YoY.
Due to the retail focus of many banks, branch network and the number of ATMs
increased by 55 and 881 respectively during 2011. With the addition of two new
foreign bank branches, the number of foreign banks operating increased to 11
along with 12 domestic banks.
Exhibit 32: Key financials of Saudi banks (2011) - SR million; network of branches and ATMs
Banks Branches ATMs Assets
Loans &
advances
Customer
deposits Net profits
D
o
m
e
s
t
i
c

B
a
n
k
s
E
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t
a
b
l
i
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a
s

S
a
u
d
i

B
a
n
k
s
The National Commercial Bank 295 1,791 301,198 135,289 239,458 6,012
Al Rajhi Bank 455 3,034 220,813 140,772 173,429 7,378
Samba Financial Group 69 520 192,774 89,111 137,257 4,303
Riyad Bank 248 2,594 180,887 112,973 139,823 3,149
The Saudi nvestment Bank 48 334 51,946 27,114 36,770 708
Bank Aljazira 51 318 38,898 23,307 31,159 303
Alinma Bank 37 400 36,783 25,259 17,776 431
Bank Albilad 82 586 27,727 13,780 23,038 330
J
V

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p
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t
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e
r
s
Banque Saudi Fransi 83 437 140,480 92,325 109,963 2,911
SABB 80 524 138,658 84,811 105,577 2,888
Arab National Bank 142 935 117,574 72,844 87,859 2,171
Saudi Hollandi Bank 44 257 57,549 37,745 45,024 1,032
F
o
r
e
i
g
n

B
a
n
k
s
G
C
C

B
a
n
k
s
Emirates NBD Bank 1 15
Bank Muscat 1 6
National Bank of Bahrain 1 1
National Bank of Kuwait 1 2
Gulf nternational Bank 2
N
o
n
-
G
C
C
Deutsche Bank 1 12*
BNP Paribas 1
J.P. Morgan Chase N.A. 1
National Bank of Pakistan 1
State bank of ndia 1
T C Ziraat Bankasi A.S. 1
Total 1,646 11,766 1,505,288 855,330 1,147,133 31,616
x
Source: SAMA, Tadawul, Company data, NCBC Research
Note: Financial statements of the banks are consolidated and include financial statements of its subsidiaries, including those located outside KSA.
* Five international banks namely, Gulf nternational Bank, Deutsche Bank, BNP Paribas, J.P. Morgan Chase and National Bank of Pakistan operate 12 ATMs across KSA.

MAY 2012
BANKNG
2012 expected to record continued growth
24
BANKNG NCB CAPTAL
MAY 2012

The Saudi banking sector compared to the GCC.
Considering only listed banks in our analysis, the Saudi banking sector stood
second in terms of total operating income, after UAE during 2009-11. However,
Saudi banks generate higher Return on Equity of 14.4% as compared to UAE
Bank's ROE of 11.6%. Saudi bank's strong fundamentals and higher returns
justify its premium valuation over UAE. Saudi banks trades at a higher P/E of
14.7x compared to the UAE banks P/E of 8.2x.
Exhibit 33: Total operating income of GCC banks, 2009-
11
Exhibit 34: Comparison of RoE and P/E of GCC banks,
2011
USD mn %

Source: Reuters, NCBC Research; The companies list is not exhaustive Source: Reuters, NCBC Research; Size of the bubble represents market cap. as on 27
March 2012 in USD mn

As of 28 March 2012, Al Rajhi had the largest market capitalization among the
11 listed banks that constitute the Saudi banking index. NCB, one of the largest
banks in KSA, is not mentioned in the table as it is a privately-held entity.
Exhibit 35: Sector details
Units as stated
% weight in
Index as on
28 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Al Rajhi Bank (Al Rajhi) 10.2 4.4 23.4
Samba Financial Group (SAMBA) 3.9 2.4 16.0
Banque Saudi Fransi (Saudi Fransi) 3.0 2.5 15.5
Riyad Bank (RBL) 2.9 2.5 10.6
Alinma Bank (Alinma) 2.6 3.8 2.7
Arab National Bank (Arab National) 2.2 2.8 13.6
The Saudi British Bank (SABB) 1.8 2.4 17.9
Bank AlBilad (AlBilad) 1.0 3.0 10.1
The Saudi nvestment Bank (SAB) 1.0 2.5 8.5
Bank AlJazira (BJAZ) 0.9 2.3 6.2
Saudi Hollandi Bank (Saudi Hollandi) 0.4 2.4 15.0
Source: Bloomberg, Tadawul: Company data;
* NM stands for Net nterest Margins

Exhibits below depict the performance of Saudi banks in terms of net interest
income and net interest margin during 200911. n 2011, net interest income
increased 1.5% YoY against 1.2% YoY decline in 2010, while net interest
margins contracted 15bps over 2010. This was mainly due to faster growth in
loans in the low interest rate environment. Alinma and Albilad's net interest
income grew rapidly by 79.5% and 12.5% YoY respectively, largely due to loan
book expansion. Among larger banks, RBL's net interest income grew 1.3%
YoY, while Samba and Al Rajhi reported a YoY decline of 3.5% and 1.9%
respectively.
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
2009 2010 2011
KSA UAE Kuwait Qatar Oman Bahrain
0
5
10
15
20
25
0 5 10 15 20 25 30
R
o
E

(
%
)
P/E
25
BANKNG NCB CAPTAL
MAY 2012

Exhibit 36: Net Interest Income of Banks, 2009-11 Exhibit 37: Net Interest Margin (%) of Banks, 2009-11
SR mn %

Source: Tadawul, NCBC Research Source: Tadawul, NCBC Research

The ROE for most banks increased in 2011 with an exception of Banque Saudi
Fransi and Samba. On the P/B multiple front, Al Rajhi continued to dominate
followed by SABB while RBL and SBC reported the lowest figure.
Exhibit 38: Comparison of P/B and RoE, 2010 Exhibit 39: Comparison of P/B and RoE, 2011
% %

Source: Tadawul, NCBC Research; Size of the bubble represents Mcap. as on 27 March
2012 in USDmn
Source: Tadawul, NCBC Research; Size of the bubble represents Mcap. as on 27 March
2012 in USDmn

After remaining steady for three quarters, interest rates in KSA increased
marginally in 4Q11 in line with LBOR. The government maintained the repo rate
and reverse repo rate at 2% and 0.25%, respectively, during the year. We
expect SABOR to remain at low levels until post 2014 when we believe the Fed
will start increasing its benchmark rate.
Exhibit 40: Movement in Interbank Interest Rates Exhibit 41: Movement in Repo & Reverse Repo rates
% %

Source: Bloomberg, Reuters, NCBC Research Source: SAMA, NCBC Research

0
7,000
14,000
21,000
28,000
35,000
2009 2010 2011
Al Rajhi SAMBA RBL Arab National
Saudi Fransi SABB Saudi Holl andi SBC
Alinma BJAZ AL Bilad
0
1
2
3
4
5
6
A
l

R
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H
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S
A
B
B
B
J
A
Z
2009 2010 2011
Al Rajhi
SAMBA
SABB
RBL
Saudi Fransi
Arab National
Saudi Hollandi
Alinma
SBC
BJAZ
0
5
10
15
20
25
30
0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0
R
o
E

(
%
)
P/B
Al Rajhi
SAMBA
SABB
RBL
Saudi Fransi
Arab National
Saudi Hollandi
Alinma
SBC
BJAZ
0
5
10
15
20
25
30
0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
R
o
E

(
%
)
P/B
-200
0
200
400
600
800
1000
0.0
1.0
2.0
3.0
4.0
5.0
Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11 Feb-12
Spr eads bps (RHS) SABOR LBOR
0
2
4
6
8
10
12
Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12
Repo rate Reverse Repo rate nflation
26
BANKING NCB CAPITAL
MAY 2012
27
NCBC recommendations in the sector
The year 2011 witnessed strong growth in loans and improved asset quality.
However, contraction in NIMs due to lower interest rates and increased
competition kept NSCI growth muted. Nonetheless, increased non-interest
income and reduced provisions improved the bottom-line. We expect loan
growth to continue and NIMs to compress, however, the increase in loan volume
is expected to aid NSCI growth. In addition, high trading volumes on the
Tadawul will enable banks to grow its brokerage income particularly for the
smaller banks. Strong fundamentals and improved asset quality of Saudi banks
keep our view positive on the sector.
Exhibit 42: Coverage stocks details
Al Rajhi
(1120. SE)
Overweight 90.2 Al Rajhi's loan book is likely to grow faster than industry peers benefitting from its large
deposit base. Although the bank's margins are contracting due to current low interest
rates, the bank will benefit from its lower cost of funds in the long run which will support
NSCI.
Arab National
(1080.SE)
Neutral 32.9 We believe ANB's lower loan growth and compressed margins is likely to keep its total
operating income growth muted. However, its improved asset quality is a key positive
which is likely to offset the muted total operating income.
AlBilad
(1140. SE)
Neutral 21.4 Albilad's retail focus would enable a faster growth in its net loans and increase its NSCI
for 2012. In addition, strong non-interest income and improved asset quality is likely to
add to bottom-line. However, operating costs remains a concern for its profitability.
BJAZ
(1020. SE)
Neutral 19.6 BJAZ's top-line is likely to benefit from both strong loan growth and fee income aided
by strong brokerage revenue from increasing trading volumes on the Tadawul.
However, we believe the potential gains from the surge in market activity have been
priced-in.
.
Saudi
Fransi
(1050. SE)
Overweight 38.3 BSF's retail focus is likely to grow its loan books as well as maintain NIMs. This will
keep its NSCI strong. Although the retail focus will increase operating costs, we believe
strong top-line growth and better asset quality will offset the impact of that on the
bottom-line.
Riyad Bank
(1010. SE)
Overweight 33.2 RBL's strong corporate and retail presence is likely to benefit the bank to expand its
credit portfolio and improving its asset quality. n addition, the bank's aim to maintain
margins is likely to enable the bank to post double digit net earnings growth from 2013.
SABB
(1060. SE)
Overweight 40.5 We expect SABB's total operating income in 2012 to be driven by loan volumes and
strong fee income. In addition, stable operating expenses and lower provision charges
will enable it to marginal growth in net income.
SAIB
(1030. SE)
Neutral 18.2 SAB's diversification strategy to grow retail loans will benefit the bank in long term.
However, stiff competition from established players may pressurize its net interest
margins in the near term..
Samba
(1090.SE)
Overweight 60.6 The bank's ability to post relatively strong profitability despite having a conservative
approach keeps us positive on the stock. As the high-yielding corporate bonds mature,
Samba will refocus on expanding its loan book and therefore maintain profitability.
Saudi
Hollandi
(1040.SE)
Overweight 32.2 SHB is likely to grow its loan books benefitting from its microfinance initiative. This is
also likely to improve its bottom-line. However, we are concerned about SHB's reliance
on Tier II subordinated debt for capital adequacy. Considering stringent laws of Basel
III, the bank might need to increase its equity which would limit future dividend payouts.

custo
AI Rajhi Bank (AI Rajhi), the second Iargest bank in KSA in
terms of totaI assets, was estabIished in 1976. Being a fuII-
fIedged IsIamic bank, AI Rajhi offers Sharia'a-compIiant
banking and investment products to its customers through a
network of 455 branches and 3,034 ATMs. The bank operates
in MaIaysia, Kuwait and Jordan through fuIIy-owned
subsidiaries and has offices in the UK, British Virgin IsIands
and Jersey.
x Business brief
Al Rajhi offers Sharia'a-compliant retail as well as corporate banking and
treasury services to its customers. Al Rajhi Capital, the bank's subsidiary,
manages investment banking, asset management and brokerage
businesses. During 2011, the bank established Al Rajhi Bank Jordan
(100% stake) and Al Rajhi Takaful Agency Company (99%).
x FinanciaIs
Al Rajhi's net income grew 9.0% to YoY SR7.4bn in 2011. Net special
commission income declined 1.9% YoY despite a 16.9% growth in loan
books. This is mainly due to contraction in NMs as interest rates remained
low. However, non-special commission income grew 36.2% YoY, leading to a
7.2% increase in total operating income. The bank's provisions declined
13.8% YoY due to improved asset quality. However, other operating
expenses grew 17%, pushing the cost-to-income ratio to 28% from 26%.
During the year, Al Rajhi's customer deposits grew 21.2%; as a result, the
LTD ratio fell to 81% from 84% in 2010.
x Recent deveIopments
n March 2012, Abdullah bin Sulaiman Al Rajhi resigned as CEO and MD, but
would continue to be in the BoD. Suliman bin AbdulAziz Azzabin was
appointed the new CEO with effect from 1 April 2012. n January 2012, Al
Rajhi announced dividends of SR3bn for the second half of fiscal year 2011.
n December 2011, Fitch affirmed Al Rajhi Bank's long-term issuer default
rating (DR) at 'A+' with a stable outlook.
BANKNG ~ MAY 2012
AL RAJH BANK
ALSO KNOWN AS: AL RAJH
OVERWEIGHT
Current price (SR) 75.5
Pricing as of 09-05-2012

STOCK DETAILS
52-week range H/L (SR) 83/65
Market cap ($mn) 30,192
Shares outstanding (mn) 1,500
Price perform (%) 1M 3M 12M
Absolute (3.2) 1.7 (0.3)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
Avg daiIy turnover (mn) SR US$
3M 140.5 37.5
12M 82.9 22.1
Reuters code 1120.SE
Bloomberg code RJH AB
www.alrajhibank.com.sa

WEIGHTING & FREEFLOAT (%)
TAS (free float weight) 10.01
Free float 53.16

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 16.7 15.3 12.5
P/B (x) 3.7 3.5 3.2
P/S (x) 9.7 9.1 7.9
Div Yield (%) 4.6 5.0 5.6
DPS 3.5 3.8 4.2
Source: NCBC Research estimates

SHARE PRICE PERFORMANCE
66
68
70
72
74
76
78
80
82
5,500
6,000
6,500
7,000
7,500
8,000
May-11 Sep-11 Jan-12 May-12
TAS Al Rajhi (RHS)
Source: Reuters

TOP 5 SHAREHOLDERS (%)
Sulaiman Abdul Aziz Saleh Al Rajhi 19.9
Saleh Abdul Aziz Saleh Al Rajhi 15.1
GOS 9.9
Abdullah Abdul Aziz Saleh Al Rajhi 5.9

Source: Tadawul, NCBC Research
Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Net Sp. Com ncome SRmn
8,861 8,689 9,939 11,106 (1.9) 7.8
Operating ncome SRmn
11,661 12,502 14,287 16,196 7.2 11.6
Net ncome SRmn
6,771 7,378 9,036 10,457 9.0 15.6
Assets SRmn
184,841 220,813 253,666 289,056 19.5 16.1
Equity SRmn
30,318 32,821 34,945 38,317 8.3 8.1
Loans SRmn
120,065 140,396 163,608 189,946 16.9 16.5
Total Deposits SRmn
148,478 180,450 210,425 241,613 21.5 17.6
Net nterest Margin %
5.1 4.4 4.3 4.2 -
Cost/ncome %
25.6 27.8 26.7 25.6 -
ROE %
22.9 23.4 26.7 28.5 -
ROA %
3.8 3.6 3.8 3.9 -
Div Payout %
77.5 76.2 70.0 75.0
EPS SR
4.5 4.9 6.0 7.0 9.0 15.6
BVPS SR
20.2 21.9 23.3 25.5 8.3 8.1

Source: Company, NCBC Research

28

Samba FinanciaI Group (Samba), the third-Iargest bank in
Saudi Arabia in terms of totaI assets, was incorporated in
1980 through the takeover of Citigroup's branches in the
Kingdom. Samba operates 69 branches and 520 ATMs. The
bank operates in Pakistan through its subsidiary and has
branches in the UK, Dubai and Qatar.
x Business brief
Samba's core banking activities include corporate and retail banking and
treasury services. The bank also offers trade finance, Shariah-compliant
banking, and corporate investment services. Samba Capital & nvestment
Management Co., the investment banking division, handles asset
management and brokerage services. Samba Real Estate Co., another
subsidiary of the bank, manages real estate projects for Samba Real Estate
Fund.
x FinanciaIs
Samba was the only bank amongst its Saudi peers that reported a decline in
net income in 2011. The bank's net special commission income fell 3.5%
YoY due to a decline in its NMs, which overshadowed 11% YoY expansion
in loan book. n addition, the trading losses incurred in 2011 lowered the
bank's non-interest income by 7.5% YoY, resulting in a 4.9% decrease in
total operating income. Although the bank's provisions on credit losses
declined 46% YoY, subdued top line performance resulted in a 3.0% YoY
drop in net income to SR4.3bn for 2011.
n December 2011, Samba announced cash dividends of SR831mn for the
2H11. n November 2011, Samba Capital, the investment arm of Samba,
launched the first Sharia'a compliant US dollar denominated fund, "Al Nafees
Global Commodities Equity Fund"..
BANKNG ~ MAY 2012
SAMBA FNANCAL GROUP
ALSO KNOWN AS: SAMBA
OVERWEIGHT

STOCK DETAILS
Shares outstanding (mn) 900
Absolute (9.4) (2.2) (9.9)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 18.7 5.0
12M 11.1 3.0
Bloomberg code SAMBA AB
www.samba.com

Free float 50.59

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 9.9 10.2 9.1
P/B (x) 1.7 1.6 1.4
P/S (x) 6.3 6.7 6.1
Div Yield (%) 3.7 3.7 3.9
DPS 1.8 1.8 1.9

40
45
50
55
60
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS SAMBA (RHS)
Source: Reuters

Public nvst Fund 22.9
Public Pension Authority 15.0
GOS 11.4

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
4,536 4,376 4,623 5,163 (3.5) 4.4
6,901 6,562 7,273 8,163 (4.9) 5.8
Net ncome SRmn
4,435 4,303 4,845 5,501 (3.0) 7.4
Assets SRmn
187,416 192,774 214,748 238,068 2.9 8.3
Equity SRmn
25,603 28,257 31,423 35,114 10.4 11.1
Advances SRmn
80,251 89,111 98,688 110,221 11.0 11.2
Total Deposits SRmn
155,138 157,885 176,760 196,455 1.8 8.2
2.5 2.4 2.4 2.4 -
Cost/ncome %
27.7 29.8 29.0 28.4 -
ROE %
18.4 16.0 16.2 16.5 -
ROA %
2.4 2.3 2.4 2.4 -
Div Payout %
36.2 37.3 35.0 35.0
EPS SR
4.9 4.8 5.4 6.1 (3.0) 7.4
BVPS SR
28.4 31.4 34.9 39.0 10.4 11.1


29

BSF, an affiIiate of Crdit AgricoIe Group, commenced
operations in December 1977 by taking over the branches of
Banque Indosuez. The bank offers conventionaI and IsIamic
banking products through a network of 83 branches and 437
ATMs in Saudi Arabia.
x Business brief
BSF's core activities include retail and corporate banking as well as treasury
services. The bank's investment banking activities are conducted by Saudi
Fransi Capital. The bank also has an insurance JV with Allianz Group under
the name Allianz Saudi Fransi Co. (32.5. Furthermore, the bank has 27.0%
stake in Syria-based Banque BEMO Saudi Fransi.
x FinanciaIs
n 2011, BSF's net income grew 3.9% YoY to SR2.9bn. BSF's loans and
deposits 14.5% and 15.4%, respectively. However, net special commission
income grew 2.3% YoY as a result of lower net interest spreads. BSF's non-
interest income grew 8.9% YoY leading to 4.3% YoY growth in total operating
income. BSF's retail focus increased its operating expenses; as a result, its
cost-to-income ratio increased to 32.7% from 28.6%. However, improved
asset quality reduced provisions for credit losses by 53.5%, enabling the
bank to register moderate bottom line growth.
n February 2012, together with a number of banks, BSF signed a SR4.5bn
syndicated loan agreement for 15 years with Marafiq Company to finance the
expenses of the latter's projects and expansion operations in Jubail and
Yanbu. n January 2012, BSF announced its plan to increase its paid up
capital 25% to SR9.04bn from SR7.23bn through bonus issue. The bank
would offer one bonus for every four held. n November 2011, the bank
announced its plan to sell its 27% stake in Bemo Saudi Fransi Syria and 10%
stake in Bemo Lebanon due to the financial risk involved in Syria.
BANKNG ~ MAY 2012
BANQUE SAUD FRANS
ALSO KNOWN AS: BSF
OVERWEIGHT

STOCK DETAILS
Absolute (4.9) 6.8 (2.6)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 8.4 2.2
12M 5.5 1.5
Bloomberg code BSFR AB
www.alfransi.com.sa

Free float 54.67

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 11.9 11.5 10.2
P/B (x) 1.9 1.7 1.5
P/S (x) 7.6 7.3 6.5
Div Yield (%) 2.4 1.6 2.0
DPS 0.9 0.6 0.7

28
30
32
34
36
38
40
42
5,000
5,500
6,000
6,500
7,000
7,500
8,000
Apr-11 Jul-11 Nov-11 Mar-12
TAS Saudi Fransi (RHS)
Source: Reuters

Groupe Crdit Agricole [Calyon] 31.1
GOS 12.8
Rashid Al Abdul Rahman Al
Rashid & Sons 9.8

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
3,066 3,137 3,428 3,911 2.3 8.5
4,395 4,585 5,166 5,884 4.3 10.2
Net ncome SRmn
2,801 2,911 3,274 3,813 3.9 10.8
Assets SRmn
123,218 140,480 155,893 172,673 14.0 11.9
Equity SRmn
18,023 19,655 22,602 25,516 9.1 12.3
Advances SRmn
80,977 92,325 102,713 115,408 14.0 12.5
Total Deposits SRmn
100,736 116,257 128,174 141,427 15.4 12.0
2.6 2.5 2.4 2.5 -
Cost/ncome %
28.6 32.7 32.7 31.6 -
ROE %
16.6 15.5 15.5 15.8 -
ROA %
2.3 2.2 2.2 2.3 -
Div Payout %
28.6 18.7 20.0 30.0
EPS SR
3.1 3.2 3.6 4.2 3.9 10.8
BVPS SR
19.9 21.7 25.0 28.2 9.1 12.3


30

Riyad Bank (RIBL), estabIished in 1957. The bank has 248
branches and 2,594 ATMs in KSA, a branch in London, an
agency in Houston, and a representative office in Singapore.
x Business brief
RBL performs core banking activities through four divisions: Personal
Banking, Corporate Banking, Treasury Services and nternational Banking.
The bank offers a range of conventional and Sharia'a compliant banking
products. RBL provides asset and wealth management, corporate finance,
and brokerage services through its wholly owned investment banking
subsidiary, Riyad Capital. RBL's other subsidiaries operate in the leasing,
real estate, and insurance (joint venture with Royal Sun Alliance) segments.
x FinanciaIs
RBL's net income increased 11.5% YoY to SR3.1bn mainly due to a decline
in provisions. The bank's net special commission income grew 1.3%; non-
interest income increased 15.5%, leading to 5.7% growth in total operating
income. The bank's total loans increased 6.5% lower than industry average
as the bank focused on maintaining NMs. Provisions for credit losses
declined 29%, while no recovery was recorded for provisions of impaired
investments in 2011 compared to SR85mn in 2010.
n March 2012, Fitch affirmed RBL's Long-Term ssuer Default Rating (DR)
at 'A+' with a stable outlook. n January 2012, RBL declared dividends of
SR1,125mn for the 2H11. During the month, S&P affirmed RBL's A+/A-1
rating with 'stable' outlook. n October 2011, the bank signed a bridge loan
agreement with Sahara Petrochemicals Company for up to SR1bn to finance
the latter's projects.
BANKNG ~ MAY 2012
RYAD BANK
ALSO KNOWN AS: RBL
OVERWEIGHT

STOCK DETAILS
Absolute (2.0) 0.4 (5.4)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 51.8 13.8
12M 19.0 5.1
Bloomberg code RBL AB
www.riyadbank.com

Free float 47.52

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 13.0 11.6 11.0
P/B (x) 1.3 1.2 1.2
P/S (x) 6.1 5.8 5.4
Div Yield (%) 5.5 5.7 6.8
DPS 1.3 1.4 1.7

23
24
25
26
27
28
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS RBL (RHS)
Source: Reuters

GOS 21.6
PPA 9.1
Al Nahla Group 9.1
Masek Holding Company 8.0
Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
4,142 4,197 4,419 4,877 1.3 5.6
5,980 6,321 6,805 7,493 5.7 7.8
Net ncome SRmn
2,825 3,149 3,342 3,765 11.5 10.0
Assets SRmn
173,556 180,887 196,075 213,685 4.2 7.2
Equity SRmn
29,233 30,158 30,972 32,072 3.2 3.1
Advances SRmn
106,035 112,973 124,679 137,849 6.5 9.1
Total Deposits SRmn
139,456 146,064 159,972 175,969 4.7 8.1
2.4 2.5 2.4 2.5 - -
Cost/ncome %
38.6 39.7 40.3 39.1 - -
ROE %
9.8 10.6 10.9 11.9 - -
ROA %
1.6 1.8 1.8 1.8 - -
Div Payout %
71.5 66.7 75.0 75.0
EPS SR
1.9 2.1 2.2 2.5 11.5 10.0
BVPS SR
19.5 20.1 20.6 21.4 3.2 3.1


31

SABB (formerIy The Saudi British Bank) is an affiIiate of HSBC
Group. The bank commenced operations in 1978 offering
conventionaI and IsIamic products under the brand name of
SABB Amanah. SABB operates 80 branches and 524 ATMs.
The bank aIso has associate companies offering investment
banking soIutions and insurance services.
x Business brief
SABB offers personal, corporate, private and slamic banking as well as
treasury and trade services. During the year 2011, assets and liabilities of
SABB Securities (wholly-owned arm of SABB providing brokerage and
securities services) were transferred to HSBC Saudi Arabia Ltd. (a firm
providing investment banking solutions). This raised SABB's stake in HSBC
Saudi Arabia to 51% from 40% (w.e.f. 1 July 2011). SABB also provides
Sharia'a-compliant insurance products through SABB Takaful (32.5%).
x FinanciaIs
SABB's net income surged 53.4% YoY to SR2.9bn in 2011, mainly driven by
a decline in provisions. The bank's total operating income grew a marginal
1.2% YoY due to a strong 17.6% increase in non-interest income. SABB's
NMs declined 29bps YoY due to its focus on increasing loan volumes (up
14.2% YoY). Consequently, net special commission income declined 6.8%
YoY. However, the decline in operating expenses (8% YoY) and provisions
(61% YoY) helped the bank to offset the impact of subdued top line
performance and post significant growth in profits.
n March 2012, the bank successfully completed the private placement of
five-year Tier Sukuks amounting SR1.5bn with a coupon rate of SBOR +
1.2%. This will provide long-term funding base, diversify sources of funds and
support its penetration into the retail segment. During the same month, SABB
increased its paid-up capital base by 33% to SR10n by issuing one bonus
share for every three shares held and distributed cash dividends of
SR562.5mn for the year 2011.
BANKNG ~ MAY 2012
SABB
ALSO KNOWN AS: THE SAUD BRTSH BANK
OVERWEIGHT

STOCK DETAILS
Absolute (4.1) 7.8 5.1
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 8.2 2.2
12M 5.0 1.3
Bloomberg code SABB AB
www.sabb.com

Free float 32.85

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 18.6 12.1 11.2
P/B (x) 2.3 2.0 1.8
P/S (x) 7.2 7.1 6.6
Div Yield (%) 1.6 1.6 2.7
DPS 0.6 0.6 0.9

27
29
31
33
35
37
39
5,500
6,000
6,500
7,000
7,500
8,000
TAS SABB (RHS)
Source: Reuters

HSBC Holdings Co. 40.0
Al Olayan Saudi nvst Co. 16.9
GOS 9.5

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
3,243 3,022 3,241 3,638 (6.8) 3.9
4,839 4,899 5,290 5,957 1.2 7.2
Net ncome SRmn
1,883 2,888 3,121 3,526 53.4 23.3
Assets SRmn
125,373 138,658 153,896 169,907 10.6 10.7
Equity SRmn
15,172 17,166 19,257 21,433 13.1 12.2
Advances SRmn
74,248 84,811 95,513 108,342 14.2 13.4
Total Deposits SRmn
104,997 115,621 128,065 141,111 10.1 10.4
2.7 2.4 2.3 2.3 -
Cost/ncome %
36.2 32.8 32.9 32.3 -
ROE %
13.3 17.9 17.1 17.3 -
ROA %
1.5 2.2 2.1 2.2 -
Div Payout %
29.9 19.5 30.0 50.0
EPS SR
1.9 2.9 3.1 3.5 53.4 23.3
BVPS SR
15.2 17.2 19.3 21.4 13.1 12.2


32

Saudi HoIIandi Bank (SHB), headquartered in Riyadh, was
estabIished in 1977, with the conversion of ABN Amro into a
joint venture bank. CurrentIy, a consortium Ied by RBS hoIds
40% stake in SHB. The bank offers conventionaI and IsIamic
products through a network of 44 branches and 257 ATMs
across KSA.
x Business brief
SHB's core activities include corporate banking, retail banking and treasury
services. The bank offers preferred banking services, such as domestic and
international share trading services and mutual fund portfolios, to high net
worth individuals (HNs) under the wealth management segment.
x FinanciaIs
SHB's net income increased 30.6% YoY in 2011 with a decline in provisions
for credit losses. The bank's net special commission income rose just 0.2%
YoY, but strong growth in non-interest income (9.0% YoY) led to a moderate
growth of 3.2% in total operating income. The bank's total operating income
rose 7% YoY. However, a 57% fall in provisions boosted SHB's net income.
The bank's loan book expanded at a moderate rate of 7.7% YoY, while total
deposits grew 4.7%, raising the total loan-to-deposit ratio to 78.4% in 2011
from 76.2% in 2010.
n March 2012, SHB distributed cash dividends of SR331mn for 2011 and
increased its paid-up capital base by 20% to SR3,969mn from SR3,307.5mn
by issuing one bonus share for every five shares held. n February 2012,
Fitch affirmed SHB's Long-term ssuer Default Rating (DR) at 'A-' with a
stable outlook. n December 2011, the Board of Directors announced the
resignation of HE Dr. Fahad Al-Mubarak. n November 2011, SHB appointed
John Macedo as Acting Chief Financial Officer; since 2008, he has been
associated with the bank as AGM, Planning, Strategy & Business
Performance.
BANKNG ~ MAY 2012
SAUD HOLLAND BANK
ALSO KNOWN AS: SHB
OVERWEIGHT

STOCK DETAILS
Market cap ($ mn) 2,942
Absolute (3.5) 8.7 10.4
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 5.9 1.6
12M 2.8 0.7
Bloomberg code AAAL AB
www.shb.com.sa

Free float 29.33

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 14.0 10.7 9.8
P/B (x) 1.7 1.5 1.4
P/S (x) 5.6 5.5 5.1
Div Yield (%) - 3.4 3.1
DPS - 1.0 0.9

21
23
25
27
29
31
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Hollandi (RHS)
Source: Reuters

RBS, Fortis Group and Banco
Santander (ABN AMRO)
39.9
Al Olayan Saudi nvst Co. 20.8
GOS 9.6

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
1,287 1,290 1,370 1,556 0.2 6.5
1,961 2,023 2,176 2,468 3.2 8.0
Net ncome SRmn
790 1,032 1,130 1,310 30.6 18.3
Assets SRmn
53,882 57,549 62,980 71,747 6.8 10.0
Equity SRmn
6,387 7,408 7,992 8,903 16.0 11.7
Advances SRmn
35,039 37,745 42,602 48,177 7.7 11.2
Total Deposits SRmn
45,961 48,136 52,783 60,418 4.7 9.5
2.3 2.4 2.3 2.4 -
Cost/ncome %
39.4 40.6 40.2 39.2 -
ROE %
13.0 15.0 14.7 15.5 -
ROA %
1.4 1.9 1.9 1.9 -
Div Payout %
- 36.5 30.0 35.0 -
EPS SR
2.0 2.6 2.8 3.3 30.6 18.3
BVPS SR
16.1 18.7 20.1 22.4 16.0 11.7


33

Arab NationaI Bank (ANB) commenced operations in the KSA
in 1980, foIIowing the takeover of Arab Bank PLC. The bank
operates a network of 142 IocaI branches and 935 ATMs,
aIong with one branch in London. ANB hoIds 100% stake in
Arab NationaI Investment Co. and 62.5% stake in Arabian
Heavy Equipment Leasing Co.
x Business brief
ANB offers personal banking, corporate banking, treasury services and
syndications, and corporate finance services. Besides core banking activities,
it offers investment banking, heavy equipment leasing and housing finance
services through its subsidiaries and associate companies. ANB nvest
handles investment banking and asset management operations, while
Arabian Heavy Equipment Leasing Co. operates under Sharia'a guidelines
and leases heavy equipment. Saudi Home Loans Co. is an associate
providing housing finance services.
x FinanciaIs
ANB's net income increased 13.6% YoY to SR2.2bn in 2011 despite a
marginal growth of 0.7% in net special commission income and 0.8% in total
operating income. This was mainly due to a 36% YoY decline in loan loss
provisions. ANB's loan book grew 10% YoY; however, lower NMs kept the
growth in net special commission income muted. The bank's non-interest
income grew just 1.1% YoY. Coupled with higher operating expense, ANB's
pre-provision profits fell 3% YoY. However, the significant reduction in
provisions improved the bottom line performance.
n March 2012, ANB signed an agreement worth SR90mn with Jenan Real
Estate Company to finance company projects. n December 2011, it
announced dividends of SR850mn for the year 2011. n October 2011, the
bank converted 20 of its local branches to slamic banking to offer Sharia'a-
compliant products to customers.
BANKNG ~ MAY 2012
ARAB NATONAL BANK
ALSO KNOWN AS: ANB
NEUTRAL

STOCK DETAILS
Shares outstanding (mn) 850.0
Absolute (5.1) 1.0 (9.4)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 5.7 1.5
12M 4.3 1.1
Bloomberg code ARNB AB
www.anb.com.sa

Free float 49.06

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 13.3 11.7 10.7
P/B (x) 1.7 1.5 1.4
P/S (x) 5.6 5.6 5.3
Div Yield (%) 2.6 5.0 5.0
DPS 0.8 1.5 1.5

26
28
30
32
34
36
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Arab National (RHS)
Source: Reuters

Arab Bank 40.0
GOS 10.8
Rashid Al Abdul Rahman Al
Rashid & Sons
9.9
Al Jaber Trading Co. 5.6
Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
3,158 3,181 3,280 3,659 0.7 5.0
4,504 4,541 4,760 5,298 0.8 5.6
Net ncome SRmn
1,911 2,171 2,365 2,675 13.6 11.9
Assets SRmn
125,373 117,574 126,682 143,739 (6.2) 4.7
Equity SRmn
15,291 16,730 18,243 19,630 9.4 8.7
Advances SRmn
116,035 72,844 80,743 88,592 (37.2) -8.6
Total Deposits SRmn
97,983 98,371 105,842 121,382 0.4 7.4
2.9 2.8 2.8 2.8 -
Cost/ncome %
36.5 39.1 38.5 37.9 -
ROE %
12.9 13.6 13.5 14.1 -
ROA %
1.7 1.8 1.9 2.0 -
Div Payout %
34.0 58.7 53.9 54.0
EPS SR
2.2 2.6 2.8 3.1 13.6 11.9
BVPS SR
18.0 19.7 21.5 23.1 9.4 8.7


34

The Saudi Investment Bank (SAIB) was estabIished in 1976 in
Riyadh and now operates a network of 48 branches and 334
ATMs in KSA. SAIB provides investment banking and other
reIated services such as Iease financing, insurance &
reinsurance, reaI estate financing and financiaI investment.
x Business brief
SAB provides personal, corporate, investment and slamic banking along
with treasury services in KSA. n September 2011, Capital Market Authority
approved a request by Alistithmar Capital (brokerage and investment banking
arm of SAB) to acquire BNP Paribas Asset Management Co. (AMCO,
another subsidiary of SAB) as well as include all licensed activities such as
dealing, managing, arranging, advising, and custody into Alistithmar's
business profile. n December 2011, net assets of AMCO were acquired by
Alistithmar. SAB also offers related services through five associate
companies: AMEX (Saudi Arabia) Ltd, Saudi Orix Leasing Company, Medgulf
KSA, Amlak nternational, and Naeem nvestment Co.
x FinanciaIs
SAB is the only bank amongst its Saudi peers that reported a decline in loan
growth at 12.5% YoY. The bank has reduced its loan book to mitigate
concentration risk. As a result, SAB's net special commission income and
total operating income declined 6.7% and 7.6% YoY, respectively. The
bank's operating costs also rose 12% YoY, increasing its cost-to-income ratio
to 38.6% from 32% in 2010. However, the fall in total operating income and
higher expenses were offset by a steep decline in provisions, which stood at
SR373mn in 2011 compared to SR845mn in 2010 (56% lower YoY). This
enabled the bank to register a significant 64.8% YoY growth in its net profits.
n March 2012, SAB distributed cash dividends of SR324.5mn for 2011. The
bank distributed dividends for the first time in six years; the last cash
dividends were given to shareholders in 2005. The decline in dividends came
after muted profit growth as the bank increased its provisions for its exposure
to family-owned corporates.
BANKNG ~ MAY 2012
SAUD NVESTMENT BANK
ALSO KNOWN AS: SAB
NEUTRAL

STOCK DETAILS
Absolute (11.8) 0.3 (7.6)
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 9.6 2.6
12M 4.2 1.1
Bloomberg code SBC AB
www.saib.com.sa

Free float 53.67

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 22.5 13.7 13.1
P/B (x) 1.2 1.1 1.1
P/S (x) 5.5 6.0 5.9
Div Yield (%) N/A 3.4 3.4
DPS 0.0 0.6 0.6

15
16
17
18
19
20
21
22
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS SBC (RHS)
Source: Reuters

GOS 21.5
Saudi Oger Ltd. 8.5
JPMorgan Chase Co. 7.4
National Comm Bank 7.3
Company financiaIs

2010 2011 2012E 2012E
YoY
(%)
CAGR (%)
(10-13E)
1,315 1,226 1,197 1,260 (6.7) -1.4
1,749 1,616 1,645 1,762 (7.6) 0.2
Net ncome SRmn
429 708 737 793 64.8 22.7
Assets SRmn
51,491 51,946 55,615 60,130 0.9 5.3
Equity SRmn
8,141 8,557 8,974 9,367 5.1 4.8
Advances SRmn
31,002 27,114 29,055 31,336 (12.5) 0.4
Total Deposits SRmn
42,611 42,495 45,781 49,862 (0.3) 5.4
2.7 2.5 2.4 2.3 -
Cost/ncome %
32.0 38.6 40.7 41.0 -
ROE %
5.5 8.5 8.4 8.6 -
ROA %
0.8 1.4 1.4 1.4 -
Div Payout %
- 45.9 45.0 45.0 -
EPS SR
0.8 1.3 1.3 1.4 64.8 22.7
BVPS SR
14.8 15.6 16.3 17.0 5.1 4.8

35

Bank AIbiIad (AIbiIad), headquartered in Riyadh, was
estabIished in 2004 through the merger of eight money
exchange organizations. The bank operates 82 branches and
586 ATMs. AIbiIad's whoIIy owned subsidiaries are AIbiIad
Brokerage & Securities Management Co., AIbiIad Investment
Co., and AIbiIad ReaI Estate Co.
x Business brief
Albilad's business can be divided into three major segments, namely,
Consumer service, Corporate Service and nvestment Service. Through its
Consumer service segment the bank offers auto financing, personal
financing, real estate financing and credit card services. The bank's
Corporate Services division provides a range of finance solutions such as
Murabaha, Musharaka, stisna'a, and securitization finance, while nvestment
Services segment offers investment avenues in various funds, including Akar
(GCC Real Estate Fund), Amwal (Equity Fund for slamic Financial
nstitutions), Asayel (Saudi Shares Fund), Al-Murabih (Saudi Riyal Murabaha
Fund) and Al-Seef (Kuwaiti Shares Fund). The bank also offers internet
trading of Saudi shares though Albilad Tadawul.
x FinanciaIs
Albilad's net income grew 3.4 times to SR330mn in 2011 due to higher
growth in total operating income. n 2011, the bank's net financing expanded
12% YoY leading to 12.5% growth in net special commission income. n
addition, fee income increased 34% YoY, enabling 41% growth in total
operating income. Higher growth in total operating income than in operating
costs also improved its cost-to-income ratio for 2011 although it was at an
elevated 58%. Provisions for credit losses increased 4.1%; there were no
provisions on impaired investments for 2011 compared to SR47mn in 2010.
n February 2012, the bank sold the land (310,972 square meter area)
located in the Dir'iya province in Riyadh for SR653mn. This resulted in a
capital gain of SR373mn for the bank in the first quarter of the 2012.
BANKNG ~ MAY 2012
BANK ALBLAD
ALSO KNOWN AS: ALBLAD
NEUTRAL

STOCK DETAILS
Absolute (14.9) 12.8 37.3
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 57.5 15.3
12M 19.1 5.1
Bloomberg code ALB AB
www.bankalbilad.com.sa
Free float 77.18
VALUATION MULTIPLES
10A 11A 12E
P/E (x) 89.0 24.9 15.4
P/B (x) 2.6 2.4 2.1
P/S (x) 7.5 6.0 4.8
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS AL Bilad (RHS)
Source: Reuters
Mohd brahim Mohd Al Subaei 11.6
Abdullah brahim Mohd Al Subaei 11.1
Abdul Rahman Saleh Abdul Aziz
Al Rajhi 6.9
Abdul Rahman Abdul Aziz Saleh
Al Rajhi 6.5
First ncst Co 5.9

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
625 703 854 1,019 12.5 17.8
1,099 1,374 1,700 2,071 25.0 23.5
Net ncome SRmn
92 330 535 735 257.0 99.7
Assets SRmn
21,117 27,727 32,748 38,155 31.3 21.8
Equity SRmn
3,103 3,416 3,951 4,657 10.1 14.5
Advances SRmn
12,290 13,780 16,872 20,704 12.1 19.1
Total Deposits SRmn
17,315 23,460 27,775 32,273 35.5 23.1
3.4 3.0 2.9 2.9
Cost/ncome %
65.3 57.6 54.3 51.5
ROE %
3.0 10.1 14.5 17.1
ROA %
0.5 1.3 1.8 2.1
Div Payout %
- - - 20.0
EPS SR
0.3 1.1 1.8 2.5 257.0 99.7
BVPS SR
10.3 11.4 13.2 15.5 10.1 14.5


36

Bank AI Jazira (BJAZ) speciaIizes in IsIamic banking and
investment products in Saudi Arabia. The bank was
estabIished in 1975, foIIowing the takeover of the Saudi
Arabian branches of NationaI Bank of Pakistan. BJAZ
operates a network of 51 branches and 318 ATMs across the
KSA.
x Business brief
BJAZ offers Sharia'a-compliant retail banking, corporate banking and
treasury services. The bank's investment subsidiary, AlJazira Capital (AJC),
is one of the leading brokerage houses in Saudi Arabia in terms of value and
volume traded. BJAZ also operates Aman Real Estate, which acts as a
custodian of collateral in the bank's lending activities. n 2010, the bank
received a government approval to establish a Takaful company with a
capital of SR350mn.
x FinanciaIs
BJAZ's net income grew 10.5 times YoY to SR303mn in 2011, led by an 81%
decline in provisions. ncreasing loan portfolio and growing brokerage income
from higher Tadawul turnover enabled the bank to post a 9.0% growth in net
special commission and 34% increase in fee income. However, a decline in
investment income slightly lowered the growth in total operating income.
With the 24.6% YoY increase, the bank saw one of the highest loan book
growths among the banks in the Kingdom. Customer deposits also grew
significantly at 20.7% YoY.
n December 2011, BJAZ announced dividend distribution of SR160mn for
the year 2011. n June 2011, BJAZ signed a SR339mn, five-year deal with
Nama Chemicals Company. This financial facility would be used to service an
existing Murabaha loan (SR263mn) and to establish an administrative
building (SR70mn). n June 2011, Capital ntelligence lowered BJAZ's
Financial Strength Rating (FSR) to 'BBB' from 'BBB+', while the outlook was
returned to 'Stable' from 'Negative'. n the same month, Fitch affirmed BJAZ's
long-term ssuer Default Rating (DR) at 'A-' with stable outlook.
BANKNG ~ MAY 2012
BANK AL JAZRA
ALSO KNOWN AS: BJAZ, BAJ
NEUTRAL

STOCK DETAILS
Absolute (16.6) 29.2 35.2
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 43.0 11.5
12M 17.3 4.6
Bloomberg code BJAZ AB
www.baj.com.sa

Free float 67.80

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 270.8 25.9 19.2
P/B (x) 1.6 1.6 1.5
P/S (x) 6.8 6.5 5.4
Div Yield (%) - 2.0 2.1
DPS - 0.5 0.5

15
20
25
30
35
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS BJAZ (RHS)
Source: Reuters

Rashed Al Abdul Rahman Al
Rashid & Sons Co
22.2
Al Okhoah Union for devlp 6.5
National Bank of Pakistan 5.8
Saleh Abdullah Mohd Kamal 5.0
Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
717 781 894 997 9.0 11.6
1,155 1,208 1,456 1,640 4.6 12.4
Net ncome SRmn
29 303 408 482 947.5 155.4
Assets SRmn
33,018 38,898 43,433 48,995 17.8 14.1
Equity SRmn
4,806 4,937 5,185 5,505 2.7 4.6
Advances SRmn
18,704 23,307 27,189 31,817 24.6 19.4
Total Deposits SRmn
27,734 33,464 37,711 42,910 20.7 15.7
2.4 2.3 2.3 2.2 -
Cost/ncome %
66.2 69.1 66.9 64.8 -
ROE %
0.6 6.2 8.1 9.0 -
ROA %
0.1 0.8 1.0 1.0 -
Div Payout %
- 52.8 40.0 35.0
EPS SR
0.1 1.0 1.4 1.6 947.5 155.4
BVPS SR
16.0 16.5 17.3 18.4 2.7 4.6


37

AIinma Bank (AIinma) was estabIished in March 2006 with a
share capitaI of SR15bn. It operates as a Shariah-compIiant
bank in the KSA, offering retaiI and corporate banking
services. The bank began fuII-fIedged operations in 2009 and
operates a network of 37 branches and 400 ATMs.
x Business brief
Alinma is a Shariah-compliant bank that provides retail and corporate
banking services. The bank offers asset management, brokerage, investment
banking and wealth management services through Alinma nvestment Co.
Alinma entered into a joint venture to provide Takaful insurance services.
Through this, it aims to capitalize on the vast untapped retail market for
Sharia'a-compliant insurance services.
x FinanciaIs
Alinma's net income grew 28 times to SR431mn in 2011 from just SR15mn in
2010. Loan portfolio increased 62% YoY and deposits grew 113.8% YoY in
2011 primarily due to a lower base in 2010. Owing to growth in loan books,
the bank's net special commission income rose 79.5%, while fee income
grew 7.4 times; consequently, total operating income increased 109.6%.
Alinma's provisions also grew from SR3mn to SR125mn in 2011; however, its
cost-to-income ratio declined to 60% from 97%, enabling significant growth in
bottom line.
n March 2012, Alinma nvestment was appointed lead manager and
underwriter for the initial public offering of Tokio Marine Saudi Arabia (Alinma
Bank holds 28.75% stake in its SR20mn capital). n March 2012, the bank
also signed two agreements with Saudi Real Estate Development Fund to
facilitate providing loans. n February 2012, the bank launched a service to
finance residential units under construction. During the same month, the
bank started its operations in the northern borders region at the branch in the
city of Ar'ar, in line with its strategy to make its presence in all the regions of
the Kingdom.
BANKNG ~ MAY 2012
ALNMA BANK
ALSO KNOWN AS: ALNMA
NOT COVERED

STOCK DETAILS
Absolute (10.0) 30.2 37.9
Market (6.2) 6.2 7.6
Sector (6.0) 4.9 1.2
3M 948.8 252.9
12M 358.7 95.6
Bloomberg code ALNMA AB
www.alinma.com

Free float 69.29

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 97.7 NM 48.7
P/B (x) 1.3 1.5 1.3
P/S (x) 34.1 31.7 15.1
Div Yield (%) N/A N/A N/A
DPS 0.0 0.0 0.0

8
10
12
14
16
18
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Alinma (RHS)
Source: Reuters

GOS 10.0
Public Pension Authority (PPA) 10.7

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
339 607 619 1,112 79.6 81.1
339 615 662 1,388 109.7 102.4
Net ncome SRmn
390 215 15 431 2,775.6 5.2
Assets SRmn
15,556 17,306 26,669 36,783 37.9 53.8
Equity SRmn
15,390 15,605 15,621 15,894 1.8 1.6
Advances SRmn
- 1,112 15,593 25,259 62.0 NA
Total Deposits SRmn
- 1,501 10,570 20,219 91.3 NA
2.3 3.9 3.02 3.8
Cost/ncome %
65.9 67.5 97.3 59.9
ROE %
2.5 1.4 0.1 2.7
ROA %
2.5 1.3 0.1 1.4
Div Payout %
- - - -
EPS SR
0.3 0.1 0.0 0.3 2,775.6 5.2
BVPS SR
10.26 10.4 10.4 10.6 1.8 1.6


38
MAY 2012
Petrochemicals
2010 SABIC 44
2020 SAFCO 45
2310 Sipchem 46
2260 Sahara Petrochemical 47
2060 Industrialization 48
2350 Saudi Kayan 49
2290 YANSAB 50
2002 National Petrochem 51
2250 SIIG 52
2330 Advanced Petrochem 53
2380 Petro Rabigh 54
2210 Nama Chemicals 55
2170 Alujain 56
2001 Methanol Chemicals 57

The Saudi petrochemical sector is well positioned to withstand any
weakness in demand by capitalizing on its low feedstock cost and
an expanding production base. The full year contribution from
Saudi Kayan and Sahara's Al Waha plant, as well as the
commencement of Petrochem's commercial operations in 2Q12,
should boost the sector's earnings in 2012E. Proximity to growing
Asian markets remains a key positive for petrochemical firms in the
Kingdom.
Global petrochemical prices started to decline in the 2H11 as oil prices fell below
USD100/bbl and demand weakened in key end markets. Poor market conditions
also impacted the earnings of Saudi petrochemical producers during the same
period. However, we believe firms are well placed to withstand the adverse
market conditions given their low production cost as ethane and propane (key
feedstock for petrochemicals) are supplied at reduced prices by Saudi Aramco.
n our opinion, there is little scope of a strong rebound in demand and prices in
the near term as most demand indicators are still weak.
Petrochemical producers in the Kingdom procure ethane at USD0.75/mmbtu,
which is much lower than the global spot prices of over USD2/mmbtu. While
reviewing ethane prices in early 2012, the Oil Ministry decided to keep gas
prices unchanged for the year. Companies receive propane at a price linked to
the discounted rate of naphtha. Though this discount has been reduced
marginally over the years (around 30% in 2011), the procurement cost still
remains attractive for companies relative to their international counterparts.
However, with limited supply of low-cost ethane, Saudi producers are focusing
on mixed-feed crackers. The resultant increase in production costs due to an
anticipated rise in ethane cost (in 2013E) and inclusion of heavier feedstock is
not likely to have a significant impact on the earnings of Saudi producers. This
could be ascribed to an expansion in their production base and access to
growing markets in Asia and the Middle East.
n recent years, petrochemical companies in Saudi Arabia have undertaken
aggressive capex to capitalize on rising demand and their feedstock cost
advantage. According to BM, total ethylene capacity in the Kingdom is expected
to grow to 16.5mn mtpa by 2015 from around 8mn mtpa in 2008. Moreover,
SABC is seeking opportunities to invest in downstream products such as
polyurethanes and polyamides. The company aims to increase R&D spending to
over 2% of sales in forthcoming years from 1% budgeted for 2011. Tasnee is
undertaking projects to add downstream products, such as acrylic acids and
polyols to its petrochemical product mix.
The reducing number of anti-dumping claims in key end markets is favorable for
the earnings outlook. n January 2012, ndia withdrew anti-dumping duties levied
on the Kingdom's polypropylene producers in November 2010. n December
2011, the European Commission revoked anti-dumping and anti-subsidy probes
against polyethylene terephthalate (PET) from Saudi Arabia. n October 2010,
Chinese authorities decided against imposing any duty on Saudi methanol
producers after conducting a year-long investigation. The Chinese government
MAY 2012
PETROCHEMCALS
Startups, low production cost to support earnings
40
PETROCHEMCALS NCB CAPTAL
MAY 2012

lowered anti-dumping charges on Sipchem's Butanediol output to 4.5% in
December 2009 from 20.9% in May 2009.
The sector currently comprises 14 listed companies, with SABC being the
largest. SABC is also the largest petrochemical company in the Middle East.
Headquartered in Riyadh, the company's annual production volumes aggregated
67mn mt in 2010 and accounted for 64.3% of total revenues from the
petrochemical sector in KSA in 2011. An uptrend in the earnings of
petrochemical producers continued in 2011. The sector's net income increased
37.5% YoY to SR40.7bn in 2011, driven by higher prices of petrochemicals and
fertilizers, and growth in production volumes.
Units as stated
Country
% weight in Index
as on 28 Mar 12
NIM (%),
2011
Avg. RoE
(%), 2011
Saudi Basic ndustries Corp (SABC) 11.0 15.4 22.6
National ndustrialization Co (NC) 3.7 12.4 24.1
Saudi Kayan Petrochemical Company 1.9 (10.4) (1.6)
Yanbu National Petrochemical Co (YANSAB) 1.7 32.9 35.6
Saudi ndustrial nvestment Group (SG) 1.5 11.8 9.1
Saudi nternational Petrochemical Co (Sipchem) 1.2 21.2 13.4
Sahara Petrochemical 1.1 27.0 9.7
Advanced Petrochemical Company 0.8 18.4 26.7
Rabigh Refining and Petrochemical Co 0.6 0.1 0.8
Nama Chemicals 0.3 (33.9) (16.4)
Chemanol 0.3 8.5 4.8
Petrochem 0.3 NM (1.4)
Alujain Corporation 0.2 (0.7) (1.8)
Source: Saudi Stock Exchange (Tadawul)

n 2011, the petrochemical sector's combined revenues (all of the 14
companies) increased 25.4% YoY to SR295.2bn, supported by strong prices
during the first half of the year, additional revenues from new startups (such as
Saudi Kayan and Sahara) and the full year contribution from Yansab and
Sipchem's Phase 2 expansion project. SABC reported a 25.0% YoY rise in
revenues in 2011. Net margins of petrochemical firms expanded to 13.8% in
2011 from 12.6% in 2010. Losses reported by Saudi Kayan, Nama Chemicals,
Petrochem and Alujain impacted the overall earnings growth in 2011.
Exhibit 44: Revenues of companies, 2005-11 Exhibit 45: Profitability of companies, 2005-11
SR mn %

Stock multiples improved in 2009 and 2010, after falling drastically in 2008. The
uptrend reversed in 2011 as investors adopted a cautious approach amid signs
of slower economic growth in developed countries. Of the key stocks in the
50,000
100,000
150,000
200,000
250,000
300,000
2005 2006 2007 2008 2009 2010 2011
SABC SAFCO Yansab Sipchem Others
0
10
20
30
40
50
60
70
80
90
2005 2006 2007 2008 2009 2010 2011
SABC SAFCO Yansab Sipchem NC
41
MAY 2012

sector, SABC traded at a RoE and P/B multiple of 22.6% and 2.3x at end 2011,
respectively, versus 18.8% and 2.7x at end 2010, respectively.
Exhibit 46: Comparison of P/B and ROE, 2010 Exhibit 47: Comparison of P/B and ROE, 2011
% %

Trading turnover of KSA petrochemical stocks averaged to SR94.9mn daily in
2011 compared to SR82.4mn daily in 2010. Within the sector, SABC with an
average daily turnover of SR617mn in 2011 had the largest turnover.
Exhibit 48: Avg. daily turnover, Jan11 - Dec11 Exhibit 49: Share price movement, Jan11 - Dec11
SR mn Rebased to 100 on 1
st
Jan-11

The Tadawul Petrochemical index declined 4.5% in 2011, after a growth of
19.8% in 2010. This could be ascribed to the political instability in the region
during 1Q11 and ongoing concerns related to the European debt crisis and a
slower-than-expected world economic growth.
Outlook for the Saudi petrochemical sector remains largely positive
Full year contribution from startups Saudi Kayan and Sahara's Al Waha plants
along with the prevailing feedstock advantage strengthen our outlook for the
Kingdom's petrochemical sector in 2012. Furthermore, the scheduled startup at
Petrochem could enable producers to benefit from the rising demand in Asian
economies. However, we believe a strong rebound in demand in the near-term
is unlikely given the ongoing debt concerns in Europe and a slowdown in
China's GDP growth. n our opinion, the sector's feedstock advantage and
proximity to high-growth markets in Asia and the Middle East would continue to
offer support, going forward.
SABC
SAFCO
SG
Sahara
Yansab
Nama
Sipchem
NC
Alujain
APPC
Kayan
Rabigh
Chemanol Petrochem
-10
0
10
20
30
40
50
0 1 2 3 4 5 6 7
R
O
E

(
%
)
P/B (x)
SABC
SAFCO
SG
Sahara
Yansab
Nama
Sipchem NC
Alujain
APPC
Kayan
Rabigh
Chemanol
Petrochem
-20
-10
0
10
20
30
40
50
60
0 1 2 3 4 5 6 7
R
O
E

(
%
)
P/B (x)
6
1
6
.
9
3
2
.
5
3
1
.
1
6
0
.
3
7
7
.
5
3
4
.
6
4
2
.
3
6
1
.
3
3
2
.
7
4
1
.
3
1
7
2
.
0
6
6
.
0
2
9
.
7
3
0
.
0
0
100
200
300
400
500
600
700
S
A
B
C
S
A
F
C
O
S
G
S
a
h
a
r
a
Y
a
n
s
a
b
N
a
m
a
S
i
p
c
h
e
m
N
C
A
l
u
j
a
i
n
A
P
P
C
K
a
y
a
n
R
a
b
i
g
h
C
h
e
m
a
n
o
l
P
e
t
r
o
c
h
e
m
50
70
90
110
130
150
Jan-11 Mar-11 May-11 Aug-11 Oct-11 Dec-11
Sipchem NC Yansab SAFCO SABC
42
MAY 2012

NCBC Recommendations in the Sector
Petrochemical stocks under our coverage universe include SABC, SAFCO,
Sipchem, Tasnee, Yansab, Sahara, Saudi Kayan and Petrochem. Detailed
information on the companies' performance is included in our KSA
Petrochemicals Sector Update released in March 2012.
SABC
(2010.SE)
Overweight 124.5 SABC benefits from its diversified product mix, an integrated production flow,
wide geographical reach and continued feedstock cost advantage at its facilities
in Saudi Arabia. At current levels, we believe the stock offers an attractive
investment opportunity considering the earnings growth potential and the
company's sustained focus on expansion in different product lines and
geographies.

Sipchem
(2310.SE)
Overweight 26.7 n 2011, Sipchem's operational efficiency improved as all of its plants (Phase 1
and 2) were operating at their designed capacities, thereby offering full benefits
of an integrated product flow. Resultant improvement in profitability is expected
to drive the company's earnings in 2012E.

SAFCO
(2020.SE)
Overweight 212.7 The company's high margins, low capex requirements and short cash
conversion cycle result in high free cash flows and thereby high dividend
payments. We believe continued strength in demand for fertilizers and the
SAFCO 5 project would remain attractive in the long run.

NC (Tasnee)
(2060.SE)
Neutral 36.7 Tasnee is the only titanium dioxide (TiO2) pigment producer in the Middle East
and is monetizing its low-cost feedstock advantage through its petrochemicals
business. Continued rise in TiO2 prices could support 2012E earnings growth;
however, petrochemical prices are likely to remain weak. Any positive earnings
surprises due to higher-than-expected selling prices in the titanium dioxide
business and positive news flow related to the ongoing petrochemical projects
are key stock price catalysts.

Sahara
(2260.SE)
Neutral 18.5 Sahara's 2012E performance is expected to be driven by the full-year
contribution from its Al Waha plant, which commenced operations in April 2011.
Furthermore, three new start-ups producing acrylates, caustic soda, ethylene
dichloride and superabsorbent polymers are likely to support the company's
2013E earnings. However, poor earnings from the Al Waha project in 2H11
raises concerns over Sahara's operational ability.

Yansab
(2290.SE)
Neutral 48.2 We are optimistic on the company's future earnings growth due to its low cost
structure and growing demand from emerging economies. However, we believe
the current valuation of stock factors in all positives associated with the
company and offers limited upside potential. Moreover, continued uncertainty
over economic conditions in Europe (the key end market) weigh heavily on
Yansab's near-term earnings outlook.

Saudi Kayan
(2350.SE)
Neutral 18.7 A diversified product mix and strong links with SABC are key positives for the
stock. However, poor performance in 4Q11 indicates Saudi Kayan is facing
some technical issues and is not able to manage the integrated product flow as
anticipated earlier. n our opinion, the company's ability to ramp up production
at full capacity is imperative for growth in future earnings.

Petrochem
(2002.SE)
Underweight 19.7 The company is scheduled to commence operations in 2Q12 and would be
entering into ethylene and propylene derivatives through a JV with Chevron
Phillips. However, prevailing demand and weakness in pricing are likely to
restrict earnings growth in 2012E. Any update on the project commencement
would be a key catalyst for the stock price.

43

Established in 1976, Saudi Basic Industries Corporation
(SABIC) is one of the leading petrochemical companies in the
world, with sales totaling SR190bn (USD50.7bn) in 2011. The
company produces basic chemicals (olefins, oxygenates and
aromatics), intermediates and polymers. SABIC also produces
fertilizers (through SAFCO, Ibn Al-Baytar and Al-Bayroni) and
metals (through Hadeed, ALBA and GARMCO).
x Business brief
SABC operates across the globe through its subsidiaries and associates. t
functions through six interlinked divisions: Chemicals, Polymers,
Performance Chemicals, nnovative Plastics, Fertilizers, and Metals. The
company is targeting an annual production capacity of 130mn mtpa by 2020.
x Financials
n 2011, SABC reported revenues of SR189.9bn (up 25.0% YoY) and net
income of SR29.2bn (up 35.7% YoY) due to higher production, sales
volumes and selling prices. Full year contribution from three projects
Yansab, Sharq 3
rd
expansion project and China-based Sinopec SABC
Tianjin Petrochemical Co supported the improvement in earnings. EBTDA
margins remained flat at 31.9% YoY in 2011.
x Recent developments
n February 2012, SABC, along with Sinopec, announced plans to build a
methanol complex having methanol-to-petrochemicals and methanol-to-
olefins plants in Trinidad. The project's cost is estimated at USD5.3bn. Both
companies are holding talks with the Government of Trinidad to procure
necessary natural gas for the proposed project. A final and binding
agreement is yet to be signed. n May 2011, SABC entered into an
agreement with Japan's Mitsubishi Rayon Co to construct a methyl
methacrylate plant (250k mtpa) and a polymethyl MMA plant (40k mtpa). The
SABC-Sinopec JV signed a MoU to construct a polycarbonate plant (260k
mtpa) at their Tianjin complex which would commence by 2015.
PETROCHEMCALS ~ MAY 2012
SAUD BASC NDUSTRES
CORPORATON
ALSO KNOWN AS: SABC
OVERWEIGHT
Current price 99.0

STOCK DETAILS
Absolute (5.9) 3.4 (9.2)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
Avg daily turnover (mn) SR US$
3M 599.5 159.8
12M 588.8 157.0
Bloomberg code SABC AB
www.sabic.com

Free float 21.72

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 13.8 10.2 10.0
P/B (x) 2.5 2.2 1.9
P/S (x) 2.0 1.6 1.6
Div Yield (%) 3.5 5.1 5.1
DPS 3.5 5.0 5.0

85
90
95
100
105
110
115
5,000
5,500
6,000
6,500
7,000
7,500
8,000
May-11 Aug-11 Nov-11 Feb-12 May-12
TAS SABC (RHS)

Source: Reuters

Public nvestment Fund 70.0
General Organization for Social
nsurance (GOS)
5.3


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 151,970 189,923 189,253 181,337 25.0 6.1
EBTDA SRmn 48,502 60,600 58,901 56,801 24.9 5.4
Net ncome SRmn 21,529 29,213 29,824 29,527 35.7 11.1
Assets SRmn 317,580 332,362 348,686 366,132 4.7 4.9
Equity SRmn 120,782 137,993 152,816 167,342 14.2 11.5
Total Debt SRmn 110,602 102,505 89,513 75,046 (7.3) (12.1)
Cash & Equiv SRmn 50,648 50,294 59,312 76,874 (0.7) 14.9
EBTDA Mgn % 31.9 31.9 31.1 31.3 - -
Net Mgn % 14.2 15.4 15.8 16.3 - -
ROE % 18.8 22.6 20.5 18.4 - -
ROA % 7.0 9.0 8.8 8.3 - -
Div Payout % 48.8 51.3 50.3 50.8 - -
EPS SR 7.18 9.74 9.94 9.84 35.7 11.1
BVPS SR 40.26 46.00 50.94 55.78 14.2 11.5
Source: Tadawul, Company, NCBC Research

44

Established in 1965, Saudi Arabian Fertilizer Company
(SAFCO) produces ammonia and urea nitrogen-based
fertilizers. The company markets its products in Asia,
America, Australia, Africa and the Middle East countries.
Saudi Basic Industries Corp. (SABIC) holds a 43% stake in
SAFCO.
x Business brief
SAFCO has a urea production capacity over 2.3mn mtpa, the majority of
which is exported. Urea is a key nitrogen-based fertilizer across the globe.
The company also manufactures 2.1mn mtpa of ammonia, most of which is
used as an intermediate raw material for producing urea.
x Financials
n 2011, revenues grew 33.3% YoY to SR5,051mn mainly due to higher
fertilizer prices. Gross margins stood at 74.5% versus the 71.0% reported a
year ago. The company's net profit rose 27.1% to SR4,110mn in 2011. n our
opinion, SAFCO's revenue and net profit for 2012 are likely to remain broadly
in line with 2011 as urea prices are expected to hover around the levels
witnessed last year.
On 7 December 2011, SAFCO announced the results of the feasibility
studies undertaken for the planned urea plant. The company has decided to
award the engineering, procurement and construction (EPC) contract for its
SAFCO 5 project to taly-based Saipem. Construction work is scheduled to
be completed in 26 months (starting from December 2011) and the project is
expected to start commercial operations in 3Q14. The project would add a
total annual production capacity of 1.1mn mt of urea, with the project cost
totaling SR2bn. The company aims to fund the entire project cost through its
own resources. Mr. Abdullah Bin Ali Al Bakr replaced Mr. Fahed Bin Rashed
Al Otaibi as SAFCO's new President on 21 September 2011.
SAUD ARABAN FERTLZER CO
ALSO KNOWN AS: SAFCO
OVERWEIGHT

STOCK DETAILS
Absolute (8.0) (0.5) 0.8
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 42.6 11.4
12M 29.0 7.7
Bloomberg code SAFCO AB
www.safco.com.sa

Free float 35.82

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 14.0 11.0 11.4
P/B (x) 6.4 5.5 5.1
P/S (x) 12.0 9.0 8.8
Div Yield (%) 6.6 7.2 6.6
DPS 12.0 13.0 12.0

160
170
180
190
200
210
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS SAFCO (RHS)

Source: Reuters

SABC 42.9
nsurance (GOS)
16.7


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 3,789 5,051 5,177 4,627 33.3 6.9
EBTDA SRmn 2,921 3,990 3,912 3,386 36.6 5.1
Net ncome SRmn 3,235 4,110 3,978 3,412 27.1 1.8
Assets SRmn 8,379 9,326 10,023 10,467 11.3 7.7
Equity SRmn 7,134 8,210 8,938 9,350 15.1 9.4
Total Debt SRmn 353 80 0 0 (77.3) NM
Cash & Equiv SRmn 2,256 3,261 3,517 3,909 44.6 20.1
EBTDA Mgn % 77.1 79.0 75.6 73.2 - -
Net Mgn % 85.4 81.4 76.8 73.7 - -
ROE % 45.7 53.6 46.4 37.3 - -
ROA % 37.6 46.4 41.1 33.3 - -
Div Payout % 92.7 79.1 75.4 87.9 - -
EPS SR 12.94 16.44 15.91 13.65 27.1 1.8
BVPS SR 28.54 32.84 35.75 37.40 15.1 9.4

45

Established in 1999, Saudi International Petrochemical Co
(Sipchem) is engaged in producing petrochemical products
such as methanol, butanediol, carbon monoxide, acetic acid
and vinyl acetate. The company is expanding its product mix
through its Phase III development plan.
x Business brief
Under Phase , Sipchem established a methanol plant with a production
capacity of 1mn tonnes per annum (mtpa) and a butanediol plant with a
capacity of 75k mtpa. Following the completion of the Phase expansion in
3Q10, the company added carbon monoxide (345k mtpa), acetic acid (460k
mtpa) and vinyl acetate (330k mtpa) to its product mix. Sipchem is currently
undertaking its Phase expansion to produce ethylene vinyl acetate (EVA),
low density polyethylene (LDPE), ethyl acetate and special resin grades used
in manufacturing wire and cable products.
x Financials
Sipchem generated SR3,324mn in revenues in 2011 (SR1,993mn in 2010)
driven by the full year contribution from the Phase plants and higher
petrochemical prices. The net income increased 86.7% YoY to SR706mn
benefiting from improved operational efficiencies as all of its plants (Phase
and 2) are operating at their designed capacities, offering full benefits of
integrated product flow.
n November 2011, Sipchem (through its affiliate, nternational Polymers
Company) secured SR600mn (payable in 10 years) from SDF. The proceeds
would be used to construct the EVA/LDPE plant (200k mtpa), which is
expected to commence commercial operations in 2Q13. n October 2011, it
awarded an EPC contract for the wire and cable plant (a part of the Phase
project) to a South Korean firm, Posco Engineering Co. The construction is
expected to be completed in two years. Sipchem and South Korea's Hanwha
have an equal share in the SR230mn plant. To fund expansion plans,
Sipchem raised SR1.8bn through its first issue of Sukuk in July 2011.
SAUD NTERNATONAL
PETROCHEMCAL CO
ALSO KNOWN AS: SPCHEM
OVERWEIGHT

STOCK DETAILS
Absolute (11.1) (1.0) (2.6)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 53.0 14.1
12M 36.7 9.8
Bloomberg code SPCHEM AB
www.sipchem.com

Free float 92.25

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 20.1 10.8 9.7
P/B (x) 1.5 1.4 1.3
P/S (x) 3.8 2.3 2.2
Div Yield (%) 4.8 6.0 4.8
DPS 1.0 1.3 1.0

17
19
21
23
25
5,500
6,000
6,500
7,000
7,500
8,000
TAS Sipchem (RHS)

Source: Reuters

Zamil Group Holding Company 9.6
National Manufacturing Holding
Co.
8.3
Al Olayan Financial Company 5.2


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 1,993 3,324 3,531 3,532 66.8 21.0
EBTDA SRmn 1,069 1,733 1,924 1,836 62.1 19.7
Net ncome SRmn 378 706 782 675 86.7 21.3
Assets SRmn 12,027 14,635 14,167 14,577 21.7 6.6
Equity SRmn 4,921 5,630 5,952 6,258 14.4 8.3
Total Debt SRmn 5,326 6,587 6,106 6,005 23.7 4.1
Cash & Equiv SRmn 1,621 3,606 1,771 739 122.5 (23.0)
EBTDA Mgn % 53.7 52.1 54.5 52.0 - -
Net Mgn % 19.0 21.2 22.2 19.1 - -
ROE % 7.7 13.4 13.5 11.1 - -
ROA % 3.2 5.3 5.4 4.7 - -
Div Payout % 97.0 64.9 46.9 54.3 - -
EPS SR 1.03 1.93 2.13 1.84 86.7 21.3
BVPS SR 13.42 15.36 16.23 17.07 14.4 8.3

46

Sahara Petrochemical Company (Sahara) was established in
2004 by the Al Zamil Group. The company develops, owns and
operates production facilities through joint ventures with
other companies in the petrochemical sector. Sahara has four
subsidiaries: Al Waha Petrochemical (Al Waha), Tasnee &
Sahara Olefins (TSOC), Saudi Acrylic Acid Company (SAAC)
and Arabian Chlor Vinyl Company (ACVC).
x Business brief
Al Waha has a production capacity of 467k mtpa of propylene and 450k mtpa
of polypropylene. t started commercial production in 2Q11. Saudi Ethylene
and Polyethylene Co. (SEPC) (24% owned by Sahara) has a production
capacity of 1mn mtpa of ethylene and 800k mtpa of polyethylene. Sahara
also has three projects in the pipeline: Saudi Acrylic Monomers Company
(SAMC) for producing acrylates, Superabsorbent Polymers Project (SAP
Project) for superabsorbent polymers and Arabian Chlor Vinyl Company
(ACVC) for caustic soda and ethylene dichoride.
x Financials
Sahara's 2011 revenues stood at SR1,526mn (2010: nil) with net income at
SR412 mn (up 25% YoY), benefiting from the Al Waha startup. Gross profit in
2011 came in at SR240mn (2010: nil), and operating profit stood at
SR168mn against an operating loss of SR11mn in 2010. Earlier, SEPC (a
24% owned subsidiary) was the only source of income for the company.
n February 2012, SAMC signed a financing agreement of SR600mn with
Saudi ndustrial Development Fund (SDF) which is repayable after 3.5 years.
The proceeds would be used to finance Sahara's acrylic acid project. n
December 2011, through its affiliates, Sahara signed a 16-year deal of
SR5.25bn with nine Saudi Arabia-based banks to fund acrylic acid and
superabsorbent polymer projects. During the same month, the company
offered 146.3mn shares at a price of SR10 per share through rights issue
which increased share capital by 50% to SR4.4bn from SR2.9bn.
SAHARA PETROCHEMCAL CO
ALSO KNOWN AS: SAHARA, SPCO
NEUTRAL

STOCK DETAILS
Absolute (17.1) 1.6 (24.0)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 105.7 28.2
12M 78.2 20.8
Bloomberg code SPC AB
www.saharapcc.com

Free float 88.05

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 21.1 16.8 9.4
P/B (x) 2.1 1.3 1.2
P/S (x) - 4.5 2.9
Div Yield (%) - - -
DPS - - -

12
14
16
18
20
22
24
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS SPC (RHS)

Source: Reuters

Al Zamil Group Holding Company 7.9


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn - 1,526 2,352 3,608 NM NM
EBTDA SRmn (5) 323 731 1,170 NM NM
Net ncome SRmn 329 412 740 868 25.0 38.1
Assets SRmn 6,584 8,410 8,913 9,769 27.7 14.1
Equity SRmn 3,305 5,196 5,936 6,804 57.2 27.2
Total Debt SRmn 2,329 2,179 2,087 1,956 (6.5) (5.6)
Cash & Equiv SRmn 164 998 644 1,150 508.0 91.4
EBTDA Mgn % - 21.1 31.1 32.4 - -
Net Mgn % - 27.0 31.4 24.1 - -
ROE % 10.5 9.7 13.3 13.6 - -
ROA % 5.2 5.5 8.5 9.3 - -
Div Payout % - - - - - -
EPS SR 0.75 0.94 1.69 1.98 25.0 38.1
BVPS SR 7.53 11.84 13.53 15.51 57.2 27.2

47

National Industrialization Company (Tasnee) was established
in Riyadh in 1985 to support the Kingdom's industriaI
deveIopment. In 2007, Tasnee acquired LyondeIIBaseII's
worldwide titanium dioxide business. In 2008, it acquired
Australia's Bemax Resources Ltd. and International Titanium
Powder (ITP).
x Business brief
Tasnee's main businesses are in petrochemicals and titanium dioxide (TiO2).
The company also has smaller business lines in automotive batteries, carton
packaging and related services. n 2006, Tasnee, in a JV with Sahara Olefins
and Basell, formed Saudi Ethylene and Polyethylene Co. (SEPC) that started
operations in June 2009. SEPC has a capacity of 1mn mtpa of ethylene
cracker, and 400k mtpa each of low and high density polyethylene.
x Financials
Tasnee generated SR19.6bn (up 22.9% YoY) in revenues, with net income
reaching SR2.4bn (up 65.9% YoY) in 2011, primarily due to higher prices of
petrochemical products and titanium dioxide. The company's EBTDA
margins increased to 34.4% in 2011 from 27.7% a year ago due to higher
selling prices.
At the extraordinary general meeting on 4 March 2012, Tasnee's
shareholders approved a 1:5 bonus share that, in turn, increasing the share
count by 20% to 668.9mn. n February 2012, Saudi Acrylic Monomers
Company Limited, an affiliate, signed a SR600mn financing agreement,
repayable after 3.5 years, with Saudi ndustrial Development Fund (SDF).
The proceeds would be used to finance Tasnee's acrylic acid project. n
December 2011, three subsidiaries Saudi Acrylic Acid Company (SAAC),
Saudi Acrylic Monomers Company (SAMCO) and Saudi Superabsorbent
Polymers Company (SAPCO) signed a 16-year deal of SR5.25bn
(USD1.4bn) with nine Saudi banks to fund the acrylic acid and
superabsorbent polymer projects.
NATONAL NDUSTRALZATON
CO
ALSO KNOWN AS: NC, TASNEE
NEUTRAL

STOCK DETAILS
Market cap (SR mn) 5,992
Absolute (14.5) 2.1 5.3
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 63.1 16.8
12M 55.2 14.7
Bloomberg code NC AB
www.tasnee.com
Free float 87.68
VALUATION MULTIPLES
10A 11A 12E
P/E (x) 15.3 9.2 10.1
P/B (x) 2.4 2.0 1.8
P/S (x) 1.4 1.1 1.1
Div Yield (%) 2.5 3.7 3.7
DPS 0.8 1.2 1.2
28
33
38
43
48
5,500
6,000
6,500
7,000
7,500
8,000
TAS NC (RHS)

Source: Reuters
Al Sha'er Trade, ndustries and
Construction
8.8
nsurance (GOS)
8.2
Gulf nvestment Corporation 7.3
Kingdom Holding Company 6.2
Swicorp Co. 5.6

Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 15,989 19,644 20,565 19,528 22.9 6.9
EBTDA SRmn 4,430 6,766 6,213 5,775 52.7 9.2
Net ncome SRmn 1,473 2,443 2,234 1,984 65.9 10.4
Assets SRmn 34,748 40,038 45,165 42,980 15.2 7.3
Equity SRmn 9,262 11,019 12,417 13,565 19.0 13.6
Total Debt SRmn 15,987 17,382 18,800 14,095 8.7 (4.1)
Cash & Equiv SRmn 3,886 4,636 8,612 6,918 19.3 21.2
EBTDA Mgn % 27.7 34.4 30.2 29.6 - -
Net Mgn % 9.2 12.4 10.9 10.2 - -
ROE % 17.3 24.1 19.1 15.3 - -
ROA % 4.3 6.5 5.2 4.5 - -
Div Payout % 37.9 34.2 37.4 42.1 - -
EPS SR 2.20 3.65 3.34 2.97 65.9 10.4
BVPS SR 13.85 16.47 18.56 20.28 19.0 13.6

48

Saudi Kayan Petrochemical Company (Kayan) was
established by SABIC (35% stake) and Al Kayan
Petrochemical (20%) in 2007 to set up a petrochemical
complex in Jubail Industrial City. The plant has the capacity to
produce approximately 6mn mtpa of petrochemical products
each year.
x Business brief
The complex, which is believed to be one of the world's largest integrated
petrochemical plants, manufactures specialized chemicals such as
polycarbonate, bisphenol A and acetone. Kayan had commenced trial
operations at most of its plants (such as olefins, ethylene glycol,
polypropylene, phenolics and high density polyethylene plants) during the
2H10 and January 2011. The company later started commercial operations
at its 12 main plants on 1 October 2011. Experimental runs are expected to
start at the remaining plants in phases during 2012-2013.
x Financials
4Q11 was the first quarter that Kayan reported operating results. However,
despite having a full quarter contribution from its key plants, the company
incurred an operating loss in 4Q11 as its plants were running at a lower
operating rate of 3040%. Kayan reported a net loss of SR250.3mn in 2011
compared to SR14.7mn in 2010 due to higher Zakat provisions and lower
petrochemical prices in 4Q11.
On 27 March 2012, the company announced it had initiated trial runs at its
ethanolamines (100k mtpa) and ethoxylates (40k mtpa) plants. On 11
February 2012, Kayan announced that its olefins complex and HDPE plant
are operating at normal rates after shutting down for maintenance work
during 1-9 February 2012. The company expects the financial impact of this
temporary shutdown to be reflected in its 1Q12 results.
SAUD KAYAN PETROCHEMCAL
CO
ALSO KNOWN AS: KAYAN
NEUTRAL

STOCK DETAILS
Absolute (11.7) 4.3 (6.6)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 427.6 114.0
12M 205.2 54.7
Bloomberg code KAYAN AB
www.saudikayan.com

Free float 40.17

VALUATION MULTIPLES
10A 11A 12E
P/E (x) - - 13.1
P/B (x) 1.6 1.7 1.5
P/S (x) - 10.5 2.4
Div Yield (%) - - -
DPS - - -

15
17
19
21
23
5,500
6,000
6,500
7,000
7,500
8,000
TAS Kayan (RHS)

Source: Reuters

SABC 35.0


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn - 2,403 10,492 11,797 NM NM
EBTDA SRmn - 397 4,265 5,037 NM NM
Net ncome SRmn (15) (250) 1,931 2,411 NM NM
Assets SRmn 43,474 46,689 47,017 48,436 7.4 3.7
Equity SRmn 15,463 15,212 17,143 19,553 (1.6) 8.1
Total Debt SRmn 26,089 29,510 27,102 26,040 13.1 (0.1)
Cash & Equiv SRmn 967 469 797 425 (51.5) (24.0)
EBTDA Mgn % - 16.5 40.6 42.7 - -
Net Mgn % - - 18.4 20.4 - -
ROE % (0.1) (1.6) 11.3 12.3 - -
ROA % (0.0) (0.6) 4.1 5.1 - -
Div Payout % - - - - - -
EPS SR (0.01) (0.17) 1.29 1.61 NM NM
BVPS SR 10.31 10.14 11.43 13.04 (1.6) 8.1

49

Yanbu National Petrochemicals Company (Yansab) was
established in 2006 to set up a 4mn mt per annum
petrochemical complex in the Yanbu Industrial City. SABIC
holds a majority stake (51%) in Yansab. The company
commenced commercial operations in March 2010.
x Business brief
Yansab has a diversified petrochemical product mix, including Ethylene
(1.3mn mtpa), Propylene (400k mtpa), Polypropylene (400k mtpa),
Polyethylene (both low and high density with 400k mtpa each) and Mono, Di
and Tri Ethylene Glycol (770k mtpa total). Other products such as Benzene,
Butene, Methyl Tertiary Butyl Ether and Benzene Toluene Xylene have a
total production capacity of close to 375k mtpa.
x Financials
Yansab's revenues grew 65.9% YoY to SR9.7bn in 2011 and net income
increased 89.8% to SR3.2bn driven by higher prices and production volumes.
n 2011, the company enjoyed the full year contribution from its
petrochemical complex, which started commercial operations in March 2010.
Yansab reported a gross profit of SR3,793mn in 2011; this represents a
gross margin of 39.3%, higher than the 37.3% a year earlier. We believe the
current weak demand for petrochemicals in Europe and the anticipated drop
in petrochemical prices would restrict growth in Yansab's earnings in 2012E.
For 2012E, we project revenues of SR9.5bn (flat YoY), net income of SR3bn
(down 6.1% YoY) and gross margin of 39.2% (flat YoY).
On 17 March 2012, Yansab held its fourth annual general meeting at Yanbu
ndustrial City. The company did not pay any dividend for 2011.

YANBU NATONAL
PETROCHEMCAL COMPANY
ALSO KNOWN AS: YANSAB
NEUTRAL

STOCK DETAILS
Absolute (5.6) 8.3 (0.2)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 80.9 21.6
12M 64.4 17.2
Bloomberg code YANSAB AB
www.yansab.com.sa

Free float 37.66

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 16.7 8.8 9.4
P/B (x) 3.8 2.7 2.1
P/S (x) 4.8 2.9 2.9
Div Yield (%) - - -
DPS - - -

40
45
50
55
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS YANSAB (RHS)

Source: Reuters

SABC 51.0
nsurance (GOS)
11.0


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 5,822 9,659 9,509 9,305 65.9 16.9
EBTDA SRmn 2,881 4,635 4,492 4,236 60.9 13.7
Net ncome SRmn 1,673 3,174 2,981 2,833 89.8 19.2
Assets SRmn 23,163 22,975 24,719 25,942 (0.8) 3.8
Equity SRmn 7,340 10,515 13,495 16,329 43.2 30.5
Total Debt SRmn 14,411 11,173 9,810 8,213 (22.5) (17.1)
Cash & Equiv SRmn 790 599 2,930 5,106 (24.1) 86.3
EBTDA Mgn % 49.5 48.0 47.2 45.5 - -
Net Mgn % 28.7 32.9 31.3 30.4 - -
ROE % 25.7 35.6 22.1 17.4 - -
ROA % 7.6 13.8 12.5 11.2 - -
Div Payout % - - - - - -
EPS SR 2.97 5.64 5.30 5.04 89.8 19.2
BVPS SR 13.05 18.69 23.99 29.03 43.2 30.5

50

National Petrochemical Company (Petrochem) was
established in 2008. The company is mainly involved in
investing in the petrochemical industry through its 65%
owned Saudi Polymers Company.
x Business brief
Petrochem completed the construction of its SR20.8bn petrochemical
complex at the end of 2011. t is expected to commence commercial
operations in 2Q12. The project cost is estimated to be over SR20.8bn. Once
operational, the project would have a production capacity of 3.4mn mtpa,
including ethylene, propylene, HDPE, LDPE, polypropylene, polystyrene, and
hexane. Petrochem is 50.0% owned by Saudi ndustrial nvestment Group
(SG).
x Financials
Petrochem incurred a net loss of SR64.5mn in 2011, higher than the
SR42.6mn in 2010, primarily due to higher general and administrative
expenses, and Zakat provisions. The company is in a pre-operational stage
and is expected report its first set of operating results in 2Q12. We expect the
company's net income to total SR890mn in 2012E, with revenues of
SR5.2bn, EBTDA margins of 38.9% and net margins of 17.0%.
On 18 February 2012, Petrochem announced it is currently conducting trial
runs and commissioning at the units of its petrochemical project, Saudi
Polymers Company. The company mentioned that commercial operations are
scheduled to commence in 2Q12. However, on 7 December 2011, the
company had announced commercial operations would start in 1Q12.
Petrochem owns a 65% stake in this project, while 35% is held by Arabian
Chevron Phillips Petrochemical Company Limited.

NATONAL PETROCHEMCAL CO
ALSO KNOWN AS: SAUD PETROCHEM, PETROCHEM
UNDERWEIGHT

STOCK DETAILS
Absolute (4.1) 15.4 4.3
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 41.7 11.1
12M 26.3 7.0
Bloomberg code PETROCH AB
www.petrochem.com.sa

Free float 17.50

VALUATION MULTIPLES
10A 11A 12E
P/E (x) - - 13.1
P/B (x) 2.5 2.5 2.1
P/S (x) - - 2.2
Div Yield (%) - - -
DPS - - -

18
20
22
24
26
28
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Petrochem (RHS)

Source: Reuters

Saudi ndustrial nvestment Grp Co. 50.0
nsurance (GOS)
16.2


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn - - 5,238 8,477 NM NM
EBTDA SRmn (14) (47) 2,036 3,389 NM NM
Net ncome SRmn (43) (64) 890 1,291 NM NM
Assets SRmn 18,320 19,996 21,967 22,713 9.2 7.4
Equity SRmn 4,715 4,650 5,540 6,830 (1.4) 13.2
Total Debt SRmn 11,593 13,352 13,983 13,118 15.2 4.2
Cash & Equiv SRmn 2,103 1,707 117 205 (18.9) (53.9)
EBTDA Mgn % - - 38.9 40.0 - -
Net Mgn % - - 17.0 15.2 - -
ROE % (0.9) (1.4) 17.5 20.9 - -
ROA % (0.3) (0.3) 4.2 5.8 - -
Div Payout % - - - - - -
EPS SR (0.09) (0.13) 1.85 2.69 NM NM
BVPS SR 9.82 9.69 11.54 14.23 (1.4) 13.2

51

Saudi Industrial Investment Group (SIIG) was established in
1996 in Riyadh. The company primarily focuses on investment
opportunities in the Kingdom's petrochemicaI sector. SIIG
operates through three subsidiaries - Saudi Chevron Phillips,
Jubail Chevron Phillips and National Petrochemicals
Company (PetroChem).
x Business brief
Of the three subsidiaries, Saudi Chevron Philips and Jubail Chevron Phillips
are operational. Saudi Chevron Phillips produces cyclohexane (780k mtpa)
and motor gasoline (290k mtpa), while Jubail Chevron Phillips manufactures
styrene (750k mtpa) and propylene (150k mtpa). n 2007, SG, through
Petrochem, formed Saudi Polymers Co to manufacture a range of
petrochemical products such as ethylene, propylene and their derivatives.
The project, entailing an investment of SR21bn, has an annual production
capacity of 3.4mn mt and is scheduled to commence operations in 2Q12.
x Financials
SG's revenues grew 37.8% YoY to SR4,500.8mn in 2011 from
SR3,265.6mn in 2010 on the back of higher petrochemical prices and
improved utilization. The company reported a net income of SR528.4mn in
2011, higher than the SR404.6mn in 2010. However, SG's gross margins
contracted to 17.4% in 2011 from 19.7% in 2010 due to the weak pricing
environment in 2H11 and additional expenses incurred related to the month-
long maintenance shutdown in October 2011.
n December 2011, Petrochemical Conversion Company Limited (PCC)
awarded a contract of SR700mn to Nesma and Partners Contracting Co Ltd
for building its Nylon 6,6 and conversion plants in the Jubail ndustrial City.
These plants are scheduled to start operations in 2013. PCC is an equally-
owned JV between SG and Arabian Chevron Phillips Petrochemical Co Ltd.
n October 2011, SG conducted a month-long maintenance works at its
benzene, cyclohexane, and motor gasoline producing units.
SAUD NDUSTRAL
ALSO KNOWN AS: SG
NOT COVERED
Current price 23.4

STOCK DETAILS
Absolute (0.2) 10.9 (10.3)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 51.7 13.8
12M 34.2 9.1
Bloomberg code SG AB
www.siig.com.sa

Free float 87.90

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 34.4 26.0 19.9
P/B (x) 1.9 1.9 1.8
P/S (x) 2.8 3.2 2.3
Div Yield (%) 2.1 2.1 4.3
DPS 0.5 0.5 1.0

17
19
21
23
25
27
5,500
6,000
6,500
7,000
7,500
8,000
TAS SG (RHS)

Source: Reuters

Ali Abdullah brahim Al Jafaly 6.3


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 2,139 3,760 3,266 4,501 37.8 28.1
EBTDA SRmn 221 555 701 809 15.5 54.2
Net ncome SRmn 49 306 405 528 30.6 121.3
Assets SRmn 8,649 19,699 23,674 25,602 8.1 43.6
Equity SRmn 5,197 5,503 5,681 5,983 5.3 4.8
Total Debt SRmn 2,731 10,174 12,940 14,538 12.4 74.6
Cash & Equiv SRmn 2,703 4,586 3,769 3,515 (6.8) 9.1
EBTDA Mgn % 10.3 14.8 21.5 18.0 - -
Net Mgn % 2.3 8.1 12.4 11.7 - -
ROE % 1.2 5.7 28.9 36.2 - -
ROA % 0.7 2.2 7.5 8.6 - -
Div Payout % - 73.5 55.6 85.2 - -
EPS SR 0.11 0.68 0.90 1.17 30.6 121.3
BVPS SR 11.55 12.23 12.62 13.29 5.3 4.8

52

Advanced Petrochemical Company (APPC) was established in
2005. It developed a SR2.9bn integrated propane
dehydrogenation and polypropylene complex in Jubail
Industrial City. The facility has an annual production capacity
of 450k mt of polypropylene. It commenced commercial
operations in 2008.
x Business brief
APPC has an annual production capacity of 450k mt of polypropylene, which
is used in several applications such as manufacturing of fabrics, moldings,
pipes and furniture. APPC operates a propylene plant (with a capacity of
455k mtpa) by using CATOFN-ABB Lumus technology, which converts
propane gas into propylene. The company appointed Vinmar nternational
Limited, Mitsubishi Corporation and Domo N.V to offtake the output from the
complex. Most of the production would be shipped through the ports of
Dammam, Jeddah and Jubail.
x Financials
APPC's revenue grew 37.4% YoY to SR2,791mn in 2011 compared to
SR2,031mn in 2010 due to higher polypropylene prices. This coupled with
reduced operating and financing expenses in 2011 supported the increase in
net income (56.2% YoY to SR512.8mn). APPC's gross margins stood at
20.6% in 2011, up from 19.5% a year ago.
On 22 February 2012, APPC's shareholders approved the distribution of a
bonus share for every 6.25 shares held, thereby increasing share capital by
16% with the addition of 141.4mn shares. n January 2012, ndia decided to
withdraw anti-dumping duties that were levied on Saudi Arabia-based
polypropylene manufacturers (including APPC) in November 2010. n
October 2011, APPC undertook maintenance work at its propylene plant for
10 days. As per the company, the shutdown had limited impact on 4Q11
earnings as APPC met customer orders using inventories.

ADVANCED PETROCHEM
ALSO KNOWN AS: APPC
NOT COVERED

STOCK DETAILS
52-week range H/L (SR) 34/22 5
Market cap ($ mn) 1,137 M
Shares outstanding (mn) 164 S
Price perform (%) 1M 3M 12MP
Absolute (19.0) 0.9 (5.8) A
Market (6.2) 6.2 7.6 M
Sector (9.1) 3.4 (5.7) S
Avg daily turnover (mn) SR US$ A
3M 52.0 13.9 3
12M 40.9 10.9 1
Reuters code 2330.SE R
Bloomberg code APPC AB B
www.advancedpetrochem.com

TAS (free float weight) 0.67 T
Free float 94.62 F

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 33.5 13.0 8.3 P
P/B (x) 2.6 2.4 2.1 P
P/S (x) 2.9 2.1 1.5 P
Div Yield (%) 3.8 6.7 7.7 D
DPS 1.0 1.8 2.0 D

21
24
27
30
33
36
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS APPC (RHS)

Source: Reuters

National Polypropylene Co.
nsurance (GOS)
7.9
5.3


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,459 1,467 2,031 2,791 37.4 24.1
EBTDA SRmn 366 357 570 751 31.9 27.1
Net ncome SRmn 210 127 328 513 56.2 34.6
Assets SRmn 3,507 3,414 3,365 3,380 0.5 (1.2)
Equity SRmn 1,617 1,670 1,811 2,028 12.0 7.8
Total Debt SRmn 1,713 1,474 1,264 925 (26.8) (18.6)
Cash & Equiv SRmn 216 296 457 476 4.3 30.1
EBTDA Mgn % 25.1 24.3 28.0 26.9 - -
Net Mgn % 14.4 8.7 16.2 18.4 - -
ROE % 13.9 7.7 75.4 106.8 - -
ROA % 27.8 14.7 38.7 60.8 - -
Div Payout % - 129.0 87.4 64.0 - -
EPS SR 1.28 0.78 2.00 3.13 56.2 34.6
BVPS SR 9.86 10.19 11.04 12.37 12.0 7.8

53

Rabigh Refining and Petrochemical Co. (PetroRabigh),
established in Rabigh in 2005, is a joint venture between
Saudi Aramco and Japan's Sumitomo Chemical. The US$10bn
project can produce 130 mn barrels (bbl) of refined products
and 2.4mn mt of petrochemical products annually.
x Business brief
Aramco is expected to supply 400k barrels of crude oil, 95mn cubic feet (mcf)
of ethane and about 15k barrels of butane on a long-term and fixed-price
basis to PetroRabigh. Sumitomo provides the technological and marketing
expertise. The plant is equipped with a sophisticated High Olefins Fluid
Catalytic Cracker (HOFCC) and Ethane Cracker. Saudi Aramco is
responsible for marketing PetroRabigh's refining petroleum products, while
Sumitomo handles the marketing of the petrochemical products. PetroRabigh
is planning to commence work on its phase project, which would double its
capacity by 2015.
x Financials
During 2011, PetroRabigh's revenues grew 14.0% YoY to SR53.4bn, while
net income dropped 68.4% YoY to SR65.9mn. Net losses incurred during
2Q11 and 3Q11 due to the planned maintenance shutdown from 21 April
2011 to 30 June 2011 impacted the company's earnings for the year. A non-
operating, non-recurring income of SR310.8mn from derecognition of leased
assets and related lease obligations during 2010 further widened the YoY
drop in net income.
On 31 December 2011, PetroRabigh announced the completion of the
lenders reliability test (LRT) at all its production units. The test (which entailed
running the petrochemical complex at an operating rate of 97% for 210 days)
validates its production stability and reliability. On 4 December 2011,
PetroRabigh announced the successful completion of the performance
guarantee test conducted at its High Olefins Fluidized Catalytic Cracking
(HOFCC) unit.
RABGH REFNNG AND
PETROCHEMCAL
ALSO KNOWN AS: PETRORABGH
NOT COVERED

STOCK DETAILS
Absolute (14.6) (3.3) (22.0)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 79.4 21.2
12M 51.0 13.6
Bloomberg code PETROR AB
www.petrorabigh.com

Free float 17.42

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - 91.7 290.5
P/B (x) 2.4 2.4 2.4
P/S (x) 0.7 0.4 0.4
Div Yield (%) - - -
DPS - - -

20
22
24
26
28
30
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Petro Rabigh (RHS)

Source: Reuters

Saudi Arabian Oil Company
(Aramco)
37.5
Sumitomo Chemical Company 37.5


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 6,543 29,423 46,838 53,377 14.0 101.3
EBTDA SRmn (1,029) (144) 1,906 2,210 15.9 NM
Net ncome SRmn (1,256) (1,433) 209 66 (68.4) NM
Assets SRmn 47,911 52,146 47,243 49,852 5.5 1.3
Equity SRmn 9,264 7,831 8,010 8,086 0.9 (4.4)
Total Debt SRmn 31,685 34,103 26,852 25,567 (4.8) (6.9)
Cash & Equiv SRmn 1,534 1,306 2,548 2,710 6.3 20.9
EBTDA Mgn % (15.7) (0.5) 4.1 4.1 - -
Net Mgn % (19.2) (4.9) 0.4 0.1 - -
ROE % (16.5) (16.8) 10.5 3.3 - -
ROA % (3.4) (2.9) 1.7 0.5 - -
Div Payout % - - - - - -
EPS SR (1.43) (1.64) 0.24 0.08 (68.4) NM
BVPS SR 10.58 8.94 9.14 9.23 0.9 (4.4)
Source: Zawya, Tadawul, Company, NCBC Research

54

Established in 1992, Nama Chemicals Company (NAMA)
develops, owns and operates industrial projects within the
chemical and petrochemical sectors. NAMA functions through
its affiliates Arabian Alkali Company (55k mtpa capacity) and
Jubail Chemical Industries Company (60k mtpa capacity).
x Business brief
Arabian Alkali is one of the largest caustic soda producers in the Middle East.
Jubail Chemical ndustries (JANA) produces epoxy resins and markets them
under the brand names RAZEEN and ARALDTE. NAMA set up the Hassad
Petrochemical Company in 2005, which manufactures different types of
chemicals to supply feedstock to both of its subsidiaries.
x Financials
NAMA's revenues grew 15.8% YoY to SR728mn in 2011, but it posted a net
loss of SR247mn (net income of SR34.5mn in 2010) due to higher raw
material costs, reduced selling prices, higher financing and depreciation-
related cost as well as an additional expense of SR168mn in 2011. Weak
global demand for petrochemical products (mainly in Europe) impacted
selling prices and NAMA's operating rate in 4Q11.
On 21 March 2012, NAMA's subsidiary JANA obtained SR209mn in debt
from the SDF to fund the hike in cost of its Hassad project. On 12 February
2012, JANA signed an agreement with the Royal Commission of Jubail &
Yanbu to use land for constructing a facility producing epoxy resins, caustic
soda and calcium chloride. On 30 January 2012, NAMA announced that it
would increase its epoxy resins capacity to 120k mtpa from the current 60k
mtpa by investing SR109mn. Trial runs are scheduled to start in 3Q12. On 30
January 2012, NAMA announced that it started trial runs at its chloride plant,
and the facility is expected to reach full capacity by 4Q12. On 1 January
2012, Mr. Fahed Rached Mohammad Al Otaibi replaced Mr. Abdulrahman
Abdullah Al Hammad as NAMA's CEO.
NAMA CHEMCALS
ALSO KNOWN AS: NAMA
NOT COVERED

STOCK DETAILS
Market cap ($ mn) 630
Absolute (17.3) 29.6 60.0
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 288.8 77.0
12M 120.3 32.1
Bloomberg code NAMA AB
www.nama.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - 68.6 -
P/B (x) 1.5 1.5 1.7
P/S (x) 5.9 3.8 3.3
Div Yield (%) - - -
DPS - - -

8
13
18
23
28
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS NAMA (RHS)

Source: Reuters

Ahmed Hamad Al Gosaibi Co. 7.4


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 622 398 628 728 15.8 5.4
EBTDA SRmn 27 (28) 62 13 (79.0) (21.4)
Net ncome SRmn (67) (50) 34 (247) NM NM
Assets SRmn 2,545 2,396 2,448 2,392 (2.3) (2.0)
Equity SRmn 1,557 1,565 1,630 1,382 (15.2) (3.9)
Total Debt SRmn 800 702 660 826 25.1 1.1
Cash & Equiv SRmn 487 23 216 123 (43.2) (36.9)
EBTDA Mgn % 4.3 (7.0) 9.8 1.8 - -
Net Mgn % (10.9) (12.5) 5.5 (33.9) - -
ROE % (5.4) (3.2) 2.2 (65.5) - -
ROA % (3.1) (2.0) 1.4 (40.7) - -
Div Payout % - - - - - -
EPS SR (0.53) (0.39) 0.27 (1.92) NM NM
BVPS SR 12.12 12.18 12.68 10.75 (15.2) (3.9)
Source: Zawya, Tadwul, Company, NCBC Research

55

Alujain Corporation (Alujain), an industrial investment firm,
was established in 1991 and promoted by Xenel Industries
(one of the oldest conglomerates in the Kingdom). The
company's investments incIude a 57.4% stake in NationaI
Petrochemical Co. (NatPet) and a 100% stake in Arab
Pesticide Co. (MOBEED).
x Business brief
Alujain predominantly invests in the Saudi petrochemical, energy, mining and
metals sectors. The company transferred its Alfasel propylene production
facility to the Teldene polypropylene project, promoted by its associate
NatPet, in May 2006. NatPet owns a SR2.3bn propylene and polypropylene
plant, with a 400k mtpa capacity. The company signed a contract with Noble
Group for the offtake of its production.
x Financials
n 2011, Alujain reported revenues of SR1,472mn, indicating a YoY growth of
72.7%, driven by the full year contribution from its subsidiary (NatPet), which
started commercial operations on 6 August 2010. However, it reported net
loss of SR10mn in 2011 (net profit of SR42.2mn in 2010) due to lower
production volumes, higher feedstock cost, increased interest expense in
4Q11, and a SR5.1mn expense related to a write-off of a subsidiary's project
development cost in 4Q11. An unplanned shutdown of 23 days in 4Q11 and
planned turnaround work for 49 days in 2Q11 lowered volumes in 2011.
On 19 October 2011, Alujain announced that its Natpet complex resumed
operations after an unplanned closure on 26 September 2011 caused by a
technical issue at the dehydrogenation unit. On 20 June 2011, Alujain
announced that the Natpet complex resumed operations at its plants after
conducting process and machinery enhancement work for a period of 49
days. Alujain finished the turnaround work 11 days before schedule.
ALUJAN CORPORATON
ALSO KNOWN AS: ALUJAN
NOT COVERED

STOCK DETAILS
Absolute (19.4) (1.0) (9.8)
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 89.6 23.9
12M 48.8 13.0
Bloomberg code ALCO AB
www.alujaincorporation.com

Free float 85.09

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - 31.1 -
P/B (x) 2.5 2.4 2.4
P/S (x) - 1.5 0.9
Div Yield (%) - - -
DPS - - -

15
17
19
21
23
25
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS ALCO (RHS)

Source: Reuters

Safra Co 14.9
Khalid Abdul Rahman Saleh Al
Rajhi
9.9


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn - - 852 1,472 72.7 NM
EBTDA SRmn (59) (63) 183 240 30.6 NM
Net ncome SRmn (65) (27) 42 (10) NM NM
Assets SRmn 3,229 3,406 3,559 3,355 (5.7) 1.3
Equity SRmn 515 519 554 557 0.5 2.7
Total Debt SRmn 2,142 2,077 2,171 1,941 (10.6) (3.2)
Cash & Equiv SRmn 113 52 312 86 (72.3) (8.7)
EBTDA Mgn % - - 21.5 16.3 - -
Net Mgn % - - 5.0 (0.7) - -
ROE % (11.2) (5.3) 31.5 (7.2) - -
ROA % (2.2) (0.8) 4.8 (1.2) - -
Div Payout % - - - - - -
EPS SR (0.94) (0.39) 0.61 (0.14) NM NM
BVPS SR 7.44 7.49 8.01 8.05 0.5 2.7

56

Established in 1989, Methanol Chemicals Company
(Chemanol) is a manufacturer of methanol, formaldehyde and
its derivatives, including urea formaldehyde, acetaldehyde,
hexamine, resins and super plasticizers. The company
exports around 83% of products to more than 50 countries,
including the UK, France, Germany, South Africa, the US,
Canada, and Japan.
x Business brief
Chemanol produces and supplies methanol, formaldehyde and its derivatives
for use across industries such as agricultural, pharmaceutical, paper
manufacturing and construction. The company had its nitial Public Offering
(PO) on the Saudi Stock Exchange in August 2008 to finance an expansion
plan involving around SR2bn investment.
x Financials
Chemanol's revenues grew to SR830mn in 2011 (SR590mn in 2010), while
net income increased to SR70.2mn (from SR6mn). This was due to higher
selling prices and sales volumes along with improved operational efficiency.
Earnings for 2011 benefited from the full-year contribution made by the
dimethylformamide plant (started commercial operations on 28 June 2010).
Chemanol conducted technical enhancement works at its methanol and
dimethylformamide plants during 1224 October 2011 to improve their
efficiency and productivity. On 5 June 2011, it secured a Murabaha
refinancing facility (in which SABB, Riyadh Bank and Samba participated) of
SR832mn to fund cost overruns and working capital needs. t would be
repaid in 14 semi-annual installments starting from 15 July 2011 to 15
December 2017. On 7 May 2011, Chemanol and Sahara signed a MoU to
build a 50k-mtpa neopentyl glycol plant, estimated to cost SR470mn.
Chemanol would hold 15% stake in it and provide formaldehyde (key
feedstock) to this facility. The project is scheduled to be completed by 2Q14.
METHANOL CHEMCALS
ALSO KNOWN AS: CHEMANOL
NOT COVERED

STOCK DETAILS
Absolute (15.3) 18.8 20.4
Market (6.2) 6.2 7.6
Sector (9.1) 3.4 (5.7)
3M 205.4 54.8
12M 78.6 21.0
Bloomberg code CHEMANOL AB
www.chemanol.com

Free float 77.50

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 93.5 341.4 29.4
P/B (x) 1.5 1.5 1.4
P/S (x) 5.1 3.5 2.5
Div Yield (%) - - -
DPS - - -

10
14
18
22
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Chemanol (RHS)

Source: Reuters

Yusuf Bin Ahmed Kanoo Co. Ltd 11.2
Zamil Group Holding Co 8.2
Mohammed Jalal & Sons Co. 5.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 571 402 589 830 40.8 13.3
EBTDA SRmn 73 59 138 256 86.2 52.0
Net ncome SRmn 38 22 6 70 1,062.3 22.5
Assets SRmn 2,640 3,033 3,092 3,028 (2.1) 4.7
Equity SRmn 1,390 1,411 1,415 1,483 4.9 2.2
Total Debt SRmn 1,150 1,449 1,488 1,429 (4.0) 7.5
Cash & Equiv SRmn 375 270 136 122 (10.3) (31.2)
EBTDA Mgn % 12.8 14.6 23.3 30.9 - -
Net Mgn % 6.7 5.5 1.0 8.5 - -
ROE % 3.7 1.6 1.7 19.4 - -
ROA % 1.9 0.8 0.8 9.2 - -
Div Payout % - - - - - -
EPS SR 0.32 0.18 0.05 0.58 1,062.3 22.5
BVPS SR 11.53 11.70 11.73 12.30 4.9 2.2

57
MAY 2012
Cement
3030 Saudi Cement 64
3020 Yamamah Cement 65
3050 Southern Cement 66
3040 Qassim Cement 67
3080 Eastern Cement 68
3060 Yanbu Cement 69
3010 Arabian Cement 70
3091 Al Jouf Cement 71
3090 Tabuk Cement 72
3001 Hail Cement 73

KSA's cement sector expanded significantly in 2011 after three
years of negative and weak performance. We expect demand to
continue to be strong in 2012 driven by robust expenditure by the
government on infrastructure projects and housing. We estimate
demand for cement to grow 10.8% (to 52.2mn tons) in 2012 and
8% in 2013.
Cement sales are estimated to increase at a CAGR of 6.3% until 2016 driven
primarily by increased government spending on infrastructure and housing in the
medium term. As per our estimates, government spending in 2012 will be 13%
higher than budgeted at SR780bn in addition to the SR120bn allocated to build
500,000 housing units. Additionally, the value of construction contracts awarded
in Saudi Arabia rose 155% YoY to SR270bn in 2011, with nearly 69% awarded
during the second half of the year.
Another key trend in the sector is the shift in local demand from the central to the
western region due to the government's redevelopment projects. Furthermore,
the western region is now the center of mega project developments including the
Haramain Railway, Jeddah's new airport, major drainage and other
infrastructure works.
n 2011, the Saudi cement sector had a capacity of 51mn tons, while demand
totaled 47mn tons. Considering the expected growth in demand, the country is
likely to witness a demand-supply gap, especially in the western region.
However, on the back off the government's recent intervention to aid supply, we
believe prices are likely to stabilize in the near term (close to ceiling levels). n
the medium term, the healthy demand outlook should provide strong pricing
support. Moreover, in February 2012, the Saudi government imposed a ban on
the export of clinker and cement (exports constituted 4% of total cement sales in
2011).
Fuel Key catalyst in the near term
The recent fuel allocations are likely to temporarily benefit several companies,
including Yanbu Cement (3mn tons new line capacity) and Southern Cement
(1.5mn tons new line capacity), in the short term. However, uncertain fuel supply is
expected to be the main constraint on cement capacity addition over the long
term. The government set up a committee to analyze and forecast demand of
cement. The committee is required to report its suggestions within six months
when the current order approving fuel supply ends.
MAY 2012
CEMENT
Government spending key to prospective growth
59
CEMENT NCB CAPTAL
MAY 2012

Exhibit 51: Clinker stock per company Exhibit 52: Cement stock per company
'000 tons '000 tons

Source: Yamamah Cement, NCBC Research Source: Yamamah Cement, NCBC Research

ntrinsic cost advantages compared to other GCC players
Saudi cement companies post impressive returns compared to their GCC peers
primarily due to significant cost advantages. Cement companies in KSA have
access to limestone quarries under licenses granted by the government.
Furthermore, in KSA, the cost of natural gas/oil, which is used as fuel by cement
plants and is a major component of a cement firm's overall expenses, is low.
Consequently, the cost of production for KSA-based companies is much lower than
that for other GCC and global players. Thus average gross margin for Saudi cement
companies was around 54% in 2011 relative to the GCC average of 37%.The
average cost of cement per ton increased marginally to SR112/ton in 2011.
Exhibit 53: Gross margin, 2011 Exhibit 54: Comparison of ROE and P/E of GCC cos,
2011
%

%

Source: Bloomberg, Tadawul, NCBC Research Source: Bloomberg, Tadawul, NCBC Research. The mkt cap of bubble is as on 4 Apr.' 12.

The sector fares well on a ROE basis as well as attractive P/E multiples compared
to other countries in the GCC. With the enlistment of Hail Cement Company in 2011,
there are currently ten listed cement players on the Tadawul ndex.
Units as stated
Country
% weight in Index
as on Mar 2011
Net margin
(%), 2011
ROE
(%) 2011
Div. Yield
(%) 2011
Saudi Cement Co. 1.7 48.4 25.0 9.0
Yamama Saudi Cement Co. 1.4 51.3 22.6 5.7
Yanbu Cement Co 1.0 46.7 19.7 3.7
Southern Province Cement Co 0.9 53.0 34.8 7.3
Arabian Cement Co 0.7 37.8 15.4 NA
Qassim Cement Co 0.6 53.4 29.0 7.9
Eastern Province Cement Co 0.6 44.8 17.1 6.3
Tabuk Cement Co 0.4 39.1 12.7 NA
Al Jouf Cement 0.4 26.1 6.3 NA
Source: Bloomberg, Tadawul: Company data, NCBC Research

0
600
1,200
1,800
2,400
3,000
Yamama
Cement
Saudi
Cement
Eastern
Cement
Qassim
Cement
Yanbu
Cement
Arabian
Cement
Southern
Cement
Tabuk
Cement
Feb-12 Mar-12 Apr -12
0
40
80
120
160
Yamama
Cement
Saudi
Cement
Eastern
Cement
Qassim
Cement
Yanbu
Cement
Arabian
Cement
Southern
Cement
Tabuk
Cement
Feb-12 Mar-12 Apr -12
0
10
20
30
40
50
60
70
KSA Kuwait Oman Qatar UAE
2009 2010 2011
0
5
10
15
20
25
30
5 10 15 20 25 30 35
R
O
E

(
%
)
P/E (x)
KSA Kuwait Oman Qatar UAE
60
CEMENT NCB CAPTAL
MAY 2012

Cement production in KSA grew 12.8% YoY to 48.4mt, whereas the total cement
and clinker sales volume increased 11% YoY to 49.3mt during 2011, driven by
increased construction activity. Southern Cement reported the strongest sales
volume growth up 25.3% and Eastern cement was weakest with volumes
declining by 8.3%YoY. The four unlisted private companies total sales volume
increased by 1.7% to 10.1mn tons in 2011.
The revenues of KSA's nine listed cement companies increased by 21% YoY in
2011 to SR9.6bn. Apart from Jouf cement which tripled the revenues as its
factory reached full production, Arabian Cement reported the strongest growth of
45% YoY with Eastern cement reporting the weakest with revenues declining by
1% YoY. The average Net income margin of the sector improved 230 bps to
44.5% in 2011.
Prices to remain near ceiling levels
Following its directive on fuel supply, in March 2012, the KSA government
reduced the price cap of cement from SR250/ton to SR240/ton. Prior to this,
cement prices in the western region were close to the then government-set
ceiling of SR250/ton, while those in the eastern region were marginally lower at
SR244/ton. However, amid increased monitoring by the government, all
companies started selling cement at SR240/ton since March 21, 2012.
The continued pricing pressure that we have seen in last few years has stalled.
The average price of cement per ton grew significantly, up 7.3% to SR245 in
2011 after falling to SR228 in 2010 from SR235 in 2009 and SR255 in 2008.
Due to this, the sector's adjusted net profit increased 24.6% to SR4.5bn in 2011.
Arabian Cement among the listed companies reported the highest average price
at SR284/ton in 2011.
Exhibit 56: Price/Cost of cement per ton Exhibit 57: Net profit for the sector, 2008-11
SR per ton SR mn

Source: Bloomberg, Tadawul, NCBC Research Source: Bloomberg, Tadawul, NCBC Research

Reasonable valuations
The sector's 2011 P/E and P/BV multiple currently stands at 14.4x and 3.0x,
respectively, versus 19.9x and 1.8x for the overall GCC cement market. While
Southern Cement reported the highest RoEs of around 35%, Al Jouf Cement
reported the lowest RoE in the industry at 6% for 2011.
150
175
200
225
250
275
300
325
0
25
50
75
100
125
150
1
Q
-
0
7
2
Q
-
0
7
3
Q
-
0
7
4
Q
-
0
7
1
Q
-
0
8
2
Q
-
0
8
3
Q
-
0
8
4
Q
-
0
8
1
Q
-
0
9
2
Q
-
0
9
3
Q
-
0
9
4
Q
-
0
9
1
Q
-
1
0
2
Q
-
1
0
3
Q
-
1
0
4
Q
-
1
0
1
Q
-
1
1
2
Q
-
1
1
3
Q
-
1
1
4
Q
-
1
1
Average Cost (per ton) Average Price (per ton) RHS
0
1,000
2,000
3,000
4,000
5,000
2008 2009 2010 2011
61
CEMENT NCB CAPTAL
MAY 2012

% %

Source: Bloomberg, Tadawul, NCBC Research. Source: Bloomberg, Tadawul, NCBC Research

Average daily turnover for the sector stood at SR58mn per day in 2011 up from
SR36.9mn per day in 2010. Arabian Cement had the highest average daily
turnover at SR14.6mn in 2011, followed by Saudi Cement at SR10.9mn.
Exhibit 60: Average daily turnover, Jan-Dec 11 Exhibit 61: Share price movement, Jan-Dec 11
st
Jan-11


Although, the demand outlook for the sector remains bullish due to strong
government spending on infrastructure and housing, we remain Neutral for the
sector as a whole as we believe the positive outlook is currently priced in. n the
current environment, we believe companies with excess stock/capacity as well
as in close proximity to key demand points (gradually shifting to the western
region) stand to benefit the most. Currently, we have six stocks under our
coverage: Yamama Cement, Eastern Cement, Yanbu Cement, Saudi Cement,
Southern Cement and Qassim Cement.
-10
-5
0
5
10
15
20
25
30
35
40
0 1 2 3 4 5 6 7
R
O
E

(
%
)
P/BV (x)
Saudi Cement Yamamah Cement Southern Province
Yanbu Cement Qassim Cement Eastern Province
Arabian Cement Tabuk Cement AL Jouf Cement
-20
-10
0
10
20
30
40
50
60
0 1 2 3 4 5 6 7
R
O
E

(
%
)
P/BV (x)
Saudi Cement Yamamah Cement Southern Province
Yanbu Cement Qassim Cement Eastern Province
Arabian Cement Tabuk Cement AL Jouf Cement
15
11
9
6 6
5
4
2
1
3
5
7
9
11
13
15
17
19
Arabian Saudi YamamaQassim Eastern Tabuk Yanbu Southern
70
90
110
130
150
Yamama Saudi Eastern Qassim Yanbu
Arabian Southern Tabuk Al Jouf
62
CEMENT NCB CAPTAL
MAY 2012

Stock
Current
Rating PT (SR) Comments
Yamamah Cement
(3020.SE)
Neutral 55.8 Strong demand in Riyadh and the ability to sell in different regions are the main
advantages. However, high utilization rate and declining stock level are the key
negatives.

Eastern Cement
(3080.SE)
Neutral 59.1 Shifting focus to domestic market due to export, but limitation on exports remains key
downside. Still focused on Eastern region for sales.

Yanbu Cement
(3060.SE)
Neutral 75.2 Demand shift from Central to the western region is key advantage. The company is
located close to the region's main projects. n addition, it has a new line of 3mn tons

Saudi Cement
(3030.SE)
Neutral 82.7 Based in the Eastern region, away from most of the key demand centers. However, ts
high stock level, excess capacity and re-operating its old lines are positives.

Southern Cement
(3050.SE)
Neutral 99.5 Well positioned for Jizan Economic City in the South. New facility near Makkah with
1.5mn tons should also help. High stock level and excess capacity supports the outlook.

Qassim Cement
(3040.SE)
Neutral 81.4 Lowest cost cement producer in the country with very low inventory levels. Lack of
capacity expansion plans could limit growth.

63

Saudi Cement Company (SCC) is one of the Iargest cement
companies in Saudi Arabia. A Iow cost base given its
reIativeIy new production Iines aIong with high stock IeveIs
are the company's key strengths. AdditionaIIy the resumption
of operations in its oId Iines and the seIIing of cIinker stocks
are key advantages in the near term.
x Business brief
SCC was established in 1955 and specializes in the production of ordinary
Portland cement, sulphate resistant cement, and oil well cement. SCC, which
has the largest production capacity (7.2mn tons of cement/year) in Saudi,
would further increase it by 24% (extra total production of 5,325 tons/day) on
reopening the old lines. SCC has been losing ground in the domestic market
in the past few years, mainly due to competition from new entrants. n 2011,
SCC had a market share of 14.7%, which has declined from 19% in 2006.
SCC has a 36% equity stake in United Cement Company (Bahrain) and
another 33.0% in Cement Product ndustry Co. Ltd.
x FinanciaIs
Revenues grew 12.4% YoY to SR1,716mn in 2011 attributed to growth in
sales volume in the backdrop of increased demand from the local market,
combined with YoY increase in prices. EBTDA increased 17.5% to
SR1,051mn due to lower costs as a result of efficiency gains from the new
production lines. Consequently, net profit of the year also rose 26.0% to
SR831mn.
On March 17, 2012, SCC approved the distribution of SR4.5 per share cash
dividend for the 2H11, changing the full year dividend to SR6.5 per share.
Furthermore, on February 15, 2012, the company signed an agreement to
sell 400,000 tons of clinker to Arabian and Qassim Cement. Finally, on
February 14, 2012, the company announced the re-opening of four of its
production lines, with a capacity of 5,325 clinker tons/day, by May 2012.
CEMENT ~ MAY 2012
SAUD CEMENT
ALSO KNOWN AS: SCC
NEUTRAL

STOCK DETAILS
Absolute 2.6 8.1 50.8
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 20.2 5.4
12M 9.6 2.6
Bloomberg code SACCO AB
www.saudicement.com.sa

Free float 86.1

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 20.8 16.5 12.9
P/B (x) 4.1 4.2 4.0
P/S (x) 9.0 8.0 6.6
Div Yield (%) 4.5 7.2 6.7
DPS 4.0 6.5 6.0

50
60
70
80
90
100
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Cement (RHS)

Source: Bloomberg

nsurance (GOS)
8.5
Khalid Abdul Rahman Saleh Al Rajhi 7.9


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 1,526 1,716 2,089 2,147 12.4 12.0
EBTDA SRmn 894 1,051 1,269 1,304 17.5 13.4
Net ncome SRmn 660 831 1,062 1,099 26.0 18.5
Assets SRmn 4,617 4,599 4,870 4,926 (0.4) 2.2
Equity SRmn 3,371 3,282 3,424 3,603 (2.6) 2.2
Total Debt SRmn 927 970 1,042 912 4.7 (0.5)
Cash & Equiv SRmn 91 232 554 738 155.4 101.1
EBTDA Mgn % 58.6 61.3 60.7 60.7 - -
Net Mgn % 43.2 48.4 50.8 51.2 - -
ROE % 20.5 25.0 31.7 31.3 - -
ROA % 13.8 18.0 22.4 22.4 - -
Div Payout % 92.7 119.6 86.4 83.5 - -
EPS SR 4.31 5.43 6.94 7.18 26.0 18.5
BVPS SR 22.03 21.45 22.38 23.55 (2.6) 2.2
Source: Tadawul, Zawya, Company, NCBC Research

64
65
Yamama Cement Company (YSCC), which is located in Riyadh
is one of the oldest and largest cement companies in Saudi
Arabia. Its stock level is the key advantage while the limited
excess capacity and the shift in demand to the western region
are the main concerns.
x Business brief
YSCC was founded in 1961 and is one of the largest cement companies in
Saudi Arabia with annual cement and clinker production capacities of 6.3mn
tons and 6.0mn tons, respectively. Based in Riyadh, YSCC is strategically
located to take advantage of the increased momentum of the construction
sector in 2011, particularly in the Central region. Although it has declined,
from 2009, YSCC maintains one of the highest cement market shares in the
country (12.2% in 2011 and 13.5% in 2009).
x Financials
In 2011, YSCC's revenues were up 13.4% YoY to SR1,442mn driven by
increased sales volume combined with a YoY increase in cement prices.
EBITDA grew 10.4% YoY to SR946mn, with net income up 12.6% YoY to
SR740mn driven largely by the top-line growth. However, net margin fell
slightly by 36bps YoY to 51.3% in 2011 from 51.6% in 2010 due to higher
SG&A expenses during the year.
On February 26, 2012, YSCC approved the distribution of SR2 per share
cash dividend for the six month period ending December 31, 2011.
Additionally, on October 2011, the company announced the liquidation of its
holding in Sudani Kuwaiti Holding Company, where the company's share of
liquidation amounted to SR13,975mn.
CEMENT ~ MAY 2012
YAMAMA CEMENT
ALSO KNOWN AS: YSCC
NEUTRAL
STOCK DETAILS
Absolute (3.1) (6.1) 18.5
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 36.1 9.6
12M 17.0 4.5
Bloomberg code YACCO AB
www.yamamacement.com
TASI (free float weight) 1.38
Free float 86.27
VALUATION MULTIPLES
10A 11A 12E
P/E (x) 14.7 13.0 11.4
P/B (x) 3.1 2.9 2.8
P/S (x) 7.6 6.7 5.8
Div Yield (%) 5.6 5.6 6.3
DPS 2.7 2.7 3.0
33
38
43
48
53
58
5,500
6,000
6,500
7,000
7,500
8,000
TASI Yamamah Cement (RHS)
Source: Bloomberg
Prince Sultan M.S. Al Saud 9.7
General Org. for Social Insurance 7.8
Public Pension Agency (PPA) 5.3
Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 1,272 1,442 1,672 1,687 13.4 9.9
EBITDA SRmn 857 946 1,039 1,049 10.4 7.0
Net Income SRmn 657 740 846 856 12.6 9.2
Assets SRmn 3,653 3,822 3,874 3,831 4.6 1.6
Equity SRmn 3,159 3,375 3,409 3,453 6.8 3.0
Total Debt SRmn 267 190 190 98 (28.8) (28.4)
Cash & Equiv SRmn 700 898 1,000 1,053 28.3 14.6
EBITDA Mgn % 67.4 65.6 62.1 62.2 - -
Net Mgn % 51.6 51.3 50.6 50.8 - -
ROE % 21.1 22.7 24.9 24.9 - -
ROA % 17.9 19.8 22.0 22.2 - -
Div Payout % 82.2 73.0 71.8 76.9 - -
EPS SR 3.24 3.65 4.18 4.23 12.6 9.2
BVPS SR 15.60 16.67 16.83 17.05 6.8 3.0

Southern Province Cement Company (SPCC) is Saudi Arabia's
Iargest cement producer in terms of market capitaIization and
the second-Iargest in terms of capacity. SPCC's high capacity
and stock IeveIs wouId better enabIe it to meet the
incrementaI increase in domestic demand.
x Business brief
SPCC was set up in 1978 and operates production facilities in Jazan, Bisha,
and Tuhama, with the bulk of the production taking place in the first two
facilities. t has a cement production capacity of 7.5mn tons per year. SPCC's
share in the domestic market continues to decline mainly due to rising
competition from several new players in the industry. ts share has fallen from
15.3% in 2008 to 13.9% in 2011. The Public nvestment Fund owns a 37.4%
stake in the company.
x FinanciaIs
Revenues increased 29.2% YoY to SR1,691mn in 2011 due to increased
sales volume and the increase in prices. Driven by this, EBTDA grew 30.2%
YoY to SR1,039mn in 2011; net income increased 36.0% YoY to SR896mn.
On March 20, 2012, Southern Cement approved the distribution of SR3.5 per
share cash dividend for the second half of 2011. Additionally, on March 04,
2012, the company announced the commencement of the commercial
production at its second line in Tuhama plant on March 01, 2012. With this,
the total production capacity for the three plants would reach 23,000 tons of
clinker/day, equaling 24,000 tons of cement/day.
CEMENT ~ MAY 2012
SOUTHERN CEMENT
ALSO KNOWN AS: SPCC
NEUTRAL
Current price 98.5

STOCK DETAILS
Absolute 0.5 13.5 42..8
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 7.6 2.0
12M 4.0 1.1
Bloomberg code SOCCO AB
www.spcc.com.sa

Free float 42.34

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 20.9 15.4 13.0
P/B (x) 5.5 5.2 4.9
P/S (x) 10.5 8.2 7.0
Div Yield (%) 4.6 6.3 6.3
DPS 4.5 6.3 6.3

67
77
87
97
107
117
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Southern Cement (RHS)
Source: Bloomberg

nsurance (GOS)
15.4


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 1,309 1,691 1,962 2,149 29.2 18.0
EBTDA SRmn 798 1,046 1,206 1,336 30.0 18.7
Net ncome SRmn 659 896 1,057 1,199 36.0 22.1
Assets SRmn 2,832 2,992 3,185 3,415 5.6 6.4
Equity SRmn 2,488 2,648 2,828 3,045 6.4 7.0
Total Debt SRmn - - - - - -
Cash & Equiv SRmn 77 129 104 144 67.5 23.2
EBTDA Mgn % 61.0 61.4 61.5 62.2 - -
Net Mgn % 50.3 53.0 53.9 55.8 - -
ROE % 26.6 34.9 38.6 40.8 - -
ROA % 23.4 30.8 34.2 36.3 - -
Div Payout % 95.7 97.7 82.8 81.7 - -
EPS SR 4.7 6.4 7.6 8.6 36.0 22.1
BVPS SR 17.8 18.9 20.2 21.8 6.4 7.0

66

Qassim Cement Company (QCC) was founded in 1976 in
Buraydah, which is Iocated in the centraI region of KSA. As of
December 2010, QCC had a totaI production capacity of 4.1mn
tons of cement and 3.5mn tons of cIinker. QCC's high
dividend yieId remains a key strength of the company; high
utiIization rates and Iow inventory IeveIs remain key concerns.
x Business brief
QCC held a steady share of the KSA's cement market for many years;
however, this fell to 8.6% in 2011 from 11.1% in 2009, led by increased
competition from private players. Nevertheless, QCC is still one of the most
efficient companies in the domestic cement sector. n 2011, QCC produced
cement at SR101 per ton, compared to the industry average of SR112 per
ton. However, it is expected to increase to SR105 as a result of buying
clinker from Saudi Cement.
x FinanciaIs
Qassim's revenues grew 6.9% in 2011 compared to the 2.0% decline in 2010
attributable to higher sales volume and stable prices. Driven by this, EBTDA
grew by 7.5% YoY to SR663mn during the year. Net profit also increased by
10.5% YoY to SR553mn in 2011, led by improved operating performance of
its subsidiary companies.
On March 21, 2012, Qassim Cement Company approved the distribution of
SR3.5 per share cash dividend for the second half of 2011. Additionally,
according to the local press, QCC is investigating the possibility of opening a
new line of production. Finally, on January 09, 2011, the company
announced that they have successfully performed a proposal study with
respect to the new production line, but received a reply from Aramco that it
would not supply the fuel.
CEMENT ~ MAY 2012
QASSM CEMENT
ALSO KNOWN AS: QCC
NEUTRAL

STOCK DETAILS
Absolute (1.3) 5.3 20.2
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 10.8 2.9
12M 6.5 1.7
Bloomberg code QACCO AB
www.qcc.com.sa

Free float 51.2

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 14.2 12.9 12.1
P/B (x) 3.8 3.6 3.5
P/S (x) 7.3 6.9 6.3
Div Yield (%) 6.3 7.3 7.3
DPS 5.0 5.8 5.8

57
67
77
87
97
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Qassim Cement (RHS)

Source: Bloomberg

nsurance (GOS)
19.9
Public Pension Authority (PFA) 5.4


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 969 1,035 1,120 1,061 6.9 3.1
EBTDA SRmn 617 663 682 679 7.5 3.2
Net ncome SRmn 501 553 587 581 10.5 5.1
Assets SRmn 2,023 2,124 2,199 2,255 5.0 3.7
Equity SRmn 1,854 1,956 2,025 2,087 5.5 4.0
Cash & Equiv SRmn 20 245 298 379 1,141.1 167.9
EBTDA Mgn % 63.7 64.1 60.9 64.0 - -
Net Mgn % 51.7 53.4 52.4 54.8 - -
ROE % 27.2 29.0 29.5 28.3 - -
ROA % 23.5 26.7 27.2 26.1 - -
Div Payout % 89.9 93.6 88.2 89.1 - -
EPS SR 5.56 6.14 6.52 6.46 10.5 5.1
BVPS SR 20.60 21.73 22.50 23.19 5.5 4.0

67

Eastern Cement Co. (EPCC) was estabIished in 1982 near
Dammam in the Eastern region of KSA. EPCC was a reguIar
exporter of cement to neighboring countries. Limited spare
capacity and Iow inventory wouId hinder the company's abiIity
to meet increasing demand.
x Business brief
EPCC's market share has been declining over the years; it fell to 6.9% in
2011 from 8.3% in 2010 and 2009, 9.5% in 2008 and 12.0% in 2007. The
company had a production capacity of 3.5mn tons of cement. EPCC holds a
30% stake in Arabian Yemeni Cement Company, 5.4% in ndustrialization
and Energy Services Company; and 1.2% in Saudi ndustrial nvestment
Group.
x FinanciaIs
EPCC's revenue declined 0.8% YoY to SR813mn in 2011 largely due to a
decline in sales volumes by 8%, however, partially offset by higher cement
prices during the year. Despite this, EBTDA grew 7.3% to SR478mn and net
income rose 6.1% to SR364mn mainly due to the YoY decline in the unit cost
of producing cement.
On March 18, 2011, EPCC approved the distribution of 35% of its capital
(SR3.5 per share) as cash dividend for 2011.
n January 2012, the company received a 10-year license from the Ministry of
Petroleum and Mineral Resources to quarry limestone in the Wadi Al-Ahsa
province.
n September 2011, the company repaid the total loan due (SR25mn) to
Saudi ndustrial Development Fund before maturity.

CEMENT ~ MAY 2012
EASTERN CEMENT
ALSO KNOWN AS: EPCC
NEUTRAL

STOCK DETAILS
Absolute (5.6) (8.3) 13.4
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 8.8 2.3
12M 5.6 1.5
Bloomberg code EACCO AB
www.eastern-cement.com.sa

Free float 68.0

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 13.8 13.0 11.5
P/B (x) 2.2 2.2 2.1
P/S (x) 5.8 5.8 5.4
Div Yield (%) 6.4 6.4 7.3
DPS 3.5 3.5 4. 0

45
50
55
60
65
70
75
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Eastern Cement (RHS)

Source: Bloomberg

Public Pension Authority (PFA) 10.6
nsurance (GOS)
10.0


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 819 813 882 895 (0.8) 3.0
EBTDA SRmn 445 478 516 526 7.3 5.7
Net ncome SRmn 343 364 412 417 6.1 6.7
Assets SRmn 2,360 2,340 2,402 2,470 (0.9) 1.5
Equity SRmn 2,111 2,158 2,224 2,295 2.2 2.8
Total Debt SRmn 75 - - - NM NM
Cash & Equiv SRmn 401 321 440 493 (19.8) 7.2
EBTDA Mgn % 54.3 58.8 58.5 58.8 - -
Net Mgn % 41.9 44.8 46.7 46.6 - -
ROE % 16.6 17.1 18.8 18.5 - -
ROA % 14.7 15.5 17.4 17.1 - -
Div Payout % 87.8 82.7 83.5 82.5 - -
EPS SR 3.99 4.23 4.79 4.85 6.1 6.7
BVPS SR 24.55 25.09 25.86 26.69 2.2 2.8

68

Yanbu Cement Company (YCC) is a medium-sized cement
company based in Jeddah. YCC's Iocation which is cIose to
the western region's main projects and its potentiaI excess
capacity are the stock's key cataIysts.
x Business brief
Jeddah-based Yanbu Cement Company was established in March 1976 with
an initial production capacity of 3,000 tons of clinker per day. The company
was set up at Ras Baridi near Yanbu on the west coast of Saudi Arabia.
Currently, YCC's total cement production capacity stands at 4.8mn tons per
year. The company's market share has been declining due to increasing
competition. n the domestic market, YCC's share fell to 9.0% in 2011 from
15.2% in 2007.
x FinanciaIs
The company's revenue increased 26.4% YoY to SR1,132mn in 2011 off the
back of higher sales volumes, coupled with increased cement prices. As a
result, net profit grew 22.9% YoY to SR529mn during the year.
On April 18, 2012, Yanbu Cement Company signed a contract with Saudi
Aramco to provide fuel for the operation of its fifth line with a daily production
capacity of 10,000 tons of clinker. Furthermore, on March 7, 2012, YCC
approved the distribution of a cash dividend of 25.0% of share capital or
SR2.5 per share. Finally, on December 2011, the company restarted
production in three of its four lines, in which it had stalled production in
October due to diversion of fuel to test new production lines.
CEMENT ~ MAY 2012
YANBU CEMENT
ALSO KNOWN AS: YCC
NEUTRAL

STOCK DETAILS
Absolute 0.6 17.0 55.3
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 16.5 4.4
12M 7.9 2.1
Bloomberg code YNCCO AB
www.yanbucement.com

Free float 76.24

VALUATION MULTIPLES
09A 10A 11E
P/E (x) 18.9 15.4 14.6
P/B (x) 3.2 2.9 2.6
P/S (x) 9.1 7.2 6.6
Div Yield (%) 2.6 3.2 3.9
DPS 2.0 2.5 3.0

47
57
67
77
87
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Yanbu Cement (RHS)
Source: Bloomberg

nsurance (GOS)
11.8
Sulaiman Abdul Aziz Saleh Al
Rajhi
8.4

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 895 1,132 1,233 1,518 26.4 19.2
EBTDA SRmn 539 642 747 940 19.0 20.3
Net ncome SRmn 430 529 557 727 22.9 19.1
Assets SRmn 4,092 4,559 4,715 4,806 11.4 5.5
Equity SRmn 2,529 2,846 3,138 3,549 12.5 12.0
Total Debt SRmn 1,072 1,284 1,143 743 19.8 (11.5)
Cash & Equiv SRmn 320 558 124 136 74.4 (24.8)
EBTDA Mgn % 60.2 56.7 60.6 61.9 - -
Net Mgn % 48.1 46.7 45.2 47.9 - -
ROE % 17.4 19.7 18.6 21.7 - -
ROA % 12.4 12.2 12.0 15.3 - -
Div Payout % 48.8 49.6 56.6 43.3 - -
EPS SR 4.10 5.04 5.30 6.92 22.9 19.1
BVPS SR 24.09 27.10 29.89 33.80 12.5 12.0

69

Arabian Cement Company (ACC) was the first to commence
cement production in Saudi Arabia in 1958. The company
mainIy produces portIand cement, portIand pozzoIan cement,
suIfate-resistant cement and ready-mix concrete. As of 2011,
ACC had a production capacity of around 3.81mn tons of
cement and 3.4mn tons of cIinker per year.
x Business brief
ACC, the oldest cement company in the Kingdom, produced 3.8mn tons of
cement and 3.4mn tons of clinker in 2011. The company's market share has
declined consistently from 11.6% in 2005 to 8.3% in 2008, and to 7.8% at the
end of 2011. This was mainly due to increased competition following the
entry of four new players in the Saudi market.
x FinanciaIs
ACC's revenue grew 44.9% YoY to SR1,079mn in 2011 driven largely by
higher sales volumes and increased cement prices. EBTDA margin
increased to 57.3% in 2011 compared to 53.2% in 2010 due to lower cost per
ton and SG&A expenses during the year. Driven by this, net margin also
moved up to 37.8% in 2011 from 34.3% in 2010; net profit grew 59.4% YoY
to SR407mn.
On April 1, 2012, ACC approved the distribution of SR2 per share cash
dividend for the six month period ending December 21, 2011.
On February 12, 2012 the company announced the purchase of 200,000 tons
of clinker from Saudi Cement Company.

CEMENT ~ MAY 2012
ARABAN CEMENT
ALSO KNOWN AS: ACC
NOT COVERED

STOCK DETAILS
Absolute 2.7 21.6 28.3
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 22.6 6.0
12M 16.5 4.4
Bloomberg code ARCCO AB
www.arabiacement.com

Free float 94.3

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 26.7 18.0 11.3
P/B (x) 2.0 1.8 1.6
P/S (x) 6.2 6.2 4.3
Div Yield (%) 2.2 1.7 5.2
DPS 1.3 1.0 3.0

32
42
52
62
72
5,500
6,000
6,500
7,000
7,500
8,000
TAS Arab Cement (RHS)

Source: Bloomberg

Abdulaziz Al Sulaiman 7.5
Sulaiman Abdul Aziz Saleh Al Rajhi 6.1
National Commercial Bank 5.9


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 917 737 745 1,079 44.9 5.6
EBTDA SRmn 389 451 396 618 56.2 16.7
Net ncome SRmn 324 172 255 407 59.4 7.9
Assets SRmn 3,518 3,830 4,155 4,447 7.0 8.1
Equity SRmn 2,244 2,276 2,503 2,795 11.7 7.6
Total Debt SRmn 1,017 1,296 1,405 1,391 (1.0) 11.0
Cash & Equiv SRmn 451 66 147 304 106.6 (12.3)
EBTDA Mgn % 42.4 61.2 53.2 57.3 - -
Net Mgn % 35.3 23.3 34.3 37.8 - -
ROE % 15.9 7.6 10.7 15.4 - -
ROA % 11.0 4.7 6.4 9.5 - -
Div Payout % 74.0 58.1 31.3 19.6 - -
EPS SR 4.05 2.15 3.19 5.09 59.4 7.9
BVPS SR 28.06 28.45 31.28 34.93 11.7 7.6

70

AI Jouf Cement Company (JCC) has recorded a significant
growth after commencing commerciaI production in 2010. The
company tripIed its revenues in 2011 as most of its production
units ran cIose to fuII capacity. JCC's Iocation (north western
region cIose to the Jordanian and Iraqi border) is its key
strength. In 2011, the company had an annuaI production
capacity of 1.75mn tons of cement.
x Business brief
Since commencing production in July 2010, JCC has produced an average of
107k tons of cement per month with domestic cement sales averaging 106k
tons per month. The company had a 0.9% share in the local cement market
in 2010, which increased to 3.0% in 2011.
x FinanciaIs
JCC commenced commercial sales in 2010. The company generated
SR316mn in revenues in 2011 compared to SR103mn in 2010 led by higher
sales volume. EBTDA increased to SR151mn in 2011 from SR52mn the
previous year as operational efficiency led to lower costs. Driven by this, net
profit also increased to SR83mn during the year from SR15mn last year.
On March 10, 2012, JCC signed a contract with Wartsila to supply and install
an electrical plant with a capacity of 42 MW worth SR183mn. Additionally, on
January 2, 2012, the company announced that it would set up a second
production line for clinker with a capacity of 5,000 tons per day at a cost of
SR885mn.
CEMENT ~ MAY 2012
AL JOUF CEMENT COMPANY
ALSO KNOWN AS: JCC
NOT COVERED

STOCK DETAILS
Absolute (2.8) 12.2 28.2
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 103.4 27.6
12M 73.7 19.6
Bloomberg code JOUF AB
www.joufcem.com

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 166.1 29.7
P/B (x) 2.5 1.9 1.8
P/S (x) NM 23.7 7.8
Div Yield (%) - - -
DPS - - -

12
14
16
18
20
22
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Al Jouf Cement (RHS)

Source: Bloomberg

KSB Capital Group 5.7


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn - - 103 316 206.0 NM
EBTDA SRmn (3) (6) 52 151 193.4 NM
Net ncome SRmn (11) (32) 15 83 459.6 NM
Assets SRmn 1,065 1,130 1,678 1,809 7.8 19.3
Equity SRmn 1,004 972 1,266 1,348 6.5 10.3
Total Debt SRmn - - 380 420 10.4 NM
Cash & Equiv SRmn 20 17 188 218 16.0 123.1
EBTDA Mgn % - - 50.0 48.0 - -
Net Mgn % - - 14.3 26.1 - -
ROE % (1.1) (3.2) 1.3 6.3 - -
ROA % (1.0) (2.9) 1.1 4.7 - -
Div Payout % - - - - - -
EPS SR (0.08) (0.25) 0.11 0.64 459.6 NM
BVPS SR 7.72 7.48 9.74 10.37 6.5 10.3

71

3090
Tabuk Cement Company (TCC), founded in 1994, is among the
smallest cement manufacturers in KSA in terms of market
capitalization and capacity. In 2011, the company had an
annual production capacity of 1.46mn tons of cement at its
plant in the north-west region of the Kingdom. TCC's Iocation
enables it to cater to the demand for cement in the northern
region.
x Business brief
TCC's share in the domestic cement market has declined from 4.4% in 2007,
to 3.4% in 2011. The company holds 3.37% stake in ndustrialization &
Energy Services Company, a support services and product manufacturing
organization catering to the energy sector. n addition, TCC holds a marginal
stake in Saudi Cement Company.
x Financials
TCC's revenues grew 27.4% YoY to SR350mn in 2011 due to higher sales
volumes driven by increased domestic demand. EBTDA rose 17.7% YoY to
SR210mn and net profit increased 13.2% YoY to SR137mn during the year.
However, net margins declined to 39.1% in 2011 from 44.0% in 2010 due to
an increase in operating cost and a decrease in other income.
n April 2012, TCC announced a cash dividend of 14% of capital for full-year
2011, which includes 9% for the first half of the year. Furthermore, on April 3,
2012, TCC announced its joint venture with Yamatik Finland Company and a
Malaysian firm to form a new company to produce concrete cement; TCC
would own a 60.0% stake in the venture.

CEMENT ~ MAY 2012
TABUK CEMENT
ALSO KNOWN AS: TCC
NOT COVERED

STOCK DETAILS
Absolute (5.3) 7.1 8.5
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 7.4 2.0
12M 6.1 1.6
Bloomberg code TACCO AB
www.tcc-sa.com

Free float 94.36

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 18.5 18.5 16.4
P/B (x) 2.1 2.1 2.1
P/S (x) 8.4 8.2 6.4
Div Yield (%) 5.0 5.4 5.6
DPS 1.3 1.4 1.4

20
22
24
26
28
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Tabuk Cement (RHS)

Source: Bloomberg

Khaled Saleh Abdul Rahman Al
Shathry
9.6



Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 291 267 275 350 27.4 6.3
EBTDA SRmn 195 175 179 210 17.7 2.5
Net ncome SRmn 151 121 121 137 13.2 (3.2)
Assets SRmn 1,226 1,279 1,256 1,280 1.8 1.4
Equity SRmn 1,044 1,052 1,090 1,059 (2.8) 0.5
Total Debt SRmn - - - NA NA
Cash & Equiv SRmn 353 427 392 329 (16.2) (2.3)
EBTDA Mgn % 67.2 65.4 65.0 60.1 - -
Net Mgn % 51.9 45.4 44.0 39.1 - -
ROE % 14.6 11.6 11.3 12.7 - -
ROA % 11.7 9.7 9.5 10.8 - -
Div Payout % 89.3 92.8 100.5 92.0 - -
EPS SR 1.68 1.35 1.34 1.52 13.2 (3.2)
BVPS SR 11.61 11.69 12.11 11.77 (2.8) 0.5

72

HaiI Cement Company (HCC) was estabIished in November
2010 in Saudi Arabia. The company is engaged in the
production, packaging and distribution of cIinker, ordinary
PortIand cement and suIfate resisting cement. HCC's IPO
raised SR490mn in September 2011 and was Iisted in October
2011.
x Business brief
HCC was established to produce clinker and all types of cement derivatives
and building materials, and distribute them in and outside the Kingdom. The
company's plants are currently under construction; it is expected to start
operations in 2013. Upon completion, HCC would have an annual production
capacity of 1.64mn tons of clinker, 1.7mn tons of of cement.
x FinanciaIs
HCC did not generate any revenue in 2011, as it is not yet operational. The
company reported a loss of SR41mn for the last 13 months mainly due to
high pre-operating expenses.
On January 1, 2012, HCC announced that it had signed a housing contract
worth SR117.8mn with the joint venture between Teberak Trading &
Contracting Company and Moenis Mohammed Al-Shayeb Foundation for civil
construction. The total area of the housing campus would be 80,000 Sq.mts.
The project is expected to be complete within a span of 18 months.

CEMENT ~ MAY 2012
HAL CEMENT
ALSO KNOWN AS: HCC
NOT COVERED

STOCK DETAILS
Absolute (7.3) 17.2 -
Market (6.2) 6.2 7.6
Sector (0.6) 6.9 33.2
3M 85.9 22.9
12M - -
Bloomberg code HCC AB
www.hailcement.com

Free float 50.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 4.4 2.2
P/S (x) - NM NM
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
5,000
5,500
6,000
6,500
7,000
7,500
8,000
Oct-11 Dec-11 Feb-12 May-12
TAS Hail Cement (RHS)

Source: Bloomberg

Yamama Saudi Cement Company 6.1
Saudi Real Estate Company 6.1
Al-Mal nvestment 6.1


Company financiaIs

2008 2009 2010* 2011**
YoY
(%)
CAGR (%)
(08-10)
Revenues SRmn - - - - NM -
EBTDA SRmn - - - (13) NM -
Net ncome SRmn - - (11) (41) NM -
Assets SRmn - - 497 1,025 106.3 -
Equity SRmn - - 479 938 95.9 -
Total Debt SRmn - - 9 - NM -
Cash & Equiv SRmn - - 385 646 67.9 -
EBTDA Mgn % - - NM NM - -
Net Mgn % - - NM NM - -
ROE % - - (2.2) (5.8) - -
ROA % - - (2.1) (5.4) - -
Div Payout % - - - - - -
EPS SR - - (0.11) (0.42) NM -
BVPS SR - - 4.94 9.67 95.9 -
Source: Tadawul, Company, NCBC Research * 1month December 2010 figures ** 13 months figures FY 11

73
MAY 2012
Retail
4001 Al Othaim 77
4190 Jarir Marketing 78
4240 AlHokair 79
4200 Aldrees 80
4002 Mouwasat 81
4050 SASCO 82
4180 Fitaihi Group 83
4290 Alkhaleej Trng 84
4160 National Agriculture 85
4003 Extra 86

KSA's retail sector is driven by increasing urbanization, rising
disposable incomes, growing brand awareness and greater access
to organized retail. Additionally, government initiatives such as
unemployment benefits, minimum wage rates and public sector
wage increases should support near-term retail spending. A
fragmented market provides opportunities for the market leaders to
take market share. Saudisation needs, entry of foreign firms and
supply-chain management are risks to the growth prospects of the
sector.
According to EU estimates, total retail sales in Saudi Arabia for 2011 came in at
an estimated US$98bn, up from US$87bn in 2010. Retail sales as a whole are
expected to grow by an estimated 10% in 2012 to US$108bn and increase to
US$138bn by 2015. From the retail total, approximately 49% of the sales value
in 2011 came from food sales (US$48.4bn). Through a combination of positive
macro factors (high oil price, large population which is young and growing,
increased move towards organised retailing etc), we believe this supports the
long term growth outlook of the sector.
Sustained YoY profitability growth in 2011
Of the nine companies in the sector, Jarir Marketing Co and Fawaz Abdulaziz
Al-Hokair Co are the largest, with a market capitalization of SR9.2bn and
SR5.3bn, respectively, as of 3 April 2012. The two companies' respective weight
in the TAS index was 1.4% and 0.4%, whereas the retail sector as a whole
accounted for 2.9%.
The combined revenue of the nine companies rose 25.6% YoY to SR17.2bn in
2011. The sector's net earnings grew 22% YoY to SR1.5bn during the same
period. Jarir Marketing reported a 28% YoY increase in net profit to SR513mn in
2011, while Al-Hokair's net profit grew 36.3% YoY to SR315mn in the same
year. Jarir Marketing and Al-Hokair posted net margins of 12.4% and 13.4%,
respectively, higher than the industry average of 7.4%.
Exhibit 63: Revenue of companies, 2009-2011 Exhibit 64: Profitability of companies, 2009-2011
SR mn %
Source: Zawya Source: Zawya

As of 31 December 2011, the average P/B multiple of Saudi retail companies
dropped to 4.7x from 5.5x in 2010. However, the average reported return on
equity increased by 350 basis points to 24.2% in 2011.
0
2500
5000
7500
10000
12500
15000
17500
2009 2010 2011
Jarir Al Othaim AlHokair Others
2.0%
3.6%
5.2%
6.8%
8.4%
10.0%
0
400
800
1200
1600
2000
2009 2010 2011
Net income Net margin
APRL 2012
RETAL
Volume growth potential remains high
75
RETAL NCB CAPTAL
APRL 2012

% %


Long-term drivers intact, unemployment benefits to support
growth in the near term
Looking ahead, KSA's retail sector is likely to be driven by population growth,
rising incomes, and the spread of organized retail. Additionally, the
unemployment benefit scheme introduced in late 2011 which pays unemployed
Saudi nationals SR2,000 a month could help accelerate spending in the cash-
based retail sector. Similarly, a 35%-100% increase in public sector wages could
drive revenue growth for major players, such as Jarir and AL-Hokair, in the
sector.
NCBC Recommendations for the Sector
n the long term, we are positive on Saudi Arabia's retail sector, considering the
strong fundamentals of the domestic market, as well as government stimulus
supporting consumer spending. We currently have three stocks in the sector
under our coverage: Jarir, Al-Hokair, and Al-Othaim.
Jarir
(4190.SE)
Neutral 152.0 Plans to almost double number of stores, coupled with a 50% T market share,
provide strong platform for the stock. Low liquidity and declining price of laptops
a concern. Store openings the key catalyst for the stock. Valuation is somewhat
stretched at 14.2x 2012e P/E.

Al-Hokair
(4240.SE)
Neutral 68.0 Al Hokair is undergoing aggressive international expansion in former Soviet
Union countries such as Kazakhstan and Azerbaijan. We believe this comes
with increased risks vs. its Saudi business. We believe the valuation is not
attractive at 11.2x 2013e P/E.

Al-Othaim
(4001.SE)
Overweight 115.0 Al Othaim is the number two food retailer in the KSA. t is well positioned to
increase share as market shifts to organized retailing. Entrance of foreign
players and rising COGS are key risks. Store expansion is key catalyst for the
stock. Ongoing RE acquisition is holding back the stock.

SASCO
National Agri
Fitahi Group
Jarir
Aldrees
AlHokair
Alkhaleej
Al Othaim
Al Mouwasat
United
Electronics
-40
-20
0
20
40
60
80
0 2 4 6 8 10 12 14
R
O
E

(
%
)
P/B (x)
SASCO
National Agri
Fitahi Group
Jarir
Aldrees
AlHokair
Alkhaleej
Al Othaim
Al Mouwasat
United
Electronics
-40
-20
0
20
40
60
80
0 2 4 6 8 10 12
R
O
E

(
%
)
P/B (x)
76

With operations commencing in 1956, Abdullah Al Othaim
Markets Company (Al Othaim) is the second-largest food
retailer in Saudi Arabia. It is well positioned to take advantage
of the growth prospects of organised food retail in Saudi
Arabia. However, high food prices and the company's limited
ability to pass on cost inflation amid rising competition are
the key risks for the stock.
x Business brief
Al Othaim operates four store formats: hypermarkets, supermarkets, corner
stores and wholesale stores. The company runs a chain of over 108 stores,
primarily in central Saudi Arabia, and is looking to open 12 new stores in
2012. Al Othaim has signed an agreement to buy the remaining stake in its
real estate arm in, although the deal is yet to complete.
x Financials
Al Othaim's revenues grew 16.3% YoY to SR4,091mn in 2011, largely driven
by an increase in the store count (108 at the end of 2011 and 96 at the end of
2010) as well as organic growth. EBTDA rose 19.6% YoY to SR232mn
during the year. Net profit decreased 7.3% YoY to SR150mn in 2011 due to
the absence of one-off income (SR6.5mn in 2010), as well as lower rebates
from suppliers. Adjusting for Other income, net income for the year fell 3.4%
mainly due to higher depreciation charges as well as discontinuation of the
capitalization of financial charges in 2011. Continued store expansion and
the associated increase in volumes sold are expected to drive growth in
revenues in the coming years. However, we believe organic growth would
remain subdued amid increasing competition.
To build warehouses and residences for its employees, Al Othaim acquired
433,345 square meters of land worth SR102mn in the industrial zone of
Riyadh in August 2011.
RETAL ~ MAY 2012
ABDULLAH AL OTHAM
ALSO KNOWN AS: AL OTHAM
OVERWEIGHT

STOCK DETAILS
Absolute (7.3) (3.9) (13.4)
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 9.6 2.5
12M 6.5 1.7
Bloomberg code AOTHAM AB
www.othaimmarkets.com

Free float 54.6

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 12.9 11.5 10.2
P/B (x) 3.6 3.1 2.6
P/S (x) 0.5 0.4 0.4
Div Yield (%) 3.5 3.5 3.5
DPS 3.0 3.0 3.0

80
85
90
95
100
105
5,500
6,000
6,500
7,000
7,500
8,000
TAS A. Othaim Markets (RHS)
Source: Bloomberg

Al Othaim Holding Company 27.6
Abdul Aziz Saleh Al Othaim 17.7
Abdullah Saleh Ali Al Othaim 6.0


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 3,519 4,091 4,614 5,174 16.3 13.7
EBTDA SRmn 194 232 243 268 19.6 11.4
Net ncome SRmn 162 150 168 190 (7.3) 5.5
Assets SRmn 1,480 1,676 1,793 1,969 13.2 10.0
Equity SRmn 449 531 632 754 18.5 18.9
Total Debt SRmn 351 331 243 186 (5.7) (19.1)
Cash & Equiv SRmn 45 44 36 144 (3.6) 47.1
EBTDA Mgn % 5.5 5.7 5.3 5.2 - -
Net Mgn % 4.6 3.7 3.6 3.7 - -
ROE % 40.9 30.6 28.9 27.4 - -
ROA % 11.9 9.5 9.7 10.1 - -
Div Payout % 41.7 45.0 40.2 35.5 - -
EPS SR 7.20 6.67 7.47 8.44 (7.3) 5.5
BVPS SR 19.93 23.61 28.09 33.51 18.5 18.9

77

Jarir Marketing Company (Jarir) was established in Riyadh in
1979. Historically, the company was focused on the sale of
books, school items and office supplies. In the past five years,
Jarir has increasingly focused on the sale of electronics such
as laptops, gaming devices and smartphones. The company's
position as one of the leading electronics retailer in the region
is a key positive; pressure on margins from competition is a
key risk.
x Business brief
Jarir's business activities are divided into four broad segments: School
Supplies, Office Supplies, Consumer Electronics and Books. The company
had 30 stores across the GCC as of 2011, up from 23 in 2008. Jarir has
benefited from the young demographics of the region to become one of the
leading consumer electronics retailers in the GCC.
x Financials
Jarir's revenues grew 37.6% YoY to SR4,147mn in 2011 due to strong sales
in electronic items, particularly tablets and smartphones; the company
increased its store count to 30 from 28 a year ago. Although margins
declined due to Jarir's aggressive pricing and the ongoing shift in the sales
mix towards lower margin electronic items, EBDTA increased 27% YoY to
SR528mn in 2011. Net income grew 28% YoY to SR513mn in 2011, while
net margin declined to 12.4% in 2011 from 13.3% in 2010.
On April 3, 2012, Jarir announced the opening of its 27
th
store in Saudi (31
st

store in the GCC) with a total floor space of 3,760 sq. mtrs for a total of
SR15mn. The company also mentioned that it plans to open one more store
in Riyadh; this would take its total store count to 32 at the end of 2012. n
December 2011, Jarir announced that its EGM had approved the 50% rise in
capital, which would increase its number of outstanding shares from 40mn to
60mn. On August 23, 2011, Jarir announced the opening of a new 3,700 sq.
mtr store in Al Refaai Group Center in Mekkah.
RETAL ~ MAY 2012
JARR MARKETNG
ALSO KNOWN AS: JARR
NEUTRAL

STOCK DETAILS
Absolute (1.3) 8.7 42.1
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 10.5 2.8
12M 8.7 2.3
Bloomberg code JARR AB
www.jarirbookstore.com

Free float 100.0

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 17.8 14.2 13.1
P/B (x) 10.1 8.9 8.0
P/S (x) 2.2 1.8 1.6
Div Yield (%) 4.6 5.8 6.2
DPS 7.0 8.8 9.5

90
110
130
150
170
5,500
6,000
6,500
7,000
7,500
8,000
TAS Jarir (RHS)
Source: Bloomberg
Jarir Commercial nvestment Co. 9.5
Mohammed Abdul Rahman
Nasser Al Aqeel
9.0
Abdul Salam Abdul Rahman
Nasser Al Aqeel
9.0
Abdullah Abdul Rahman Nasser Al
Aqeel
9.0
Abdul Karim Abdul Rahman
Nasser Al Aqeel
9.0


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 3,015 4,147 4,964 5,594 37.6 22.9
EBTDA SRmn 415 528 657 717 27.2 20.0
Net ncome SRmn 401 513 642 697 28.0 20.3
Assets SRmn 1,433 1,720 1,930 2,126 20.0 14.0
Equity SRmn 798 907 1,023 1,149 13.7 12.9
Total Debt SRmn 150 175 134 100 16.7 (12.7)
Cash & Equiv SRmn 52 60 (56) (12) NM NM
EBTDA Mgn % 13.8 12.7 13.2 12.8 - -
Net Mgn % 13.3 12.4 12.9 12.5 - -
ROE % 52.7 60.2 66.5 64.2 - -
ROA % 29.9 32.5 35.2 34.4 - -
Div Payout % 77.9 81.9 82.2 81.8 - -
EPS SR 6.68 8.55 10.70 11.62 28.0 20.3
BVPS SR 13.29 15.11 17.05 19.15 13.7 12.9

78

Fawaz Abdulaziz AlHokair Company (AlHokair), established in
1990, is the largest fashion retail franchise player in Saudi
Arabia, accounting for roughly half of the mid-market fashion
retail business in the KSA through its 70 plus brands. The
firm's position as a leading player in the growing market is a
key positive, while increased risk from overseas expansion
and potential margin pressure are the concerns for the stock.
x Business brief
AlHokair operates around 1300 fashion stores and is the retail franchise
partner for over 70 global brands. Brands under its control include Zara,
Banana Republic, GAP, Monsoon and Marks & Spencers. AlHokair owns a
majority stake in Retail Group Egypt and Retail Group Jordan (both acquired
from its parent in June 2010). After initial expansion in Jordan, Egypt and
Kazakhstan, Al-Hokair is now targeting other ex-CS countries such as
Azerbaijan, Georgia and Armenia.
x Financials
AlHokair's revenues rose 24.4% YoY to SR3,203mn for the year ended
March 2012 (FY12), mainly due to the growth in same store sales and
opening of 255 new stores during the year. EBDTA grew 48% YoY to
SR539mn in FY12 as EBTDA margin expanded to 16.8% from 14.1% last
year due to lower operating expenses as a percentage of sales. This and a
YoY jump in other income led to net income growing by 42% to SR447mn in
FY12. We expect sustained expansion in revenues in the coming years,
driven by the continued store expansion plan with a primary focus on
international markets. The recent commencement of payment to unemployed
locals by the Saudi government should boost spending on discretionary
items, thereby benefitting companies such as Al Hokair.
On October 31, 2011, the company approved the SR187.5mn financing
agreement with the nternational Finance Corporation (FC), one of the
institutions of the World Bank.
RETAL ~ MAY 2012
FAWAZ ABDULAZZ ALHOKAR
ALSO KNOWN AS: ALHOKAR
NEUTRAL

STOCK DETAILS
Absolute 6.8 17.5 70.3
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 11.9 3.2
12M 8.7 2.3
Bloomberg code ALHOKAR AB
www.alhokair.com.sa

Free float 51.0

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 18.3 12.9 11.2
P/B (x) 5.3 4.1 3.3
P/S (x) 2.2 1.8 1.5
Div Yield (%) 3.0 2.4 2.4
DPS 2.5 2.0 2.0

40
50
60
70
80
90
5,500
6,000
6,500
7,000
7,500
8,000
TAS AlHokair (RHS)
Source: Bloomberg

Fawaz Alhokair Group
49.0
Fawaz Abdul Aziz Fahd Al Hokair
7.0
Dr Abdulmajeed Abdulaziz Fahed
Alhokair
7.0
Dr Salman Abdulaziz Fahed
Alhokair
7.0

Company financials
FY11 FY12 FY13E FY14E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 2,575 3,203 3,836 4,240 24.4 18.1
EBTDA SRmn 364 539 639 715 48.1 25.2
Net ncome SRmn 315 447 512 567 41.8 21.6
Assets SRmn 2,169 2,594 3,154 3,614 19.6 18.5
Equity SRmn 1,095 1,402 1,769 2,196 28.1 26.1
Total Debt SRmn 386 539 361 286 39.7 (9.5)
Cash & Equiv SRmn 107 198 402 555 84.5 72.9
EBTDA Mgn % 14.1 16.8 16.7 16.9 - -
Net Mgn % 12.3 14.0 13.3 13.4 - -
ROE % 28.8 35.8 32.3 28.6 - -
ROA % 15.6 18.8 17.8 16.8 - -
Div Payout % 55.5 31.3 27.3 24.7 - -
EPS SR 4.51 6.39 7.31 8.10 41.8 21.6
BVPS SR 15.64 20.03 25.27 31.37 28.1 26.1

79

Aldrees Petroleum and Transport Services Co. (Aldrees),
established in 1963, has three main operational divisions:
Petroleum, Transport and Food. The company owns a 98%
stake in Aldrees Sudan, which is engaged in marine, land and
air transportation.
x Business brief
Aldrees' Petroleum division operates a network of 410 gas stations under the
brand name 'Petrol'. t operates on 23 year contracts and supplies fuel to
government and private companies. The Transport segment operates and
maintains a fleet of more than 2,500 carriers, ranging from chemical/lubricant
tankers, trailers and bulkers to flat beds. The Super 2 division runs coffee
and cake stores under the brand name 'Super Caf'. t also handles car wash
and car detailing centers (located in the company's gas station network)
under the brand name 'Super Wash'.
x Financials
Aldrees' revenue grew 14.4% YoY to SR1,694mn in 2011 on higher sales
volume due to expansion of stations. EBDTA increased 10.1% YoY to
SR154mn in 2011 mainly owing to increase in operational efficiency. Net
profit increased 7.1% YoY to SR92mn in 2011.
n February 2012, CMA approved a 20% increase in Aldrees' share capital
(from SR250mn to SR300mn) through the distribution of one bonus share for
every five existing shares. Subsequently, Aldrees' approved the capital
increase in its EGM held on 10 March 2012. The cost of distribution of bonus
shares would be met from the company's retained earnings. n addition, the
company announced the payment of cash dividend of SR2.0 per share for
2011.

RETAL ~ MAY 2012
ALDREES PETROLEUM
ALSO KNOWN AS: APTSCO, ALDREES
NOT COVERED

STOCK DETAILS
Absolute (10.7) (8.7) (10.3)
Market (2.8) 7.5 33.1
Sector (6.2) 6.2 7.6
3M 22.2 5.9
12M 9.6 2.6
Bloomberg code ALDREES AB
www.aldrees.com

Free float 100

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 15.2 12.2 11.4
P/B (x) 3.0 2.7 2.4
P/S (x) 0.8 0.7 0.6
Div Yield (%) 4.3 5.7 5.7
DPS 1.5 2.0 2.0

32
37
42
47
5,500
6,000
6,500
7,000
7,500
8,000
TAS Aldrees (RHS)
Source: Bloomberg

Hamad Mohammed Saad Al Drees
6.7
Abdul Mohsen Mohammed Saad
Al Drees
5.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,134 1,309.5 1,480.4 1,694 14.4 14.3
EBTDA SRmn 93 118 140 154 10.1 18.3
Net ncome SRmn 53 68.9 86.0 92 7.1 20.3
Assets SRmn 664 734 770 830 7.8 7.7
Equity SRmn 317 347 393 434 10.3 11.0
Total Debt SRmn 122 155 137 174 26.7 12.6
Cash & Equiv SRmn 27 70 18 21 15.9 (7.2)
EBTDA Mgn % 8.2 9.0 9.5 9.1 - -
Net Mgn % 4.7 5.3 5.8 5.4 - -
ROE % 17.3 20.8 23.3 22.3 - -
ROA % 8.9 9.9 11.4 11.5 - -
Div Payout % 84.9 65.3 69.8 65.1 - -
EPS SR 1.77 2.30 2.87 3.07 7.1 20.3
BVPS SR 10.57 11.55 13.11 14.47 10.3 11.0

80

Mouwasat Medical Services (Mouwasat) owns, manages and
operates hospitals, dispensaries and pharmacies across
Saudi Arabia. Incorporated in 1974, the company commenced
its first owned comprehensive medical facility in 1988.
x Business brief
Mouwasat operates in the field of medical services across the Kingdom and
owns nine pharmacies, two dispensaries and five hospitals (with a combined
capacity of 953 beds). ts medical network covers the main cities of Saudi
Arabia, including Dammam, Jubail, Qatif, Al Ahsa, Riyadh and Al Madina. Al
Mouwasat converted from a limited liability company to a joint stock company
in January 2006.
x Financials
Mouwasat's revenue grew 15.5% YoY to SR687mn in 2011 due to increased
efficiency in the operation of assets as well as rise in the number of
outpatient clinics. EBTDA rose 24.4% YoY to SR256mn in 2011. Net income
increased 24.9% YoY to SR148mn.
On April 02, 2012, Mouwasat's board approved distribution of 100% bonus
shares for 2011, thereby increasing the company's share capital to
SR500mn. n September 2011, the company signed two Murabaha facilities
agreements worth SR175mn with Samba Financial Group to finance the
construction of the Dhahran hospital and its residential complex.

RETAL ~ MAY 2012
MOUWASAT MEDCAL SERVCES
ALSO KNOWN AS: MOUWASAT
NOT COVERED

STOCK DETAILS
Absolute (2.9) 8.6 22.9
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 14.9 4.0
12M 6.9 1.8
Bloomberg code MOUWASAT AB
www.mouwasat.com

Free float 47.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 23.5 21.2 17.0
P/B (x) 5.0 4.1 3.5
P/S (x) 4.9 4.3 3.7
Div Yield (%) 1.0 2.0 3.0
DPS 0.5 1.0 1.5

30
35
40
45
50
55
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS Mouwasat (RHS)
Source: Bloomberg

Mohammed Sultan Hammad Al
Subaei
17.5
Nasser Sultan Fahad Al Subaei 17.5
Sulaiman Mohammed Sulaiman Al
Saleem
17.5
EFG-Hermes UAE 5.1


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 455 518 587 678 15.5 14.3
EBTDA SRmn 140 156 206 256 24.4 22.3
Net ncome SRmn 97 107 119 148 24.9 15.1
Assets SRmn 622 720 891 985 10.5 16.5
Equity SRmn 426 503 608 711 17.0 18.6
Total Debt SRmn 113 116 167 138 (16.9) 6.9
Cash & Equiv SRmn 29 48 137 193 40.5 87.0
EBTDA Mgn % 30.8 30.1 35.0 37.7 - -
Net Mgn % 21.4 20.7 20.2 21.8 - -
ROE % 24.9 23.0 21.3 22.5 - -
ROA % 16.5 15.9 14.7 15.8 - -
Div Payout % 43.8 23.4 42.2 50.7 - -
EPS SR 1.94 2.14 2.37 2.96 24.9 15.1
BVPS SR 8.52 10.06 12.15 14.22 17.0 18.6
Source: Company, NCBC Research ^ % Var indicates variance from NCBC forecasts

81

Saudi Automotive Services Company (SASCO), established in
1982 and headquartered in Riyadh, provides a variety of
services and utilities for cars, motorists and travelers. It owns
specialized maintenance workshops in Saudi Arabia. The
company also owns and manages supermarkets, rest areas
and restaurants for travelers.
x Business brief
SASCO offers services such as car maintenance and repair, spare parts, car
rescue, first aid, issuance of car test certificates and international driving
licenses. The company also operates a network of supermarkets, petrol
pumps, housing facilities, rest areas, restaurants and other facilities across
Saudi Arabia to service motorists and travelers. t has minority investments in
four firms: Middle East Battery Co. (7.94%), ndustrialization & Energy
Services Co. (3.37%), National Co. for Tourism (0.4%) and United Rally Co.
(25%).
x Financials
SASCO recorded a 14.5% YoY growth in revenue at SR244mn in 2011.
EBDTA margin for the year declined to 7.9% compared to 9.1% in 2010 due
to higher operating expenses, mainly incurred for re-qualification of some
petrol stations. Net income increased 11.3% YoY to SR40mn due to a rise in
investment income and gains from sale of assets worth SR5.3mn.
On February 28, 2012, SASCO signed an agreement with Ultra Tune
Australia to form a joint venture company with a capital of USD1mn; the JV
would offer maintenance services for vehicles and passenger cars at
gasoline stations in the Kingdom. SASCO signed an agreement to sell its
stake (2mn shares worth SR38mn) in ndustrialization and Energy Services
Company to the latter company. The effect of this transaction would be
reflected in 1Q12.
RETAL ~ MAY 2012
SAUD AUTOMOTVE
ALSO KNOWN AS: SASCO
NOT COVERED

STOCK DETAILS
Absolute (12.9) 8.2 41.7
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 56.9 15.2
12M 24.9 6.6
Bloomberg code SACO AB
www.sasco.com.sa

Free float 89.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 29.3 25.7 23.1
P/B (x) 1.9 1.8 1.7
P/S (x) 4.9 4.3 3.8
Div Yield (%) - 2.4 2.4
DPS - 0.5 0.5

10
15
20
25
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS SASCO (RHS)
Source: Bloomberg

Nahaz Trade nvestment
Company
10.5
brahim Mohammed brahim Al
Hadithi
9.7


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 214 191 213 244 14.5 4.5
EBTDA SRmn 33 18 19 19 (0.2) (16.1)
Net ncome SRmn 36 32 36 40 11.3 4.1
Assets SRmn 469 556 587 678 15.3 13.1
Equity SRmn 413 499 513 544 6.2 9.7
Total Debt SRmn - - - 61 NM NM
Cash & Equiv SRmn 134 129 59 57 (4.0) (24.9)
EBTDA Mgn % 15.3 9.6 9.1 7.9 - -
Net Mgn % 16.6 16.5 16.9 16.4 - -
ROE % 8.5 6.9 7.1 7.6 - -
ROA % 7.5 6.1 6.3 6.3 - -
Div Payout % 0.0 0.0 62.5 56.2 - -
EPS SR 0.79 0.70 0.80 0.89 11.3 4.1
BVPS SR 9.17 11.09 11.39 12.10 6.2 9.7

82

Established in 1992, Fitaihi Group Holding Company
undertakes designing, manufacture, and wholesale and retail
distribution of gems, jewelry and precious stones. The
company has two marketing subsidiaries, Marina B Creation
Vados and Marina B Geneve, which market its products
worldwide. It is also engaged in the management of leading
hospitals in the region.
x Business brief
Fitaihi's product portfolio includes precious stones, jewelry, beauty products,
kitchenware, leather products and clothing, accessories, perfumes, medical
equipment, and industrial parts. The company has presence in the hospital
industry through a 19.3% investment in nternational Medical Center and
5.7% stake in Dar Al Fouad Hospital. Fitaihi also has a 20% stake in Fitaihi
Junior. The company owns two premium department stores under the brand
name 'Fitaihi' in Jeddah and Riyadh, in addition to other outlets.
x Financials
Fitaihi's revenues for 2011 increased 24.5% YoY to SR207mn. EBTDA rose
50.8% YoY to SR40mn. However, the company reported a net loss of
SR43mn in 2011 compared to net profit of SR22mn in 2010. This was mainly
due to losses in investments in Egypt (SR57.2mn) and the US (SR7.1mn),
reduction in value of inventory (SR7.2mn) and provision for zakat related to
previous year (SR3.7mn).
Fitaihi's BOD approved a 10% increase in the company's capital to SR550mn
(55mn shares) from SR500mn (50mn shares) by granting one bonus share
for every 10 shares owned.
RETAL ~ MAY 2012
FTAH GROUP HOLDNG
ALSO KNOWN AS: FTAH
NOT COVERED

STOCK DETAILS
Absolute (17.1) 12.9 43.9
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 89.9 24.0
12M 47.4 12.6
Bloomberg code AHFCO AB
www.fitaihigroup.com

Free float 77.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 100.9 47.8 NM
P/B (x) 1.7 1.6 1.6
P/S (x) 6.8 6.3 5.0
Div Yield (%) - - -
DPS - - -

8
13
18
23
28
5,500
6,000
6,500
7,000
7,500
8,000
TAS Fitaihi (RHS)

Source: Bloomberg

Ahmed Hussain Ahmed Fitaihi 22.2

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 194 153 166 207 24.5 2.1
EBTDA SRmn 34 25 26 40 50.8 5.1
Net ncome SRmn 19 10 22 (46) NM NM
Assets SRmn 720 731 702 686 (2.3) (1.6)
Equity SRmn 560 616 659 635 (3.6) 4.3
Total Debt SRmn 71 55 0 0 NA NA
Cash & Equiv SRmn 14 10 11 54 407.5 57.6
EBTDA Mgn % 17.6 16.1 15.8 19.2 - -
Net Mgn % 9.9 6.7 13.1 (22.4) - -
ROE % 3.2 1.8 3.4 (7.2) - -
ROA % 2.6 1.4 3.0 (6.7) - -
Div Payout % - - - - - -
EPS SR 0.35 0.19 0.40 NM NM NM
BVPS SR 10.18 11.21 11.98 11.55 (3.6) 4.3

83

Established in 1992, Alkhaleej Training and Education
Company (Alkhaleej) conducts training programs in the fields
of IT, electronics and English language, and also offers
administrative and financial services. It operates more than 82
branches in the KSA, and has presence in over 19 locations in
the Middle East and nine facilities outside the region.
x Business brief
Alkhaleej implements training programs through various divisions, including
New Horizons (centers for computer learning, and the largest independent T
training company in the KSA), Direct English centers, Platinum (center for
advanced training solutions offers advanced computer courses), Takniat
(for training, business and professional development; specializes in
management training), Kawader (employs graduates of the company's
programs), E-Learning (provides over 2000 courses online) and Al Dhiafa
(hospitality and tourism training).
x Financials
Alkhaleej's revenue grew 30.2% YoY to SR515mn in 2011 on higher sales in
the government sector. EBDTA increased 18.1% YoY to SR87mn; however,
EBTDA margins declined to 16.9% in 2011 from 18.6% due to higher
operating expenses. Net income grew 15.9% YoY to SR53mn in 2011 mainly
owing to rise in profits from subsidiaries and education projects.
On April 10, 2012, Alkhaleej's board approved distribution of cash dividend of
5% of capital for 2011. n addition, the board granted approval for increasing
the share capital of the company by 25% to SR250mn by issuing bonus
shares in the ratio of 1:4. n July 2011, Alkhaleej signed a loan agreement
worth SR30mn with Riyadh Bank to fund the construction of administrative
offices in Riyadh. The loan would be repaid in 10 semi-annual installments of
SR3mn from December 15, 2013.
RETAL ~ MAY 2012
ALKHALEEJ TRANNG
ALSO KNOWN AS: ALKHALEEJ
NOT COVERED

STOCK DETAILS
Absolute (12.0) 0.4 16.3
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 9.3 2.5
12M 7.1 1.9
Bloomberg code ALKHLEEJ AB
www.alkhaleej.com.sa

Free float 32.1

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 21.3 19.8 17.0
P/B (x) 3.9 3.4 2.9
P/S (x) 2.6 2.3 1.7
Div Yield (%) 1.1 1.1 1.1
DPS 0.4 0.4 0.4

25
30
35
40
45
5,500
6,000
6,500
7,000
7,500
8,000
TAS Alkhaleej Trng (RHS)
Source: Bloomberg
Abdulaziz Rashid Abdul Al Rashid 20.3
Ahmed Ali Ahmed Al Shadwi 13.3
EFG-Hermes UAE Ltd 12.6
Al Waleed Abdul Saleh Al Dreian 11.8
Abdulaziz Hamaad N Al Belaihid 10.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 346 350 395 515 30.2 14.1
EBTDA SRmn 70 70 74 87 18.1 7.6
Net ncome SRmn 41 42 45 53 15.9 8.5
Assets SRmn 357 425 481 541 12.5 14.9
Equity SRmn 195 228 264 309 16.8 16.6
Total Debt SRmn 89 109 119 134 12.6 14.5
Cash & Equiv SRmn 34 31 33 26 (21.2) (8.1)
EBTDA Mgn % 20.1 19.9 18.6 16.9 - -
Net Mgn % 11.9 12.0 11.5 10.2 - -
ROE % 23.7 19.9 18.5 18.4 - -
ROA % 12.5 10.8 10.0 10.3 - -
Div Payout % 36.4 23.8 22.0 19.0 - -
EPS SR 1.65 1.68 1.82 2.11 15.9 8.5
BVPS SR 7.78 9.11 10.57 12.35 16.8 16.6

84

National Agriculture Marketing Co (THIMAR), established in
1987 and headquartered in Riyadh, manufactures, procures,
processes and markets agricultural products, accessories,
meat and other supplies through various dealers. The
company, which holds a 100% stake in Wasmi Meat, runs 23
stores in Saudi Arabia.
x Business brief
THMAR primarily sells agricultural and meat products to its clients from
different sectors such as hotels, restaurants and the military. The company
also provides services for the operation, management and marketing of
agricultural projects. t also undertakes wholesale and retail trading of
agricultural and meat products.
x Financials
THMAR's revenues fell 27.6% YoY to SR55mn in 2011. EBDTA for the year
decreased 77% YoY to SR4mn. However, the company reported a net
income of SR5mn in 2011, compared to a net loss of SR18mn in 2010, due
to gain (SR19.2mn) realized from the sale of land in Jeddah.
n December, THMAR's board approved reduction in share capital from
SR100mn to SR75mn; however, this is awaiting approval from the EGM.
n the same month, the company sold 7,650sq metres of land in Jeddah
through an auction, with a gross sale value of SR32.1mn. The company
realized a SR19.2mn capital gain from the sale.

RETAL ~ MAY 2012
NATONAL AGRCULTURE
ALSO KNOWN AS: THMAR
NOT COVERED

STOCK DETAILS
Absolute (3.5) (16.0) 9.4
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 49.3 13.1
12M 39.3 10.5
Bloomberg code THMAR AB
www.thimar.com.sa

Free float 100

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM 75.4
P/B (x) 4.0 8.3 7.5
P/S (x) 2.1 3.7 5.1
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
May-
11
Aug-
11
Nov-
11
Feb-
12
May-
12
TAS Thim'ar (RHS)
Source: Bloomberg



Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 146 132 76 55 (27.6) (27.9)
EBTDA SRmn 1 (10) (16) (4) NM NM
Net ncome SRmn (10) (11) (18) 5 NM NM
Assets SRmn 115 99 59 65 9.8 (17.3)
Equity SRmn 81 69 33 37 10.5 (22.9)
Total Debt SRmn - - - 0.3 NM NM
Cash & Equiv SRmn 5 7 2 33 NM 86.0
EBTDA Mgn % 1 (7) (21) (7) - -
Net Mgn % (7.0) (8.1) (23.7) 8.4 - -
ROE % (11.9) (14.2) (35.1) 13.1 - -
ROA % (8.7) (9.9) (22.7) 7.4 - -
Div Payout % - - - - - -
EPS SR (1.02) (1.06) (1.80) 0.46 NM NM)
BVPS SR 8.07 6.89 3.35 3.70 10.5 (22.9)

85

Established in 1994, Extra (UEC, United Electronics Company)
is the largest consumer electronics retailer in Saudi Arabia.
Extra provides electronic, household and communication
devices as well as related solutions and services. The
company serves around 90% of customers in Saudi Arabia
annually, with more than 12,000 products across 25 stores.
x Business brief
Extra is engaged in the retail trading of consumer electronics and home
appliances. t offers all leading international brands and stocks an extensive
product range. The product range is supported by comprehensive after-sales
services through its trade mark 'Force 24/7', with three dedicated service
centers across the Kingdom. t has 25 stores, which include seven in Riyadh;
three in Jeddah; two in Dammam; and one each in Makkah, Madinah, Al
Khobar and Al Hassa.
x Financials
Extra's revenue grew 38.4% YoY to SR2,462mn in 2011 mainly due to the
continued expansion of its store network (from 17 in 2010 to 24 in 2011) as
well as increase in market share (led by promotional activity) amid steady
growth in demand for electronic devices and smartphones. EBDTA rose
32.1% YoY to SR158mn in 2011 from SR118mn in 2010. As a result, net
income increased 35% YoY to SR132mn during the year.
Extra signed a JV with Al Meera Holding (Qatar) in February 2012 to open its
first big-box store in Qatar during 2013. Extra would form a limited liability
company with an initial capital investment of QR200,000.

RETAL ~ MAY 2012
EXTRA
ALSO KNOWN AS: UEC, United Electronics Company
NOT COVERED

STOCK DETAILS
Absolute (2.2) 3.5 -
Market (6.2) 6.2 7.6
Sector (2.8) 7.5 33.1
3M 11.8 3.1
12M 56.6 15.1
Bloomberg code EXTRA AB
www.extra.com.sa

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 51.5 21.6 16.0
P/B (x) 14.5 8.7 5.6
P/S (x) 1.5 1.2 0.9
Div Yield (%) - - 2.8
DPS - - 2.5

70
75
80
85
90
95
5,500
6,000
6,500
7,000
7,500
8,000
Dec-
11
Jan-
12
Feb-
12
Mar-
12
Apr-
12
May-
12
TAS Extra (RHS)
Source: Bloomberg

Al Fozan Holding Company 45.4
Abdulaziz Alsaghyir Commercial 14.9


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,263 1,440 1,778 2,462 38.4 24.9
EBTDA SRmn 46 62 120 158 32.1 50.6
Net ncome SRmn 29 41 98 132 35.1 65.5
Assets SRmn 502 633 589 775 31.5 15.6
Equity SRmn 104 146 243 375 54.3 53.2
Total Debt SRmn 87 91 21 0 NM) NM)
Cash & Equiv SRmn 55 15 30 65 113.7 5.7
EBTDA Mgn % 3.7 4.3 6.7 6.4 - -
Net Mgn % 2.3 2.9 5.5 5.4 - -
ROE % 7.9 32.8 50.3 42.7 - -
ROA % 4.6 7.2 16.0 19.4 - -
Div Payout % - - - 45.4 - -
EPS SR 1.21 1.71 4.07 5.50 35.1 65.5
BVPS SR 4.35 6.06 10.14 15.64 54.3 53.2

86
MAY 2012
Energy & Utilities
5110 Saudi Electricity 90
2080 GASCO 91

Saudi Arabia's power sector is being mainly driven by sustained
expansionary policies, rising infrastructure investment and
population growth. According to the Ministry of Water and
Electricity, the demand for power in the Kingdom is likely to grow at
an annual rate of 4.5% until 2023, thereby increasing the demand
to an estimated 75,000MW. n order to cater to this strong demand,
the government is investing heavily in the power sector, and plans
to add a production capacity of 3,0004,000MW each year.
The Saudi Arabian government is encouraging more private sector participation
in the power and desalination sectors. The initial series of the three ndependent
Power Projects (PPs) awarded by Saudi Electricity Company (SECO) is
scheduled for completion by 2014. These projects (combined capacity of
5,200MW) were announced in 2007, and would be built in Rabigh, Riyadh and
Qurayyah. Two additional PPs at Qurayyah and Dheba are scheduled to come
online by 2017. Several ndependent Water and Power Projects (WPPs) have
also been commissioned, with the most prominent one being developed by
Marafiq. The government is supporting this massive expansion by increasing
allocation to the water and infrastructure sectors by about 13% to SR57.5bn.
Exhibit 68: Revenue of GCC energy and utilities
companies, 2009-11
Exhibit 69: Comparison of ROE, P/E & Mcap of GCC
companies, 2011
USD mn %

Source: Tadawul, Zawya, NCBC Research; Source: Tadawul, Zawya, NCBC Research

The Saudi Stock Exchange (Tadawul) currently has two companies trading
under the Energy & Utilities sector; Saudi Electricity Company (SECO), and
National Gas and ndustrialization Co. (NGC). SECO is one of the heavyweights
in the market, accounting for about 1.82% of the TAS's free float.
SECO has a near monopoly in Saudi Arabia's electricity sector. After the delay
in 2011, implementation of SECO's restructuring and privatization plan is
expected to go ahead in 2012. As part of the restructuring plan, the company
would be split into four power generation units, one distribution firm and one
transmission firm, while SECO would operate as a holding company. n 2011,
the company's revenue grew 9.7% YoY to SR30.6bn, while net profit fell 2.9%
YoY to SR2.2bn. NGC's revenues rose 5.7% YoY to SR1.7bn during the year,
while net profit increased 17.9% to SR106.4mn from SR90.2mn in 2010.
0
1500
3000
4500
6000
7500
9000
2009 2010 2011
KSA Kuwait Qatar UAE Oman
-3.0
2.0
7.0
12.0
17.0
22.0
27.0
32.0
-6% 0% 6% 12% 18% 24% 30% 36%
P
/
E
ROE (%)
KSA Kuwait Qatar UAE Oman
MAY 2012
ENERGY & UTLTES
Primary focus Power and Water
88
ENERGY & UTLTES NCB CAPTAL
MAY 2012

Units as stated
Country
% weight in Index
as on 28 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Saudi Electricity Co (SEC) 1.82 7.2 4.26
National Gas & ndustrialization Co (NGC) 0.21 6.4 10.33
Source: Bloomberg, Tadawul: Company data

Exhibit 71: Revenue of companies, 2009-11 Exhibit 72: Profitability of SECO, relative to sector avg
SR mn %


The Kingdom is keen to reduce its dependence on fossil fuels and develop
alternative energy sources such as solar, hydro and nuclear power. King
Abdullah City for Renewable Energy (KACRE) plans to increase the share of
alternative fuels in the Kingdom's energy mix from zero at present to 43% by
2030 and 85% by 2050.
We are cautiously positive on the sector given the increased demand for power.
We currently are neutral on Saudi Electricity.

Saudi
Electricity
(5110.SE)
Neutral 15.3 The new tariff structure on industrial, commercial and government customers came into
effect on July 1, 2010. This had a significant impact on the company's profitability,
which we believe the market has already priced into the stock. Going forward, the key
risks include rising cost of energy purchased from independent producers as well as an
increase in depreciation expense.

1,500
1,550
1,600
1,650
1,700
20,000
24,000
28,000
32,000
2009 2010 2011
SECO NGC
0%
2%
4%
6%
8%
2009 2010 2011
Sector Average SECO
89

Saudi Electricity Company (SEC) is the largest power
generator in Saudi Arabia. Established in 2000, the company
is engaged in the generation, transmission and distribution of
electric power across the Kingdom. SEC was formed through
the consolidation of 10 regional electricity companies.
x Business brief
SEC has a monopoly in the transmission and distribution of electricity in
Saudi Arabia and a near-monopoly in generation. The company also exports
and imports energy, and invests in various power projects in the Kingdom.
SEC had a total available capacity of 51,743 megawatts (MW) at the end of
2011.
x Financials
Revenues grew 9.7% YoY to SR30,570mn in 2011, mainly driven by the
increase in consumption due to rising demand for electricity and expansion of
capacity across the Kingdom. Net profit came in at SR2,213mn, down 3%.
This was mainly due to the rise in the cost of purchased energy and higher-
than-expected depreciation.
On March 31, 2012, SEC announced that it had been granted a loan of
USD1.4bn to finance the construction of its sixth power plant in Rabigh. The
loan would be repaid in semi-annual installments over a period of 15 years.
SEC plans to build a 2,400 MW, heavy fuel oil burning plant, to be called
Jeddah South. The oil-fired power plant is expected to be completed by
2016.
To meet the growing demand, SEC plans to set up power transport lines,
gas-powered generating units and transformers in different parts of the
Kingdom. n line with this, the company signed 11 contracts worth SR2bn in
December 2011.

Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 27,858 30,570 32,708 34,973 9.7 7.9
EBTDA SRmn 10,186 11,743 12,747 13,504 15.3 9.9
Net ncome SRmn 2,279 2,213 2,226 2,243 (2.9) (0.5)
Assets SRmn 190,872 208,882 240,036 261,388 9.4 11.0
Equity SRmn 50,657 52,325 54,003 55,699 3.3 3.2
Total Debt SRmn 30,509 30,715 56,901 67,706 0.7 30.4
Cash & Equiv SRmn 7,231 2734 1635 1749 (62.2) (37.7)
EBTDA Mgn % 36.6 38.4 39.0 38.6 - -
Net Mgn % 8.2 7.2 6.8 6.4 - -
ROE % 4.6 4.3 4.2 4.1 - -
ROA % 1.3 1.1 1.0 0.9 - -
Div Payout % 128.0 132.1 132.1 129.6 - -
EPS SR 0.55 0.53 0.53 0.54 (2.9) (0.5)
BVPS SR 12.16 12.56 12.96 13.37 3.3 3.2
UTLTES ~MAY 2012
SAUD ELECTRCTY
ALSO KNOWN AS: SEC, SECO
OVERWEIGHT

STOCK DETAILS
Absolute (11.1) (6.4) (3.3)
Market (6.2) 6.2 7.6
Sector (10.1) (4.9) (1.4)
3M 164.6 43.9
12M 76.2 20.3
Bloomberg code SECO AB
www.se.com.sa

Free float 17.18

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 24.0 24.8 24.6
P/B (x) 1.1 1.0 1.0
P/S (x) 2.0 1.8 1.7
Div Yield (%) 5.3 5.3 5.3
DPS 0.7 0.7 0.7

12
13
14
15
16
17
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Electricity (RHS)
Source: Bloomberg

Government ownership in SEC
Capital
74.3
ARAMCO 6.9
Public 18.8


90

National Gas & Industrialization Company (GASCO) was
established in 1963 through the merger of two companies.
GASCO is engaged in filling, refilling and distributing liquefied
petroleum gas (LPG); designing and building gas networks;
and selling as well as installing gas tanks and cylinders.
x Business brief
GASCO sells LPG gas cylinders (in 26.5 and 52.5 liter sizes) across Saudi
Arabia. The company also provides various types of gas tanks and related
accessories. Of its total carriers, about 350 have a capacity of 40,000 liters
each, while the remaining 42 have capacity in the range of 11,00023,000
liters. The company's filling plants are located in Riyadh, Jeddah, Dammam,
Al Madinah, Taif, Bureidah and Khamis Mushait. GASCO also designs and
installs gas networks for retail and industrial customers.
x Financials
GASCO's revenues grew 5.7% to SR1,672mn in 2011 from SR1,582mn in
2010. Net income for the year increased 17.8% to SR106mn from SR90mn.
Net income grew due to profit from the sale of the company's investment in
banks and other non-core investments.
GASCO announced a cash dividend of SR1.0 per share for 2011 on March
27, 2012.
.
UTLTES ~MAY 2012
NATONAL GAS &
NDUSTRALZATON COMPANY
ALSO KNOWN AS: GASCO
NOT COVERED

STOCK DETAILS
Absolute (0.2) 9.8 17.2
Market (6.2) 6.2 7.6
Sector (10.1) (4.9) (1.4)
3M 12.8 3.4
12M 7.6 2.0
Bloomberg code NGC AB
www.gasco.com.sa

Free float 67.46

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 18.8 15.9
P/B (x) 1.7 1.7 1.6
P/S (x) 1.1 1.2 1.0
Div Yield (%) 2.2 3.1 4.4
DPS 0.5 0.7 1.0


15
20
25
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS Gas&ndustrialization (RHS)

Source: Bloomberg

Saeed Ali Ghadran Al Ghamdi 11.9
nsurance (GOS)
6.1


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,471 1,546 1,582 1,672 5.7 4.4
EBTDA SRmn 115 136 138 171 23.8 14.2
Net ncome SRmn 149 (59) 90 106 17.8 (10.7)
Assets SRmn 1,297 1,344 1,425 1,489 4.5 4.7
Equity SRmn 941 991 1,002 1,029 2.7 3.0
Cash & Equiv SRmn 133 262 240 42 (82.5) (32.0)
EBTDA Mgn % 7.8 8.8 8.7 10.2 - -
Net Mgn % 10.1 (3.8) 5.7 6.3 - -
ROE % 14.6 (6.1) 9.0 10.4 - -
ROA % 10.7 (4.5) 6.5 7.3 - -
Div Payout % 75.5 - 58.3 70.8 - -
EPS SR 1.99 (0.79) 1.2 1.41 17.8 (10.7)
BVPS SR 12.55 13.22 13.36 13.72 2.7 3.0

91
MAY 2012
Agriculture & Food
2050 Savola Group 95
2280 Almarai 96
6090 Jazan Development 97
2270 SADAFCO 98
6010 NADEC 99
6002 Herfy Foods 100
6070 Jouff Agriculture 101
6020 Qassim Agriculture 102
4061 Anaam International 103
6001 Halwani Bros 104
6050 Saudi Fisheries 105
2100 Wafra Food 106
6040 Tabuk Agriculture 107
6060 Sharqiya Dev Co. 108

Saudi Arabia is the largest food market in the GCC, accounting for
65% of total food consumption in 2011. The Kingdom's food
market is estimated to be worth SR115bn in 2011, increasing to
SR140bn in 2015 according to EU estimates. Factors such as
Saudi Arabia's relatively large and young demographics (70% of
the population is under 30 years of age) and rising per capita
income are the key long-term demand drivers. However, the
country's reliance on imported food and its inability to pass on the
increased cost to consumers remain the main concerns.
Saudi Food market the largest in the GCC
By far the Saudi Food and Agriculture sector is the largest in the GCC, largely
off the back of around 70% of the population of the GCC being based in Saudi
Arabia. n terms of listed companies, again, the revenues generated by Saudi
companies exceeded USD10bn in 2011, compared to less than USD400mn in
other major GCC countries.
Exhibit 74: Revenue of listed GCC agri. companies Exhibit 75: Comparison of ROE & P/E of GCC Cos, 2011
USD mn %

Source: Tadawul, Bloomberg, NCBC Research Source: Tadawul, Bloomberg, NCBC Research

High dependence on food imports
According to the Saudi Ports Authority, Saudi Arabia imported 20mn tons of food
items in 2010 (equivalent to 80% of the total volume consumed in Saudi Arabia)
and up from 15mn tons in 2006. The reliance on imports is due to the scarcity of
water and adverse weather conditions which make domestic agricultural
production difficult. At SR63bn in 2010, food and agricultural imports accounted
for 15.8% of overall imports in to KSA and grew by 19% YoY. According to the
Economist ntelligence Unit (EU), food imports are set to more than double to
SR132bn in 2020. Given its reliance on imports, the Kingdom remains
vulnerable to a rise in global food prices
Almarai and Savola, key stocks in the food sector
Of the 14 companies in the sector, Almarai and Savola are by far the largest,
with a market capitalization of SR26.2bn and SR18.1bn, respectively (75% of
the total sector market capitalization). These accounted for 1.9% and 1.7%,
respectively, of the Tadawul as of 1 April 2012.
Revenue for the sector increased 17.6% YoY to SR38.4bn in 2011, while the
industry's net earnings rose 6.8% YoY to SR2.8bn. Savola recorded 19.8% YoY
0
2,000
4,000
6,000
8,000
10,000
0
100
200
300
400
500
2009 2010 2011
Kuwait UAE Qatar KSA (RHS)
-4
0
4
8
12
16
20
24
28
0 9 18 27 36
R
O
E

(
%
)
P/E (x)
KSA Kuwait UAE Qatar
April 2012
AGRCULTURE & FOOD
Exposure to global food prices a concern
93
AGRCULTURE & FOOD NCB CAPTAL
APRL 2012

revenue growth and a 35.6% YoY increase in earnings. The good performance
was mainly based on increased market share and increased margins at its food
retail business. Almarai's revenues increased 14.7% during the year although
reported net income decline by 11.4% due mainly to a provision on its Zain KSA
holding. However, excluding one-off gains/losses, Savola's net income grew
11% in 2011, while Almarai's net income grew 1% YoY during the year.
Exhibit 76: Revenue of listed companies,
2009-2011
Exhibit 77: Savola - Profitability relative to sector
average
SR mn %

Source: Tadawul, Bloomberg, NCBC Research Source: Tadawul, Bloomberg, NCBC Research

Long-term growth drivers intact; stable food prices key to
profitability in near to medium term
We expect Saudi Arabia's favorable demographics to continue driving the
sector's growth. The Kingdom's relatively large population, low per capita food
consumption, rising income levels and increased religious pilgrims will continue
driving growth in the sector. However, KSA's ongoing dependence on imported
food and the phasing out of subsidies by the government are risks for the sector.
Both listed and private companies in the sector are attempting to mitigate these
risks by expanding geographically, as well as investing in agricultural projects in
less developing countries.
NCBC recommendation
We are cautiously optimistic about the sector's performance in the long term. We
believe most of the demand for the sector is locally driven and therefore likely to
remain strong despite ongoing global challenges. However, the Kingdom's
dependence on imported food is a key weakness. Nevertheless, in the short-run,
the moderate global outlook for 2012-2013 will likely ensure that commodity
prices will be under pressure, allowing margin expansion. We currently rate
Savola as overweight as we believe the margin expansion potential at the retail
business is significant, with the food business continuing to grow its volumes.
We are currently neutral on Almarai given our concerns on the return on
investment from the poultry business, alongside the time it will take for the new
businesses to become profitable.
Savola
(2050.SE)
Overweight 39.1 Food retail business is expanding aggressively with margins expected to increase as
buying power strengthens. Food business continues to take market share and expand
geographically across the region. Move to a holding company may unlock value.
Almarai
(2280.SE)
Neutral 60.4 Geographic expansion of the bakery and juice businesses and the start of operations at
the new poultry venture are key drivers for the stock. Our concerns are on the pace of
progress at poultry, as well as the returns which can be gained on this SR4bn investment.


0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2009 2010 2011
Savola Almarai Others
0%
2%
4%
6%
8%
2009 2010 2011
Sector Average Savola
94

SavoIa is one of the Ieading food companies in the MENA
region with operations stretching from Morocco to
Kazakhstan. The company is weII positioned to benefit from
the growth in mass grocery retaiI in the region as weII as
increased spending on food. SavoIa's move towards a
'FinanciaI HoIding Company' structure may unIock some of
the congIomerate discount currentIy present in the stock.
Limited abiIity to pass on the rise in raw materiaI prices to
consumers is a key risk.
x Business brief
Savola's business interests are divided into three segments: Savola Foods
(edible oils, sugar and pasta), Savola Retail (Panda and Hyper Panda) and
Savola Plastic. With more than 131 outlets across the KSA, Savola enjoys a
leading position in retailing. Savola has major investments in Almarai Dairy
Co. (30%), Herfy Foods Co. (47.6%), Kinan (30%), and Alexandria Sugar
(45.5%), among others. The company is also one of the founding
shareholders of KEC in Madinah and KAEC in Rabigh, KSA.
x FinanciaIs
Savola's revenues grew 19.8% to SR25.2bn in 2011 from SR21bn the
previous year, driven by market share gains in the food and retail division as
well as continued geographic expansions. Net income rose 35.6% YoY to
SR1.2bn during the year due to one-off gains from the sale of land during
4Q11 as opposed to one-off losses in the form of impairment during the last
quarter of 2010. Adjusting for these, net income increased at a slower pace
of 11% YoY to SR1,085mn as net margin declined from 4.6% in 2010 to
4.3% in 2011 due to higher financial charges.
n April 2012, Savola acquired 9.7% and 3.6% stakes in its subsidiaries USC
(KSA) and USCE (Egypt), respectively, from UK-based Tate & Lyle. n
December 2011, it announced the sale of its stakes in various lands and
bought the remaining stake in a pasta company in Egypt.
AGRCULTURE & FOOD | MAY 2012
SAVOLA GROUP
ALSO KNOWN AS: SAVOLA
OVERWEIGHT

STOCK DETAILS
Absolute (2.9) 9.3 21.0
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 18.1 4.8
12M 12.5 3.3
Bloomberg code SAVOLA AB
www.savola.com

Free float 73.4

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 15.7 14.3 12.9
P/B (x) 2.2 2.0 1.8
P/S (x) 0.7 0.6 0.6
Div Yield (%) 3.8 3.5 3.5
DPS 1.3 1.2 1.2

22
27
32
37
5,500
6,000
6,500
7,000
7,500
8,000
TAS SAVOLA Group (RHS)
Source: Bloomberg

Mohammed brahim Mohammed
Al Essa
12.0
nsurance (GOS)
10.9
Abdullah Mohammed Abdullah Al
Rabeah
8.7
Abdul Qader Al Muhaidib and
Sons Co.
8.5

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn
21,029 25,196 28,222 29,703 19.8 12.2
EBTDA SRmn
2,312 2,359 2,547 2,792 2.0 6.5
Adjusted Net ncome SRmn
975 1,085 1,185 1,321 11.3 10.7
Assets SRmn
17,782 20,101 21,943 22,968 13.0 8.9
Equity SRmn
7,020 7,722 8,537 9,258 10.0 9.7
Total Debt SRmn
5,174 6,232 6,813 7,026 20.4 10.7
Cash & Equiv SRmn
577 1,214 2,084 2,447 110.4 61.9
EBTDA Mgn %
11.0 9.4 9.0 9.4 - -
Net Mgn %
4.6 4.3 4.2 4.4 - -
ROE %
14.0 14.7 14.6 14.8 - -
ROA %
5.6 5.7 5.6 5.9 - -
Div Payout %
64.1 59.9 50.6 45.4 - -
EPS SR
2.0 2.2 2.4 2.6 10.0 9.1
BVPS SR
14.0 15.4 17.1 18.5 10.0 9.7

95

AImarai is the Ieading dairy company in the MiddIe East.
RecentIy, AImarai expanded into fruit juice, bakery, pouItry
and infant miIk as it seeks to become the Ieading food
company in the region. Key cataIysts for the coming year
incIude the pace of progress in its new pouItry business, as
weII as expansion of juice and bakery into the rest of the GCC.
x Business brief
Almarai's product range includes fresh and long-life dairy products, several
fruit juice flavors, cheese and butter, and bakery products. The company
recently entered the poultry and infant milk markets. The company expects to
increase the poultry output capacity fivefold to 100mn birds per year by 2012
and 150mn birds by 2014; the trial operation of nfant Milk and integration of
the recently acquired Fondomonte is anticipated in 2012.
x FinanciaIs
Almarai's revenues grew 14.7% YoY to SR7.9bn in 2011 led by higher
market share across key products, diversification and focus on product
innovation, service and quality. However, growth was lower vs. the average
of 27% over the last five years. Fruit Juice and Bakery segments registered
the strongest growth of 19% and 18%, respectively, during the year. Adjusted
net income grew just 1% YoY to SR1.3bn as margins came under pressure
due to higher commodity prices and limited pricing power. Management
expects 1520% YoY growth in revenue in 2012.
On April 3, 2012, Almarai approved a 74% increase in share capital through
bonus shares. On March 28, 2012, it raised its stake in nternational Dairy
and Juice from 48% to 52%. n the same month, Almarai announced the
completion of its first sukuk for SR1bn. n January 2012, it announced a trial
run at the local production facility for nfant Milk has been scheduled during
MarchMay 2012. n December 2011, Almarai announced the full acquisition
of Fondomonte S.A. (Argentina) for SR312mn.
AGRCULTURE & FOOD ~ MAY 2012
ALMARA COMPANY
ALSO KNOWN AS: ALMARA
NEUTRAL
Pri ci ng as of 09-05-2012

STOCK DETAILS
Shares outstandi ng (mn) 400
Absol ute 0.0 12.7 24.1
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 44.4 11.8
12M 25.3 6.7
Bloomberg code ALMARA AB
www.al marai .com

WEIGHTI NG & FREEFLOAT (%)
TAS (free fl oat wei ght) 1.84
Free fl oat 41.4

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 20.5 17.2 15.2
P/B (x) 4.0 3.5 3.1
P/S (x) 3.4 2.9 2.6
Di v Yi eld (%) 3.4 4.2 4.6
DPS 2.3 2.8 3.1


45
50
55
60
65
70
5,500
6,000
6,500
7,000
7,500
8,000
TAS Almarai (RHS)
Source: Bloomberg

Savol a Group 29.9
HH Pri nce Sul tan bin Mohammed
Saud Al Kabi r Al Saud
28.6
Omran Mohammed Al Omran and
Company
5.7


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn
6,931 7,951 9,141 10,329 14.7 14.2
EBTDA SRmn
1,886 2,037 2,470 2,906 8.0 15.5
Net ncome SRmn 1,287 1,300 1,554 1,762 1.0 11.0
Assets SRmn
12,571 15,654 17,889 19,675 24.5 16.1
Equi ty SRmn
6,134 6,718 7,621 8,731 9.5 12.5
Total Debt SRmn 4,847 6,926 7,925 8,325 42.9 19.8
Cash & Equi v SRmn
241 272 351 376 13.0 16.0
EBTDA Mgn %
27.2 25.6 27.0 28.1 - -
Net Mgn % 18.6 14.3 17.0 17.1 - -
ROE %
22.4 17.7 21.7 21.6 - -
ROA %
10.9 8.1 9.3 9.4 - -
Di v Payout % 69.9 70.7 72.0 70.3 - -
EPS SR
3.22 3.25 3.89 4.41 1.0 11.0
BVPS SR
15.35 16.81 19.07 21.84 9.5 12.5


96

Jazan DeveIopment Co. (JAZADCO) is headquartered in
Jazan. The company was estabIished in 1993 to conduct
agricuIture and aquacuIture activities in KSA. JAZADCO's
subsidiaries incIude Fish Hatcheries Company (40%), Jannat
AgricuIturaI Investment Company (25%) and Tabuk Fisheries
Company (20%).
x Business brief
JAZADCO's principal activities comprise ownership and operation of fish,
shrimp and fruit farms; investment in real estate and agricultural sectors;
production of mineral water and seafood; distribution of industrial, electrical
and food retail equipment; and real estate development including
establishment and operation of industrial projects. The company sells
products across Saudi Arabia as well as exports to other countries in GCC,
Europe and Far East. JAZADCO has an annual production capacity of 3,000
tons of shrimp, 46mn liters of mineral water and 800 tons of mangoes.
x FinanciaIs
Revenues declined 6.9% YoY to SR70mn in 2011. However, EBTDA fell
significantly to report a loss of SR8mn due to low production and high cost of
shrimp (owing to infection in the farm due to the white spot syndrome virus).
Net loss increased to SR69mn from SR22mn in 2010 due to the 50% drop in
Tabuk Fisheries Company's share capital (Jazadco holds a 20% stake) and
losses from the sale of Selonda UK.
On January 17, 2012, the company announced a loss of SR12mn from the
sale of Selonda UK, its 50% owned subsidiary, for a total value of
GBP1.2mn.
On December 12, 2011, JAZADCO filed a lawsuit against the former Board
of Directors of Tabuk Fisheries Company for not following company
procedures that led to losses of SR85mn; the company had to reduce its
share capital by 50% to SR100mn to cover these losses.
JAZAN DEVELOPMENT
ALSO KNOWN AS: JAZADCO
NOT COVERED

STOCK DETAILS
Absol ute (13.4) (21.7) (4.0)
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 104.3 27.8
12M 48.4 12.9
Bloomberg code GZACO AB
www.j azadco.com.sa

Free fl oat 98.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 1.6 1.7 1.9
P/S (x) 24.3 13.5 14.5
Di v Yi eld (%) - - -
DPS - - -


15
20
25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS Jazan Development (RHS)
Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
42 42 75 70 (6.9) 18.7
EBTDA SRmn
0 11 6 (8) (237.7) (364.1)
Net ncome SRmn
20 (29) (22) (69) 217.8 (251.1)
Assets SRmn
723 730 703 627 (10.8) (4.6)
Equi ty SRmn
675 649 600 527 (12.2) (7.9)
Total Debt SRmn
20 20 38 38 (0.0) 23.7
Cash & Equi v SRmn
83 42 35 29 (17.5) (29.4)
EBTDA Mgn %
1.0 26.4 7.5 (11.1) - -
Net Mgn %
47.6 (69.0) (28.8) (98.3) - -
ROE %
3.0 (4.4) (3.5) (12.3) - -
ROA %
2.8 (4.0) (3.0) (10.4) - -
Di v Payout %
125.0 - - - - -
EPS SR
0.40 (0.58) (0.43) (1.38) 217.8 (251.1)
BVPS SR
13.50 12.98 12.00 10.54 (12.2) (7.9)

97

Jeddah-based Saudia Dairy and Foodstuff Company
(SADAFCO) focuses on dairy products. It commenced
operations in 1977, and has since diversified its product Iine
by entering into joint ventures with other food companies.
SADAFCO's portfoIio comprises more than 100 products soId
under the SAUDIA brand.
x Business brief
SADAFCO operates through five main segments: Milk, Juices, Snacks, ce
Cream and Other Food items. Under the Milk division, SADAFCO offers a
wide range of milk packs, milk powder, cheddar cheese and milk shakes. The
ce Cream segment sells a number of ice cream flavors, while the Other Food
segment produces tomato ketchup and paste, as well as hummus.
x FinanciaIs
SADAFCO's revenues grew 10.9% YoY to SR1,134mn in 2011 due to a
robust growth in core categories, including milk and ice cream, along with
successful new innovations. EBTDA grew 1.4% YoY to SR165mn in 2011.
The company reported a net income of SR130mn in 2011 compared to
SR203mn in 2010, which was due to exceptional gains from sale of
investment.
On February 15, 2012, SADAFCO's Board of Directors approved the
establishment of a SR65mn regional distribution center in Riyadh, which is
expected to start operations by 2014. On September 27, 2011, SADAFCO
announced plans to reactivate the Dammam factory to expand production
capacity and meet the expected consumer demand.

SAUDA DARY AND FOODSTUFF
COMPANY
ALSO KNOWN AS: SADAFCO
NOT COVERED

STOCK DETAILS
Absolute (0.4) 8.7 29.0
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 14.8 3.9
12M 14.4 3.8
Bloomberg code SADAFCO AB
www.sadafco.com

Free float 58.2

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 64.9 9.0 14.2
P/B (x) 3.7 2.8 2.5
P/S (x) 2.0 1.8 1.6
Div Yield (%) - 5.3 5.3
DPS - 3.0 3.0

33
43
53
63
73
5,500
6,000
6,500
7,000
7,500
8,000
TAS SADAFCO(RHS)
Source: Bloomberg

United Manufacturing Co. 30.1
Al Samh Trading Ltd. 11.6
Global nvestment House 8.9

Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
878 922 1,023 1,134 10.9 8.9
EBTDA SRmn
104 103 163 165 1.4 16.7
Net ncome SRmn
58 28 203 130 (36.3) 30.4
Assets SRmn
764 719 964 1,074 11.4 12.0
Equity SRmn
515 502 667 731 9.7 12.4
Total Debt SRmn
6 18 0 0 NM NM
Cash & Equiv SRmn
83 50 323 338 4.5 59.7
EBTDA Mgn %
11.8 11.2 15.9 14.6 - -
Net Mgn %
6.7 3.1 19.9 11.4 - -
ROE %
11.7 5.6 34.8 18.5 - -
ROA %
7.8 3.8 24.1 12.7 - -
Div Payout %
83.4 0.0 48.0 75.3 - -
EPS SR
1.80 0.87 6.25 3.99 (36.3) 30.4
BVPS SR
15.85 15.45 20.51 22.49 9.7 12.4

Source: Tadawul, Zawya, Company, NCBC Research, Year end March 31

98

NationaI AgricuIture DeveIopment Company (NADEC)
commenced operations in 1981 with a 20% government stake.
The company focuses on agricuIturaI production, food
processing and distribution. NADEC operates through three
business segments: agricuIturaI, dairy and juice products.
The company seIIs products under the NADEC brand.
x Business brief
NADEC offers a wide range of products under each of its operating
segments. The company provides manufactured products such as tomato
paste, grains, vegetables, fruits, fodder, olives and honey under the
agricultural segment. The dairy products segment offers long-life products
(including cheese and milk), desserts and special products. The juice
segment offers a range of fresh and long-life juices in containers of various
sizes. NADEC has an annual production capacity of 106,000 tons of
potatoes, 150,000 tons of wheat, 82,000 tons of wheat seeds, 53,000 liters of
olive oil, 300,000 tons of alfalfa, 40,000 tons of onion, 5,000 tons of dates,
60,000 tons of maize, 9 tons of honey and 6,000 tons of grain maize. The
company also produces 800,000 liters of dairy products per day. NADEC
operates five agricultural projects, six cattle farms and two modern dairy
plants across Saudi Arabia.
x FinanciaIs
NADEC's revenues increased 7.5% YoY to SR1,556mn in 2011. The
company's EBTDA grew 36.4% YoY to SR305mn during the year. As a
result, EBTDA margin expanded to 19.6% from 15.4% in 2010. NADEC
benefited from a recovery in the agricultural and dairy segments (vis--vis the
previous year) and an improvement in efficiency through cost control
programs. The company's net income rose to SR91mn during the year
compared to a profit of SR11mn in 2010.
On March 20, 2012, the company recommended the distribution of 7.5%
cash dividends (SR0.75 per share) for 2011.
NATONAL AGRCULTURE
ALSO KNOWN AS: NADEC
NOT COVERED

STOCK DETAILS
Absolute (8.3) (4.2) 9.1
Market (6.2) (6.2) 7.6
Sector (3.8) 4.7 23.9
3M 39.7 10.6
12M 25.2 6.7
Bloomberg code NADEC AB
www.nadec.com.sa

Free float 68.6

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 171.4 19.7
P/B (x) 1.8 1.9 1.7
P/S (x) 1.3 1.2 1.2
Div Yield (%) - - 2.5
DPS - - 0.8

22
27
32
37
5,500
6,000
6,500
7,000
7,500
8,000
TAS NADEC (RHS)
Source: Bloomberg

Public nvestment Fund
20.0
Saleh Abdul Aziz Saleh Al Rajhi
11.4
Abdullah Abdul Aziz Saleh Al Rajhi
8.3
Sulaiman Abdul Aziz Saleh Al Rajhi
7.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
1,339 1,335 1,448 1,556 7.5 5.1
EBTDA SRmn
260 212 224 305 36.4 5.5
Net ncome SRmn
69 (43) 11 91 769.3 9.9
Assets SRmn
2,442 2,510 2,375 2,342 (1.4) (1.4)
Equity SRmn
1,059 975 972 1,063 9.4 0.1
Total Debt SRmn
922 1,103 980 907 (7.4) (0.5)
Cash & Equiv SRmn
18 35 47 28 (41.2) 15.5
EBTDA Mgn %
19.4 15.9 15.4 19.6 - -
Net Mgn %
5.1 (2.9) 0.7 5.9 - -
ROE %
6.7 (3.8) 1.1 9.0 - -
ROA %
3.2 (1.6) 0.4 4.9 - -
Div Payout %
65.2 0.0 0.0 49.3 - -
EPS SR
1.15 (0.64) 0.18 1.52 769.3 9.9
BVPS SR
17.65 16.26 16.19 17.72 9.4 0.1


99

EstabIished in 1981, Herfy Food Services Company (Herfy)
has a chain of fast food restaurants as weII as pastry, bakery
and chocoIate showrooms across Saudi Arabia. Herfy is
KSA's Iargest food chain with over 170 fast food restaurants,
16 pastry and chocoIate showrooms and one meat processing
pIant.
x Business brief
Herfy operates fast food restaurants, food retail outlets, bakeries and
chocolate showrooms. The company is also engaged in meat processing. ts
combined production capacity of sweets and bakery products stands at
13,400 tons per annum and frozen meat capacity at 4,090 tons a year.
x FinanciaIs
Herfy's revenues grew 22.2% to SR709mn in 2011 from SR580mn in 2010
largely due to the opening of 20 new restaurants during the year and the first
branch of the Herfy Cafe & Grill restaurant in 4Q11. Net income increased
18.0% YoY to SR147mn in 2011 as the company improved operating
efficiency through cost controls, thereby limiting the impact of higher raw
material prices. Cost containment also limited the impact on margins,
restricting the declineEBTDA margin stood at 26.7% and net margin at
20.7% during the year, as compared to 27.1% and 21.4%, respectively, in
2010.
On March 11, 2012, Herfy announced that the AGM would be held to
approve the distribution of 15% cash dividend. On August 25, 2011, Herfy
announced it had secured a SR45mn loan from the Saudi ndustrial
Development Fund to finance its cake and pastry plant project, expected to
start production in the coming six months.

HERFY FOOD SERVCES
ALSO KNOWN AS: HERFY
NOT COVERED

STOCK DETAILS
Absol ute (3.1) (7.0) 9.8
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 4.4 1.2
12M 3.3 0.9
Bloomberg code HERFY AB
www.herfy.com

Free fl oat 32.1

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 25.2 23.2 19.7
P/B (x) 9.1 7.6 6.6
P/S (x) 5.6 5.0 4.1
Di v Yi eld (%) - 3.5 3.5
DPS - 3.0 3.0


70
75
80
85
90
95
5,500
6,000
6,500
7,000
7,500
8,000
TAS Herfy Foods (RHS)
Source: Bloomberg

Savol a Group 47.6
Ahmed Hamad Mohammed Al
Sai d
20.3


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
466 518 580 709 22.2 15.0
EBTDA SRmn
118 141 158 189 20.1 17.2
Net ncome SRmn
91 115 124 147 18.0 17.1
Assets SRmn
355 411 499 587 17.7 18.3
Equi ty SRmn
262 317 380 440 15.6 18.8
Total Debt SRmn
30 18 34 41 21.9 11.3
Cash & Equi v SRmn
21 20 50 58 15.4 39.5
EBTDA Mgn %
25.2 27.3 27.2 26.7 - -
Net Mgn %
19.6 22.1 21.4 20.7 - -
ROE %
37.0 39.6 35.7 35.8 - -
ROA %
26.8 30.0 27.3 27.0 - -
Di v Payout %
- - 72.4 61.4 - -
EPS SR
3.04 3.82 4.14 4.89 18.0 17.1
BVPS SR
8.74 10.56 12.67 14.55 15.6 18.8

100

AI-Jouf AgricuIture DeveIopment Co (AI Jouf) was estabIished
in 1988. Headquartered in AI Jouf, the company processes
and seIIs agricuIturaI and animaI products. AI Jouf seIIs
across Saudi Arabia as weII as neighboring countries through
its marketing outIets.
x Business brief
Al Jouf's core activities are processing and marketing agricultural and animal
products. The company's product portfolio includes potatoes and potato
seeds, onion and onion seeds, and fruits such as peaches, plums, apples,
apricots and grapes. t also offers products such as olive oil, honey, dates,
wheat, barley, and alfalfa fodder for livestock and fodder dealers. Other
projects undertaken by the company include milk production and processing
(under the brand Al-Safwa Dairies), and sheep breeding and fattening.
x FinanciaIs
Revenues increased 18.8% to SR293mn from SR247mn in 2010. Top-line
growth was supported by higher sales. Furthermore, EBTDA margin
improved to 44.5% during the year from 43.5% in 2010, aided by a decline in
the share of cost of sales in total revenues. Consequently, net income grew
27.7% to SR85mn in 2011 from SR66mn in 2010.
On March 31, 2012, the Board of Directors announced that the AGM would
be held on April 18, 2012, to approve the distribution of cash dividend of
SR2.0 per share for 2011. On December 18, 2011, the Governor of Al-Jouf,
Prince Fahd bin Badr, inaugurated the Olive ndustrial Complex in the Basta
area. The factory is expected to have a daily production capacity of 200 tons
of olive.

AL-JOUF AGRCULTURE
ALSO KNOWN AS: AL JOUF, JADCO
NOT COVERED

STOCK DETAILS
Absol ute (10.5) 1.6 40.7
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 14.5 3.9
12M 19.0 5.1
Bloomberg code JADCO AB
www.al j ouf.com.sa

Free fl oat 95.2

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 15.0 14.2 11.1
P/B (x) 1.8 1.7 1.6
P/S (x) 3.5 3.8 3.2
Di v Yi eld (%) 5.3 5.3 5.3
DPS 2.0 2.0 2.0

23
28
33
38
43
5,500
6,000
6,500
7,000
7,500
8,000
TAS Jouff Agriculture (RHS)
Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 213 266 247 293 18.8 11.3
EBTDA SRmn
96 107 107 131 21.6 10.8
Net ncome SRmn
54 63 66 85 27.7 15.8
Assets SRmn 545 578 610 706 15.7 9.0
Equi ty SRmn
472 535 558 600 7.4 8.3
Total Debt SRmn
6 1 0 18 NM 46.1
Cash & Equi v SRmn 28 94 65 26 (59.8) (2.3)
EBTDA Mgn %
45.1 40.2 43.5 44.5 - -
Net Mgn %
25.5 23.7 26.8 28.8 - -
ROE % 12.1 12.5 12.1 14.6 - -
ROA %
10.3 11.2 11.2 12.9 - -
Di v Payout %
23.0 79.4 75.5 59.1 - -
EPS SR 2.18 2.52 2.65 3.38 27.7 15.8
BVPS SR
18.89 21.41 22.33 23.98 7.4 8.3


101

Qassim AgricuIture Co. (GACO), estabIished in 1984 and
headquartered in Qassim, invests in agricuIturaI and Iivestock
businesses. It has two business divisions - Farming and
Manufacturing. GACO is engaged in agricuIturaI and animaI
farming, harvesting and importing of grains and seeds.
x Business brief
GACO mainly undertakes crop production, food processing and animal
farming activities. The company produces 2,500 tons of dates, 25,000 tons of
corn and 42,000 tons of wheat annually. GACO is also a distributor of dates
and dairy products. The company invests in the construction of cooling stores
as well as transportation and import of fodder, cereals and agricultural
equipment to meet internal requirements.
x FinanciaIs
GACO's revenues fell 21.8% YoY to SR63mn in 2011. The company
reported lower losses (SR2mn) in EBTDA during the year. Net loss for the
year stood at SR16mn, compared to losses of SR18mn in 2010, due to
improved levels of productivity for wheat and maize, and restructuring of
projects. Furthermore, the operating efficiency was enhanced due to
administrative and technical skills that helped in resolving many issues.
On April 4, 2012, GACO announced that the change in the company's name
from 'Al Qassim Agricultural Company' to 'Al Qassim Holding' would be
considered in the upcoming EGM. On April 2, 2012, GACO announced the
filing of a lawsuit against Najdiyah Marketing Company for breach of terms of
the lease agreement of the company's dairy factory. On July 26, 2011, the
company leased out its poultry project to National Poultry Company for a
period of 15 years and a total value of SR150mn.
QASSM AGRCULTURE
ALSO KNOWN AS: GACO
NOT COVERED

STOCK DETAILS
Absolute (16.7) (17.0) 110.5
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 68.1 18.2
12M 58.0 15.5
Bloomberg code QAACO AB
www.gaco.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 3.0 3.1 3.3
P/S (x) 14.2 14.8 19.0
Div Yield (%) - - -
DPS - - -

5
15
25
35
45
5,500
6,000
6,500
7,000
7,500
8,000
TAS Qassim Agriculture (RHS)
Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
88 84 81 63 (21.8) (10.4)
EBTDA SRmn
14 6 (7) (2) (77.4) (149.3)
Net ncome SRmn
0 (7) (18) (16) (9.1) (482.5)
Assets SRmn
574 562 539 510 (5.3) (3.8)
Equity SRmn
405 399 381 365 (4.3) (3.5)
Total Debt SRmn
61 58 43 15 (64.7) (37.2)
Cash & Equiv SRmn
2 0 3 1 (66.7) (20.1)
EBTDA Mgn %
15.5 7.6 (9.0) (2.6) - -
Net Mgn %
0.3 (8.2) (21.8) (25.4) - -
ROE %
0.1 (1.7) (4.5) (4.3) - -
ROA %
0.1 (1.2) (3.2) (3.1) - -
Div Payout %
- - - - - -
EPS SR
0.01 (0.14) (0.35) (0.32) (9.1) (482.5)
BVPS SR
8.11 7.97 7.62 7.30 (4.3) (3.5)


102

EstabIished in 1982, Anaam InternationaI is headquartered in
Jeddah, Saudi Arabia. The company imports, produces and
seIIs frozen food and animaI feed. Anaam aIso invests in
industriaI projects and Iivestock trade. The company's
factories and pIants are Iocated in Jouf and Qassim.
x Business brief
Anaam is engaged in the import, export, supply, trade, transportation and
breeding of livestock in Saudi Arabia. The company also trades in marine
equipment. Other activities include production and transportation of meat,
management and operation of slaughter houses, processing of meat imports,
wholesale trade of frozen food, production of animal feed, and investments in
industrial projects. Anaam has a production capacity of 66,000 tons per year
of animal feed. The company is also involved in real estate development.
x FinanciaIs
Anaam's revenues rose 53.7% to SR215mn in 2011 from SR140mn in 2010
mainly due to the 57% rise in the food division's sales. The company's
EBTDA margins narrowed to 4.1% from 7.4% in 2010. Net profit improved
5.5% YoY to SR12mn in 2011. This was ascribed to the collection of previous
debt, an adjustment of SR7.6mn in provisions and a gain of SR3mn from the
sale of property and equipment.
On October 11, 2011, the company announced plans to expand its dry and
frozen foods businesses, along with the livestock-feed unit.

ANAAM NTERNATONAL
ALSO KNOWN AS: ANAAM
NOT COVERED

STOCK DETAILS
Absolute (1.7) 6.2 55.9
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 104.6 27.9
12M 76.8 20.5
Bloomberg code ANAAM AB
www.anaam.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 69.9 66.3
P/B (x) 7.1 6.4 5.9
P/S (x) 12.6 5.7 3.7
Div Yield (%) - - -
DPS - - -

35
45
55
65
75
85
5,500
6,000
6,500
7,000
7,500
8,000
TAS Anaam Holding (RHS)
Source: Bloomberg

Prince Abdullah bin Turki bin Abdul
Aziz Al Saud
9.9


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
103 63 140 215 53.7 27.7
EBTDA SRmn
9 6 10 9 (13.8) 0.8
Net ncome SRmn
5 (8) 11 12 5.5 33.6
Assets SRmn
248 233 237 243 2.6 (0.7)
Equity SRmn
120 112 123 135 9.7 4.0
Total Debt SRmn
22 19 15 33 110.5 13.9
Cash & Equiv SRmn
14 21 4 4 2.3 (32.3)
EBTDA Mgn %
8.4 10.2 7.4 4.1 - -
Net Mgn %
4.9 (12.8) 8.1 5.6 - -
ROE %
4.3 (7.0) 9.6 9.3 - -
ROA %
2.0 (3.4) 4.8 5.0 - -
Div Payout %
- - - - - -
EPS SR
0.46 (0.74) 1.04 1.09 5.5 33.6
BVPS SR
11.01 10.24 11.28 12.37 9.7 4.0


103

HaIwani Brothers Company (HB) produces, markets and
distributes food products in and outside Saudi Arabia. HB has
over 26 brands and 15 pIants in Saudi Arabia and Egypt.
EstabIished in 1952, the company is headquartered in Jeddah,
Saudi Arabia.
x Business brief
HB produces cheese, ice-creams, frozen and processed meat, jams, grains,
juices, dates and Arabic sweets, as well as manufacturing tissues. The
company has the capacity to produce 12,100 tons of tahina, 20,100 tons of
Arabic sweets, 22,950 tons of meat, 3,000 tons of cheese, 3,348 tons of
Arabic sweets, 4,500 tons of dairy products and 9,996 tons of jam per year.
x FinanciaIs
HB's revenues grew 11.2% YoY to SR814mn in 2011. However, top-line
growth was offset by higher raw material costs. ncreased cost of sales
lowered the EBTDA margin 138 bps to 15.7% as the company did not pass
on higher costs to consumers. EBTDA grew just 2.2% YoY to SR127mn. Net
income rose a marginal 0.2% to SR81mn in 2011 from SR80mn in 2010.
Growth in revenues was also impacted by a slowdown in operations in Egypt
due to the political and economic conditions in the country.
On April 11, 2012, HB announced a dividend of SR2 per share for 2011. On
March 15, 2012, the company expanded operations in Egypt, raising its
annual production capacity of processed meat by 50%. On August 16, 2011,
HB signed an 18-month contract worth SR77mn with Union Engineering
Projects Company to complete the civil and steel structure work of the
second phase of the company's industrial complex.

HALWAN BROTHERS
ALSO KNOWN AS: HALWAN, HB
NOT COVERED

STOCK DETAILS
Absol ute (7.3) (11.2) 19.8
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 18.7 5.0
12M 23.7 6.3
Bloomberg code HB AB
www.hal wani .com.sa

Free fl oat 44.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 28.7 15.3 15.2
P/B (x) 2.6 2.4 2.3
P/S (x) 2.0 1.7 1.5
Di v Yi eld (%) 2.3 3.5 4.7
DPS 1.0 1.5 2.0


25
35
45
55
65
5,500
6,000
6,500
7,000
7,500
8,000
TAS H B (RHS)
Source: Bloomberg

Dal ah ndustri al nvestment Co. 55.5
Mohamed Abdel Hameed
Mahmood Hal wani
6.9


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 664 617 732 814 11.2 7.0
EBTDA SRmn
71 89 125 128 2.2 21.4
Net ncome SRmn
58 43 80 81 0.2 11.3
Assets SRmn 646 570 653 689 5.5 2.2
Equi ty SRmn
485 463 508 538 6.0 3.5
Total Debt SRmn
66 0 0 13 NM (42.3)
Cash & Equi v SRmn 188 144 117 121 3.6 (13.6)
EBTDA Mgn %
10.8 14.5 17.1 15.7 - -
Net Mgn %
8.8 6.9 11.0 9.9 - -
ROE % 15.5 9.0 16.6 15.4 - -
ROA %
10.8 7.0 13.1 12.0 - -
Di v Payout %
36.7 67.0 53.3 71.0 - -
EPS SR 2.04 1.49 2.81 2.82 0.2 11.3
BVPS SR
16.97 16.21 17.76 18.82 6.0 3.5


104

Dammam-based Saudi Fisheries Company (SFC) commenced
operations in 1981. With ALASMAK as its fIagship brand, the
company operates in fishing, aquacuIture, and seafood
manufacturing and distribution. SFC manufactures products
at its processing pIants and deIivers them using its own fIeet.
x Business brief
SFC generates revenues from four operating segments: Value-added
Products (2,000 tons production capacity), ndividually Quick-Frozen or QF
Products (1,000 tons capacity), Fish Products and a new product called
Alasmak Tuna. The Value-added Products segment comprises fish sticks,
fish burgers, shrimp nuggets, king shrimp and golden crispy shrimp. The QF
division offers QF shrimp in retail packs. A company-owned chain of retail
shops and fish service counters handles the distribution process. The
company operates four processing plants (Dammam, Jeddah, Jazan and
Riyadh).
x FinanciaIs
SFC's revenues declined 11.6% YoY to SR87mn in 2011 compared to
SR98mn in 2010 mainly due to a decline in shrimp farm production as a
result of the white spot disease. EBTDA losses increased to SR13mn
compared to SR10mn in 2010. Furthermore, net losses increased to SR31m
in 2011 from SR27mn in 2010 due to the extraordinary losses incurred on
account of the disease that spread in the shrimp farm. As a result, a huge
stockpile of shrimp stock had to be discarded.
On September 14, 2011, an increase in the company's capital through a
168% rights issue was approved in the EGM.
SAUD FSHERES
ALSO KNOWN AS: ALASMAK, SFC
NOT COVERED

STOCK DETAILS
Absolute (11.7) (10.7) 22.1
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 87.5 23.3
12M 84.1 22.4
Bloomberg code SFCO AB
www.saudi-fisheries.com

Free float 38.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 13.1 16.3 4.3
P/S (x) 15.0 18.1 20.5
Div Yield (%) - - -
DPS - - -

17
27
37
47
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Fisheries (RHS)
Source: Bloomberg

Public investment Fund 39.9
Prince Mete'eb Bin Abdul Aziz Al
Saud
21.4

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
123 118 98 87 (11.6) (11.1)
EBTDA SRmn
(12) (11) (10) (13) 34.8 2.5
Net ncome SRmn
(26) (29) (27) (31) 14.4 6.0
Assets SRmn
200 187 197 536 172.4 38.8
Equity SRmn
164 136 109 413 280.0 36.0
Total Debt SRmn
2 9 48 71 47.8 248.3
Cash & Equiv SRmn
2 2 2 355 20162.5 461.9
EBTDA Mgn %
(9.8) (9.4) (9.8) (14.9) - -
Net Mgn %
(21.0) (24.3) (27.5) (35.5) - -
ROE %
(14.6) (19.1) (22.0) (11.8) - -
ROA %
(12.1) (14.8) (14.0) (8.4) - -
Div Payout %
- - - - - -
EPS SR
(0.48) (0.54) (0.50) (0.57) 14.4 6.0
BVPS SR
3.07 2.53 2.03 7.72 280.0 36.0


105

Riyadh-based Food Products Company was estabIished in
1989 to provide food products in Saudi Arabia. The company
focuses on processing, marketing, distributing and exporting
vaIue-added food items. Its target markets incIude Asia and
the MiddIe East.
x Business brief
Food Products Company operates under the brand name 'WAFRA' and has
a 11.1% stake in Jannat Agricultural nvestment Co. The company classifies
its operations under four business segments: Meat Factory (offers beef and
chicken burgers, kebabs, frankfurters); Vegetable Factory (offers frozen
French fries, potato wedges and a variety of peanuts); Pasta Factory
(produces a wide range of pastas under various brands); and Breakfast
Cereals (supplies corn flakes, frosted flakes and rice crispies).
x FinanciaIs
The company's revenues grew 11.4% YoY to SR82mn in 2011. However,
higher cost of sales (as a percentage of total revenues) due to rising raw
material prices lowered the EBTDA 2.2% YoY to SR16mn during the year.
The company's net income declined 43.8% YoY to SR10mn in 2011 due to
higher general and administrative expenses and lower rent income (as it
conceded the right of rent after it sold one of its building premises for
SR9.7mn).
On April 11, 2012, the company announced it had signed a contract with
Tabuk Agricultural Development Company for SR20.07mn to buy processed
potatoes. The company also announced signing a SR9.75mn contract with
an talian company to supply a new line of pastas and noodles, which would
be reflected in its financial statements for 2Q12. On December 4, 2011, the
company declared it had signed a memorandum of understanding with East
Asia Company to contribute SR5mn to the initial capital of Agricultural
Development and nvestment Company, which is currently in the process of
being established.
FOOD PRODUCTS COMPANY

NOT COVERED

STOCK DETAILS
Absolute (7.1) (1.7) 57.9
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 75.1 20.0
12M 61.2 16.3
Bloomberg code FPCO AB
www.wafrah.com

Free float 87.7

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 100.6 33.1 58.8
P/B (x) 3.3 3.0 2.8
P/S (x) 8.1 7.9 7.1
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Food (RHS)
Source: Bloomberg

Abdulhakeem A. O. Al Sheikh 10.2

Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
76 71 73 82 11.4 2.5
EBTDA SRmn
18 14 16 16 (2.2) (4.2)
Net ncome SRmn
14 6 17 10 (43.8) (11.1)
Assets SRmn
185 200 210 219 4.5 5.7
Equity SRmn
170 177 194 205 5.2 6.4
Total Debt SRmn
- - - - NM NM
Cash & Equiv SRmn
5 5 67 74 10.3 141.3
EBTDA Mgn %
23.7 19.5 22.0 19.3 - -
Net Mgn %
18.4 8.1 23.8 12.0 - -
ROE %
8.5 3.3 9.4 4.9 - -
ROA %
7.6 3.0 8.5 4.6 - -
Div Payout %
0.0 0.0 0.0 0.0 - -
EPS SR
0.70 0.29 0.87 0.49 (43.8) (11.1)
BVPS SR
8.50 8.83 9.72 10.23 5.2 6.4


106

Tabuk AgricuIture DeveIopment Company (TADCO),
estabIished in 1983 and headquartered in Tabuk, primariIy
manufactures and markets agricuIturaI products. It is aIso
engaged in environment protection and water resource
management. Its products incIude fruits, vegetabIes, forage
products, grains & seeds, and processed products such as
oIive oiI and honey.
x Business brief
TADCO operates through five business units: Forage (produces alfalfa to sell
mainly to dairy farms), Olive (produces and processes olive oil through olive
tree cultivation), Vegetable (mainly yields and markets onions and potatoes),
Fruit (cultivates fruits such as peaches, apricots, plums, nectarines and
pears) and Grain (produces wheat and wheat seeds).
x FinanciaIs
TADCO's revenues increased 15.4% YoY to SR174mn in 2011 due to higher
sales price realization for some products. EBTDA improved significantly by
52.6% YoY to SR58mn during the period as cost of production declined for
some of the products. Consequently, net income surged 185.1% YoY to
SR33mn in 2011.
On April 11, 2012, TADCO announced that it has signed a SR20mn contract
with Food Products Company to sell processed potatoes. On April 3, 2012,
the company informed it had signed a SR20mn contract with Al Safi Dairy
Company (Saudi Arabia) to provide the latter with green feed from April to
November 2012. On March 25, 2012, the company announced that it had
signed a Memorandum of Understanding to start a due diligence with Naji El
Dine Group (Morocco) for acquiring three of the latter's subsidiaries. The
acquisition would be financed by the company and its partners.
TABUK AGRCULTURE
ALSO KNOWN AS: TADCO
NOT COVERED

STOCK DETAILS
Absolute (15.7) (13.8) 31.9
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 54.1 14.4
12M 69.5 18.5
Bloomberg code TAACO AB
www.tadco-agri.com

Free float 72.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 85.2 51.7 18.1
P/B (x) 1.7 1.7 1.6
P/S (x) 3.6 4.0 3.5
Div Yield (%) 1.7 1.7 1.7
DPS 0.5 0.5 0.5

20
25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS Tabuk Agriculture (RHS)
Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
172 168 151 174 15.4 0.3
EBTDA SRmn
51 35 38 58 52.6 4.3
Net ncome SRmn
24 7 12 33 185.1 12.0
Assets SRmn
435 423 422 450 6.6 1.2
Equity SRmn
369 364 357 371 4.0 0.1
Total Debt SRmn
4 3 6 22 281.6 80.5
Cash & Equiv SRmn
4 10 5 5 0.7 6.4
EBTDA Mgn %
29.7 20.8 25.2 33.3 - -
Net Mgn %
13.7 4.2 7.7 19.1 - -
ROE %
6.2 1.9 3.2 9.1 - -
ROA %
5.3 1.6 2.7 7.6 - -
Div Payout %
42.4 142.0 86.1 30.2 - -
EPS SR
1.18 0.35 0.58 1.66 185.1 12.0
BVPS SR
18.47 18.18 17.85 18.56 4.0 0.1


107

Ash-Sharqiyah DeveIopment Company (Ash-Sharqiyah), was
estabIished in 1986 and seIIs meat and agricuIturaI products.
The company aIso undertakes agricuIturaI projects, Iand
rehabiIitation and irrigation work. Ash-Sharqiyah owns stakes
in AI Hassa Food Industries, United Dairy Farms and Pure
Breed PouItry.
x Business brief
Ash-Sharqiyah is engaged in the production and marketing of wheat, barley,
fodder crops (such as alfalfa and rhodes grass), wheat and barley straw and
potatoes. The company has an annual production capacity of 14.5 million
tons of milk, 14,000 tons of wheat and 550 kilograms of honey. Other
projects undertaken by the company include breeding of calf and sheep and
production of bio-fertilizers. Ash-Sharqiyah also owns a shopping center in
Dammam.
x FinanciaIs
The company's revenues declined 10.5% YoY to SR32mn in 2011. Higher
cost of production inputs and lower productivity levels of some agricultural
crops led to a fall in EBTDA margins to 0.1% from 18.8% in 2010.
Furthermore, higher administrative and marketing expenses increased
annual net losses to SR9mn in 2011 from SR5mn the previous year.
On December 7, 2011, the sale of the company's 50% owned subsidiary, Al
Ahsa Food ndustries Company, was approved by the BOD for a total value
of SR8mn.

ASH-SHARQYAH
ALSO KNOWN AS: SHADCO
NOT COVERED

STOCK DETAILS
Absol ute (6.2) (15.2) 27.7
Market (6.2) 6.2 7.6
Sector (3.8) 4.7 23.9
3M 61.7 16.4
12M 50.7 13.5
Bloomberg code ASACO AB
www.asharqi yah.com.sa

Free fl oat 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 4.7 5.0 5.7
P/S (x) 12.3 11.2 12.5
Di v Yi eld (%) - - -
DPS - - -


20
40
60
80
100
5,500
6,000
6,500
7,000
7,500
8,000
TAS Eastern Agriculture (RHS)
Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 51 32 35 32 (10.5) (14.7)
EBTDA SRmn
21 7 7 0 (99.7) (90.2)
Net ncome SRmn
(12) (5) (5) (9) 80.8 (8.4)
Assets SRmn 133 115 106 97 (8.5) (9.9)
Equi ty SRmn
104 85 80 70 (11.6) (12.2)
Total Debt SRmn
11 8 1 - NM NM
Cash & Equi v SRmn 1 0 1 0 (71.4) (21.8)
EBTDA Mgn %
41.2 22.0 18.8 0.1 - -
Net Mgn %
(23.5) (14.9) (14.4) (29.1) - -
ROE % (10.9) (5.1) (6.2) (12.3) - -
ROA %
(8.7) (3.9) (4.6) (9.1) - -
Di v Payout %
- - - - - -
EPS SR (1.60) (0.64) (0.68) (1.23) 80.8 (8.4)
BVPS SR
13.87 11.29 10.61 9.38 (11.6) (12.2)


108
MAY 2012
Telecom
7020 Etihad Etisalat 114
7010 STC 115
7030 Zain KSA 116
7040 Etihad Atheeb 117
7050 Saudi Integrated 118

The liberalization of the telecom sector in Saudi Arabia since 2006
has led to significant growth in the sector. The sector's subscriber
base has grown from 19.7mn in 2006 to 53.7mn in 2011. The
introduction of mid- and low-end smart phones, improved technical
capability coupled with the young population of Saudi Arabia has
led to an increase in the mobile broadband penetration rate to
39.6% at the end of 2011 from 0.1% in 2006. We believe
broadband potential remains significant; pressure on pricing and
margins are concerns.
Saudi Arabia remains the largest market for mobile services in the GCC, with the
mobile penetration rate having reached 188% at the end of 2011. With
penetration reaching this level, we believe the focus of operators is moving away
from acquiring new incremental subscribers to deriving more value from existing
subscribers. Therefore, we expect the penetration rate to grow at a slower pace
of 5% YoY in 2012. nternet penetration reached 47.6% in 2011 with 13.6mn
subscribers from 41% penetration rate and 11.4mn subscribers in 2010, while
broadband subscribers are likely to increase to 19mn by 2015 from 11.3mn at
the end of 2011. At 39.6% in 2011, broadband penetration in KSA was still
below that in Bahrain, Qatar and the UAE (more than 50% in all three countries).
KSA's fixed-line penetration increased almost 10% to 4.63mn subscriptions at
the end of 2011 from 4.13m at the end of 2010. Growth in the segment remained
subdued during 20082010 with a higher number of people preferring mobiles
and the corporate segment remaining restrained amid the global economic
downturn. Nevertheless, subscriptions grew significantly during 2011, largely
due to the buoyant construction activities in the country as well as the entry of
new player 'Atheeb' that resulted in competition-led growth. Over the longer
term, factors such as reducing household size, growing population and
increased demand from corporates are expected to drive fixed-line growth.
Margin stability key to outlook
n 2011, the telecom sector in Saudi Arabia faced margin pressure (mainly the
international voice segment). Access charges were the main cost items dragging
the bottom line, while other gross and operating costs were relatively well
managed across the sector. Decline in ARPU as a result of the aggressive
pricing policy pursued by Zain KSA exerted further pressure on margins.
However, going forward, we believe companies would continue to focus on the
data segment (primarily mobile broadband) and subscriber conversions from
prepaid to postpaid. This, in turn, will stabilize ARPU and offset some of the
margin pressure. According to CTC data, 300k net additions were made to the
post-paid subscriber base in 2011 compared to just 200k in 2010.
MAY 2012
TELECOM
Broadband to drive the next phase of growth
110
TELECOM NCB CAPTAL
MAY 2012

Exhibit 79: Fixed-line and mobile penetration rate Exhibit 80: Broadband & internet penetration rate
% %

Source: EU, BM, TU, CTC (as per latest data available) Source: EU, BM, TU, CTC, (as per latest data available)
The rapid growth in the Saudi Arabian telecom market has positioned it as the
largest in the GCC in revenue terms in 2011. However, the sector was behind its
GCC peers in terms of return on equity, mainly due to the losses incurred by
Zain KSA and Atheeb. The sector is trading at a P/E multiple of 9.8x, above the
GCC average of 8.1x.
Exhibit 81: GCC TeIco's revenues, 2009-11 Exhibit 82: GCC TeIco's RoE and P/E comparison, 2011
USD mn %

Source: Reuters, Tadawul, Bloomberg
The companies list is not exhaustive.
Source: Reuters, Tadawul, Bloomberg, NCBC Research
Size of the bubble represents market cap. as on 4 April 2012

Saudi listed telecoms market
STC is the largest company in the Kingdom's telecommunication sector (market
cap of SR81bn as on 4 April 2012), followed by Mobily (market cap of
SR46.4bn). Zain had its initial public offering in 2008 and launched commercial
services in August 2008. Atheeb listed in March 2009, while Saudi ntegrated
Telecom Company made its debut on the bourse in July 2011.
Units as indicated
Country
% weight in Index
as of March 2012
NIM (%),
2011
Avg. RoE (%),
2011
Etihad Etisalat Co (Mobily) 4.0 25.4 30.0
Saudi Telecom Co (STC) 2.1 13.9 17.0
Mobile Telecommunication Co. (Zain) 1.1 (28.8) (37.0)
Atheeb Telecom 0.1 NA NA
Source: Bloomberg, Tadawul, Reuters; *start periods may differ based on the availability of data

Despite intense competition, Mobily reported robust revenue growth of 25.2%
during 2011. This can be largely ascribed to the higher usage (minutes and data
transmission) and increased broadband subscribers. STC's revenues grew 7.5%
to SR55.6bn during 2011 due to an increase in revenues from international
0%
40%
80%
120%
160%
200%
10%
12%
13%
15%
16%
18%
2004 2005 2006 2007 2008 2009 2010 2011
Fixed-line Mobile (RHS)
0%
10%
20%
30%
40%
50%
0%
10%
20%
30%
40%
50%
2004 2005 2006 2007 2008 2009 2010 2011
Broadband nternet (RHS)
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
2009 2010 2011
-60.0
-40.0
-20.0
0.0
20.0
40.0
7 9 11 13
R
O
E
(
%
)
P/E (x)
111
TELECOM NCB CAPTAL
MAY 2012

operations and data services. However, net profit (excluding capital gain)
declined 18.1% due to increased cost of services and operating expenses. Zain
KSA's revenues grew 12.9% YoY, but it incurred losses of SR1.9bn during 2011.
Atheeb proved to be a significant gainer in the sector in terms of growth, with a
fourfold increase in revenues to SR186.6mn.
Exhibit 84 Revenue of companies, 2009-2011 Exhibit 85: Net profit margin, 2009-2011
SR mn %
Source: Tadawul Source: Tadawul

As of 31 December 2011, the P/B multiples of STC and Mobily stood at 1.7x and
2.5x, respectively, while that of Zain stood at 3x. ROE of STC and Mobily stood
at 17% and 30%, respectively. With Zain and Atheeb continuing to report losses,
their ROE remained negative.
% %

Source: Bloomberg, Tadawul
Source: Bloomberg, Tadawul

Zain was the most active stock in the telecom sector (turnover of SR62.5mn per
day in 2011), followed by Mobily (SR60.2mn per day).
0
12000
24000
36000
48000
60000
72000
84000
96000
2009 2010 2011
Atheeb Zain Mobily STC
10%
14%
18%
22%
26%
30%
2009 2010 2011
STC Mobily
-75
-45
-15
15
45
75
0 1 2 3 4 5 6 7 8
R
O
E

(
%
)
P/BV (x)
STC Mobily Zain KSA Atheeb
-200
-150
-100
-50
0
50
100
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
R
O
E

(
%
)
P/BV (x)
STC Mobily Zain KSA Atheeb
112
TELECOM NCB CAPTAL
MAY 2012

Exhibit 88: Avg. daily turnover, Jan11 - Dec11 Exhibit 89: Share price movement, Jan11 - Dec11
st
Jan-11
Source: Bloomberg, Tadawul Source: Bloomberg, Tadawul

The Saudi Arabian telecommunication sector is witnessing strong price based
competition with the focus shifting from voice to data. The drive to capture the
evolving data segment, which is largely underpenetrated now, is leading to
significant pricing pressure. Nevertheless, we believe the long-term growth
drivers for the sector remain intact due to the increased adoption of value-added
services amid lower tariff & handset prices and the evolution of smart phones
(sales of smart handheld devices increased 154% in 2010, according to CTC).
A relatively young population and their willingness to adopt new technologies as
well as the rising disposable income in KSA should support the demand for
these services. We believe the existing pressure on margins is likely to
rationalize after CTC's comment of avoiding price wars given it is adverse to
long term investment in the sector.
We have a cautiously optimistic view on the Saudi Arabian telecom sector as a
whole. Concerns exist over declining ARPUs, limited room for operating
efficiencies, high mobile penetration levels and a saturating voice market.
However, increasing focus on the largely underpenetrated data sub-segment
(primarily value added services and broadband access), increasing equipment
demand, potential international exposure and strong underlying macroeconomic
factors are likely to supplement the sector's growth in the near term. We are
currently covering three stocks in the sector: Saudi Telecom Co, Mobily and Zain
KSA.
Saudi Telecom Co.
(7010.SE)
Overweight 50.2 Key positives of the stock include its dominance in DSL and its higher and more
secure ARPU levels. Key concerns on the stock are focused on the limited
information available on its international operations as well as FX exposure
through its international investments.

Mobily
(7020.SE)
Overweight 75.5 Key positives of the stock include its dominance in wireless internet access and
its focused strategy. Key concerns on the stock are focused on its declining
ARPU levels and acquisition costs of new customers.

Zain KSA
(7030.SE)
Neutral 7.0 Key positives of the stock include its attractive and innovative packages and
increasing market share. Key concerns on the stock are focused on its high
debt levels and the financing of this as well as ownership concerns.

60
62
32
(5)
5
15
25
35
45
55
65
Mobily Zain STC
60
80
100
120
140
Mobily Zain KSA STC
113

Etihad Etisalat Company (Mobily) is the second largest mobile
operator in Saudi Arabia. As of December 2011, the company
had a market share of around 40%. Stable ARPU, increased
equipment sales, gains in data, and a potential upside in the
size and frequency of dividends are key positives. The
possibility of continued price-led competition, particularly in
the international call segment, is a key threat.
x Business brief
Mobily was established in 2004 with UAE-based Emirates
Telecommunications Corporation (Etisalat) as the majority owner. Mobily
commenced operations in 2005 by providing wireless telecommunication
services. The company offers mobile telephony services in the Kingdom
using GSM, 3/3.5G and Wimax technologies. Mobily's broadband subscribers
totaled 8.7mn in 2011.
x Financials
Mobily's revenues grew 25.2% YoY to SR20,052mn in FY11 attributable
largely to increased % of revenue from data (22% against 18% in 2010) as
broadband subscribers grew from 2.3mn in 2010 to 8.7mn in 2011. ncrease
in postpaid subscribers and expansion of business sector revenue by 50%
and 85%, respectively, also supported the revenue growth. EBTDA surged
20.9% YoY to SR7,454mn in FY11 as margins declined due to increased
competition in the international call and data business, as well as higher
contribution of low-margin smart phones and tablet PCs' during the year. Due
to this, net income came in at SR5,083mn, up 20.7% YoY. Net margin
declined by 95bps YoY to 25.4% in 2011 as compared to 26.3% in 2010.
x Recent Developments
n February 2012, Mobily signed a refinancing agreement worth SR10bn with
seven local banks to refinance three of its existing short, medium and long
term loans. n March, 2012, the company announced collaboration with
Etihad Atheeb Telecom (GO) to provide fixed voice services.
TELECOM ~ MAY 2012
ETHAD ETSALAT
ALSO KNOWN AS: MOBLY
OVERWEIGHT

STOCK DETAILS
Absolute (1.1) 12.9 26.4
Market (6.2) 6.2 7.6
Sector (1.1) 15.3 24.5
3M 76.8 20.5
12M 53.4 14.2
Bloomberg code EEC AB
www.mobily.com.sa

Free float 58.4

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 9.1 8.2 7.8
P/B (x) 2.5 2.2 1.9
P/S (x) 2.3 2.0 1.9
Div Yield (%) 4.9 6.1 7.0
DPS 3.3 4.0 4.6

45
50
55
60
65
70
75
5,500
6,000
6,500
7,000
7,500
8,000
TAS Etihad Etisalat Co
Source: Bloomberg

Etisalat UAE 27.4
nsurance (GOS)
11.2


Company financials
2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues
SRmn 16,013 20,052 22,546 23,681 25.2 13.9
EBTDA
SRmn 6,165 7,454 8,223 8,770 20.9 12.5
Net ncome
SRmn 4,211 5,083 5,595 5,867 20.7 11.7
Assets
SRmn 33,430 37,501 39,377 41,033 12.2 7.1
Equity
SRmn 15,580 18,388 21,183 23,820 18.0 15.2
Total Debt
SRmn 7,972 7,073 5,995 5,004 (11.3) (14.4)
Cash & Equiv
SRmn 1,661 1,690 1,307 1,648 1.7 (0.3)
EBTDA Mgn
% 38 37 36.5 37.0 - -
Net Mgn
% 26.3 25.4 24.8 24.8 - -
ROE
% 30.3 29.9 28.3 26.1 - -
ROA
% 13.1 14.3 14.6 14.6 - -
Div Payout
% 33.2 44.8 50.0 55.0 - -
EPS
SR 6.0 7.3 8.0 8.4 20.7 11.7
BVPS
SR 22.3 26.3 30.3 34.0 18.0 15.2

114

Despite liberalization of the sector, STC remains the leading
telecom company in Saudi Arabia by revenues and market
share. Bottom line progress in its international operations and
continued growth in the Saudi market are STC's key positives;
price-led competition and FX exposure are key areas of
concern.
x Business brief
Saudi Telecom (STC) was established in 1998 as Saudi Arabia's first telecom
operator. STC classifies its operating segments in terms of service offerings:
GSM, PSTN, and DATA. The GSM segment includes mobile, 3G, prepaid
cards, international roaming and messaging services; PSTN comprises fixed-
line, card telephones, interconnect and international call services. DATA
services consist of leased data transmissions, DSL and nternet services.
More than 30% of 2011 revenues came from abroad, including Turkey,
Malaysia and ndia.
x Financials
Despite increased domestic competition, the group's revenues grew 7.5% in
2011 due to improved contribution from international business and a 131%
YoY increase in broadband revenues. EBTDA grew 8.9% YoY due to a 7.0%
decline in SG&A expenses in 2011 compared to an 18% rise in 2010.
EBTDA margin is expected to remain close to 35% in 2012, since the
adverse impact of lower margin handset sales has mostly been felt in 2011.
However, a 20% YoY increase in financial charges led to an 18.1% decline in
net income in FY11. The company is expected to continue to invest in
upgrading networks and increasing its international presence, which might
increase its debt levels.
n December 2011, STC entered into an agreement with Saudi Research and
Marketing Group to purchase SRMG's 20% share in ntigral. STC abandoned
a plan to bid for raq's fourth mobile phone license after delays in awarding
the contract.
TELECOM ~ MAY 2012
SAUD TELECOM
ALSO KNOWN AS: STC
OVERWEIGHT

STOCK DETAILS
Absolute 3.3 15.0 14.1
Market (6.2) 6.2 7.6
Sector (1.1) 15.3 24.5
3M 58.7 15.7
12M 36.1 9.6
Bloomberg code STC AB
www.stc.com.sa

Free float 16.3

VALUATION MULTIPLES
11A 12A 13E
P/E (x) 8.8 10.7 10.1
P/B (x) 1.5 1.5 1.6
P/S (x) 1.6 1.5 1.4
Div Yield (%) 7.3 4.8 6.9
DPS 3.0 2.0 2.9

30
35
40
45
5,500
6,000
6,500
7,000
7,500
8,000
TAS STC (RHS)
Source:Bloomberg

nsurance (GOS)
7.0


Company financials
2010 2011 2012E 2013E YoY CAGR (%)
Revenues SRmn 51,787 55,662 59,733 60,987 7.5 5.6
EBTDA SRmn 19,621 21,371 21,496 22,246 8.9 4.3
Net ncome SRmn 9,436 7,729 8,163 8,425 (18.1) (3.7)
Assets SRmn 110,781 111,402 116,684 120,405 0.6 2.8
Equity SRmn 53,464 54,082 51,072 55,497 1.2 1.3
Total Debt SRmn 21,741 24,969 24,707 23,436 14.8 2.5
Cash & Equiv SRmn 6,051 6,589 9,906 10,190 8.9 19.0
EBTDA Mgn % 37.9 38.4 36.0 36.5 - -
Net Mgn % 18.2 13.9 13.7 13.8 - -
ROE % 18.1 14.4 15.5 15.8 - -
ROA % 8.6 7.0 7.2 7.1 - -
Div Payout % 63.6 51.8 70.1 67.9 - -
EPS SR 4.7 3.9 4.1 4.2 (18.1) (3.7)
BVPS SR 26.7 27.0 25.5 27.7 1.2 1.3

115

Mobile Telecommunications Company Saudi Arabia (Zain
KSA)-a member of Mobile Telecommunications Group (Zain),
Kuwait-was established in 2007 in Saudi Arabia to provide
wireless telecommunications services. Good progress in
growing its subscriber base is a key positive of Zain;
continued management change and further delay in balance
sheet restructuring are key risks.
x Business brief
Zain KSA is the third mobile operator in the Kingdom, which offers both voice
and data services. The company launched commercial services in August
2008 and is said to have 10mn subscribers as of December 2011. Zain KSA
became EBTDA positive in 2010. However, the company's ability to
generate net profits is hampered by a high debt burden and continuous
management change, as the company announced its new CEO on 3 March,
2012 (third CEO in six months).
x Financials
Due to its increased subscriber base and broadband customers, Zain KSA
recorded a 13% YoY revenue growth in 2011. COGS declined 19.0% in
FY11 compared to 37% in FY10, leading to a positive EBTDA of SR899mn
compared to SR331mn in 2010. The 7.0% fall in financial charges in FY11
vis-a-vis 47.0% in FY10 limited net losses to SR1, 925mn YoY.
On March 3, 2012, the Board appointed Mr. Fraser Curley as the new CEO of
the company. On 26 January, 2012, the company received investor approval
for a SAR 9.75bn syndicated Murabaha financing to extend the murabaha's
maturity till 27 July, 2012.
TELECOM ~ MAY 2012
ZAN KSA
ALSO KNOWN AS: ZAN
NEUTRAL

STOCK DETAILS
Absolute (8.5) 24.5 30.7
Market (6.2) 6.2 7.6
Sector (1.1) 15.3 24.5
3M 722.9 192.7
12M 237.7 63.4
Bloomberg code ZANKSA AB
www.sa.zain.com

Free float 45.0

VALUATION MULTIPLES
11A 12A 13E
P/E (x) - - -
P/B (x) 3.0 3.8 4.6
P/S (x) 1.9 1.7 1.5
Div Yield (%) - - -
DPS - - -

4
6
8
10
12
5,500
6,000
6,500
7,000
7,500
8,000
TAS Zain (RHS)
Source: Bloomberg

Mobile Telecommunications Co 25.0
Faden Commercial & Real Estate
Establishment
6.8
Factory Steak Saudi ELPLA 6.8

Source: Tadawul NCBC Research
Company financials
2010 2011 2012E

2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 5,934 6,699 7,694 8,356 12.9 12.1
EBTDA SRmn 491 975 1,599 2,058 98.6 61.2
Net ncome SRmn (2,358) (1,925) (903) (616) (18.4) (36.1)
Assets SRmn 28,055 26,744 26,027 25,590 (4.7) (3.0)
Equity SRmn 6,129 4,293 3,390 2,775 (30.0) (23.2)
Total Debt SRmn 13,980 6,396 0 9,748 (54.3) (11.3)
Cash & Equiv SRmn 702 780 484 641 11.1 (3.0)
EBTDA Mgn % 8.3 14.6 20.8 24.6 - -
Net Mgn % (39.7) (28.7) (11.7) (7.4) - -
ROE % (32.0) (36.9) (23.5) (20.0) - -
ROA % (8.4) (7.0) (3.4) (2.4) - -
Div Payout % 0.0 0.0 0.0 0.0 - -
EPS SR (1.68) (1.38) (0.65) (0.44) (18.4) (36.1)
BVPS SR 4.38 3.07 2.42 1.98 (30.0) (23.2)

116

Etihad Atheeb Telecommunications Company (Atheeb) was
established in 2008 to provide fixed-line telecommunication
services in KSA. The company is a joint venture between
Bahrain Telecom and KSA-based Atheeb Trading Co, Al-Nahla
Trading Co, and Traco Group.
x Business brief
Atheeb was established to build, operate and maintain the second fixed-line
telecommunication network in Saudi Arabia. The company offers video
services, internet telephony and broadband internet, as well as voice
telephone communications and data services. The company offers voice and
internet services across 11 cities in KSA under the GO brand.
x Financials
Atheeb's revenues increased 31.2% YoY to SR179mn in 9M12 compared to
SR137mn in 9M11. Furthermore, a 56.0% decline in COGS restricted
EBTDA losses to SR72mn (SR319mn loss in 9M11). Other income
increased to SR287mn, leading to a net profit of SR21mn in 9M12 against a
net loss of SR453mn in 9M11. The company expanded its proposed
SR600mn rights issue to SR1.175bn to meet additional funding needs.
On March 19, 2012, Atheeb announced collaboration with Etihad Etisalat
Company (Mobily) to provide fixed voice services to several commercial and
residential complexes which would be agreed upon in due course. n March
2012, Atheeb Telecom (GO) announced collaboration with Saudi Telecom
Company (STC) on offering commercial services.
TELECOM ~ MAY 2012
ETHAD ATHEEB
ALSO KNOWN AS: ATHEEB
NOT COVERED

STOCK DETAILS
Absolute (5.3) NA 1.4
Market (6.2) 6.2 7.6
Sector (1.1) 15.3 24.5
3M NA NA
12M NA NA
Bloomberg code EAT AB
www.go.com.sa

Free float 35.0

VALUATION MULTIPLES
10A 11A TTM
P/E (x) - - -
P/B (x) 4.6 61.9 42.3
P/S (x) 80.0 15.2 12.4
Div Yield (%) - - -
DPS - - -

12
17
22
27
32
5,500
6,000
6,500
7,000
7,500
8,000
May-11 May-11 Apr-12 Apr-12 May-12
TAS Atheeb (RHS)
Source: Bloomberg

Atheeb Trading Co. Ltd. 16.1
Bahrain Telecom 15.0
Al Nahla Commercial & Real Estate 13.7
TRACO 5.8

Company financials*
FY09 FY10** FY11 9M12*
YoY
(%)
CAGR (%)
(09-12E)
Revenues SRmn - 35 187 179 0.3 -
EBTDA SRmn - (310) (265) (72) (0.8) -
Net ncome SRmn - (379) (575) 21 (1.0) -
Assets SRmn - 2,114 2,113 1,779 (0.2) -
Equity SRmn - 621 46 67 (0.6) -
Total Debt SRmn - 1,008 1,610 1,125 (0.3) -
Cash & Equiv SRmn - 77 187 22 (0.9) -
EBTDA Mgn % - (875.7) (141.8) (40.2) - -
Net Mgn % - (1,069.4) (308.3) 11.7 - -
ROE % - (61.0) (172.5) 17.9 - -
ROA % - (17.9) (26.7) 1.0 - -
Div Payout % - - - - - -
EPS SR - (2.41) (3.66) 0.13 (1.0) -
BVPS SR - 3.96 0.29 0.43 (0.6) -
Source: Tadawul, Zawya, Company, NCBC Research, *company's year ending is 31 March, **Atheeb started operations in January
2010

117

Saudi Company for Integrated Telecommunications Company
(SITC) was formed as a partnership between Integrated
Telecom (ITC) and PCCW (one of the biggest
telecommunication providers in Hong Kong). In June 2011,
SITC launched its IPO to offer 35mn shares, representing 35%
of its share capital and was listed on the Tadawul Stock
Exchange on June 28, 2011.
x Business brief
STC was established to offer next-generation solutions for broadband,
interconnection and satellite services in Saudi Arabia. According to the terms
of the agreement, PWCC would manage the business for five years on a
build-operate-and-transfer basis. TC, the founder company, is one of the
leading telecommunication firms in the Kingdom, with six international
gateways. One of the key benefits that TC enjoys is gains from significant
investments in independent and state-of-the-art fiber network of 12,000 KM
connecting key cities in the Kingdom and another 10,000 KM in metro areas.
x Financials
STC has not completed one full year of operations; hence, financials have
not been discussed.
The Board of the Capital Markets Authority (CMA) announced suspension of
trading in STC's shares from 01 April 2012 as the company did not disclose
its 2011 financial results by the stipulated deadline set by the CMA.

TELECOM ~ MAY 2012
SAUD NTEGRATED
ALSO KNOWN AS: ALMUTAKA SA
NOT COVERED
Pricing as of 31-03-2012*

STOCK DETAILS
Absolute NA NA NA
Market (6.2) 6.2 7.6
Sector (1.1) 15.3 24.5
3M 259.9 69.3
6M - -
Bloomberg code ALMUTAKA AB
www.itc.net.sa

Free float 35.0

VALUATION MULTIPLES
08A 09A 10A
P/E (x) - - -
P/B (x) - - -
P/S (x) - - -
Div Yield (%) - - -
DPS - - -


6
16
26
36
46
56
5,500
6,000
6,500
7,000
7,500
8,000
Jun-11 Sep-11 Dec-11 Mar-12
TAS Almutaka (RHS)

Source: Bloomberg
Al Mawarid nvestment Co. Ltd. 28.0
PCCW Cascade Middle East 15.0
ntegrated Telecommunications Ltd 8.0
Al Mawarid Electronic Co Ltd 7.0
Public Pension Agency 5.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn - - - - - -
EBTDA SRmn - - - - - -
Net ncome SRmn - - - (43) - -
Assets SRmn - - - 314 - -
Equity SRmn - - - 307 - -
Cash & Equiv SRmn - - - - - -
EBTDA Mgn % - - - - - -
Net Mgn % - - - - - -
ROE % - - - (14.1) - -
ROA % - - - (13.8) - -
Div Payout % - - - - - -
EPS SR - - - (0.43) - -
BVPS SR - - - 3.07 - -
Source: Tadawul, Zawya, Company, NCBC Research , * Trading suspended since 01-04-2012

118
MAY 2012
Insurance
8010 Tawuniya 122
8030 MEDGULF 123
8020 Malath Insurance 124
8310 AMANA Insurance 125
8200 Saudi Re 126
8290 Solidarity 127
8210 BUPA Arabia 128
8260 Gulf General 129
8250 AXA-Cooperative 130
8230 ARCCI 131
8170 Trade Union 132
8190 U C A 133
8080 SABB Takaful 134
8130 Alahli Takaful 135
8180 Sagr Insurance 136
8280 Al Alamiya 137
8220 Weqaya Takaful 138
8160 Arabia Insurance 139
8060 Walaa Insurance 140
8120 Gulf Union 141
8070 Arabian Shield 142
8270 Buruj Insurance 143
8090 SANAD 144
8300 Wataniya Insurance 145
8240 ACE Arabia 146
8040 ALLIANZ SF 147
8050 Saudi Salama 148
8140 Al-Ahlia Insurance 149
8150 ACIG 150
8100 SAICO 151
8110 Saudi Indian 152
8311 Saudi Enaya 153

Saudi Arabia is one of the largest insurance markets in the GCC.
However, insurance penetration in the Kingdom is among the
lowest in the region. n KSA, non-life policies generate most of the
premium income (93%) compared to life policies (7%). According
to the Economist ntelligence Unit (EU), health insurance is the
biggest line of business (53% of the insurance market in 2010),
followed by general insurance (41%), which includes property and
automobile insurance. Favorable demographic profile, regulatory
support and wider acceptance for Takaful insurance are likely to
drive growth in the industry.
The insurance sector in Saudi Arabia continued to expand in 2011sector
revenue rose 23.9% YoY to USD3.7bn from USD3.0bn in 2010. The sector
continues to offer significant growth opportunities, given that insurance
penetration in the Kingdom is low with the ratio of total estimated premiums to
GDP pegged at 1.1% in 2010 (according to Swiss Re). High population growth
with rising proportion of young people and supportive government regulations
(mandatory health insurance for expats and most nationals) reinforce the outlook
for growth in the industry. However, with around 50 insurance players in the
Kingdom, the industry faces intense competition.
Listed insurance companies in KSA are trading at a higher P/B multiple of 5.9x
compared to the GCC average of 2.0x. However, the average ROE for players in
the Kingdom is as low as -4.0% compared to the GCC average of 3.8%. This is
because majority of the companies continue to make losses (39% of the total
listed companies in the sector incurred losses in 2011), which indicates that the
sector is still in the nascent stage of development.
Exhibit 91: Revenue of GCC insurance companies,
2009-11
Exhibit 92: Comparison of ROE and P/E of GCC
companies, 2011
USD mn %

Source: Zawya, Bloomberg, Tadawul, NCBC Research Source: Zawya, Bloomberg, Tadawul, NCBC Research

As of March 28, 2012, market capitalization of the 32 companies in KSA's
insurance sector stood at USD7.2bn. The erstwhile state-owned monopoly,
Tawuniya, is the largest company in Saudi Arabia, accounting for 16.4% of the
total market capitalization, followed by Mediterranean & Gulf nsurance &
Reinsurance Co. (MEDGULF, 10.7%). Given that insurance is a capital intensive
business with a high gestation period and that KSA's insurance sector is still in
0
500
1000
1500
2000
2500
3000
3500
4000
2009 2010 2011
KSA UAE Qatar Kuwait Bahrain Oman
-8%
-4%
0%
4%
8%
12%
16%
0.0 5.0 10.0 15.0 20.0 25.0 30.0
KSA UAE Qatar Kuwait Bahrain Oman
MAY 2012
NSURANCE
Health insurance drives insurance market
120
NSURANCE NCB CAPTAL
MAY 2012

its early stages, several listed companies are experiencing low levels of
profitability or losses.
Units as stated
Country
% weight in Index
as on 28 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Saudi Fransi Co-operative nsurance Co. (Allianz SF) 0.94 0.4 1.0
The Company for Co-operative nsurance (Tawuniya) 0.37 13.3 23.0
The Mediterranean & Gulf nsurance and Reinsurance Co. (MEDGULF) 0.16 11.9 21.1
Malath Co-operative nsurance and Reinsurance Co. (Malath) 0.14 3.2 5.2
Solidarity Saudi Takaful Co (Solidarity) 0.10 NM (17.3)
Saudi Enaya Cooperative nsurance Company 0.10 NM NM
SABB Takaful (SABB) 0.08 (5.9) (3.2)
Amana Cooperative nsurance Co (Amana) 0.08 (49.4) (24.9)
Bupa Arabia for Co-operative nsurance Co. (Bupa) 0.07 2.2 8.3
Saudi United Cooperative nsurance Co. (Walaa) 0.06 2.5 3.0
Gulf Union Co-operative nsurance Co. (Gulf Union) 0.06 (34.5) (34.9)
United Co-operative Assurance (UCA) 0.06 6.6 16.5
Weqaya Takaful insurance & reinsurance Co. (Weqaya) 0.06 (107.4) (30.7)
Al-Rajhi Company for Cooperative nsurance (ARCC) 0.06 (11.7) (26.0)
Gulf General Cooperative nsurance Company (Gulf General) 0.06 (29.9) (44.2)
Arabian Shield Co-operative nsurance Co. (Arabian Shield) 0.05 5.5 5.0
The Saudi Arabian Cooperative nsurance Co. (SACO) 0.05 (2.1) (11.4)
Alahli Takaful Company (ATC) 0.05 (349.8) (4.8)
Al-Ahlia nsurance Co. (Al-Ahlia) 0.05 (2.8) (14.3)
Arabia nsurance Co-operative Co. (ACC) 0.05 4.8 (10.3)
Trade Union Co-operative nsurance (Trade Union) 0.05 7.2 8.8
Al-Sagr Cooperative nsurance Co. (Al Sagr) 0.05 15.5 13.4
ACE Arabia Cooperative nsurance Co. (ACE) 0.05 13.3 11.9
AXA Cooperative nsurance Co. (AXA-Cooperative) 0.05 (6.7) (13.6)
Al Alamiya for Cooperative nsurance Company (Al Alamiya) 0.05 NM NM
Buruj Cooperative nsurance Company (Buruj) 0.05 34.9 20.1
Wataniya nsurance Company (Wataniya) 0.05 (7.9) (13.0)
slamic Arab nsurance Co. (SALAMA) 0.04 1.8 3.0
Sanad nsurance and Reinsurance Co-operative Co. (Sanad) 0.04 (15.4) (23.1)
Saudi ndian Company for Cooperative nsurance (Saudi ndian) 0.04 (1.7) (2.2)
Allied Co-operative insurance group (ACG) 0.04 (2.0) (9.2)
Saudi Re for Co-operative Reinsurance Co. (Saudi Re) 0.01 (45.9) (3.6)
Source: Zawya, Bloomberg, Tadawul: Company data

The sector's profit fell 31% to USD129.3mn in 2011 from USD188.0mn in 2010
as new companies incurred higher losses. Tawuniya's revenue grew 16.4% to
SR3.2bn, while net income fell about 9.5%. MEDGULF's revenue rose 7.6%
YoY to SR2.0bn, while BUPA's revenue increased 19.7% YoY to SR1.9bn, in
2011.
SR mn %

Source: Zawya, Bloomberg, Tadawul, NCBC Research Source: Zawya, Bloomberg, Tadawul, NCBC Research;
0
2000
4000
6000
8000
10000
12000
14000
2009 2010 2011
Tawuniya Medgulf Bupa Arabia Others
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2009 2010 2011
Tawuniya Medgulf Bupa Arabia
121

The Company for Cooperative Insurance (NCCI), wideIy known
as Tawuniya, was estabIished in Riyadh in 1986. Tawuniya
provides IsIamic as weII as conventionaI generaI and famiIy
insurance services. It aIso undertakes reinsurance and
agency activities. The company's subsidiaries incIude United
Insurance Company (50% stake), WaseeI Co. (45%) and
Cooperative ReaI Estate Investment Co. (33.33%).
x Business brief
Tawuniya's product portfolio falls under two broad categories: retail and
corporate. The retail segment provides motor vehicle, medical & accident, fire
& property, and miscellaneous insurance. The corporate division offers motor
vehicle, medical, fire & property, casualty, engineering, marine, aviation and
energy insurance services. To aid its insurance services, the company
entered into agreements with international re-insurers such as Munich Re.
x FinanciaIs
Tawuniya's gross written premium increased 6.0% YoY to SR4.10bn for the
year ended December 2011. The company's net premium earned rose
16.5% YoY to SR3.1bn. As a result, total revenue grew 16.4% YoY to
SR3.3bn. However, net income declined 9.5% YoY as net claims increased
35.5% YoY. Profit margins also fell due to a decline in prices and
policyholders' investment income.
n March 2012, Tawuniya announced the distribution of SR3.5 per share
cash dividend for the year ended 31December 2011.
NSURANCE ~ MAY 2012
TAWUNYA
ALSO KNOWN AS: TAWUNYA

NOT COVERED

STOCK DETAILS
Market cap (SR mn) 980
Absolute (18.7) (15.5) (26.0)
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 23.5 6.3
12M 12.7 3.4
Bloomberg code TAWUNYA AB
www.tawuniya.com.sa

Free float 53.37 F

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 12.4 7.6 8.4
P/B (x) 2.6 2.1 1.8
P/S (x) 1.7 1.3 1.1
Div Yield (%) 8.2 6.1 7.1
DPS 4.0 3.0 3.5

40
45
50
55
60
65
70
5,500
6,000
6,500
7,000
7,500
8,000
TAS Tawuniya (RHS)
Source: Bloomberg

nsurance (GOS)
22.8


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn 1,271 2,064 2,659 3,098 16.5 34.6
Total Revenues
SRmn 1,602 2,175
2,829 3,293 16.4 27.2
Net ncome
SRmn 67 296
485 439 (9.5) 86.9
Assets
SRmn 5,097 7,227 7,532 7,384
(2.0) 13.2
Equity
SRmn 1,073 1,416
1,769 2,049 15.8 24.0
nvestments
SRmn 1,081 1,407 1,816 2,052
13.0 23.8
Technical Reserves SRmn 2,783 1,838 2,198 2,316
5.3 (5.9)
Combined Ratio % 110.1 88.4 86.8 91.0
- -
Net Mgn
% 4.2 13.6 17.1 13.3
- -
ROE
% 4.6 23.8 30.4 23.0
- -
ROA
% 1.3 4.8 6.6 5.9
- -
Div Payout
% 223.1 101.2 46.4 59.8
- -
EPS
SR 0.9 4.0 6.5 5.9
(9.5) 86.9
BVPS
SR
14.3 18.9 23.6 27.3 15.8 24.0
122

Mediterranean & GuIf Insurance & Reinsurance Co.
(MEDGULF), a subsidiary of MedguIf Group, is a Ieading
insurance and reinsurance company in the MiddIe East with
operations across Saudi Arabia, Bahrain, Lebanon, Turkey,
Jordan, the UAE, and the UK. EstabIished in 2006, the
company currentIy operates through offices in Riyadh,
Jeddah and Khobar.
x Business brief
MEDGULF provides insurance products including motor, health, aviation,
banker's blanket bonds, burglary, contractor's all risk, credit, employer's
liability, fidelity guarantee, marine cargo and hull insurance. The company
offers one-stop solution by providing insurance and reinsurance services
along with risk management and third-party administration.
x FinanciaIs
Net insurance premium, which contributes around 93% to MEDGULF's total
revenue, grew 4.4% YoY to SR1.8bn in 2011. Consequently, total revenue
rose 7.6% YoY to SR2bn. Despite an increase in combined ratio to 94% in
2011 from 91% in 2010, the company's net income grew 3.3% YoY to
SR240mn. The rise in net income can be attributed to increased insurance
operation surplus.
n March 2012, MEDGULF approved the distribution of cash dividend of SR2
per share for the year ended December 31, 2011. n August 2011, the
company appointed Khaled Abdullah Shathry and Emad Jalal Baban as
independent board of directors. n May 2011, MEDGULF entered into a
three-year contract with SABC to provide health insurance to the latter's
employees and family members as per contract terms and conditions. During
the same month, the company obtained an A- credit rating from Standards &
Poor's.

NSURANCE ~ MAY 2012
MEDGULF
ALSO KNOWN AS: MEDGULF SAUD

NOT COVERED

STOCK DETAILS
Market cap ($mn) 646
Absolute (11.4) (4.4) (7.1)
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 17.9 4.8
12M 11.2 3.0
Bloomberg code MEDGULF AB
www.medgulf.com

Free float 35.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 16.5 10.4 10.1
P/B (x) 2.6 2.3 2.1
P/S (x) 1.8 1.3 1.2
Div Yield (%) 2.5 4.1 6.6
DPS 0.8 1.3 2.0

20
25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS MEDGULF (RHS)
Source: Bloomberg

MEDGULF 40.5
Saudi nvestment Bank 19.0


Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn - 1,300 1,792 1,871 4.4 NM
Total Revenues SRmn - 1,354 1,870 2,012 7.6 NM
Net ncome SRmn 5 147 232 240 3.3 255.6
Assets SRmn 807 2,961 3,914 3,922 0.2 69.4
Equity SRmn 788 925 1,069 1,174 9.8 14.2
nvestments SRmn 773 576 593 593 (0.0) (8.5)
Technical Reserves SRmn - 1,411 1,945 2,131 9.6 NM
Combined Ratio % - 92 91 94 - -
Net Mgn % - 10.8 12.4 11.9 - -
ROE % 0.7 17.1 23.3 21.4 - -
ROA % 0.7 7.8 6.8 6.1 - -
Div Payout % - 41.0 43.0 66.6 - -
EPS SR 0.07 1.83 2.90 3.00 3.3 255.6
BVPS SR 9.85 11.57 13.36 14.67 9.8 14.2

* Financials of 2008 for 20 Months
123

MaIath Cooperative Insurance and Reinsurance Company
(MaIath) was estabIished in 2007. Headquartered in Riyadh,
MaIath, was the second insurance company (after Tawuniya)
to be Iisted on the Saudi Stock Exchange. In addition to
generaI insurance, the company aIso provides facuItative
reinsurance products.
x Business brief
Malath's Corporate Products segment offers health, group life, motor,
property, engineering, marine, aviation and energy insurance. Under the
Retail division, the company provides health, medical malpractice, travel and
motor insurance. Malath derives premium income mainly from motor,
medical, property, aviation, marine cargo & hull, energy, and engineering
insurance.
x FinanciaIs
Malath's total revenue increased 15.7% YoY to SR444mn in 2011. The
growth can be mainly attributed to a rise in net insurance premium earned,
which grew 22.5% YoY to SR398mn from SR325mn in 2010. However, the
company's net income declined 22% YoY to SR14mn in 2011 compared to
SR18mn in 2010. The fall was mainly due to credit sales and a change in the
bad debt provision calculation method based on Saudi Arabian Monetary
Agency's requirements, which increased bad debt provision by SR12mn in
2011. Motor claims provision also rose as a result of the new royal decree on
blood money.
n November 2011, Malath entered into a one-year agreement with Aviva
British Co. to provide health insurance services to students on UK
scholarship. This contract is worth more than 10% of the company's annual
sales in 2010. n May 2011, Standards & Poor's revised the company's
outlook to positive from stable and affirmed its credit rating at 'BBB'.
NSURANCE ~ MAY 2012
MALATH COOPERATVE
ALSO KNOWN AS: MALATH

NOT COVERED

STOCK DETAILS
Absolute (22.5) 14.6 33.1
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 78.5 20.9
12M 35.2 9.4
Bloomberg code MALATH AB
www.malath.com.sa

Free float 100.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 99.4 39.8 51.0
P/B (x) 2.8 2.7 2.6
P/S (x) 4.3 1.9 1.6
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Malath nsurance(RHS)
Source: Bloomberg



Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn 27 131 325 398 22.5 145.2
Total Revenues SRmn 44 166 383 444 15.7 116.0
Net ncome SRmn (33) 7 18 14 (22.0) NM
Assets SRmn 447 697 990 1028 3.9 32.0
Equity SRmn 232 252 263 281 6.8 6.5
nvestments SRmn 114 217 215 238 10.5 27.7
Technical Reserves SRmn 121 321 575 567 (1.4) 67.2
Combined Ratio % 256.0 118.2 110.2 105.9 - -
Net Mgn % (75.9) 4.4 4.7 3.2 - -
ROE % (13.0) 3.0 7.0 5.2 - -
ROA % (8.6) 1.3 2.1 1.4 - -
Div Payout % - - - - - -
EPS SR (1.1) 0.2 0.6 0.5 (22.0) NM
BVPS
SR
7.7 8.4 8.8 9.4 6.8
6.5

124

Amana Cooperative Insurance Company (Amana), Iisted on 13
June 2010 on the TASI, provides various insurance products
to companies and individuaIs. Headquartered in Riyadh, the
company has branches in Jeddah and Khobar.
x Business brief
Amana was established by three companies: El Seif Co., FAL Holding, and
Libano-Suisse Group; these firms together own 60% of its shares. The
company provides insurance services through two broad segments:
individual and corporate. Under the individual products segment, Amana
offers medical, accident (personal accident, motor, travel and others), fire,
and marine insurance products. Under the corporate division, the company
provides health, fire, car, engineering, property, marine and land shipments,
and other miscellaneous insurance products.
x FinanciaIs
Amana reported net loss of SR17.1mn, 64.5% lower than the previous year's
loss of SR48mn. The company's net insurance premium grew tremendously
from just SR4mn in 2010 to SR127.9mn in 2011. However, higher operating
expenses (due to early start-up stage of business) resulted in net loss for
2011. Nonetheless, Amana was able to reduce its combined ratio to 110.5%
in 2011 from 479.6% in 2010.
x Recent DeveIopments
n January 2012, Amana received approval from Saudi Arabian Monetary
Agency (SAMA) to offer travel insurance products for a period of six months.
n November 2011, the company announced that SAMA extended provisional
approval of 25 insurance products for a period of six months. n October
2011, Amana appointed Saleh Bin Nasser Al Omair as Managing Director
and member of BOD, replacing Lucien Joseph.

NSURANCE ~ MAY 2012
AMANA COOPERATVE
ALSO KNOWN AS: AMANA

NOT COVERED

STOCK DETAILS
Absolute (14.6) (29.5) (10.0)
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 76.0 20.3
12M 73.3 19.5
Bloomberg code AMANA AB
www.amana-coop.com.sa

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 3.7 4.0
P/S (x) - NM 7.9
Div Yield (%) - - -
DPS - - -

20
25
30
35
40
45
50
5,500
6,000
6,500
7,000
7,500
8,000
TAS Amana (RHS)

Source: Bloomberg

Amana Gulf nsurance Co. 18.3


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn
- -
4 127.9 3,096.2 -
Total Revenues
SRmn
- -
4 128.4 3,076.2 -
Net ncome
SRmn
- -
(48) (17.1) (64.5) -
Assets
SRmn
- -
352 489 39.0 -
Equity
SRmn
- -
272 255 (6.3) -
nvestments
SRmn
- -
239 105 (56.0) -
Technical Reserves SRmn
- -
49 79 61.0 -
Combined Ratio %
- -
479.6 110.5 - -
Net Mgn
%
- -
(1,195.7) (13.4) - -
ROE
%
- -
(13.7) (4.1) - -
ROA
%
- -
(17.8) (6.5) - -
Div Payout
%
- -
NA NA - -
EPS
SR
- -
(1.51) (0.54) (64.5) -
BVPS
SR
- -
8.49 7.95 (6.3) -


125

EstabIished in May 2008, Saudi Reinsurance Co. (Saudi Re) is
the first cooperative reinsurance company in Saudi Arabia.
Headquartered in Riyadh, the company provides Iife and non-
Iife Sharia'a-compIiant reinsurance products. Its products
cover treaty and facuItative types of reinsurance in aII cIasses
of business in the Kingdom as weII as other countries across
the MENA region.
x Business brief
Saudi Re offers reinsurance-related products such as fire, marine (hull and
cargo), general accident, engineering (machinery breakdown and
contractor's risks), aviation, motor, third-party liability, as well as life and
medical insurances.
x FinanciaIs
Saudi Re's gross premiums written grew 48.5% YoY to SR159mn in 2011
from SR107mn in 2010. The company's net insurance premium rose 88.6%
YoY to SR55mn. As a result, its revenue increased 88.6% to SR75mn in
2011. However, Saudi Re posted a loss of SR34mn in 2011 due to a
significant increase in net claims (205%) as well as higher general and
administrative expenses (95%).
n May 2011, Saudi Re appointed its Sharia'a Board to fulfill clients'
requirements and provide Sharia'a-compliant reinsurance solutions in the
Takaful industry. Members of the board include Sheikh Dr. Abdulsattar Abu
Ghuddah, Sheikh Dr. Mohamed Ali Elgari, and Sheikh Yousef Al-Farraj
n April 2011, the company announced that Standard and Poor's Ratings
Service had rated its financial strength as BBB+.
NSURANCE ~ MAY 2012
SAUD RENSURANCE
ALSO KNOWN AS: SAUD RE

NOT COVERED

STOCK DETAILS
Absolute (7.6) 0.7 33.7
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 126.0 33.6
12M 56.7 15.1
Bloomberg code SAUDRE AB
www.saudi-re.com

Free float 42.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 287.8 NM NM
P/B (x) 1.4 1.4 1.5
P/S (x) 105.7 30.9 18.6
Div Yield (%) - - -
DPS - - -

7
9
11
13
15
17
19
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Re (RHS)

Source: Bloomberg

Jordanian slamic Finance Bank 5.0
Ahmad Hamad AlGosaibi & Bros. Co. 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn
0 8 29 55
88.6 NM
Total Revenues SRmn
0 13 45 75
66.4 NM
Net ncome SRmn
26 5 0 (34)
NM NM
Assets SRmn
1,033 1,094 1,196 1,256
5.0 6.7
Equity SRmn
1,026 1,006 984 930
(5.5) (3.2)
nvestments SRmn
1,012 1,035 1,024 964
(5.8) (1.6)
1 15 111 228
104.7 633.7
Combined Ratio %
NM 403.9 229.7 237
- -
Net Mgn %
NM 36.7 0.1 (45.9)
- -
ROE %
2.5 0.5 0.0 (3.6)
- -
ROA %
2.5 0.5 0.0 (2.8)
- -
Div Payout %
NA NA NA NA
- -
EPS SR
0.26 0.05 0.00 (0.34)
NM NM
BVPS SR
10.26 10.06 9.84 9.30
(2.1) (3.2)

126

SoIidarity Saudi TakafuI Company (SoIidarity) was Iisted on
the Saudi Stock Exchange (TadawuI) in June 2010.
Headquartered in Riyadh, the company provides insurance
services in segments such as property, medicaI, marine
(cargo and huII), generaI accident and motor.
x Business brief
Solidarity, which has a paid up capital base of SR555mn, offers insurance
products including property insurance, medical insurance, marine (cargo and
hull) insurance, general accident insurance, engineering insurance and motor
insurance. The company operates through branches in Riyadh, Jeddah, and
Khobar. Solidarity plans to open new branches across major cities in Saudi
Arabia.
x FinanciaIs
Solidarity's total gross written premiums (GWP) and net written premiums
earned for 2011 totaled SR0.133mn and SR0.020mn, respectively. The
company reported a net loss of SR84.3mn in 2011 as it is still in the stage of
setting up operations.
n April 2012, Solidarity's 33 insurance products' temporary approval was
extended for a period of six months. n March 2012, the company received
approval from Saudi Arabian Monetary Agency (SAMA) to market and sell
medical insurance products. During the same month, Solidarity obtained
approval from SAMA and the Council of Cooperative Health nsurance to sell
and market group health insurance products. n September 2011, the Board
appointed Adel bin Abdulaziz Al-Essa as Chief Executive Officer, replacing
Saleh bin Nasser Al-Omair. n May 2011, SAMA approved Solidarity's 18
vehicle insurance products.

NSURANCE ~ MAY 2012
SOLDARTY SAUD
ALSO KNOWN AS: SSTC, SOLDARTY

NOT COVERED

STOCK DETAILS
52-week range H/L (S) 32/14
Absolute (15.6) (4.8) 27.0
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 138.6 37.0
12M 98.1 26.1
Bloomberg code SOLDAR AB
www.sstc.com.sa

Free float 40.00 F

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 2.6 2.8
P/S (x) - NM NM
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Solidarity (RHS)

Source: Bloomberg

Solidarity Company 27.5


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - - 0 0 NM -
Total Revenues
SRmn - - 0 0 NM -
Net ncome
SRmn - - (38) (84) 123.3 -
Assets
SRmn - - 519 505 (2.7) -
Equity
SRmn - - 503 470 (6.4) -
nvestments
SRmn - - 510 412 (19.1) -
Technical Reserves SRmn - - 0 0 NM -
Combined Ratio % - - NM NM NM -
Net Mgn
% - - NM NM NM -
ROE
% - - NM NM NM -
ROA
% - - NM NM NM -
Div Payout
% - - NA NA NA -
EPS
SR - - (0.68) (1.52) 123.3 -
BVPS
SR - - 9.06 8.48 (6.4) -

127

Bupa Arabia for Cooperative Insurance, a medicaI insurance
company, was estabIished in Jeddah in 2008. Prior to its
Iisting on TadawuI, Bupa Arabia conducted business under a
joint venture between Nazer Group and BUPA Group (UK).
x Business brief
Bupa Arabia offers medical insurance to companies, businesses and
families. The company's corporate services include customized healthcare
plans, which have been divided into BUPA Direct and BUPA Corporate
Health Care Scheme. BUPA Direct targets companies with 1050 employees
through three main schemes: Executive, Classic, and Essential. BUPA
Corporate Health Care Scheme targets companies with over 50 employees.
Bupa Arabia also offers a medical insurance scheme under the Bupa
Corporate scheme for companies with more than 100 employees.
x FinanciaIs
Bupa Arabia's total revenue grew 19.7% YoY to SR1,928mn in 2011, mainly
due to 19.8% YoY growth in net insurance premium. However, the
company's net income declined 40.3% YoY to SR42mn due to a change in
the method of calculating bad debts provision as per changes in regulatory
requirements. Consequently, bad debt provision increased by SR33mn in
2011. n addition, general and administration expenses increased, resulting
in a higher combined loss ratio of 97.3% compared to 95.2% in 2010.
n October 2011, Council of Cooperative nsurance (CCH) approved the
company's requalification for CCH health insurance.
n July 2011, Bupa signed a one-year renewable agreement to receive
Sharia advisory and audit services on its activities and operations with the
Shariyah Review Bureau.
n June 2011, the company renewed its activities license for three years from
Saudi Arabian Monetary Agency.
NSURANCE ~ MAY 2012
BUPA ARABA
ALSO KNOWN AS: BUPA ARABA

NOT COVERED

STOCK DETAILS
Absolute (16.0) (14.2) 16.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 50.4 13.4
12M 28.2 7.5
Bloomberg code BUPA AB
www.bupa.com.sa

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 20.7 16.4 27.5
P/B (x) 2.7 2.4 2.2
P/S (x) 1.0 0.7 0.6
Div Yield (%) - - -
DPS - - -

12
17
22
27
32
37
5,500
6,000
6,500
7,000
7,500
8,000
TAS Bupa Arabia (RHS)

Source: Bloomberg

Bupa Middle East Holdings 22.5
Bupa nvestments Limited 15.0
Modern Software Solutions Co 5.0
Nadher Group Holding Co 5.0
Assas Company for Healthcare 5.0

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Net ns. Premium SRmn - 1,205 1,609 1,928 19.8 26.5
Total Revenues SRmn - 1,208 1,613 1,931 19.7 26.4
Net ncome SRmn - 56 71 42 (40.3) (13.2)
Assets SRmn - 1,403 1,669 1,830 9.7 14.2
Equity SRmn - 437 493 527 6.8 9.7
nvestments SRmn - 309 313 312 (0.2) 0.6
Technical Reserves SRmn - 798 1,012 1,104 9.1 17.6
Combined Ratio % - 95.3 95.2 97.3 - -
Net Mgn % - 4.6 4.4 2.2 - -
ROE % - 12.8 15.2 8.3 - -
ROA % - 4.0 4.6 2.4 - -
Div Payout % - - - - - -
EPS SR - 1.40 1.77 1.06 (40.3) (13.2)
BVPS
SR
- 10.93 12.32 13.16 6.8 9.7


128

GuIf GeneraI Cooperative Insurance Company (GuIf GeneraI)
was estabIished in December 2009 through the merger of
Saudi GeneraI Insurance Co. (SGI) and GuIf Cooperation
Insurance Co. (GCI). Headquartered in Jeddah, the company
provides various generaI insurance services in Saudi Arabia.
x Business brief
Gulf General offers insurance services in segments including fire, accident,
property, engineering, vehicle, marine (cargo and hull), health, aviation and
energy. The company has also been authorized to provide personal accident,
workmen compensation, life, theft/burglary, money, fidelity, pecuniary and
liability insurance services. Gulf General has offices in Jeddah, Riyadh, and
Dammam.
x FinanciaIs
Gulf General's net insurance premium rose 419% YoY to SR187mn in 2011
from SR36mn in 2010. Consequently, total revenue grew 418% YoY to
SR212mn. However, due to an increase in the provision for doubtful debts,
BNR provisions and pre-operating expenses, the company reported a net
loss of SR63mn during the year compared to a loss of SR43mn in 2010.
Gulf General received approval from Saudi Arabian Monetary Agency
(SAMA) to market and sell group insurance products in April 2012, as well as
vehicle insurance and insurance that covers personal accident for individuals
as well as companies in March 2012. The company also obtained SAMA's
six-month extension of temporary approval to sell 28 insurance products in
March 2012. Furthermore, it received approval from SAMA in January 2012
for insurance products covering commercial general liability. SAMA granted
six-month extension of temporary approval to Gulf General to market 31
insurance products in September 2011. n July 2011, the company received
property insurance claim (worth about SR39mn) for fire in Alesayi Plaza in
JeddahGulf General claims 95% of the value is reinsured.
NSURANCE ~ MAY 2012
GULF GENERAL
ALSO KNOWN AS: GG, GGC

NOT COVERED

STOCK DETAILS
Absolute (15.4) (12.8) (2.8)
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 56.6 15.1
12M 59.4 15.8
Bloomberg code GGC AB
www.ggi-sa.com

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 5.0 5.7
P/S (x) - 18.6 3.6
Div Yield (%) - - -
DPS - - -

25
35
45
55
65
5,500
6,000
6,500
7,000
7,500
8,000
TAS Gulf General (RHS)

Source: Bloomberg

Saudi General nsurance Co. 15.0
Gulf Cooperative nsurance Co. 15.0
Al Fadel nvestments 5.0
Mohammed Said Tamr
Commercial nvestment
5.0
Abella nternational Real Estate
Development Co.
Ansaf nternational Real Estate
Development Co.
5.0
5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - - 36 187 418.5 -
Total Revenues
SRmn - - 41 212 417.5 -
Net ncome
SRmn - - (43) (63) 45.9 -
Assets
SRmn - - 369 475 28.6 -
Equity
SRmn - - 154 134 (13.0) -
nvestments
SRmn - - 151 117 (22.8) -
Technical Reserves SRmn - - 120 278 132.6 -
Combined Ratio % - - 181.7 134.3 - -
Net Mgn
% - - (106.2) (29.9) - -
ROE
% - - (28.3) (44.2) - -
ROA
% - - (11.8) (15.0) - -
Div Payout
% - - - - - -
EPS
SR - - (2.17) (3.17) 45.9 -
BVPS
SR - - 7.68 6.68 (13.0) -


129

AXA Cooperative Insurance Company (AXA Cooperative) is
part of the AXA Group headquartered in France. EstabIished
in JuIy 2008, AXA Cooperative is engaged in providing various
insurance and reinsurance services for individuaI and
institutionaI cIients in Saudi Arabia.
x Business brief
AXA Cooperative provides insurance policies suitable for individual as well as
business needs. The company offers motor, property, golf, relocation, yacht,
health, travel and home insurance products for individuals. t also provides
marine, fire, engineering, life and liability insurance services to corporate
customers. AXA Cooperative operates through offices in Riyadh, Jeddah and
Dammam in Saudi Arabia.
x FinanciaIs
Net insurance premium stood at SR361mn in 2011 compared to SR128mn
for the 19 months ended December 2010. Total revenues were reported at
SR371mn for 2011. However, the company recorded a net loss of SR25mn
due to a rise in net claims incurred, which increased by SR197mn compared
to previous reported numbers for the 19 months.
x Recent DeveIopments
n January 2012, AXA Cooperative announced Saudi Arabian Monetary
Agency's (SAMA) approval for the extension of provisional approval of 28
insurance products for a period of six months. n October 2011, the company
announced that the losses it incurred due to the fire in Center Point (Riyadh)
were 77.5% reinsured. n September 2011, AXA Cooperative announced that
it appointed Waseela nsurance Agency as the company's sales and
marketing agent.

NSURANCE ~ MAY 2012
AXA COOPERATVE
ALSO KNOWN AS : AXA

NOT COVERED
Pricing of as 09-05-2012

STOCK DETAILS
Absolute (14.4) (9.1) (3.1)
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 48.5 12.9
12M 52.5 14.0
Bloomberg code AXA AB
www.axa-gulf.com

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 3.5 3.5 4.0
P/S (x) - 5.2 1.8
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
70
80
5,500
6,000
6,500
7,000
7,500
8,000
TAS AXA (RHS)

Source: Bloomberg

AXA nsurance Gulf Bahrain 32.0
AXA Mediterranean Sea Holding 18.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Net ns. Premium SRmn - - 128* 361 182.1 -
Total Revenues SRmn - - 131* 371 183.0 -
Net ncome SRmn - 0 1* (25) NM NM
Assets SRmn - 205 550 601 9.2 71.4
Equity SRmn - 195 195 171 (12.7) (6.4)
nvestments SRmn - 204 205 229 11.3 5.8
Combined Ratio % - - 101.5 108.6 - -
Net Mgn % - - 0.7 (6.7) - -
ROE % - 0.1 0.5 (13.6) - -
ROA % - 0.1 0.2 (4.3) - -
Div Payout % - - - - - -
EPS SR - 0.01 0.04 (1.24) NM NM
BVPS SR - 9.73 9.77 8.53 (12.7) (6.4)
*2010 numbers are for 19 months from 3 June 2009 to 31 December 2010
130

EstabIished in 1990 in Bahrain, AI Rajhi Company for
Cooperative Insurance (ARCCI) is an IsIamic insurance
company. The company set up operations in Saudi Arabia in
JuIy 2008. ARCCI provides cooperative insurance and
reinsurance services in compIiance with Sharia'a principIes to
individuaIs and corporates in Saudi Arabia.
x Business brief
ARCC offers general, health and family insurance products and services.
Under general insurance, the company provides property, marine (hull and
cargo) & aviation, engineering, liability, casualty, travel, motor, workmen's
compensation, fidelity guarantee, medical malpractice and related products.
Under health insurance, the company offers products for individuals, families
and companies. ARCC offers health plans that fully comply with the
requirements of the Council for Cooperative Health nsurance (CCH). The
company operates through a network of three branches in Riyadh, Jeddah
and Dammam; its head office is located in Riyadh.
x FinanciaIs
ARCC recorded total revenues amounting to SR280mn in 2011 compared to
SR82mn for the 19 months ended December 2010. Net insurance premium,
which accounted for 96.8% of the revenues, stood at SR271mn. Despite
increased revenues, the company reported a net loss of SR33mn due to a
337% increase in net claims incurred compared to the 19-month period from
1 June 2009 to 31 December 2010; there was also a rise in the general and
administration expenses.
n March 2012, the company announced the change of its name from "Al
Rajhi Company for Cooperative nsurance" to "Al Rajhi Company for
Cooperative nsurance Takaful Al Rajhi", which would be approved in the
EGM soon. The company received SAMA's interim approval for its personal
accident insurance product in November 2011, and errors and omission
insurance product in September 2011.
NSURANCE ~ MAY 2012
AL RAJH COOPERATVE
ALSO KNOWN AS: ARCC

NOT COVERED

STOCK DETAILS
Absolute (4.2) 0.0 21.2
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 68.6 18.3
12M 44.9 12.0
Bloomberg code ARCC AB
www.alrajhitakaful.com

Free float 30.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 6.5 7.9 10.3
P/S (x) - 13.9 4.0
Div Yield (%) - - -
DPS - - -

30
40
50
60
70
5,500
6,000
6,500
7,000
7,500
8,000
TAS Al Rajhi Co (RHS)

Source: Bloomberg

Al Rajhi Banking and nvestment 22.5
Al Rajhi nsurance Ltd. 22.5
Oman nsurance Company 10.0
Al Ramtan Summit Co. 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Net ns. Premium SRmn - - 73* 271 NM NM
Total Revenues SRmn - - 82* 280 NM NM
Net ncome SRmn - (29) (58)* (33) NM NM
Assets SRmn - 193 439 816 85.8 105.5
Equity SRmn - 173 143 109 (23.7) (20.4)
nvestments SRmn - 187 213 252 18.0 16.2
Combined Ratio % - - 214.6 148.1 - -
Net Mgn % - - (70.8) (11.7) - -
ROE % - (16.7) (36.6) (26.0) - -
ROA % - (14.9) (18.3) (5.2) - -
Div Payout % - - - - - -
EPS SR - (1.44) (2.89) (1.65) NM NM
BVPS SR - 8.63 7.17 5.47 (23.7) (20.4)

*2010 figures are for 19 months
131

Saudi Arabia-based Trade Union Cooperative Insurance &
Reinsurance Company (Trade Union) was estabIished in 2007.
The company is headquartered in AI Khobar and registered
with the CounciI of Cooperative HeaIth Insurance (CCHI).
x Business brief
Trade Union's product portfolio includes property insurance (fire and allied
perils), liability insurance (general and product), marine insurance (hull, cargo
and land transit), crime insurance (burglary and computer fraud), engineering
insurance (machinery breakdown and contractor's risks), motor insurance
(commercial or heavy vehicles) and personal lines (personal accident, new
vehicle warranty and household comprehensive). The company also provides
medical and life insurance products as well as reinsurance services led by
Swiss Reinsurance Co. ts medical treaty is secured by Munich Re. Trade
Union has reinsurance treaties with eight re-insurers: Hanover Re, Swiss Re,
CCR, R+V Re, Odessey Re, SCOR, Paris Re, and Mapere Re. Hanover Re
is the company's leading re-insurer.
x FinanciaIs
Trade Union's net insurance premium grew 27.5% YoY to SR329mn in 2011
from SR258mn in 2010. Consequently, total revenues rose 25.2% YoY as
net insurance premium earned accounts for 94% of total revenue. The
company's net income also increased in tandem with revenue rising 20.8%
YoY to SR25mn. The growth in net income can be ascribed to an increase in
shareholders' net investment return.
n April 2012, Saudi Arabian Monetary Agency (SAMA) approved change in
the company's name from "Trade Union Cooperative nsurance Company" to
"Trade Union Cooperative nsurance Company (ttihad). SAMA granted six-
month extension to provisional approval on the company's 16 insurance
products during the same month. n February 2012, Trade Union announced
plans to increase its capital by 10% through bonus shares to SR275mn. n
December 2011, it received BBB+ credit rating from AM Best.
NSURANCE ~ MAY 2012
TRADE UNON CO-OP
ALSO KNOWN AS: TUCC, TUC

NOT COVERED

STOCK DETAILS
Absolute (5.8) (8.0) 7.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 41.7 11.1
12M 22.2 5.9
Bloomberg code TRDUNON AB
www.tui-sa.com

Free float 42.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 47.6 33.3 28.0
P/B (x) 2.7 2.5 2.4
P/S (x) 2.5 2.5 2.0
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Trade Union (RHS)

Source: Bloomberg

United Commercial nsurance Co 22.3
Al Ahlia nsurance Company 10.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn NA 254 258 329 27.5 NM
Total Revenues SRmn 7 281 280 351 25.2 270.5
Net ncome SRmn NA 15 21 25 20.8 NM
Assets SRmn 262 858 860 970 12.8 54.8
Equity SRmn 248 261 276 295 6.5 6.0
nvestments SRmn 257 243 242 258 6.6 0.1
Technical Reserves SRmn NA 346 354 426 20.3 NM
Combined Ratio % NM 103.4 99.5 99.5 - -
Net Mgn % NA 5.3 7.4 7.2 - -
ROE % NA 5.8 7.8 8.8 - -
ROA % NA 2.6 2.4 2.8 - -
Div Payout % NA NA NA NA - -
EPS SR NA 0.59 0.83 1.01 20.8 NM
BVPS SR 9.90 10.45 11.06 11.78 6.5 6.0

132

United Cooperative Assurance Company (UCA) is engaged in
the insurance business in Saudi Arabia. The company was
estabIished in Jeddah in 2007 as a separate entity from UCA
Insurance Co. of Bahrain. UCA was Iisted on TadawuI in June
2008.
x Business brief
UCA offers insurance products such as engineering (contractor's risks,
machinery, and plant & equipment used for construction), medical, personal
accident and protection, motor insurance, and marine cargo. The company's
220 employees serve clients through offices in three major cities of the
Kingdom (Jeddah, Riyadh, and Khobar).
x FinanciaIs
UCA's net insurance premium and total revenue grew 14.9% and 12.2%
YoY, respectively, in 2011. However, net income declined 10.6% YoY to
SR51mn. The fall in net income can be mainly ascribed to higher general and
administrative expenses and technical reserves due to an increase in gross
written premiums. A decline in investment income from policyholders'
portfolio also contributed toward lower net income.
n March 2012, UCA announced the approval of distribution of 10% cash
dividends (SR1 per share) for the year 2011. n November 2011, the
company received approval from the Saudi Arabian Monetary Agency to
renew insurance and reinsurance license to proceed with its General
nsurance and Medical nsurance activities for a three-year term. UCA's
qualification was renewed by The Council of Cooperative Health nsurance in
July 2012. This would enable the company to issue health insurance policies
in accordance with cooperative health insurance policy standards.

NSURANCE ~ MAY2012
UNTED COOPERATVE
ALSO KNOWN AS: UCA

NOT COVERED

STOCK DETAILS
Absolute (11.8) 7.8 24.7
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 43.2 11.5
12M 25.2 6.7
Bloomberg code UCA AB
www.uca.com.sa

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 14.9 13.2 14.7
P/B (x) 3.0 2.5 2.3
P/S (x) 1.1 1.1 1.1
Div Yield (%) - 2.7 2.7
DPS - 1.0 1.0

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS U C A (RHS)

Source: Bloomberg

UCA nsurance Co. 32.5
Al Faisaliah Group Holding 5.0
Civil Woks Co. 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn NA 628* 623 716 14.9 NM
Total Revenues
SRmn NA 674* 680 763 12.2 NM
Net ncome
SRmn (10) 50* 57 51 (10.6) NM
Assets
SRmn 207 1,188 1,260 1,283 1.8 83.7
Equity
SRmn 190 246 295 318 7.6 18.7
nvestments SRmn 206 169 170 219 28.4 2.0
Technical Reserves
SRmn NA 647 531 662 24.8 NM
Combined Ratio
% NA 96.6 98.6 99.2 - -
Net Mgn
% N/M 7.4 8.3 6.6 - -
ROE
% (5.4) 23.1 21.0 16.5 - -
ROA % (4.9) 7.2 4.6 4.0 - -
Div Payout
% NA NA 35.3 39.5 - -
EPS
SR (0.51) 2.51 2.83 2.53 (10.6) NM
BVPS
SR 9.49 12.28 14.75 15.88 7.6 18.7
* For the 20 months to end 2009
133

SABB TakafuI was estabIished in 2007 in Riyadh as an
associate company of SABB and HSBC. The company
conducts its business through SABB's estabIished
distribution network (80 branches) and direct saIes team
across Saudi Arabia. SABB TakafuI's insurance products are
Sharia'a compIiant.
x Business brief
SABB Takaful offers products under the Family, General, Corporate, and
Group Takaful categories. Under the Family Takaful segment, the company
covers education, savings, retirement, and investment plans. The General
Takaful segment covers everyday travel, home, and personal accident risks.
Corporate Takaful provides cover for marine cargo, commercial fire
protection, and business takaful solutions for SMEs.
x FinanciaIs
n 2011, the company's net insurance premium registered 13% YoY growth
to SR166mn. SABB Takaful's net earned premium contributes 95.4% of its
total revenues. Consequently, total revenues increased 12.2% YoY to
SR174mn. SABB Takaful's net income rose to SR10mn in 2011 from a loss
of SR5.6mn in 2010 due to an increase in the net earned contribution owing
to the release of reserves and 11% fall in operating expense during the year.
n October 2011, the company received an extension of the provisional
approval of its 11 insurance products from Saudi Arabian Monetary Agency
(SAMA). n August 2011, SAMA approved two new products of SABB Takaful
for a period of six months.
NSURANCE ~ MAY 2012
SABB TAKAFUL
ALSO KNOWN AS: MEDGULF SAUD

NOT COVERED

STOCK DETAILS
Absolute (13.7) 8.5 89.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 105.0 28.0
12M 58.4 15.6
Bloomberg code SABBT AB
www.sabbtakaful.com

Free float 35.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM 119.5
P/B (x) 3.7 3.8 3.7
P/S (x) 17.5 7.9 7.0
Div Yield (%) - - -
DPS - - -

10
20
30
40
50
5,500
6,000
6,500
7,000
7,500
8,000
TAS SABB Takaful (RHS)
Source: Bloomberg

SABB 32.5
HSBC Holding Co. 31.0


Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn 46 63 147 166 13.0 53.2
Total Revenues
SRmn 51 70 155 174 12.2 50.9
Net ncome
SRmn (48) (16) (6) 10 NM NM
Assets
SRmn 209 793 971 985 1.4 67.7
Equity
SRmn 51 330 320 326 1.8 85.5
nvestments
SRmn 28 287 313 319 2.0 126.4
Technical Reserves SRmn 115 403 566 617 9.0 75.1
Combined Ratio % 127.8 125.1 105.2 96.2 - -
Net Mgn
% (95.0) (23.6) (3.6) 5.9 - -
ROE
% (90.5) (8.6) (1.7) 3.2 - -
ROA
% (33.5) (3.3) (0.6) 1.0 - -
Div Payout
% - - - - - -
EPS
SR (1.4) (0.5) (0.2) 0.3 NM NM
BVPS
SR 1.5 9.7 9.4 9.6 1.8 85.5

134

AIAhIi TakafuI Company (ATC), estabIished in 2006, is a joint
venture between NationaI CommerciaI Bank, FWU AG,
InternationaI FinanciaI Corporation and VHV. The company,
headquartered in Jeddah, provides a range of takafuI
insurance products and services in Saudi Arabia.
x Business brief
ATC offers a range of financial planning products for savings, retirement,
education and marriage. The company's AlAhli Takaful and Saving Program
provides maturity benefit by investing regular contributions, and death benefit
through the coverage of paid and future contributions.
x FinanciaIs
n 2011, ATC's total revenues decreased 44.8% YoY to SR1.4mn due to a
fall in net insurance premium earned in 2011, the company's only source of
revenue. Net income losses decreased to SR5mn in 2011 compared to
SR9mn in 2010 due to a fall in general and administrative
expenses (in line with the company's strategy to reduce expenses).
n December 2012, ATC announced that it had signed an agreement with
National Commercial Bank to provide the latter's employees with insurance
products. n November, the company announced plans to increase its capital
by 66.67% from SR100mn to SR166.7mn by issuing 5-for-3 right issue
shares at SR12 per share.

NSURANCE ~ MAY 2012
ALAHL TAKAFUL
ALSO KNOWN AS: ATC

NOT COVERED

STOCK DETAILS
Absolute (9.8) (4.2) 26.4
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 57.1 15.2
12M 48.3 12.9
Bloomberg code ATC AB
www.alahlitakaful.com

Free float 26.45

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 13.4 15.5 7.6
P/S (x) NM NM NM
Div Yield (%) - - -
DPS - - -


30
50
70
90
110
130
5,500
6,000
6,500
7,000
7,500
8,000
TAS ATC (RHS)

Source: Bloomberg

National Commercial Bank 29.9
FWU Group 13.1
nternational Finance Corporation 13.1
VHV Co. 7.4


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 1 3 1 (44.8) NM
Total Revenues
SRmn (0) 1 3 1 (44.8) NM
Net ncome
SRmn (12) (5) (9) (5) NM NM
Assets
SRmn 95 158 315 523 66.0 76.7
Equity
SRmn 83 77 67 136 102.9 17.7
nvestments
SRmn 72 66 59 133 125.2 22.7
Combined Ratio % 52.4 131.2 72.1 77.5 - -
Net Mgn
% - (456.3) (355.6) (349.8) - -
ROE
% (13.5) (6.5) (12.5) (4.8) - -
ROA
% (12.6) (4.1) (3.8) (1.2) - -
Div Payout
% - - - - - -
EPS
SR (0.72) (0.31) (0.54) (0.29) NM NM
BVPS
SR 4.99 4.61 4.01 8.13 102.9 17.7


135

AI Sagr Company for Cooperative Insurance (Sagr Insurance)
commenced operations in Saudi Arabia in 1983 as a branch of
AI Sagr NationaI Insurance Co. (ASNIC), Dubai. Headquartered
in AI Khobar, Sagr Insurance operates through its three
branches in Dammam, Riyadh and Jeddah.
x Business brief
Sagr nsurance's wide range of insurance products comprises fire and
general (property, engineering, liability and miscellaneous), marine (cargo
and hull), motor, life and medical insurance services. The company also
provides jewellery merchant insurance, hotel/furnished apartments - blanket
insurance and reinsurance services. t has reinsurance treaties with 10 re-
insurers in the Middle East and Europe, including Allianz Re and Converium
(Germany), Odyssey Re (France), Takaful Re (UAE) and BEST RE (Tunis).
x FinanciaIs
Sagr nsurance's net insurance premium grew 20.1% YoY to SR196.3mn in
2011. Total revenues increased 18.0% to SR206.1mn, mainly due to growth
in net insurance premium, which contributed 95.2% to total earnings. Sagr
nsurance's net income increased significantly by 85.3% YoY to SR37mn in
2011 as its total operating costs increased just 12% YoY against an 18%
growth in revenue. Consequently, its combined ratio also fell from 91.5% in
2010 to 85.2% in 2011, thus increasing its net margin to 18% from 11.4% in
2010.
n January 2012, Sagr nsurance was assigned a 'BBB' long-term
counterparty credit and insurer financial strength rating with stable outlook by
Standard & Poor's. n December 2011, the company received Saudi Arabian
Monetary Agency's approval on 14 new insurance products. n May 2011, it
started seven new branches (Jeddah, Abha, Khamis Mushayt, Al Khobar, Al
Qatif, Tabuk and Najran).
NSURANCE ~ MAY 2012
AL SAGR COMPANY
ALSO KNOWN AS: AL SAGR SAUD
NOT COVERED

STOCK DETAILS
Absolute (14.0) (10.3) 18.6
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 36.7 9.8
12M 30.3 8.1
Bloomberg code SAGR AB
www.alsagrsaudi.com

Free float 42.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 186.0 27.1 14.6
P/B (x) 2.7 2.4 2.1
P/S (x) NM 3.1 2.6
Div Yield (%) - - -
DPS - - -

10
20
30
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS Sagr nsurance (RHS)

Source: Bloomberg

Al Saqar National nsurance Co. 26.0
Arabian Red Land ndustrial
Services
5.0
Abdullah Rasheed Al Rasheed &
Sons Co.
5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 124 163 196 20.1 -
Total Revenues
SRmn - 134 175 206 18.0 -
Net ncome
SRmn 2 3 20 37 85.3 147.2
Assets
SRmn 208 432 522 575 10.0 40.3
Equity
SRmn 202 203 223 255 14.4 8.0
nvestments
SRmn 185 192 214 196 (8.2) 2.0
Technical Reserves SRmn 0 137 167 174 4.1 -
Combined Ratio % - 105.3 91.5 85.2 - -
Net Mgn
% - 2.2 11.4 18.0 - -
ROE
% 1.2 1.4 9.4 15.5 - -
ROA
% 1.2 0.9 4.2 6.8 - -
Div Payout
% - - - - -
EPS
SR 0.12 0.15 1.00 1.85 85.3 147.2
BVPS
SR 10.12 10.15 11.14 12.75 14.4 8.0


136

AI AIamiya Cooperative Insurance Company (AI AIamiya) was
estabIished in Riyadh in June 2009. The company was Iisted
on the Saudi Arabian Stock Exchange (TadawuI) in December
2009. AI AIamiya is in the initiaI stages of business and offers
fire, motor, marine, property and heaIth insurance.
x Business brief
Al Alamiya has received approval for conducting operations as well as selling
insurance products in Saudi Arabia. However, many of the company's
products are undergoing the regulatory approval process with Saudi Arabian
Monetary Agency (SAMA). n February 2012, the company acquired the
insurance business of Royal & Sun Alliance nsurance Co.
x FinanciaIs
Al Alamiya reported nil revenues for 2011 as the company is still in
operational phase. Net loss before zakat of SR0.08mn was due to general
and administrative costs being more than income from bank deposits, and
also owing to high incorporation and floatation expense.
n February, 2012, Al Alamiya announced that SAMA has agreed upon the
portfolio transfer from Royal & Sun Alliance (Middle East) Limited to Al
Alamiya; this would reflect in the company's 1Q12 financial statements. n
October 2011, the company announced that SAMA has extended its
approval of 29 insurance products for a period of six months. n October
2011, it appointed Mr. Michael William Jakeman as Managing Director on an
interim basis. He replaced Mr. Hassan Ali Nasser, who resigned in
September 2011 as Managing Director and Chief Executive Officer.

NSURANCE ~ MAY 2012
AL ALAMYA
ALSO KNOWN AS: AL ALAMYA

NOT COVERED

STOCK DETAILS
Absolute (7.1) 4.3 54.1
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 61.0 16.3
12M 49.8 13.3
Bloomberg code ALALAMY AB
www.alamiyainsurance.com.sa

Free float 30.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 5.7 5.8
P/S (x) - NM NM
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS Alamiyah (RHS)

Source: Bloomberg

Royal & Sun Alliance nsurance 50.0
Riyad Bank nvestment Portfolio 19.9


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn
- -
0 0 - -
Total Revenues
SRmn
- -
0 0 - -
Net ncome
SRmn
- -
(25) (0.1) (99.7) -
Assets
SRmn
- -
178 174 (1.9) -
Equity
SRmn
- -
172 168 (1.9) -
nvestments
SRmn
- -
177 163 (8.3) -
- -
0 0 - -
Combined Ratio %
- -
0 0 - -
Net Mgn
%
- -
NM NM - -
ROE
%
- -
NM NM - -
ROA
%
- -
NM NM - -
Div Payout
%
- -
NA NA - -
EPS
SR
- -
(1.25) (0.00) (99.7) -
BVPS
SR
- -
8.58 8.42 (1.9) -


137

Weqaya TakafuI Insurance & Reinsurance Company (Weqaya)
was estabIished in May 2009 with a paid up capitaI of
SR200mn. The company is headquartered in Riyadh with
regionaI offices in Jeddah and Dammam. Weqaya offers
insurance products in heaIthcare, generaI insurance and
reinsurance segments.
x Business brief
Weqaya's insurance portfolio includes motor, property, engineering, marine
cargo, accident, health as well as Takaful protection and savings products.
x FinanciaIs
Weqaya's net insurance premium rose to SR37mn in 2011 from SR0.4mn in
2010. Consequently, total revenue increased to SR39mn from SR1mn in
2010. Despite higher revenues, the company reported a net loss of SR42mn
in 2011, 5% lower than the previous year's loss of SR44mn. This is mainly
due to higher provisions, which include high custom unearned premiums and
allowance of reported and unreported claims.
n November 2011, Weqaya announced the extension of temporary approval
from Saudi Arabian Monetary Agency on 14 insurance products for a six-
month period. During the same month, Standard & Poor's assigned the
company BBB rating for its long-term counterparty credit and financial
strength. n June 2011, Weqaya's qualification was renewed by The Council
of Cooperative Health for one year.

NSURANCE ~ MAY 2012
WEQAYA TAKAFUL
ALSO KNOWN AS: WEQAYA

NOT COVERED

STOCK DETAILS
Absolute (23.9) 28.0 84.5
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 80.1 21.3
12M 59.2 15.8
Bloomberg code WEQAYA AB
www.weqaya.com.sa

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 4.7 5.4 7.4
P/S (x) NM NM 21.9
Div Yield (%) - - -
DPS - - -

12
22
32
42
52
62
5,500
6,000
6,500
7,000
7,500
8,000
TAS Weqaya (RHS)

Source: Bloomberg

First nvestment Takaful Co. 20.0
Rana nvestment Co. 5.0
Abdul Aziz Al Ajlan & Sons 5.0
Al Mal nvesmtment House 5.0
nternational Financial Advisors 5.0

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Net ns. Premium SRmn - NA 0 37 NM NM
Total Revenues SRmn - NA 1 39 NM NM
Net ncome SRmn - (11) (44) (42) (5.4) NM
Assets SRmn - 190 188 246 30.5 13.7
Equity SRmn - 181 158 117 (26.1) (19.8)
nvestments SRmn - 183 159 145 (8.9) (10.8)
Technical Reserves SRmn - - 4 71 N/M NM
Combined Ratio % - NA 3,722 212.2 - -
Net Mgn % - NA (8,002) (107.4) - -
ROE % - (6.1) (26.2) (30.6) - -
ROA % - (5.8) (23.5) (19.4) - -
Div Payout % - NA NA NA - -
EPS SR - (0.55) (2.22) (2.10) (5.4) NM
BVPS SR - 9.07 7.90 5.84 (26.1) (19.8)

*2010 numbers are for six months period from 1 June to 31 December.
138

EstabIished in 2007, Arabia Insurance Cooperative Company
(AICC) is headquartered in Riyadh. The company has been
issuing insurance poIicies since January 2009.
x Business brief
ACC is engaged in insurance as well as reinsurance activities and services
across Saudi Arabia. The company is authorized to offer insurance products
including motor, property, marine, engineering, health and general accident
insurance. ACC also offers term insurance protection plans and unit-linked
savings plans. Furthermore, it is looking to expand into the market for Takaful
life policies and investment products. The company operates through its
branches in Riyadh, Jeddah, Mekkah, Taif, Damam, Khobar, Hafuf, and
Khamis Mushet.
x FinanciaIs
ACC's revenue increased 32.1% YoY to SR361mn in 2011. Net insurance
premium rose 28.2% YoY to SR334mn in 2011. Net income expanded 51.3%
to SR17mn in 2011 over that in 2010 on account of YoY growth in the top line
for the year. Consequently, the company's ROE increased to 10.3% in 2011
from 7.3% in 2010.
n April 2012, ACC received a B++ rating for financial strength and bbb for
issuer credit from A.M. Best. n March 2012, Saudi Arabian Monetary Agency
(SAMA) approved the issue of the company's Fire and Theft nsurance
products. n January 2012, ACC obtained approval from SAMA to offer
"Collective Life insurance product", and extend provisional approval of 22
insurance products for a period of six months. n December 2011, the
Council of Saudi Chambers approved the company's offer to provide
Commercial ndustrial Chambers' employees with a full medical insurance
service. This contract would be reflected in ACC's financial statements for
2Q12. n the same month, the company obtained approval from SAMA to
market and sell worker's compensation insurance.

NSURANCE ~ MAY 2012
ARABA NSURANCE
ALSO KNOWN AS: ACC

NOT COVERED

STOCK DETAILS
Absolute (7.2) 2.1 19.7
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 35.1 9.4
12M 19.5 5.2
Bloomberg code ACC AB
http://www.aicc.com.sa

Free float 47.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 52.1 34.5
P/B (x) 3.9 3.7 3.4
P/S (x) 3.4 2.2 1.6
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS ACC (RHS)

Source: Bloomberg

Arab Holding Co. 19.2
Jordanian nsurance Co. 12.2
Arab Supply and Trading
(ASTRA)
5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 166 260 334 28.2 -
Total Revenues
SRmn - 174 274 361 32.1 -
Net ncome
SRmn (27) -14 11 17 51.3 NM
Assets
SRmn 177 541 833 1,162 39.5 87.3
Equity
SRmn 171 154 161 174 7.6 0.6
nvestments
SRmn 169 195 143 167 17.1 (0.4)
Technical Reserves SRmn - 262 463 836 80.5 -
Combined Ratio % - 114.2 101.4 103.0 - -
Net Mgn
% - (0.1) 0.0 0.0 - -
ROE
% (15.7) (8.7) 7.3 10.3 - -
ROA
% (15.1) (3.9) 1.7 1.7 - -
Div Payout
% - - - - - -
EPS
SR (1.34) (0.70) 0.57 0.86 51.3 NM
BVPS
SR 8.54 7.69 8.07 8.69 7.6 0.6

139

EstabIished in AI-Khobar in 2006, Saudi United Cooperative
Insurance Company (WaIa'a Insurance) speciaIizes in
business risks and government agencies. The company
markets products and services under the WALAA brand and
operates through its branches in Riyadh, Jeddah and AI-
Khobar.
x Business brief
Wala'a nsurance offers cooperative insurance products for property (fire and
allied risks), motor, marine cargo and hull, engineering, medical and
miscellaneous accidents insurance. The company earns most revenues from
the motor, medical and property insurance segments.
x FinanciaIs
n 2011, the company's net insurance premium grew 38.6% YoY to
SR164.4mn from SR118.6mn in 2010. Consequently, total revenues rose
35.1% YoY to SR180mn from SR133mn the previous year. The company
posted a net profit in 2011 compared to a net loss in 2010 primarily led by
better underwriting performance across all lines of insurance business due to
optimization of operational expenses.
n November 2011, Wala'a nsurance announced that it has signed a two-
year contract with Al Wafaa nsurance Agency Company. The latter is an
insurance agent licensed by Saudi Arabian Monetary Agency and operates
through several branches and points of sale across KSA. n December 2011,
the company announced the appointment of Mr. Johson Varghese as Chief
Executive Officer.

NSURANCE ~ MAY 2012
SAUD UNTED
ALSO KNOWN AS: WALA'A

NOT COVERED

STOCK DETAILS
Absolute (9.4) (5.5) 6.1
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 52.7 14.1
12M 29.5 7.9
Bloomberg code WALAA AB
www.walaa.com

Free float 66.80

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM 98.5
P/B (x) 2.9 3.0 2.9
P/S (x) 9.6 3.4 2.5
Div Yield (%) - - -
DPS - - -

12
17
22
27
32
5,500
6,000
6,500
7,000
7,500
8,000
TAS Walaa nsurance (RHS)
Source: Bloomberg

nternational for General nsurance
Company
10.5


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn NA 41.6 118.6 164.4 38.6 NA
Total Revenues
SRmn NA 47 133 180 35.1 NA
Net ncome
SRmn (15)* (25) (7) 5 NM NM
Assets
SRmn 187 361 369 472 27.9 36.2
Equity
SRmn 181 154 150 154 2.9 (5.1)
nvestments
SRmn 182 190 156 138 (11.6) (8.9)
Technical Reserves SRmn NA 123 163 209 28.8 NA
Combined Ratio % NA 175.1 117.6 105.8 - -
Net Mgn
% NA (53.2) (5.2) 2.5 - -
ROE
% (8.0) (15.0) (4.6) 3.0 - -
ROA
% (7.9) (9.2) (1.9) 1.1 - -
Div Payout
% - - - - - -
EPS
SR (0.74) (1.25) (0.35) 0.23 NM NM
BVPS
SR 9.05 7.71 7.51 7.72 2.9 (5.1)

* Financials of 2008 for 18 months
140

GuIf Union Cooperative Insurance Company (GuIf Union) was
estabIished by GuIf Union Insurance and Projects
Management HoIding Co in August 2007. The company offers
Sharia'a compIiant insurance products catering to cIients in
Saudi Arabia as weII as customers of GuIf Union Insurance
and Risk Management Company.
x Business brief
Gulf Union is engaged in cooperative insurance and reinsurance activities,
excluding protection and savings insurance. The company's product portfolio
comprises insurance for property, engineering, marine, liability, motor,
individual, health, and other related cooperative insurance activities. Apart
from Dammam, Gulf Union operates branches in Jeddah, Khobar and
Riyadh.
x FinanciaIs
Gulf Union's net insurance premium fell 22.0% YoY to SR145mn in 2011. As
a result, total revenues declined 22% YoY to SR183mn in 2011 compared to
SR234mn in 2010. Net claims incurred increased by SR18mn in 2011. n
addition, general and administrative expenses as well as bad debts provision
rose. Consequently, the company incurred a net loss of SR63mn in 2011
compared to a profit of SR11mn 2010.
n April 2012, the company received approval from Saudi Arabian Monetary
Agency (SAMA) for the sale and marketing of its "Life Group Protection
nsurance" and "Public Liability nsurance" products. n the same month, Gulf
Union announced the appointment of Mr. Omar Bin Abdullah Al Rashed as a
member of the Board, replacing Mr. Sulaiman Bin Abdullah Al Zamil. n
November 2011, Gulf Union and Services Claims and Risks Company
entered into an agreement to settle medical claims of the former's clients.

NSURANCE ~ MAY 2012
GULF UNON COOPERATVE
ALSO KNOWN AS: GULF UNON

NOT COVERED

STOCK DETAILS
Absolute (9.7) (2.1) 8.0
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 42.5 11.3
12M 27.2 7.3
Bloomberg code GULFUN AB
www.gulfunion.com.sa

Free float 64.24

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 30.8 42.4 NM
P/B (x) 2.2 2.2 3.1
P/S (x) 2.0 2.0 2.5
Div Yield (%) - - -
DPS - - -

10
14
18
22
26
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS Gulf Union (RHS)

Source: Bloomberg

Gulf Union nsurance Company 23.5


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 176 186 145 (22.0) -
Total Revenues
SRmn - 229 234 183 (22.0) -
Net ncome
SRmn (20) 15 11 (63) NM NM
Assets
SRmn 205 872 730 747 2.2 53.9
Equity
SRmn 195 206 212 149 (29.7) (8.6)
nvestments
SRmn 175 183 153 165 8.2 (1.9)
Combined Ratio % - 119.5 117.4 166.6 - -
Net Mgn
% - 6.5 4.7 (34.5) - -
ROE
% 7.5 5.2 (34.9) - -
ROA
% (9.7) 2.8 1.4 (8.5) - -
Div Payout
% - - - - - -
EPS
SR 0.68 0.50 (2.86) NM NM
BVPS
SR 8.87 9.34 9.64 6.78 (29.7) (8.6)


141

Arabian ShieId Cooperative Insurance Company (Arabian
ShieId), headquartered in Riyadh and estabIished in 2007,
commenced operations in January 2008. The company, a
subsidiary of Bahrain-based Arabian ShieId Insurance
Company, is engaged in cooperative insurance and
reinsurance activities.
x Business brief
Arabian Shield provides general insurance products including motor, marine,
engineering, property, liability, airplane and accident insurance. t also offers
medical insurance to individuals as well as companies.
x FinanciaIs
Arabian Shield's net insurance premium, accounting for 85.6% of total
revenue, grew 32.3% YoY to SR173mn in 2011. Total revenue increased
28.1% YoY to SR202mn. Net income fell 25.8% YoY to SR15.1mn in 2011
mainly due to rising reserves allocated for death accidents and over-all
increase in net claims incurred throughout the year.
n April 2012, Arabian Shield announced that Arabian Shield nsurance
Company (Bahrain), a 30% stakeholder in the company, has ceased its
operations in Bahrain. Arabian Shield nsurance Company was suspended
from working in Saudi Arabia since 1 January 2009 after selling its portfolio of
insurance and all assets related to Arabian Shield Cooperative nsurance
(Saudi Arabia).

NSURANCE ~ MAY 2012
ARABAN SHELD
ALSO KNOWN AS: ARABAN

NOT COVERED

STOCK DETAILS
Absolute (4.0) (12.8) 57.8
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 22.1 5.9
12M 15.8 4.2
Bloomberg code SHELD AB
www.arabianshield.com

Free float 43.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 82.3 44.2 59.7
P/B (x) 3.3 3.0 2.9
P/S (x) 7.0 4.2 3.3
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS Arabian Shield (RHS)
Source: Bloomberg

Arabian Shield nsurance Co. 30.0
Bahrain National Holding Co. 15.0
Yamama Saudi Cement Co. 5.0
Al Obaikan nvestment Group 5.0


Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 68 131 173 32.3 -
Total Revenues
SRmn - 95 158 202 28.1 -
Net ncome
SRmn (4) 8 15 11 (25.8) NM
Assets
SRmn 202 448 456 520 14.2 37.1
Equity
SRmn 196 204 219 231 5.1 5.5
nvestments
SRmn 202 256 193 172 (10.5) -5.1
Combined Ratio % - 116.6 103.0 106.4 -
Net Mgn
% - 8.5 9.5 5.5 - -
ROE
% (1.9) 4.0 7.1 5.0 - -
ROA
% (1.8) 2.5 3.3 2.3 - -
Div Payout
% - - - - - -
EPS
SR (0) 0 1 1 (25.8) NM
BVPS
SR 10 10 11 12 5.1 5.5

142

Buruj Cooperative Insurance Company (Buruj), a part of
Kuwait's GuIf Insurance Group, was estabIished in October
2008 in Riyadh. FormerIy known as Saudi PearI Insurance Co.,
it was re-estabIished as Buruj Cooperative Insurance
Company due to reguIatory changes in KSA's insurance
sector. The company was Iisted on the TASI in February 2010.
x Business brief
Buruj's product portfolio includes various insurance covers such as Motor,
Property and Fire, Marine, Engineering, Fidelity and Money, Liability, and
other types. The company follows regulations laid by The Cooperative
nsurance for cooperative insurance as well as guidelines issued by Saudi
Arabian Monetary Agency.
x FinanciaIs
Buruj reported net insurance premium of SR40mn and a total revenue of
SR53mn in 2011. The company reported a net loss of SR18mn during the
year. This fall in net loss, compared to the six-month period of 2010, is mainly
due to the increase in gross written premiums and also since all the pre-
incorporation costs were expensed in the financials of 2010.
n March 2012, the company received final sales and marketing approval for
its vehicle insurance products and eight other insurance products from Saudi
Arabian Monetary Agency (SAMA). n October 2011, the company received
final accreditation from the Council of Cooperative Health nsurance, and
received a six-month extension on temporary approval from SAMA for 16
insurance products. n August 2011, Buruj received approval from SAMA to
sell and market health insurance products.

NSURANCE ~ MAY 2012
BURUJ COOPERATVE
ALSO KNOWN AS: BURUJ

NOT COVERED

STOCK DETAILS
Absolute NA** (16.6) 73.7
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 69.1 18.4
12M 66.6 17.8
Bloomberg code BURUJ AB
www.burujinsurance.com

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM NM
P/B (x) - 7.1 8.8
P/S (x) - NM 13.7
Div Yield (%) - - -
DPS - - -

10
60
110
160
210
260
5,500
6,000
6,500
7,000
7,500
8,000
May-11 Sep-11 Jan-12
TAS Buruj Cooperative(RHS)

Source: Bloomberg

Gulf nsurance Co. KSC 22.5
Yousef Mohammed Abdel Wahab
Naghy Co.
5.0
Gulf Medical Co. 5.0
Batterji ndustrial Group Co. 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn
-
- 2 40 1,725 -
Total Revenues SRmn - - 3 53 1,707 -
Net ncome SRmn - - (30) (18) (38) -
Assets SRmn - - 138 181 30 -
Equity SRmn - - 100 82 (18) -
nvestments SRmn - - 100 68 (33) -
Technical Reserves SRmn - - 16 67 320 -
Combined Ratio % - - 548.1 170.0 - -
Net Mgn % - - (1,023.9) (34.9) - -
ROE % - - (29.7) (20.1) - -
ROA % - - (21.5) (11.5) - -
Div Payout % - - - - - -
EPS SR - - (2.29) (1.41) (38) -
BVPS SR - - 7.71 6.29 (18) -

Source: Tadawul, Zawya, Company, NCBC Research;
* 2010 figures are for 6 months, **1 month absolute stock price performance is not available since the stock did not trade at the
corresponding period 143

Sanad Insurance & Reinsurance Cooperative Company
(SANAD), estabIished in 2006, is headquartered in Riyadh. The
company provides a range of car, generaI, heaIth, property,
and marine insurance as weII as reinsurance services. SANAD
aIso pIans to expand its product portfoIio to cover insurance
for agricuIture, airIines, ships, petroI, and power.
x Business brief
SANAD provides fire, travel, medical, motor, property, marine, and
engineering insurance products. The company also offers insurance against
general accidents. n addition, SANAD provides life insurance products and
reinsurance services.
x FinanciaIs
The company's net insurance premium fell 7.5% YoY to SR171mn in 2011.
Total revenues decreased 7.9% YoY to SR181mn in 2011 due to a drop in
net insurance premium, which accounts for 94.5% of total revenues.
Consequently, SANAD's net loss increased to SR28mn in 2011 compared to
SR21mn in the previous year.
n January 2012, SANAD announced that Mr. Sultan Bin Mohammed Bin
Saleh had resigned as a member of the Board of Directors. On August 20,
2011, the company appointed Mr. Philippe William as Chief Executive Officer
in place of Mr. Gram Efnes, who had resigned in July 2011.

NSURANCE ~ MAY 2012
SANAD NSURANCE
ALSO KNOWN AS: SANAD

NOT COVERED

STOCK DETAILS
Absolute (10.3) (4.9) 16.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 41.1 10.9
12M 24.1 6.4
Bloomberg code SANAD AB
www.sanad.com.sa

Free float 49.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 3.0 3.5 4.4
P/S (x) 5.6 2.4 2.6
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS SANAD (RHS)
Source: Bloomberg

Al Khazna nsurance Co. 15.0
Continental nsurance Co. 10.0
Ramat Marketing and Distribution
Ltd
5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn 3 77 185 171 (7.5) 304.5
Total Revenues
SRmn 3 83 196 181 (7.9) 296.3
Net ncome
SRmn (15) (15) (21) (28) 32.7 22.7
Assets
SRmn 199 415 370 374 1.0 23.4
Equity
SRmn 175 157 135 107 (20.6) (15.1)
nvestments
SRmn 173 28 36 35 (3.0) (41.4)
Combined Ratio % 369.8 104.8 129.4 128.8 - -
Net Mgn
% (520.0) (17.5) (10.7) (15.4) - -
ROE
% (8.3) (8.8) (14.4) (23.1) - -
ROA
% (7.7) (4.8) (5.4) (7.5) - -
Div Payout
% - - - - - -
EPS
SR (0.76) (0.73) (1.05) (1.40) 32.7 22.7
BVPS
SR 8.75 7.86 6.74 5.36 (20.6) (15.1)

144

Wataniya Insurance Company (Wataniya) was Iisted on the
Saudi Stock Exchange (TadawuI) in June 2010. The company
offers Sharia'a-compIiant non-Iife insurance and reinsurance
services in the Kingdom. Wataniya operates through offices in
Jeddah, Riyadh and Khobar.
x Business brief
Wataniya offers a wide range of insurance services in segments such as
property, medical, marine, aviation, engineering, fire, general accident, motor
and liability insurance. The company capitalizes on its strategic partnerships
with New Re Company (part of Munich Re Group) and Saudi Hollandi Bank
to sell insurance products.
x FinanciaIs
Wataniya's revenues grew 336.0% YoY to SR80mn in 2011 from SR18mn in
2010. However, during 2010, the company was operational only from April to
December. Revenues for 2011 totaled SR110mn compared to SR21mn for
the nine months in 2010. Significant growth in revenues resulted in a net
income of SR10mn in 2011 compared to a net loss of SR20mn the previous
year. For the 21 months from April 2010 to December 2011, the company
recorded pre-corporation expenses of SR1.49mn and provisions of
SR4.62mn along with unreported claims of SR7.395mn.
n February 2012, Wataniya received an approval from Saudi Arabian
Monetary Agency (SAMA) for its Group Personal Accident nsurance and
ndividual Term Life nsurance products. n January, Standard and Poor's
affirmed the company's financial strength with a credit rating of BBB. During
the same month, Wataniya appointed Mr. brahim Al Hussein as temporary
Chief Executive Officer; the company also announced that it has earned a
contract worth SR8mn from Saudi Cement Company to provide insurance
coverage to the latter's assets and property for one year. n December 2011,
SAMA approved the company's ndividual Personal Accident nsurance
product.
NSURANCE ~ MAY 2012
WATANYA NSURANCE
ALSO KNOWN AS WATANYA

NOT COVERED

STOCK DETAILS
Absolute (4.0) (4.5) 74.2
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 61.3 16.3
12M 55.0 14.7
Bloomberg code WATAN AB
www.wataniya.com.sa

Free float 30.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - NM 89.6
P/B (x) - 12.1 10.9
P/S (x) - 43.3 8.3
Div Yield (%) - - -
DPS - - -

40
60
80
100
120
5,500
6,000
6,500
7,000
7,500
8,000
TAS Wataniya (RHS)

Source: Bloomberg

Saudi National nsurance Co. 27.5
Saudi Hollandi Bank 20.0
New Reinsurance Co. Ltd. 10.0
brahim Al Juffali & Bros. Co. 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn - - 18 80 336.0 -
Total Revenues SRmn - - 21 110 420.7 -
Net ncome SRmn - - (20) 10 NM -
Assets SRmn - - 156 340 117.6 -
Equity SRmn - - 75 83 11.3 -
nvestments SRmn - - 60 51 (15.7) -
Technical Reserves
SRmn - - 55 213 286.5 -
Combined Ratio
% - - 188.1 166.5 - -
Net Mgn % - - 97.1 9.3 - -
ROE % - - 27.3 12.2 - -
ROA % - - 13.1 3.0 - -
Div Payout % - - NA NA - -
EPS SR - - (2.04) 1.02 NM -
BVPS SR - - 7.49 8.34 11.3 -

* 2010 revenues are for nine months (April to December)
145

Headquartered in AI Khobar, ACE Arabia Cooperative
Insurance Company (ACE) is a joint venture between ACE
Limited and EI Khereiji Group. The company was estabIished
in 2009 and received reguIatory approvaI from Saudi Arabian
Monetary Agency (SAMA) to commence operations in January
2010. ACE operates in Saudi Arabia through its offices in AI
Khobar, Riyadh, Jeddah and AI Hassa.
x Business brief
ACE offers insurance products in the property, casualty, financial, personal
and health segments to a diverse range of clients in Saudi Arabia. t provides
an array of customized insurance products, including health, fire and
property, engineering, accidents, liability, car, marine, aviation, energy and
collective insurance.
x FinanciaIs
n 2011, ACE's net insurance premium stood at SR99mn compared to
SR190mn for an 18-month period ending December 2010. The company
reported total revenues of SR121mn and net income of SR16mn in 2011.
Statements for the year 2011 reflect the purchase and transfer of the
insurance portfolio related to ACE Arabia nsurance Company and
nternational nsurance Company.
n March 2012, SAMA extended its temporary approval for the company's 30
insurance products for a period of six months. n January 2012, ACE
obtained SAMA approval to market and sell its Comprehensive General
Liability nsurance Policy. n the same month, the company received SAMA's
consent to transfer portfolios of ACE Arabia nsurance Company (BSC) and
nternational nsurance Company (E. C.) to ACE Arabia Cooperative
nsurance Company with effect from 1 January 2009; this would reflect in
ACE's 2011 financial statements. n October 2011, the company received
SAMA's permission to extend the temporary approval of its 13 insurance
products for six months.
NSURANCE ~ MAY 2012
ACE ARABA
ALSO KNOWN AS: ACE

NOT COVERED

STOCK DETAILS
Absolute 13.1 59.0 153.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 57.8 15.4
12M 41.9 11.2
Bloomberg code ACE AB
www.ace-mena.com

Free float 40.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 28.4 60.7
P/B (x) 10.7 7.6 6.9
P/S (x) - 4.0 8.0
Div Yield (%) - - -
DPS - - -

25
45
65
85
105
125
5,500
6,000
6,500
7,000
7,500
8,000
TAS Ace Arabia (RHS)

Source: Bloomberg

ASNA nternational Holding 30.0
General Company for
Technological Development
5.0
Wehdan nvestment 5.0
General Company for nvestment 5.0
Middle East nvestment 5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Net ns. Premium
SRmn - - 190* 99 NM -
Total Revenues
SRmn - - 240* 121 NM -
Net ncome
SRmn - - 34* 16 NM NM
Assets
SRmn - 100 390 466 19.5 115.6
Equity
SRmn - 90 128 141 10.3 24.8
nvestments
SRmn - 98 79 80 0.4 (9.6)
Combined Ratio % - - 98 100 - -
Net Mgn
% - - 14 13 - -
ROE
% - (10.6) 31.3 11.9 - -
ROA
% - (9.5) 13.9 3.7 - -
Div Payout
% - - - - - -
EPS
SR - - 3.41 1.60 (53.1) NM
BVPS
SR - 9.04 12.77 14.09 10.3 24.8

* 2010 numbers are for the period of 18 months starting July 2009 to December 2010.
146

Saudi Fransi Cooperative Insurance Company (AIIianz SF)
was estabIished in 2007 in Riyadh. The company is a
subsidiary of Banque Saudi Fransi and Assurances GeneraIes
de France (member of the AIIianz Group).
x Business brief
Allianz SF offers multiple insurance solutions through two main segments:
individual and corporate. Under the individual solutions segment, the
company provides Sharia'a-compliant insurance products including individual
financial planning (for education, protection and retirement), family income
protection, life and disability insurance, and corporate solutions assurance.
The corporate solutions division offers fire, general accident,
construction/engineering, marine cargo, aviation and employee
compensation insurance products.
x FinanciaIs
After posting net loss for four years, Allianz SF recorded net profit of SR2mn
in 2011. This can be mainly attributable to an increase in gross and net
insurance premiums. Net insurance premium, which accounted for 92.6% of
total revenue in 2011, rose 52.1% YoY. As a result, the company's total
revenue grew 54.1% to SR383mn in 2011. ts combined ratio declined
slightly to 108% in 2011 from 110% in 2010.
n April 2012, Allianz SF received approval from Saudi Arabian Monetary
Agency (SAMA) for "Civil and Product" insurance product, and banking-
related insurance products (effective from January 2011). n December 2011,
the company announced the merger of its founding shareholder, Allianz
France "AGF" nternational, with Allianz France. n the process of the merger,
all assets of Allianz France "AGF" nternational would be transferred to
Allianz France. During the same month, Allianz SF obtained final approval
from SAMA for Workers' compensation insurance product. The company
also received SAMA's extension of provisional approval for 11 insurance
products for a period of six months.
NSURANCE ~ MAY 2012
ALLANZ SAUD FRANS
ALSO KNOWN AS: ALLANZ SF, ALLANZ SAUD FRANS
NOT COVERED

STOCK DETAILS
Absolute 5.4 77.1 255.8
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 90.7 24.2
12M 39.2 10.5
Bloomberg code ALLANZ AB
www.allianzsf.com

Free float 33.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 38.9 10.5 10.5
P/S (x) 11.6 6.7 4.4
Div Yield (%) - - -
DPS - - -

10
30
50
70
90
110
130
5,500
6,000
6,500
7,000
7,500
8,000
TAS ALLANZ SF (RHS)
Source: Bloomberg

Banque Saudi Fransi 32.5
AGF nternational Co. 16.2
SN Holding Co. 16.2


Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn 4 127 233 355 52.1 359.1
Total Revenues
SRmn 4 144 249 383 54.1 362.1
Net ncome
SRmn (33) (22) (8) 2 NM NM
Assets
SRmn 239 443 941 1,075 14.2 65.0
Equity
SRmn 66 43 158 158 (0.2) 33.8
nvestments
SRmn 72 46 161 163 1.3 31.3
Combined Ratio % 797.2 128.2 110.2 108.1 (2.0) (48.6)
Net Mgn
% (862.4) (15.5) (3.4) 0.4 - -
ROE
% (44.6) (41.2) (8.3) 1.0 - -
ROA
% (19.5) (6.6) (1.2) 0.2 - -
Div Payout
% - - - - - -
EPS
SR (1.7) (1.1) (0.4) 0.1 118.6 NM
BVPS
SR 3.3 2.1 7.9 7.9 (0.2) 33.8

147

EstabIished in 2006 in accordance with a RoyaI Decree, Saudi
IAIC Cooperative Insurance Company (SaIama) is a Jeddah-
based insurance company. The company markets insurance
products under the SALAMA brand. SALAMA, a subsidiary of
UAE-based IsIamic Arab Insurance Co., provides Sharia'a-
compIiant generaI insurance soIutions.
x Business brief
SALAMA's products are broadly classified into three segments: health, motor,
and general insurance. The health insurance segment offers individual and
corporate healthcare cover. Motor insurance provides comprehensive and
third-party liability insurance cover. The general insurance division offers
cover for fire & property, personal accident, marine, engineering, aviation and
miscellaneous insurance.
x FinanciaIs
SALAMA's net insurance premium declined 0.3% to SR132mn in 2011
despite a 57.1% increase in gross written premiums (GWP) to SR218mn in
2011 compared to SR139mn in 2010. The company's total revenue fell 5.8%
YoY in 2011. ts net income also declined 65.5% YoY due to an increase in
provision for unearned premium. Consequently, SALAMA's ROE fell to 2.7%
from 8.3% in 2010.
n April 2012, SALAMA terminated two-year sales agreement with Al
Mayazeen nsurance Agency to sell medical insurance and civil liability
insurance. n January 2012, the company received final approval from Saudi
Arabian Monetary Agency (SAMA) for Loss of Profit following Machinery
Breakdown. This increased its total final approved products to 20. n
November 2011, Standard & Poor's raised counterparty credit and insurer
financial strength ratings on SALAMA to 'A-' from 'BBB+'. n September 2011,
the company obtained SAMA's approval to open 25 point of sale distribution
centers across KSA.
NSURANCE ~ MAY 2012
SAUD AC
ALSO KNOWN AS: SAUD SALAMA

NOT COVERED

STOCK DETAILS
Absolute (6.9) 1.4 22.9
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 36.9 9.8
12M 19.5 5.2
Bloomberg code SALAMA AB
www.salama.com.sa

Free float 59.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 36.6 65.3 189.3
P/B (x) 5.7 5.2 5.1
P/S (x) 2.0 2.9 3.0
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS SALAMA (RHS)
Source: Bloomberg

Arab slamic nsurance Company 30.0
Bin Dawood & Sons Commercial
Co.
5.0
Al Sha'er Trade, ndustries and
Construction
5.0
Cooperative Group Company for
Trade & Construction
5.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium SRmn 72* 210 133 132 (0.3) 22.5
Total Revenues SRmn 76 * 214 151 142 (5.8) 23.1
Net ncome SRmn (38)* 12 7 2 (65.5) NM
Assets SRmn 257 255 257 284 10.6 3.4
Equity SRmn 61 76 82 85 3.1 11.7
nvestments SRmn 64 76 71 72 1.2 3.9
Technical Reserves
SRmn 134 127 122 151 23.7 4.0
Combined Ratio
% 119.5 92.0 106.2 103.5 - -
Net Mgn % (50.6) 5.5 4.4 1.6 - -
ROE % (53.4) 17.2 8.3 2.7 - -
ROA % (20.9) 4.6 2.6 0.8 - -
Div Payout % NA NA NA NA - -
EPS SR (3.8) 1.2 0.7 0.2 (65.5) NM
BVPS SR 6.1 7.6 8.2 8.5 3.1 11.7

148

AI-AhIia Insurance Company (AI-AhIia) was estabIished by the
NationaI Insurance Company of Egypt and severaI Saudi
investors in 2007. Headquartered in Riyadh, the company
offers Sharia'a-compIiant cooperative insurance and
reinsurance services in the Kingdom.
x Business brief
Al-Ahlia offers a range of general insurance products, including fire
insurance, property insurance, marine insurance, motor insurance, money
insurance, engineering insurance, medical insurance, medical malpractice
insurance, fidelity insurance and liability insurance.
x FinanciaIs
Al-Ahlia's net insurance premium, which contributes 93% to total revenues,
increased 5.2% YoY to SR172mn in 2011. Total revenues grew 7.5% YoY to
SR185mn compared to SR172mn in 2010. Net income losses decreased to
SR5mn in 2011 from SR11mn in 2010; however, combined ratio increased
from 73.8% to 115.5% as operating expenses grew 64.7%.
n March 2012, Al-Ahlia announced that Saudi Arabian Monetary Agency
(SAMA) has extended its approval for vehicle insurance products for a period
of three months (until June 15, 2012) and the group medical insurance
product for eight months (until October 31, 2012). n January 2012, the
company obtained a renewal permit from SAMA to continue insurance
business for a period of three years for its general and health insurance
segments. n December 2011, the company received approval from SAMA to
start six new branches in Riyadh, Qassim, Jeddah, Al Madinah, Taif and Al-
Khobar. n the same month, Al-Ahlia received SAMA's consent on increasing
capital base to SR220mn by way of rights issue. n October 2011, the
company received an extension of provisional approval for 21 insurance
products for a period of six months.

NSURANCE ~ MAY 2012
AL-AHLA NSURANCE
ALSO KNOWN AS: AL-AHLA

NOT COVERED

STOCK DETAILS
Absolute (8.9) (2.4) 19.4
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 48.9 13.0
12M 37.0 9.9
Bloomberg code ALAHLA AB
www.alahlia.com.sa

Free float 73.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 8.0 10.6 12.5
P/S (x) 24.5 2.4 2.2
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS Al-Ahlia (RHS)

Source: Bloomberg

Al Ahlia nsurance Co. - Egypt 18.0


Company financiaIs

2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 16 164 172 5.2 NM
Total Revenues
SRmn - 17 172 185 7.5 NM
Net ncome
SRmn (15) (31) (11) (5) (55.3) (30.7)
Assets
SRmn 107 182 315 305 (3.1) 41.8
Equity
SRmn 83 51 38 33 (15.0) (26.7)
nvestments
SRmn 101 16 1 41 5,680.7 (25.8)
Technical Reserves SRmn - 61 164 167 2.0 NM
Combined Ratio % - 277.9 73.8 115.5 - -
Net Mgn
% NM (186.6) (6.6) (2.8) - -
ROE
% (16.7) (46.2) (25.5) (14.3) - -
ROA
% (13.9) (21.4) (4.6) (1.6) - -
Div Payout
% - - - - - -
EPS
SR (1.53) (3.10) (1.14) (0.51) (55.3) (30.7)
BVPS
SR 8.30 5.11 3.84 3.27 (15.0) (26.7)

* Financials reported for 2008 is for 18 months
149

AIIied Cooperative Insurance Group (ACIG) was incorporated
in 2007 through the acquisition of the Saudi Arabian assets
and cIient portfoIio of its parent company, ACIG Bahrain.
Based in Jeddah, ACIG offers Sharia'a-compIiant insurance
and reinsurance products in Saudi Arabia.
x Business brief
ACG offers slamic general insurance products including marine, medical,
motor, accident and engineering insurance. The company provides marine
cargo and inland transit insurances through the Marine nsurance segment.
The Motor nsurance division offers third-party liability protection, personal
accident cover (for drivers and passengers) and comprehensive 'own
damage' options. The General nsurance segment provides money, fidelity,
personal accident, public liability, workmen's compensation and medical
malpractice insurance.
x FinanciaIs
ACG's net insurance premium grew over 461% YoY to SR124mn in 2011.
Consequently, the company's total revenue increased 432% YoY to
SR128mn. Net loss incurred declined to SR2mn from SR20mn in 2010 due
to a rise in total insurance revenue and stable general & administrative
expenses, which reduced combined ratio to 105% from 198%.
n April 2012, ACG received approval from Saudi Arabian Monetary Agency
(SAMA) to renew its General and Health insurance licenses for a period of
three months. n January 2012, the company obtained approval from the
Council of Cooperative Health nsurance to renew its insurance license for a
three-year period. During the same month, ACG received SAMA's extension
of provisional approval to market 26 insurance products for a period of six
months, and signed a one-year renewable contract with Rowad nsurance
Agency to market and sell the company's insurance products in Saudi Arabia.
n September 2011, ACG received SAMA's consent to offer travel insurance
for a period of six months.
NSURANCE ~ MAY 2012
ALLED CO-OPERATVE
ALSO KNOWN AS: ACG, SAUD ACG

NOT COVERED
Pricing as of 31-03-2012*

STOCK DETAILS
Absolute (13.8) 1.8 33.7
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 41.5 11.1
12M 27.8 7.4
Bloomberg code ACG AB
www.acig.com.sa

Free float 58.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 8.5 14.3 15.5
P/S (x) NM 17.6 3.3
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
May-11 Aug-11 Nov-11 Feb-12
TAS ACG (RHS)

Source: Bloomberg

Allied Cooperative nsurance Group 20.0
slamic Development Bank 20.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 1 22 124 461.4 -
Total Revenues
SRmn - 1 24 128 431.6 -
Net ncome
SRmn (23) (24) (20) (2) (91.5) (58.2)
Assets
SRmn 78 91 142 137 (3.8) 20.6
Equity
SRmn 70 50 30 27 (7.5) (27.0)
nvestments
SRmn 74 48 38 26 (30.9) (29.0)
Combined Ratio % - 1,423.5 197.7 104.5 - -
Net Mgn
% - (2,463.0) (81.6) (1.3) - -
ROE
% (28.1) (40.3) (49.4) (5.9) - -
ROA
% (26.4) (28.7) (16.9) (1.2) - -
Div Payout
% - - - - - -
EPS
SR (2.28) (2.42) (1.96) (0.17) (91.5) (58.2)
BVPS
SR 7.02 4.99 2.96 2.74 (7.5) (27.0)

Source: Tadawul, Zawya, Company, NCBC Research, * Stock not trading since 31-03-2012

150

EstabIished in 2007, Saudi Arabian Cooperative Insurance
Company (SAICO) offers Sharia'a-compIiant insurance
services across Saudi Arabia. SAICO is a subsidiary of
Bahrain-based Saudi Arabian Cooperative Insurance
Company, which hoIds 30% stake in the company.
x Business brief
SACO provides insurance services in two categories: business and
personal. Under business insurance, the company covers liabilities such as
fire and property, marine cargo, engineering, aviation, motor vehicle, energy,
life, and health. Personal insurance provides insurance for home, car, boat,
life, health, and accidents.
x FinanciaIs
SACO's net insurance premium, which contributed 85.4% of total revenues,
increased 48.9% YoY to SR323mn in 2011. Consequently, total revenues
grew over 47.4% YoY to SR378mn. The company incurred a net loss of
SR8mn during the year, 17.3% lower than net loss in 2010 (SR9mn), mainly
due to a rise in the net premium and commission income earned during the
year.
SACO received Saudi Arabian Monetary Agency's (SAMA) approval to sell
its medical malpractices product in April 2012, motor insurance product in
March 2012, insurance product for banking operations in January 2012, and
glass insurance product in December 2011. The company also received
SAMA's approval in December 2011 to renew provisional approval for its 29
insurance products.

NSURANCE ~ MAY 2012
SAUD ARABAN
ALSO KNOWN AS: SACO SAUD

NOT COVERED

STOCK DETAILS
Absolute (3.2) 8.0 35.8
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 61.6 16.4
12M 40.7 10.9
Bloomberg code SACO AB
www.saico.com.sa

Free float 68.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 5.5 6.2 7.0
P/S (x) 32.2 1.7 1.2
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
5,500
6,000
6,500
7,000
7,500
8,000
TAS SACO (RHS)
Source: Bloomberg

Saudi Arab nsurance Co. 30.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - 12 217 323 48.9 -
Total Revenues
SRmn - 14 256 378 47.4 -
Net ncome
SRmn (10)* (8) (9) (8) (17.3) (8.3)
Assets
SRmn 94 204 611 599 (2.0) NM
Equity
SRmn 90 82 72 64 (10.8) NM
nvestments
SRmn 91 69 79 66 (16.2) NM
Technical Reserves SRmn NA 64 433 441 1.9 NM
Combined Ratio % NA 149.4 121.6 118.7 - -
Net Mgn
% NA (60.3) (3.7) (2.1) - -
ROE
% (11.0) (9.8) (12.2) (11.4) - -
ROA
% (10.7) (5.6) (2.3) (1.3) - -
Div Payout
% - - - - - -
EPS
SR (1.01) (0.84) (0.94) (0.78) (17.3) (8.3)
BVPS
SR 8.99 8.15 7.22 6.44 (10.8) (10.5)

151

In 2007, Saudi Indian Company for Co-operative Insurance
(Saudi Indian) was estabIished through a joint venture
between New India Assurance Co., Life Insurance Corporation
of India (IntI), and Fawaz AbduIaziz AI Hokair and Co.
Headquartered in Riyadh, the company provides Iife and
generaI insurance services to individuaIs and commerciaI
estabIishments.
x Business brief
Saudi ndian's product profile is segregated into two broad categories: life
insurance and non-life insurance. The company offers various products
related to protection and savings, such as Takaful nsurance, Participating
Endowment, Cash Back, Money Back & Protect Lifelong, and Child Benefit
plans through the life insurance segment. Under the non-life insurance
segment, Saudi ndian provides insurance for fire, motor, engineering, health
and other miscellaneous products, including personal accident, burglary,
money and fidelity guarantee.
x FinanciaIs
SCC's net insurance premium rose 46.2% YoY to SR56mn in 2011.
Consequently, the company's total revenues grew 48.3% YoY to SR66mn in
2011. The company's net loss also declined to SR1mn in 2011 compared to
SR3mn in 2010, mainly due to a 63% fall in general and administrative
expenses of shareholders and a reversal of SR2.1mn in the Director's
remuneration in 2011.
n April 2012, the company announced the appointment of Mr. S.
Ramabhadran as a representative of New ndia Assurance Company Ltd,
replacing Mr. A.R. Sekar. n February 13, 2012, the company received Saudi
Arabian Monetary Agency's approval to change its name from "Saudi ndian
Company for Co-operative nsurance" to "WAFA for nsurance (Saudi ndian
Company for Co-operative nsurance)".
NSURANCE ~ MAY 2012
SAUD NDAN
ALSO KNOWN AS: SCC, SAUD NDAN

NOT COVERED

STOCK DETAILS
Absolute (18.0) (7.3) 31.3
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
3M 47.2 12.6
12M 26.6 7.1
Bloomberg code SNDAN AB
www.sicci-ksa.com

Free float 45.00

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 8.1 8.7 8.2
P/S (x) 10.1 9.4 6.4
Div Yield (%) - - -
DPS - - -

20
30
40
50
60
70
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi ndian (RHS)

Source: Bloomberg

New ndia nsurance Co. 10.6
Life nsurance Corp of ndia 10.2
Life nsurance Corp (nt'l) 10.2
Khaled Abdulaziz Bin Salmah
Trading Establishment
5.0
Saleh Saad Al Khariji Establishment 5.0

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn 1 38 38 56 46.2 297.0
Total Revenues
SRmn 1 42 44 66 48.3 307.8
Net ncome
SRmn (9) (26) (3) (1) (60.0) (49.7)
Assets
SRmn 104 183 145 159 9.8 15.3
Equity
SRmn 79 52 48 51 6.1 (13.6)
nvestments
SRmn 68 68 56 56 (0.3) (6.4)
Combined Ratio % 746.4 176.3 119.9 123.2 - -
Net Mgn
% (893.7) (63.3) (6.2) (1.7) - -
ROE
% (10.4) (40.2) (5.5) (2.2) - -
ROA
% (8.7) (18.4) (1.7) (0.7) - -
Div Payout
% - - - - - -
EPS
SR (0.87) (2.63) (0.28) (0.11) (60.0) (49.7)
BVPS
SR 7.91 5.20 4.82 5.11 6.1 (13.6)


152

Saudi Enaya Cooperative Insurance Company was estabIished
as a speciaIized heaIth insurance company in June 2011 by
KhaIed JuffaIi Company and a renowned German partner,
nameIy Munich Re (Munich HeaIth). The company was Iisted
on the Saudi Arabian Stock Exchange (TadawuI) in February
2012, with a paid-up capitaI of SAR 400 miIIion.
x Business brief
Saudi Enaya is focused on being a healthcare specialist by offering private
medical insurance with affordable quality services and solutions for group as
well as individual health risks. Saudi Enaya also provides Council of
Cooperative Health nsurance compliant products with varying levels of
coverage, and a high level of services and innovations covering insured
members. t aims to establish branches across all major regions in the
Kingdom of Saudi Arabia as well as outside.
x FinanciaIs
The company was listed in February 2012 with a paid-up capital of
SR400mn.
The company received approval from Saudi Arabia's Capital Market Authority
(CMA) for its initial public offering of 16 million shares, which represents 40%
of the company's share capital, at an offer price of SR10 per share. The
subscription period was from December 19, 2011 to December 25, 2011. The
company was hence listed within the insurance sector with the ticker 8311 on
February 27, 2012.
NSURANCE ~ MAY 2012
SAUD ENAYA
ALSO KNOWN AS: ENAYA

NOT COVERED

STOCK DETAILS
Absolute (15.2) - -
Market (6.2) 6.2 7.6
Sector (12.0) (3.4) 16.0
2M 230.7 61.5
12M - -
Bloomberg code ENAYA AB
www.saudienaya.com

Free float 40.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - - -
P/B (x) - - -
P/S (x) - - -
Div Yield (%) - - -
DPS - - -

26
36
46
56
66
76
5,500
6,000
6,500
7,000
7,500
8,000
Feb-12 Mar-12 Apr-12 Apr-12 May-12
TAS ENAYA (RHS)
Source: Bloomberg

Munich Re 15.0
National Company for Health
nsurance
5.0
Mohammed and Walid Ahmed
Naghi
5.0
Khalid Ahmed Juffali 5.0

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Net ns. Premium
SRmn - - - - - -
Total Revenues
SRmn - - - - - -
Net ncome
SRmn - - - - - -
Assets
SRmn - - - - - -
Equity
SRmn - - - - - -
nvestments
SRmn - - - - - -
Technical Reserves SRmn - - - - - -
Combined Ratio % - - - - - -
Net Mgn
% - - - - - -
ROE
% - - - - - -
ROA
% - - - - - -
Div Payout
% - - - - - -
EPS
SR - - - - - -
BVPS
SR - - - - - -

153
MAY 2012
Multi-Investment
4280 Kingdom Holding 157
4080 Assir 158
2190 SISCO 159
2030 SARCO 160
2140 Al Ahsa for Dev. 161
2120 Saudi Advanced 162
4130 Al Baha 163

KSA's multi-investment sector comprises diversified holding groups
with investments in a wide range of sectors, including hospitality,
real estate, manufacturing, energy, infrastructure, and education.
The sector witnessed significantly low activity in 2011. Kingdom
Holding Company (Kingdom) remains its largest player, accounting
for about 49% of total sector revenue in 2011.
Saudi Arabia's multi-investment sector comprises seven listed players, which
together accounted for 99% of the total GCC revenue in 2011.
Exhibit 96: Revenue of GCC multi-investment,
2009-11
companies, 2011
USD mn %
Source: Bloomberg, Tadawul, NCBC Research
Revenue in Kuwait and Qatar totaled USD5.6 mn and USD 5.5mn, respectively, in 2011.
Source: Bloomberg, Tadawul, NCBC Research
Size of the bubble represents market cap., as on March 27, 2012.

Kingdom remains the single largest company in KSA's multi-investment sector
with a weight of 0.37% in the overall market index, up 600bps YoY.
Units as stated
Country
% weight in index
as on 28 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Kingdom Holding Co. ( KNGDOM) 0.37 27.4 2.4
Aseer Trading, Tourism, Mfg., Agri., Real Estate
and Contracting Company (ATTMCO)
0.23 4.9 4.3
Saudi Arabian Refineries Co. (SARCO) 0.18 NA 2.8
Al Ahsa Development Co. (AADC) 0.17 0.9 0.2
Saudi ndustrial Services Co. (SSCO) 0.17 2.8 1.0
Saudi Advanced ndustries Co. (SAC) 0.12 41.4 1.2
Al Baha for Development & nvestment Co.
(ABDCO)
0.06 N/M N/M

Source: Bloomberg, Tadawul, Company data, NCBC Research

The multi-investment sector in KSA continued to slide in 2011 for the fourth
consecutive year amid heightened uncertainty in global markets. Sector revenue
has declined 46% since 2007. n 2011, total revenue in the sector fell 16% YoY
to SR4.8bn, mainly as Kingdom's revenue contracted 30% YoY due to sluggish
growth in the hospitality sector. However, the performance of the rest of the
sector continued to improve. SSCO, with revenue up 41% YoY to SR398.3bn in
2011, emerged as the top gainer in terms of market share. The two other major
players, ATTMCO and ABDCO, posted average revenue gains of 3.6% over the
0
250
500
750
1,000
1,250
1,500
1,750
0
2
4
6
8
10
12
14
2009 2010 2011
Kuwait Qatar KSA (RHS)
0
1
2
3
4
5
6
0 20 40 60 80 100
R
O
E

(
%
)
P/E (x)
KSA Qatar
MAY 2012
MULT-NVESTMENT
Global uncertainty hinders investment activity
155
MULT-NVESTMENT NCB CAPTAL
MAY 2012

previous year. AADC recorded the sharpest fall in revenue, down 84% to
SR15.7mn from its historical high in 2010. Net income in the sector grew a
marginal 0.04% YoY. Net income margin improved to 15.9% in 2011 from 13.3%
in 2010, mainly as Kingdom's profits rose 52% YoY on lower operating costs
and better margins of associate companies.
SR mn %


n 2011, the sector's adjusted P/E and P/BV multiples stood at 80.1x and 1.9x
compared to 64.9x and 1.8x, respectively, in 2010. ROE in KSA's multi-
investment sector averaged 1.7% in 2011 compared to 3.3% the previous year.
% %

Source: Bloomberg, Tadawul, Reuters, NCBC Research
Size of the bubble represents market cap. as on March 27, 2012.
Source: Bloomberg, Tadawul, Reuters, NCBC Research
Size of the bubble represents market cap. as on March 27, 2012.

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2009 2010 2011
SSCO AADC ATTMCO KNGDOM
(50)
(25)
0
25
50
75
100
2008 2009 2010 2011
KNGDOM ATTMCO AADC
SAC ABDCO
KNGDOM
ATTMCO
AADC
SAC
SARCO
SSCO
ABDCO
-2
0
2
4
6
8
10
12
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0
R
O
E
(
%
)
P/B (x)
KNGDOM
ATTMCO
AADC SAC
SARCO
SSCO
ABDCO
-2
0
2
4
6
8
10
12
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5
R
O
E
(
%
)
P/B (x)
156

Kingdom Holding Company, established in 1996, focuses on
banking and financial services, real estate, and hotels & hotel
management. Headquartered in Riyadh, the company has six
100% owned subsidiaries globally.
x Business brief
nitially engaged in construction, housing development, and educational
projects, Kingdom has increased its stake across sectors in several Saudi
Arabian, Middle Eastern and international companies. The company's
portfolio includes premium brands such as Apple, Time Warner, Samba,
Citigroup, Pepsi, Walt Disney and Hewlett-Packard. Kingdom has invested in
the domestic health, education, and social services sectors. The company
also operates in the private equity space in Saudi Arabia and in developing
markets in the Middle East, Africa, and Asia.
x Financials
Kingdom's revenues fell 30.3% YoY to SR2,334mn in 2011, due to a change
in the accounting method from consolidated to equity. Net income for 2011
grew 5.7% YoY to SR640mnn, driven by the increase in income from
investments, sale of real estate, and dividends.
Kingdom's board approved the issuance of sukuk worth SR3,750mn at the
EGM held in March 2012.
n February 2012, the Board of Directors approved the acquisition of a 3.867
mn square meter commercial area (Kingdom Oasis land and project) for
SR431mn. The acquisition still awaits the general assembly's approval.
Separately, Kingdom's 36% owned subsidiary Trade Center Company
(Kingdom Center) acquired a 13,550 square meter commercial area for
SR43.8mn.
MULT-NVESTMENT~ MAY 2012
KNGDOM HOLDNG
ALSO KNOWN AS: KHC
NOT COVERED

STOCK DETAILS
Absolute (4.8) 5.4 34.9
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 33.2 8.8
12M 15.2 4.1
Bloomberg code KNGDOM AB
www.kingdom.com.sa

WEIGHTING & FREE FLOAT (%)
Free float 5.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 108.6 72.3 68.3
P/B (x) 1.8 1.6 1.7
P/S (x) 10.1 13.1 18.7
Div Yield (%) - - 4.2
DPS - - 0.5

6
8
10
12
14
5,500
6,000
6,500
7,000
7,500
8,000
TAS Kingdom (RHS)

Source: Bloomberg

Prince AlWaleed Bin Talal Abdul
Aziz Al Saud
95.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 4,771 4,310 3,347 2,334 (30.3) (21.2)
EBTDA SRmn 977 675 356 294 (17.4) (33.0)
Net ncome SRmn (29,911) 403 605 640 5.7 NM
Assets SRmn 50,715 49,990 42,188 39,690 (5.9) (7.8)
Equity SRmn 21,615 24,579 27,081 25,446 (6.0) 5.6
Total Debt SRmn 17,614 14,103 12,060 12,398 2.8 (11.0)
Cash & Equiv SRmn 1,893 2,233 1,299 1,267 (2.4) (12.5)
EBTDA Mgn % 20.5 15.7 10.6 12.6 - -
Net Mgn % (627.0) 9.3 18.1 27.4 - -
ROE % (82.1) 1.7 2.3 2.4 - -
ROA % (46.3) 0.8 1.3 1.6 - -
Div Payout % - - - NM - -
EPS SR
(8.07) 0.11 0.16 0.17 5.7 NM
BVPS SR
5.83 6.63 7.31 6.87 (6.0) 5.6

Source: Tadawul, Zawya Company, NCBC Research

157

Established in 1977 and headquartered in Abha (Southwest
Saudi Arabia), Aseer Trading, Tourism and Manufacturing
Company (Aseer) is an investment holding company with
interests in five sectors - food, petrochemicals, real estate,
building materials and construction, and financial services.
x Business brief
Aseer operates in a wide range of businesses and has investments in diverse
projects, including agriculture, cement, printing & publishing, and energy. The
company is also engaged in travel and tourism and has stakes in resorts and
hotels. Aseer's wholly owned subsidiaries include Dallah ndustrial
nvestment Company, Al Ustool Arabia Real Estate Development Co. Ltd, Al
Khawatem Trading & Contracting Co. Ltd., Al Nasrah nternational Real
Estate Development Co. Ltd., Al Mawajed nternational Real Estate
Development Co., and Al Tilal Regional nvestment Co. The company has six
branches, one each in Al Madinah, Riyadh, Wadi Al Dawaser, Jeddah, Hail,
and Al Jouf.
x Financials
Aseer's revenues grew by 3.9% YoY to SR2,004mn in 2011. EBTDA
declined 16.5% YoY to SR197mn during the period. Net income grew 15.3%
YoY to SR98mn in 2011, primarily due to higher investment income.
n December 2011, the company's Board of Directors proposed a dividend of
SR0.75 per share for the year ended 2011.

MULT NVESTMENT ~ MAY 2012
ASEER TRADNG
ALSO KNOWN AS: ASEER
NOT COVERED

STOCK DETAILS
Absolute (9.8) (2.7) 41.1
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 80.8 21.6
12M 37.6 10.0
Bloomberg code ATTMCO AB
www.aseercorp.com.sa

Free float 50.1

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 31.3 29.4 25.5
P/B (x) 1.0 1.1 1.1
P/S (x) 1.5 1.3 1.2
Div Yield (%) 3.8 3.8 3.8
DPS 0.8 0.8 0.8

10
15
20
25
5,500
6,000
6,500
7,000
7,500
8,000
TAS Aseer (RHS)

Source: Bloomberg

Dalat Al Baraka Holding Co 49.9


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,727 1,713 1,928 2,004 3.9 5.1
EBTDA SRmn 158 186 236 197 (16.5) 7.7
Net ncome SRmn (434) 80 85 98 15.3 NM
Assets SRmn 3,309 3,565 3,333 3,402 2.1 0.9
Equity SRmn 2,313 2,416 2,290 2,267 (1.0) (0.7)
Total Debt SRmn 246 196 94 194 116.4 (7.6)
Cash & Equiv SRmn 254 417 188 297 57.7 5.4
EBTDA Mgn % 9.1 10.9 12.2 9.8 - -
Net Mgn % (25.1) 4.7 4.4 4.9 - -
ROE % (15.3) 3.4 3.6 4.3 - -
ROA % (11.8) 2.3 2.5 2.9 - -
Div Payout % NM 118.8 111.5 96.7 - -
EPS SR (3.43) 0.63 0.67 0.78 15.3 NM
BVPS SR 18.32 19.11 18.12 17.94 (1.0) (0.7)


158

Established in 1988, Saudi Industrial Services Company
(SISCO) undertakes large-scaIe investments in KSA's
infrastructure sector on the build-operate-transfer and build-
operate-own models. SISCO has business interests in water
desalination and distribution, development of industrial
estates, free zone ports and support services.
x Business brief
SSCO's affiliate Support Services Operations Co. (97% owned) provides
ancillary services, such as building and car maintenance, catering, and gas
stations in industrial estates. Saudi Trade & Export Development Co. (76%
owned) operates a free zone at Jeddah slamic Seaport on a BOT basis.
Kindasa Water Services (60% owned) operates a 14,000 cubic meter/day
desalination plant and water distribution network. nternational Water
Distribution Co. (50% owned) is engaged in building and operating water
distribution networks in the KSA. Red Sea Gateway Terminal Co. (53%
owned) provides container handling, stevedoring and cargo services. SA-
TALKE (33.3% owned) provides complete logistics solution to the
petrochemical industry.
x Financials
SSCO's revenues grew 41.3% YoY to SR398mn in 2011 from SR282mn in
2010. The company's net income jumped 419% YoY during the period to
SR11mn from SR2mn, mainly due to increased operating efficiency at Red
Sea Gateway Terminals.
n March 2012, SSCO provided an update on the development of the water
distribution project (JV between SSCO & Amiantit) in the industrial cities of
Riyadh and Qassim. The work on the ndustrial City in Riyadh is expected to
be completed by the end of 2012, while that on the Qassim ndustrial city is
expected to be completed by April 2012.
.
SAUD NDUSTRAL SERVCES
ALSO KNOWN AS: SSCO
NOT COVERED

STOCK DETAILS
Absolute (15.8) 4.7 22.8
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 165.4 44.1
12M 78.9 21.0
Bloomberg code SSCO AB
www.sisco.com.sa

Free float 85.3

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM 109.6
P/B (x) 1.7 1.7 1.6
P/S (x) 8.7 4.3 3.0
Div Yield (%) - - -
DPS - - -

10
14
18
22
5,500
6,000
6,500
7,000
7,500
8,000
TAS SSCO (RHS)

Source: Bloomberg

Xenei ndustrial Co. 14.6


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 135 139 282 398 41.3 43.3
EBTDA SRmn 34 34 108 159 46.7 66.6
Net ncome SRmn (24) 1 2 11 419.1 NM
Assets SRmn 1,893 2,371 2,496 2,532 1.5 10.2
Equity SRmn 722 730 725 736 1.5 0.7
Total Debt SRmn 855 1,232 1,347 1,323 (1.8) 15.7
Cash & Equiv SRmn 718 441 225 220 (2.4) (32.6)
EBTDA Mgn % 25.4 24.3 38.5 39.9 - -
Net Mgn % (17.9) 0.9 0.8 2.8 - -
ROE % (4.2) 0.2 0.3 1.5 - -
ROA % (1.9) 0.1 0.1 0.4 - -
Div Payout % - - - - - -
EPS SR (0.36) 0.02 0.03 0.16 419.1 NM
BVPS SR 10.61 10.73 10.66 10.82 1.5 0.7

159

Saudi Arabia Refineries Company (SARCO), established in
Jeddah in 1959, invests in commercial and industrial projects
in and outside Saudi Arabia. The company is principally
involved in the purchase, refining, transportation, sale, import
and export of crude oil and petroleum products.
x Business brief
SARCO owns stakes in Arabian Salfonates Company (34%), Arabian
Tankers Company (27%), Jeddah Oil Refinery Co (25%), Saudi ndustrial
nvestment Group (3.33%), Tabuk Cement, and Riyad Bank. SARCO
generates income from its stakes in other companies, as well as from capital
gains on the sale of its investments.
x Financials
SARCO has been reporting little to no revenues, as most of its income comes
from its investments in associates. Net income declined by 10.9% to
SR10.9mn in 2011, due to the decrease in deposits and investments
revenues and increase of some items in general and administrative expenses
(mainly advertisements).
n February 2012, SARCO announced that it is considering raising its stake
in Arabian Sulfonate Co. to 50% from 34%.
n December 2011, SARCO confirmed the acquisition of 2 companies,
Arabian Tankers Company L.L.C. and Arabian Salvonite Co.
SAUD ARABA REFNERES
COMPANY
ALSO KNOWN AS: SARCO
NOT COVERED

STOCK DETAILS
Absolute (11.4) (9.9) 30.2
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 75.2 20.0
12M 83.0 22.1
Bloomberg code SARCO AB
www.almasafi.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 316.0 80.4 90.3
P/B (x) 2.6 2.5 2.8
P/S (x) NM NM NM
Div Yield (%) 0.8 0.8 0.8
DPS 0.5 0.5 0.5

30
45
60
75
90
5,500
6,000
6,500
7,000
7,500
8,000
TAS SARCO (RHS)

Source: Reuters

Prince Mete'eb Bin Abdul Aziz Al
Saud
7.3
Prince Khalid Turki Abdul Aziz Turki
Al Saud
5.0

S T d l NCBC R h
Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 0 0 0 0 N/M N/M
EBTDA SRmn (2) (1) (2) (2) N/M N/M
Net ncome SRmn 8 3 12 11 (10.9) 11.5
Assets SRmn 229 397 411 364 (11.4) 16.8
Equity SRmn 212 385 398 351 (11.8) 18.4
Total Debt SRmn 0 0 0 0 - -
Cash & Equiv SRmn 47 31 30 27 (9.7) (17.0)
EBTDA Mgn % N/M N/M N/M N/M - -
Net Mgn % N/M N/M N/M N/M - -
ROE % 2.0 1.0 3.1 2.9 - -
ROA % 2.7 1.0 3.0 2.8 - -
Div Payout % 95.1 240.3 61.1 68.6 - -
EPS SR 0.53 0.21 0.82 0.73 (10.9) 11.5
BVPS SR 14.11 25.67 26.57 23.43 (11.8) 18.4

160

Al-Ahsa Development Company (AADC) was established in
1993 under the Royal Decree to undertake investment
activities in the industrial and service sectors of Saudi Arabia,
particularly in the region of Al-Ahsa. AADC has business
interests in foods, textiles, and medical services.
x Business brief
AADC's affiliate Al-Ahsa Medical Services Co. (30% stake) manages a
modern 220-bed hospital in the Al-Ahsa region. Al-Ahsa Food Services Co.
(50% stake), a JV with Eastern Agriculture Development Co, has the capacity
to process 5,000 tons of dates and produces date molasses vinegar, dates,
and compressed dates. The company's affiliate Saudi Japanese Textile Co.
(100% stake) produces synthetic fiber used in the production of dress
materials. Al-Ahsa Recreation and Tourism Co. (17.4% stake) establishes
and manages recreational projects.
x Financials
AADC's revenues declined 83.7% to SR16mn in 2011 from SR98mn in 2010.
Net income fell by 99.7% to SR0.1mn in 2011, as profits from its Real estate
investment declined by about SR77.5mn. Lower profits from the company's
securities investment exerted more pressure on its bottom line.
AADC acquired 492,422 shares (worth SR12.8mn) in Takween Advanced
ndustries in January 2012. This acquisition was in line with the company's
strategy of increasing its exposure to the industrial sector.
On December 30, 2012, the company's SaudiJapanese textile subsidiary
signed a Memorandum of Understanding (MoU) with one of ndonesia's
leading textile fabric manufacturers for restarting the Al-Ahsa textile factory.
The company expects to re-open the factory in eight months.
AADC's Board of Directors approved the full acquisition of Al-Ahsa Food
ndustries Company by purchasing Ash-Sharqiyah Development Company's
50% stake for SR8mn.

AL-AHSA DEVELOPMENT
ALSO KNOWN AS: AADC
NOT COVERED

STOCK DETAILS
Absolute (22.5) (15.0) (40.9)
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 129.3 34.5
12M 69.0 18.4
Bloomberg code AADC AB
www.ahsa-dev.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 248.6 18.1 NM
P/B (x) 2.0 1.7 1.8
P/S (x) 51.4 8.5 52.2
Div Yield (%) - - -
DPS - - -

8
13
18
23
28
5,500
6,000
6,500
7,000
7,500
8,000
TAS Al Ahsa for Dev. (RHS)

Source: Bloomberg



Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn (21) 16 98 16 (83.7) (192.0)
Net ncome SRmn (56) 3 46.3 0.1 (99.7) (113.4)
Assets SRmn 559 571 621 550 (11.5) (0.5)
Equity SRmn 397 420 479 469 (2.2) 5.7
Total Debt SRmn 132 126 108 71 (34.1) (18.6)
Cash & Equiv SRmn 6 7 16 69 332.7 131.5
EBTDA Mgn % NM (23.8) (4.5) (18.8) - -
Net Mgn % NM 20.7 47.2 0.6 - -
ROE % (12.3) 0.8 10.3 - - -
ROA % (8.7) 0.6 7.8 - - -
Div Payout % - - - - - -
EPS SR (1.15) 0.07 0.94 0.00 (99.7) (113.4)
BVPS SR 8.11 8.57 9.78 9.57 (2.2) 5.7


161

Saudi Advanced Industries Co. (SAIC), established in 1987,
develops and promotes industrial projects under The
Economic Offset Program organized by the Ministry of
Defense and Aviation. SAIC encourages firms in the US, the
UK and France to collaborate with Saudi companies to
establish high-tech plants in diversified industries.
x Business brief
SAC has stakes in Al Obaikan Glass Co. (40.0%), NPS Bahrain for Oil &
Gas Services Co. (20.0%), Gulf Salt Co. (11.2%), Al Salam Aircraft Co.
(10.0%), ndustrialization & Energy Services Co. (3.4%), Arabian ndustrial
Fibers Co. (0.6%), and Yanbu National Petrochemicals Co. SAC enters into
contracts with other firms to set up technology-oriented companies.
x Financials
SAC's total operating revenue declined 25.3% YoY to SR10mn in 2011. Net
income for the year fell 58.6% YoY to SR4.1mn, due to the increase in
General and Administrative expenses and decrease in earnings from
investees.
SAC's Board of Directors approved the appointment of Mr. Saed Al-Shamry
as the company's General Manager, effective January 22, 2012, replacing
Mr. Mansour Al Yihyan.
On October 23, 2011, SAC said its 40% owned subsidiary, Obeikan Glass
Company, will start commercial operations on November 1, 2011.
n reference to the Alliance dated April 26, 2011, SAC said the company has
registered its 50:50 venture with National ndustrialization Company under
the name Advanced Polyol Manufacturing Company, with capital of
SR140mn. SAC was granted a three-year slamic financing facility by Saudi
Hollandi Bank to pay for its 50% share of the capital (SR 70mn).
MULT-NVESTMENT ~ MAY 2012
SAUD ADVANCED
ALSO KNOWN AS: SAC
NOT COVERED

STOCK DETAILS
Absolute 1.7 28.0 52.6
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 71.6 19.1
12M 40.2 10.7
Bloomberg code SAC AB
www.saic.com.sa

Free float 77.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 29.6 103.6 250.4
P/B (x) 1.3 1.2 1.2
P/S (x) 25.8 77.3 103.6
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Advanced (RHS)

Source: Bloomeberg

Khalid Saleh Abdul Rahman Al
Shethry
23.1

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
25 40 13 10 (25.3) (26.6)
EBTDA SRmn
20 36 11 5 (55.8) (38.1)
Net ncome SRmn
18 35 10 4 (58.6) (39.8)
Assets SRmn
892 778 834 898 7.7 0.2
Equity SRmn
702 776 832 825 (0.8) 5.5
Total Debt SRmn
- - - 70 NA NA
Cash & Equiv SRmn
1 19 11 9 (13.1) 89.6
EBTDA Mgn %
79.3 90.9 80.4 47.6 - -
Net Mgn %
71.3 87.4 74.7 41.4 - -
ROE %
2.4 4.7 1.2 0.5 - -
ROA %
2.1 4.2 1.2 0.5 - -
Div Payout %
120.6 - - - - -
EPS SR
0.41 0.81 0.23 0.10 (58.6) (38.8)
BVPS SR
16.25 17.96 19.25 19.10 (0.8) 5.5


162

Al-Baha Investment & Development Co. (Al-Baha) was
established in 1992 to develop and operate projects in Al-
Baha province. Engaged in a wide range of industrial,
commercial and agricultural activities, the company plans to
expand beyond the region. Al-Baha's investments include a
95% stake in Al-Baha Marble & Granite Company.
x Business brief
Al-Baha is engaged in wholesale and retail trading, as well as in industrial
projects, including construction. The company also operates refrigeration
stores as well as repair and maintenance workshops, besides developing
animal and agricultural products. n addition, Al-Baha owns and reclaims
agricultural land for use in new projects. Furthermore, the company
constructs, maintains and operates public utilities (including tramways), and
develops recreational and tourist facilities, such as parks and tourist villages.
x Financials
Al-Baha's revenues grew 6% YoY to SR0.16mn in 2011. The company's loss
narrowed to SR5.7mn in 2011 from SR6.4mn in 2010. An increase in general
and administrative expenses and a decline in the value of assets post
revaluation hurt the company in 2011.
On December 28, 2011, Al-Baha announced the cancellation of its MoU with
Malaysia's PERSPEC PRME, citing failure to reach a final agreement.
Separately, Al-Baha filed a lawsuit against Al Sateaa Modern General
Contracting Company accusing Al Sateaa of refusing to return the SR7mn
paid to it by Al-Baha for acquiring a part of Al Sateaa Modern General
Contracting Company's assets. Al Sateaa had declined to go ahead with the
deal after it rejected the results of the due diligence conducted.

MULT-NVESTMENT ~ MAY 2012
AL-BAHA NVESTMENT
ALSO KNOWN AS: Al-BAHA
NOT COVERED

STOCK DETAILS
Absolute (6.8) (11.3) 28.1
Market (6.2) 6.2 7.6
Sector (10.0) 0.0 35.4
3M 52.5 14.0
12M 45.5 12.1
Bloomberg code ABDCO AB
NA

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 3.0 3.3 3.5
P/S (x) NM NM NM
Div Yield (%) - - -
DPS - - -

10
15
20
25
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS Al Baha (RHS)

Source: Bloomberg



Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 0.23 0.24 0.15 0.16 6.0 (10.9)
Net ncome SRmn (15) (4.6) (6.4) (5.7) NM NM
Assets SRmn 119 128 117 110 (6.1) (2.5)
Equity SRmn 105 102 94 88 (6.4) (5.6)
Total Debt SRmn - - - - -! -
Cash & Equiv SRmn 28 39 23 12 (46.9) (24.5)
EBTDA Mgn % NM NM NM NM - -
Net Mgn % NM NM NM NM - -
ROE % (13.1) (4.4) (6.1) (6.6) - -
ROA % (11.2) (3.7) (4.9) (5.3) - -
Div Payout % - - - - - -
EPS SR (1.00) (0.30) (0.40) (0.40) NM NM
BVPS SR 6.97 6.79 6.27 5.87 (6.4) (5.6)


163
MAY 2012
Industrial-Investment
1211 MA'ADEN 167
2230 Saudi Chemical 168
2070 SPIMACO 169
1212 Astra Ind 170
1213 AlSorayai Group 171
2150 ZOUJAJ 172
1214 Shaker Group 173
2300 SPM 174
2340 AlAbdullatif 175
1210 BCI 176
2220 Maadaniyah 177
4140 Saudi Export 178
2180 FIPCO 179
1201 Takween 180

The Saudi Arabian industrial investment sector includes companies
which operate in various sectors. These include; machinery and
equipment, consumer durables, chemicals, industrial textiles,
pharmaceuticals, packaging, mining, and paper. The sector's
revenues rose 23.1% in 2011 due to the strong performance of
Saudi Arabian Mining Co. (Maaden), Al Hassan Ghazi brahim
Shaker Co. (Shaker), and Astra ndustrial Group (Astra).
KSA's industrial investment sector continued to report strong revenue growth.
Revenues have been increasing at a CAGR of 19.3% since 2009. The ROE of
KSA's listed players averaged at 13.8% compared to the GCC average of 17.7%
in 2011. The sector's adjusted P/E averaged at 24.9x for 2011.
Exhibit 103: Revenue of GCC industrial investment
companies, 2009-11
Exhibit 104: Comparison of ROE & P/E of GCC companies,
2011
USD mn %

The industrial investment sector has a large number of private players, and 14
listed companies. Among the listed players, Maaden has the heaviest weight of
1.67% in the TAS index in terms of free float, yet its average ROE for 2011
stood at 2.4%, which is regarded low when compared to peer sector companies.
Units as stated
Country
% weight in Index
as on 28 Mar 2012
NIM (%),
2011
Avg. RoE
(%), 2011
Saudi Arabian Mining Co. (MAADEN) 1.67 27.3 2.4
The Saudi Chemical Co. (SCCO) 0.40 14.3 19.7
Saudi Pharmaceutical ndus. & Medical Appliances
Corp. (SPMACO)
0.39 18.7 6.6
Al Hassan Ghazi brahim Shaker Co. (SHAKER) 0.20 11.5 31.9
Astra ndustrial Group (ASTRA) 0.17 18.0 13.9
Al Sorayai Trading & ndustrial Group(ALSORAYA) 0.14 4.0 7.8
Basic Chemical ndustries Co. (BC) 0.13 9.2 14.0
The National Co. for Glass ndustries (ZOUJAJ) 0.13 68.8 14.8
Saudi Paper Manufacturing Co. (SPM) 0.11 12.0 15.3
Al-Abdullatif ndustrial nvestment Co. (ALABDUL) 0.11 11.7 13.0
National Metal Manufacturing & Casting Co. (NMMCC) 0.10 0.9 0.9
Takween Advanced ndustries (TAKWEEN)** 0.09 11.0 19.6
Filling & Packing Material Mfg. Co. (FPCO) 0.08 7.6 10.8
Saudi ndustrial Export Co. (SECO) 0.07 2.3 8.0
** This company was listed in 2011
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2009 2010 2011
KSA Qatar Kuwait
0
5
10
15
20
25
30
35
40
-10 0 10 20 30 40 50 60 70
R
O
E

(
%
)
P/E (x)
KSA Qatar Kuwait
MAY 2012
NDUSTRAL NVESTMENT
Higher volumes and prices drive sales
165
NDUSTRAL NVESTMENT NCB CAPTAL
MAY 2012

The sector's revenues increased 23.1% to SR12.9bn in 2011 compared to
SR10.5bn in 2010, mainly due to the higher sales volumes and prices of
products. Maaden reported the largest growth in revenues, while Al Sorayai
Trading & ndustrial Group reported a decline in revenues. The sector's net profit
grew 26.3% to SR1.9bn in 2011 versus SR1.5bn in 2010, recording a net profit
margin of 14.4% in 2011, compared to 14.0% in 2010.
Exhibit 106: Revenue of companies, 2009-11 Exhibit 107: Profitability of Maaden relative to sector
average
SR mn %


The sector's average ROE and P/BV multiples stood at 13.8% and 2.7x,
respectively, in 2011 compared to the corresponding figures of 15.8% and 2.9x
in 2010. Among the Saudi Arabian peers, SHAKER had the highest ROE of
39.8% in 2011.
% %

0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2009 2010 2011
SPMACO SCCO SPM ALABDUL ASTRA
MAADEN AL SORAYA SHAKER Others
-20
0
20
40
60
80
2009 2010 2011
Sector Average MAADEN
-10
0
10
20
30
40
50
0 3 6
R
O
E

(
%
)
P/B (x)
ZOUJAJ FPCO NMMCC SCCO SPM
ALABDUL SECO MAADEN BC ASTRA
SPMACO AL SORAYA SHAKER TAKWEEN
-10
0
10
20
30
40
50
0 3 6
R
O
E

(
%
)
P/B (x)
ZOUJAJ FPCO NMMCC SCCO SPM
ALABDUL SECO MAADEN BC ASTRA
SPMACO AL SORAYA SHAKER TAKWEEN
166

Established in 1997, Saudi Arabian Mining Company
(Ma'aden) expIores and produces metals and non-metal ores.
The company owns five operating precious metal extraction
mines and several new projects. In July 2008, Ma'aden went
public and raised SR9.2bn, reducing the government's
holding to 55% from 100%.
x Business brief
Ma'aden currently has two business lines: gold mining and Maaden
Phosphate Company (MPC), which is a SR17bn project to set up a
diammonium phosphate (DAP) production facility. MPC is a 70:30 joint
venture between Ma'aden and SABC. Ma'aden has a total annual production
capacity of 440,000 tons of ammonia, 200,000 tons of phosphoric acid,
39,000 tons of caustic calcined magnesia, and 14.2 tons of gold and silver.
x Financials
Ma'aden's sales for 2011 grew 114.3% YoY to SR1514mn. This is mainly
ascribed to the commencement of commercial production of ammonia in
October 2011, an increase in the average price of ammonia, and higher sales
volume and average realized price per ounce of gold. The company reported
a net profit of SR413mn in 2011 compared to a loss of SR9mn in 2010,
primarily led by improved margins and lower Zakat provisions.
n March 2012, Maaden and Alcoa announced that work to add a new
production line to the joint venture aluminum complex at Ras Al-Khair in
Saudi Arabia has commenced. With a annual capacity of 100,000 metric
tons, the complex would produce sheets for use in the automotive and
construction industries; production is expected to commence in 2014.

NDUSTRAL NVESTMENT ~ MAY 2012
SAUD ARABAN MNNG
ALSO KNOWN AS: MAADEN
NOT COVERED

STOCK DETAILS
Absolute (13.0) 9.4 13.3
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 82.9 22.1
12M 50.7 13.5
Bloomberg code MAADEN AB
www.maaden.com.sa

Free float 33.1

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 73.8 - 70.5
P/B (x) 1.6 1.8 1.7
P/S (x) 45.9 41.2 19.2
Div Yield (%) - - -
DPS - - -

5,500
6,000
6,500
7,000
7,500
8,000
20
25
30
35
40
TAS MA'ADEN (RHS)

Source: Bloomberg

nsurance
9.4
Public Pension Agency 7.2

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 460 634 707 1,514 114.3 48.7
EBTDA SRmn 1 153 181 873 382.5 792.6
Net ncome SRmn 203 395 (9) 413 NM 26.7
Assets SRmn 21,358 29,230 34,717 43,574 25.5 26.8
Equity SRmn 16,188 18,365 16,573 16,986 2.5 1.6
Total Debt SRmn 820 8,783 13,517 20,399 50.9 191.9
Cash & Equiv SRmn 4,145 3,371 2,922 5,044 72.6 6.8
EBTDA Mgn % 0.3 24.1 25.6 57.6 - -
Net Mgn % 44.2 62.2 (1.3) 27.3 - -
ROE % 1.9 2.3 (0.1) 2.4 - -
ROA % 1.5 1.6 (0.0) 0.9 - -
Div Payout % - - - - - -
EPS SR 0.22 0.43 (0.01) 0.45 NM 26.7
BVPS SR 17.50 19.85 17.92 18.36 2.5 1.6

167

Saudi Chemical Company (SCC) manufactures and sells
explosives and detonators for civil and military use. In 2004,
SCC entered the seismic explosives market, serving the oil,
and gas exploration sector. The company's subsidiary Saudi
International Trading Company (SITCO Pharma) supplies
medical and surgical equipment to hospitals and medical
centers.
x Business brief
SCC's products include Prilex (a blasting agent primarily used for
underground applications and fissured sedimentary rocks), Kemulex (an
emulsion explosive used for underwater blasting and worksites with wet
holes), Sanel (a non-electric shock tube used for bench and trench blasting),
detonating cords, electric detonators, explosives packing, and blasting
machines.
x Financials
SCC's sales grew 10.7% YoY to SR1,868mn in 2011. EBTDA fell 3.8% to
SR322mn due to lower profit margin of the detonators segment and high
competition in the explosives sector. Net income further decreased 11.8%
YoY to SR267mn due to an increase in provisions.
On October 9, 2011, the company signed a SR6.3mn contract with Austin
Powder Company of Czech Republic to increase the production capacity of
non-electric detonators by 50% in the western region factory. The expansion
is expected to complete by 2Q12.
n June 2011, STCO Pharma renewed its contract with Eli Lilly
Pharmaceuticals. According to the terms of the agreement, STCO would act
as the sole distributor for Eli Lily products in the Kingdom.
NDUSTRAL NVESTMENT ~MAY 2012
SAUD CHEMCAL
ALSO KNOWN AS: SCC
NOT COVERED

STOCK DETAILS
Absolute 0.5 7.3 (15.0)
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 50.9 13.6
12M 25.0 6.7
Bloomberg code SCCO AB
www.saudichemical.com

Free float 97.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 8.7 8.6 9.8
P/B (x) 2.1 1.9 1.9
P/S (x) 1.6 1.5 1.4
Div Yield (%) 9.7 8.5 4.8
DPS 4.0 3.5 2.0

5,500
6,000
6,500
7,000
7,500
8,000
35
40
45
50
TAS SCC (RHS)

Source: Bloomberg



Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,537 1,643 1,687 1,868 10.7 6.7
EBTDA SRmn 225 298 335 322 (3.8) 12.6
Net ncome SRmn 201 301 303 267 (11.8) 10.1
Assets SRmn 2,024 2,382 2,309 2,337 1.2 4.9
Equity SRmn 1,096 1,239 1,353 1,367 1.1 7.6
Total Debt SRmn 119 50 17 134 687.6 4.0
Cash & Equiv SRmn 166 375 122 99 (19.2) (15.8)
EBTDA Mgn % 14.7 18.1 19.8 17.2 - -
Net Mgn % 13.0 18.3 18.0 14.3 - -
ROE % 20.1 25.8 23.4 19.7 - -
ROA % 10.9 13.7 12.9 11.5 - -
Div Payout % - 84.0 73.0 47.3 - -
EPS SR 3.17 4.76 4.79 4.23 (11.8) 10.1
BVPS SR 17.34 19.60 21.39 21.62 1.1 7.6

168

Saudi Pharmaceutical Industries & Medical Appliances
Corporation (SPIMACO) manufactures medicine and medical
appliances for local and international markets. Since its
establishment in 1986, SPIMACO has augmented its annual
production capacity to include 3.5mn liters of liquid medicine,
850mn tablets, and 55mn capsules of cream and ointment,
aseptic drops and penicillin.
x Business brief
SPMACO's products include Zimax, Formit, Proton, Famocid 10, Cortimax,
Sapofen Plus and Glaze. The company held the largest market share among
private players in terms of own products as well as licensors' products in the
KSA. SPMACO has eight wholly-owned subsidiaries, which help the
company to maintain its leadership position in the Saudi Arabian market.
x Financials
SPMACO's revenues increased 8.8% YoY to SR1,129mn in 2011 due to
increased production efficiency. EBTDA grew 12.5% YoY to SR222mn,
while net income increased 19.8% YoY to SR211mn. The increase in
profitability was attributable to better sales in the higher margin segments
and 34% YoY increase in the cash dividends received from the
petrochemical companies in which SPMACO has equity investments.
On March 25, 2012, the company announced that it had acquired a 48%
stake worth SR93mn in Eirgen Pharma Limited, reland.
The company also announced that CAD, which is 25% owned by SPMACO,
would get a loan of SR143mn from Saudi ndustrial Development Fund to
finance its project of manufacturing raw materials used in the pharmaceutical
industry. The project is located in Riyadh and is expected to be completed by
mid-2012.

SAUD PHARMACEUTCAL
ALSO KNOWN AS: SPMACO
NOT COVERED

STOCK DETAILS
Absolute (8.2) 5.5 15.3
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 11.7 3.1
12M 5.7 1.5
Bloomberg code SPMACO AB
www.spimaco.com.sa

Free float 65.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 22.5 19.8 16.5
P/B (x) 1.6 1.2 1.1
P/S (x) 3.7 3.4 3.1
Div Yield (%) 3.4 3.4 4.5
DPS 1.5 1.5 2.0

5,500
6,000
6,500
7,000
7,500
8,000
35
40
45
50
55
TAS SPMACO (RHS)

Source: Bloomberg

Arab Company for Drug
ndustries & Medical Appliances
20.3
Khaled S. A. Al Shetri 5.5


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 872 951 1,038 1,129 8.8 9.0
EBTDA SRmn 142 176 197 222 12.5 16.0
Net ncome SRmn 128 155 177 211 19.8 18.1
Assets SRmn 1,937 2,722 3,456 3,738 8.2 24.5
Equity SRmn 1,411 2,195 2,957 3,203 8.3 31.4
Total Debt SRmn 40 60 - - NM NM
Cash & Equiv SRmn 63 107 347 298 (14.3) 68.1
EBTDA Mgn % 16.3 18.5 19.0 19.7 - -
Net Mgn % 14.7 16.3 17.0 18.7 - -
ROE % 6.0 8.6 6.9 6.9 - -
ROA % 4.8 6.6 5.7 5.9 - -
Div Payout % 91.7 76.0 66.7 74.2 - -
EPS SR 1.64 1.97 2.25 2.70 19.8 18.1
BVPS SR 17.98 27.98 37.70 40.83 8.3 31.4

169

Astra Industrial Group (Astra) operates in the healthcare,
chemical, engineering, agricultural and home furnishing
industries. The company's subsidiaries are Tabuk
Pharmaceutical Manufacturing Co, Astra Polymer
Compounding, Astra Industrial Complex Co, and International
Building Systems Factory Co.
x Business brief
Astra's broad product portfolio includes a range of generic and under-
licensed pharmaceutical products; additives and compounds used in plastic
product production; fertilizers, agricultural pesticides, insecticides and
fungicides; and pillows, bed sheets, and mattress pads. The company also
constructs metal-based, pre-engineered industrial buildings and steel
structures.
x Financials
Astra reported 23.3% growth in sales to SR1,382mn due to improved
performance across segments in 2011. EBDTA increased at a lower rate of
4.3% YoY to SR219mn due to higher marketing expenses incurred in new
markets. The 4.2% YoY decline in net income can be ascribed mainly to a
non-recurring profit of SR29mn recorded last year following the sale of
Arabian Company for Comforts & Pillows.
On March 12, 2012, Astra announced that its 60% owned subsidiary, Astra
Mining Company, would start a calcium carbonate plant worth SR75mn. The
plant would be financed partly by Astra Mining's partners and loans from
financial institutions. Trial operations at the plant are expected to begin
during the second half of 2014.
ASTRA NDUSTRAL
ALSO KNOWN AS: AG, ASTRA
NOT COVERED

STOCK DETAILS
Absolute (4.8) 7.0 19.4
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 11.1 2.9
12M 10.4 2.8
Bloomberg code ASTRA AB
www.astraindustrial.com.sa

Free float 33.9

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 15.0 11.8 12.3
P/B (x) 2.0 1.8 1.7
P/S (x) 2.9 2.7 2.2
Div Yield (%) 3.0 3.6 4.2
DPS 1.3 1.5 1.8

5,500
6,000
6,500
7,000
7,500
8,000
28
33
38
43
48
TAS Astra ndust (RHS)

Source: Bloomberg

Arab Supply and Trading
Corporation (ASTRA)
43.8
Mohammed Nejir Saqer Al Utaibi 8.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 991 1,042 1,120 1,382 23.3 11.7
EBTDA SRmn 201 204 210 219 4.3 3.0
Net ncome SRmn 186 204 259 248 (4.2) 10.1
Assets SRmn 1,743 2,076 2,889 2,963 2.6 19.3
Equity SRmn 1,438 1,562 1,684 1,791 6.3 7.6
Total Debt SRmn 0 0 629 545 (13.4) NM
Cash & Equiv SRmn 49 89 188 118.9 (36.9) 34.3
EBTDA Mgn % 20.3 19.6 18.8 15.9 - -
Net Mgn % 18.8 19.6 23.1 18.0 - -
ROE % 16.4 13.6 16.0 14.3 - -
ROA % 13.0 10.7 10.4 8.5 - -
Div Payout % 20 45 43 52 - -
EPS SR 2.51 2.75 3.49 3.35 (4.2) 10.1
BVPS SR 19.40 21.07 22.73 24.16 6.3 7.6

170

Al Sorayai Trading & Industrial Group (Al Sorayai) is a
wholesale and retail distributor of carpets, rugs, floorings,
furniture, blankets, curtain fabrics and related materials. The
company exports products to almost 65 countries, including
the US, China, India, Iraq, Russia and Poland.
x Business brief
Al Soroyai, formerly known as Al Sorayai Carpet Factory Company Ltd,
manufactures carpets, rugs, curtains and accessories for the domestic and
export markets. t has the capacity to produce 86mn sq. meters of carpets
per annum. Al Sorayai derives around 75% of its revenue from the Saudi
market and the rest from exports to over 65 countries across the world. n
February 2010, the company raised SR243mn through an PO.
x Financials
Al Soroyai's revenues for 2011 decreased 4% YoY to SR871mn. The decline
was mainly due to economic and political instability across the globe. EBTDA
for 2011 declined 33.6% YoY to SR90mn due to increasing raw material
prices, which were not absorbed by sales. The net profit plunged 53.8% YoY
to SR35mn.
n order to diversify revenues, in December 2011, Al Sorayai announced
plans to expand its operations in Saudi Arabia. The company is keen to
expand in the real estate sector besides support and logistics.
On April 02, 2012, the company announced that it had started a fully-owned
branch in Brussels (Belgium), under the name Millennium Weavers.
On November 1, 2011, Al Sorayai announced that it had secured a six-year,
SR16.6mn loan from the Saudi ndustrial Development Fund to expand its
carpet factory in Jeddah ndustrial City.
AL SORAYA TRADNG
ALSO KNOWN AS: AL SOROYA
NOT COVERED

STOCK DETAILS
Absolute (11.8) 0.4 3.0
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 43.3 11.6
12M 21.2 5.6
Bloomberg code ALSORAYA AB
www.al-sorayai.com

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 9.5 10.0 21.7
P/B (x) 2.0 1.7 1.7
P/S (x) 0.8 0.8 0.9
Div Yield (%) - 3.9 -
DPS - 1.0 -

5,500
6,000
6,500
7,000
7,500
8,000
20
24
28
32
TAS Alsorayai (RHS)

Source: Bloomberg

Nafei Nasser Abdul Aziz Al Sorayai
9.7
Mohammed Nasser Abdul Aziz Al
Sorayai
8.7
Nasser Abdul Aziz Al Sorayai
8.7


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 937 943 907 871 (4.0) (2.4)
EBTDA SRmn 128 136 135 90 (33.6) (11.0)
Net ncome SRmn 74 80 76 35 (53.8) (21.9)
Assets SRmn 883 945 1,036 1,069 3.2 6.6
Equity SRmn 332 373 444 449 1.2 10.5
Total Debt SRmn 348 342 367 402 9.7 5.0
Cash & Equiv SRmn 10 19 16 11 (33.2) 3.3
EBTDA Mgn % 13.6 14.5 14.9 10.3 - -
Net Mgn % 7.9 8.5 8.4 4.0 - -
ROE % 23.3 22.8 18.6 7.9 - -
ROA % 8.7 8.8 7.7 3.3 - -
Div Payout % 0.0 0.0 39.5 - - -
EPS SR 2.46 2.67 2.53 1.17 (53.8) (21.9)
BVPS SR 11.08 12.42 14.79 14.96 1.2 10.5

171

National Company for Glass Industries (Zoujaj) owns glass
container factories in Riyadh and Dammam. Zoujaj has a 45%
stake in Saudi Guardian International Float Glass and
Guardian RAK, and a joint venture with Guardian Industries.
These companies manufacture float glass for automotive and
construction applications. Zoujaj owns 50% of lighting
products manufacturer, Saudi National Lamps & Electrical Co.
x Business brief
Zoujaj's plants in Riyadh and Dammam produce 92,000 metric tons of glass
containers each year for the food and beverage industry. These plants
produce 75 types of returnable/non-returnable bottles. Saudi Guardian
nternational Float Glass Co manufactures 220,000 meters of float glass per
year. Guardian RAK (with a capacity of 700 tons per day) implements a hi-
tech glass coating technology to expand its float glass offerings to regional
clients.
x Financials
n 2011, Zoujaj's revenues increased 6.5% YoY to SR118mn. EBTDA
contracted to 14.6% in 2011 due to lower realization on the average price of
glass bottles and increased operating expenses, mainly electricity cost.
However, the net income increased 14.2% in 2011, primarily due to better
performance by associates in the float glass segment.
The company has signed a memorandum of understanding with two
companies. t signed a deal with The Eastern Company for ndustrial
nvestment to acquire its 10% stake in Saudi Guardian nternational Float
Glass Company. The other deal is with Zamil Group Holding Company to
acquire the latter's 10% stake in Guardian Zoujaj nternational Float Glass
Company.

NDUSTRAL NVESTMENT~MAY 2012
NATONAL CO. FOR GLASS
ALSO KNOWN AS: ZOUJAJ
NOT COVERED

STOCK DETAILS
Absolute (18.3) (6.0) (2.1)
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 28.4 7.6
12M 10.8 2.9
Bloomberg code ZOUJAJ AB
www.zoujaj-glass.com

Free float 72.6

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 21.5 13.8 12.1
P/B (x) 2.2 1.9 1.7
P/S (x) 8.0 8.9 8.3
Div Yield (%) 1.5 3.8 6.9
DPS 0.5 1.3 2.3

5,500
6,000
6,500
7,000
7,500
8,000
30
34
38
42
TAS Zoujaj (RHS)

Source: Bloomberg

Riyadh M Abdullah Al Humaidan 25.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 109 122 111 118 6.5 2.8
EBTDA SRmn 44 65 52 45 (14.6) 0.6
Net ncome SRmn 68 46 71 81 14.2 6.2
Assets SRmn 488 509 582 630 8.3 8.9
Equity SRmn 428 455 525 574 9.2 10.2
Total Debt SRmn 25 21 17 12 (29.4) (21.5)
Cash & Equiv SRmn 17 26 69 92 33.9 77.3
EBTDA Mgn % 40.6 53.1 47.4 38.0 - -
Net Mgn % 62.4 37.2 64.1 68.8 - -
ROE % 15.5 10.3 14.5 14.8 - -
ROA % 13.7 9.1 13.0 13.4 - -
Div Payout % 66.5 32.9 52.8 83.2 - -
EPS SR 2.26 1.52 2.37 2.70 14.2 6.2
BVPS SR 14.27 15.15 17.50 19.12 9.2 10.2

172

Al Hassan Ghazi Ibrahim Shaker Company (Shaker) imports
and wholesales air conditioning products and home
appliances. The Shaker Group comprises the parent company
and three subsidiaries, and is one of the leading players in its
sector in KSA. The company completed its IPO in May 2010.
x Business brief
Shaker sells, repairs, and maintains air conditioners and home appliances.
The company's portfolio comprises over eight brands with nationwide
presence and strong market position. Shaker also sells OEM products under
its label. Exclusive sales outlets, service and display centers, warehousing
facilities and training academies helped the company to expand presence in
KSA. Shaker has 25 branches in the Kingdom with showrooms in Jeddah, Al
Qassim, Khamis Mushayt, Riyadh and Khobar.
x Financials
Revenue grew 35.5% YoY to SR1,566mn in 2011. EBDTA margin declined
to 15.3% from 17.0% in 2010 due to higher operating expenses. Net income
rose 24.1% YoY to SR180mn; however, net margin declined to 11.5% during
the year primarily due to higher interest expense.
On December 07, 2011, brahim Hussein Shaker Project and Maintenance,
the company's fully owned subsidiary, signed two contracts worth SR33.8mn
with the Ministry of Education to deliver LG air conditioning chillers to various
schools in the Kingdom within four months.
On March 31, 2012, to achieve cooperation in the marketing and sales of LG
Solar and Lighting LED and PLS products, the company signed a one-year
MoU with LG Electronics.

AL HASSAN GHAZ BRAHM
SHAKER CO.
ALSO KNOWN AS: SHAKER
NOT COVERED

STOCK DETAILS
Absolute (4.1) 12.0 10.7
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 8.7 2.3
12M 6.8 1.8
Bloomberg code SHAKER AB
www.shaker.com.sa

Free float 53.4

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 18.5 16.9 13.6
P/B (x) 6.0 5.1 4.3
P/S (x) 2.5 2.1 1.6
Div Yield (%) - 4.3 5.0
DPS - 3.0 3.5

5,500
6,000
6,500
7,000
7,500
8,000
57
62
67
72
77
TAS SHAKER (RHS)

Source: Bloomberg

A K Al-Muhaidib and Sons Group 12.2
brahim Abdullah A and Brothers 12.2
Tawazon Arabia Co. for Com nv 10.0
Lamaa Holding 7.4
Al Mutlaq Group Co. 5.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 918 998 1,156 1,566 35.5 19.5
EBTDA SRmn 118 163 197 239 21.3 26.4
Net ncome SRmn 103 132 145 180 24.1 20.5
Assets SRmn 739 658 874 1,212 38.7 17.9
Equity SRmn 387 411 485 566 16.7 13.5
Total Debt SRmn 190 123 180 418 132.2 30.1
Cash & Equiv SRmn 54 25 52 61 17.3 4.4
EBTDA Mgn % 12.9 16.4 17.0 15.3 - -
Net Mgn % 11.2 13.3 12.6 11.5 - -
ROE % 33.4 33.2 32.4 34.3 - -
ROA % 16.3 19.0 19.0 17.3 - -
Div Payout % - - 72.3 68.0 - -
EPS SR 2.94 3.78 4.15 5.15 24.1 20.5
BVPS SR 11.06 11.73 13.84 16.16 16.7 13.5
Source: Tadawul, zawya, Company, NCBC Research

173

Saudi Paper Manufacturing Company (SPMC) is among the
few integrated paper companies in the MENA region. SPMC
produces tissue paper, tissue rolls and other paper products,
and also owns recycling operations.
x Business brief
SPMC has three paper processing plants with a capacity of 125,000 tons of
tissue paper, 50,000 tons of converted paper, and 65,000 tons of de-inked
paper per year, respectively. The company's wholly owned subsidiary
Saudi Paper Converting Co (SPCC) converts tissue rolls into branded
consumables, which are distributed through the wholesale and retail
channels. Saudi Recycling Co (SRC) collects waste paper that serves as
feed for SPMC's downstream de-inking plants. Al-Madar Trading Co was set
up in the UAE to collect waste paper from international sources.
x Financials
SPMC's revenue grew 4% YoY to SR836mn in 2011. EBTDA margin
contracted 18.3% YoY to SR152mn due to an 8.5% YoY increase in
production cost during the year. This was due to long halts in production and
trial production runs on the fourth line of production of paper that required
some technical enhancements. Net income fell 18.1% YoY to SR100mn due
to increase in provisions for obsolete inventory.
On December 17, 2011, SPMC cancelled its deal with CDG Maroc due to the
prevailing uncertainty in the cellulose industry.
SPMC appointed Mr. James David Pheebs to the Board of Directors; he
replaced Mr. Raed Bin Abdulrahman Bin Abdulaziz Al Meshaal with effect
from December 19, 2011.
SAUD PAPER
ALSO KNOWN AS: SPMC, SAUD PAPER GROUP
NOT COVERED

STOCK DETAILS
Absolute (11.7) (10.6) (14.4)
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 11.8 3.1
12M 8.1 2.2
Bloomberg code SPM AB
www.saudipaper.com

Free float 50.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 12.3 9.5 11.5
P/B (x) 2.3 1.9 1.8
P/S (x) 2.1 1.4 1.4
Div Yield (%) 3.2 3.9 4.5
DPS 1.0 1.2 1.4


5,500
6,000
6,500
7,000
7,500
8,000
25
30
35
40
45
50
TAS SPM (RHS)

Source: Bloomberg

HH Prince Abdullah Bin Musaed
Bin Abdul Aziz Al Saud
50.0
Falcom Financial Services Co. 7.7

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 506 558 804 836 4.0 18.2
EBTDA SRmn 126 150 186 152 (18.3) 6.5
Net ncome SRmn 84 94 123 100 (18.1) 6.0
Assets SRmn 1,089 1,374 1,502 1,732 15.3 16.7
Equity SRmn 447 511 595 655 10.1 13.6
Total Debt SRmn 556 760 821 989 20.4 21.1
Cash & Equiv SRmn 21 37 36 67 84.7 47.2
EBTDA Mgn % 24.9 26.9 23.2 18.2 - -
Net Mgn % 16.7 16.9 15.3 12.0 - -
ROE % 20.4 19.6 22.2 16.1 - -
ROA % 9.8 7.6 8.5 6.2 - -
Div Payout % 35.5 39.9 36.7 52.3 - -
EPS SR 2.25 2.51 3.27 2.68 (18.1) 6.0
BVPS SR 11.92 13.62 15.86 17.47 10.1 13.6
Source: Tadawul, zawya, Company, NCBC Research

174

Established in 1981, Al-Abdullatif Industrial Investment
Company (Al Abdullatif) ranks among the largest carpet
manufacturers in the Middle East and Africa region. The
company has fully integrated operations, from fiber extrusion
to finishing. Its affiliates are ADFA Blanket Co., Eastern Textile
Co., National Spinning Co., Shahd Paper Tubes, and Nadeen
Arabian Color Co.
x Business brief
Al Abdullatif manufactures three kinds of carpets: tufted, woven and non-
woven, primarily made from synthetic fibers. The company exports these
carpets to more than 25 countries. The color pigment division provides
various shades required to make carpets and blankets. The paper tube
segment offers paper tubes of different sizes and thicknesses for winding
carpets and yarn. Al Abdullatif has the capacity to produce 1.5mn blankets
and 100mn sq. meters of carpets per annum.
x Financials
Al Abdullatif's revenues grew 17.4% YoY to SR1,337mn in 2011. EBDTA
remained constant at SR268mn due to high operational cost and
administrative expenses. The net profit increased 2.3% YoY to SR156mn in
2011, mainly due to profits from invested entities.
Al Abdullatif announced the appointment of external auditors for the year
2012, and the distribution of 15% cash dividend (or SR1.5 per share) for the
year ended December 31, 2011.
AL ABDULLATF NDUSTRAL
ALSO KNOWN AS: AC
NOT COVERED

STOCK DETAILS
Absolute (4.8) (0.4) 1.5
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 13.3 3.5
12M 8.6 2.3
Bloomberg code ALABDUL AB
www.carpets.com

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 13.3 14.7 14.3
P/B (x) 1.6 2.0 1.9
P/S (x) 2.2 2.0 1.7
Div Yield (%) 12.7 9.1 5.5
DPS 3.5 2.5 1.5

5,500
6,000
6,500
7,000
7,500
8,000
22
26
30
34
38
TAS AlAbdullatif (RHS)
a

Source: Bloomberg

Abdul Latif Holding Group 60.0
Omar Sulaiman Saleh Al Abdul Latif 6.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,139 996 1,139 1,337 17.4 5.5
EBTDA SRmn 282 282 268 268 0.0 (1.7)
Net ncome SRmn 201 169 152 156 2.3 (8.2)
Assets SRmn 1,534 1,596 1,509 1,680 11.3 3.1
Equity SRmn 1,215 1,383 1,130 1,204 6.6 (0.3)
Total Debt SRmn 217 112 258 327 27.0 14.6
Cash & Equiv SRmn 35 229 71 48 (32.2) 11.4
EBTDA Mgn % 24.8 28.3 23.5 20.1 - -
Net Mgn % 17.7 16.9 13.4 11.7 - -
ROE % 17.3 13.0 12.1 13.4 - -
ROA % 14.1 10.8 9.8 9.8 - -
Div Payout % - 168.7 133.3 78.1 - -
EPS SR 2.48 2.07 1.88 1.92 2.3 (8.2)
BVPS SR 14.95 17.03 13.90 14.82 6.6 (0.3)

175

n
Basic Chemical Industries (BCI), incorporated in 1973,
produces and sells chemicals through its subsidiaries, which
include Saudi Water Treatment (100% stake), National
Adhesive (47% stake), Basic Chemicals National (100% Stake),
Chemical Marketing and Distribution (99% stake), OKAZ
Chemical Marketing and Distribution Co. (100% stake), and
Arabian Polyol.
x Business brief
BC produces a variety of chemicals such as liquefied chlorine gas,
hydrochloric acid, caustic soda, polyurethane (polyol), adhesives, calcium
chloride, water treatment chemicals, laundry and janitorial products. The
company's plant, located in the First ndustrial Zone in Dammam City, has an
annual production capacity of 71,560 mt of gases. The company has a
polyurethane plant (10,826 mtpa), a chemical plant (154,428 mtpa), an
adhesives plant (18,328 mtpa), and a sulfuric acid plant (31,242 mtpa).
x Financials
BC's revenue grew 18.2% YoY to SR643mn in 2011. EBTDA increased
6.1% YoY to SR123mn. Net income decreased 10.4% YoY to SR59mn in
2011. The decrease is due to higher operating expenses and increased
share of minority interest in profits compared to the previous year.
On November 12, BC announced that it had resumed operations at its
Chlorine Gas Unit from November 2, 2011. Operations at the unit were
ceased after civil defense requested the company to ensure that all safety
measures were in place.

BASC CHEMCAL NDUSTRES
ALSO KNOWN AS: BC
NOT COVERED

STOCK DETAILS
Absolute (11.4) (1.6) 10.7
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 31.9 8.5
12M 11.9 3.2
Bloomberg code BC AB
www.bci.com.sa

Free float 77.9

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 13.7 12.9 14.4
P/B (x) 2.4 2.2 2.0
P/S (x) 1.7 1.6 1.3
Div Yield (%) 3.2 3.2 3.2
DPS 1.0 1.0 1.0

5,500
6,000
6,500
7,000
7,500
8,000
20
25
30
35
40
45
TAS BC (RHS)

Source: Bloomberg

Ali Al Abdullah Al Tamimi Co. 22.0
Abdul Aziz M Abdul Aziz Almoaibed 9.2
Abdullah M Abdul Aziz Almoaibed 7.6
Mohammed & Abdul Rahman Al
Saad Al Buwardi Co.
7.0
Noor Muhana Abdul Aziz Almoaibed 5.0

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 494 509 544 643 18.2 5.7
EBTDA SRmn 95 112 116 123 6.1 2.0
Net ncome SRmn 40 63 66 59 (10.4) (3.6)
Assets SRmn 531 570 619 690 11.4 3.7
Equity SRmn 305 354 393 425 8.1 2.6
Total Debt SRmn 93 60 21 5 (75.9) (37.8)
Cash & Equiv SRmn 35 114 150 196 31.0 9.4
EBTDA Mgn % 19.3 22.0 21.3 19.1 - -
Net Mgn % 8.0 12.3 12.2 9.2 - -
ROE % 13.4 19.0 17.7 14.5 - -
ROA % 7.6 11.4 11.1 9.1 - -
Div Payout % 34.7 43.9 41.5 46.4 - -
EPS SR 1.44 2.28 2.41 2.16 (10.4) (3.6)
BVPS SR 11.08 12.88 14.29 15.45 8.1 2.6

176

National Metal Mfg & Casting (Maadaniyah) is the largest
manufacturer of steel wire and other wire products in Saudi
Arabia. The company has two plants - a plant in Jubail
Industrial City and a plant in Dammam. The plants are
equipped with modern machinery for wire drawing, stranding,
galvanizing, and manufacturing fasteners. Maadaniyah's
brands include Aslak, Mahawer and Masabik.
x Business brief
Maadaniyah has the capacity to produce 22,000 tons of castings, 12,000
units of axles and 100,000 tons of steel wires each year. The company
specializes in the manufacture of low relaxation PC strands, high/low-
galvanized steel, carbon wires & strands, mattress spring wires, fasteners,
welding wires, and steel nails. These products are used in various sectors
such as construction, appliances, electrical cable, building systems and steel
fabrication.
x Financials
Maadaniyah's revenue increased 13.7% YoY to SR361.mn in 2011. EBTDA
fell 33% YoY to SR25mn due to higher raw material cost. Net income
decreased 81% YoY to SR3mn due to high research expenses on exploring
new investment opportunities.
On March 14, 2012, the CMA Board approved Maadaniyah'srequest to
increase its capital from SR255.5mn to SR281.1mn by issuing one bonus
share for every 10 existing shares owned by the shareholders. This would be
funded by transferring SR12.6mn from the statutory reserve account and
SR12.8mn from retained earnings account to the company's capital.

NATONAL METAL
ALSO KNOWN AS: NATMETAL, MAADANYAH
NOT COVERED

STOCK DETAILS
Absolute (11.2) (7.4) 10.4
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 55.6 14.8
12M 42.2 11.2
Bloomberg code NMMCC AB
www.maadaniyah.com

Free float 64.5

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 53.9 50.1 262.8
P/B (x) 2.4 2.4 2.4
P/S (x) 2.6 2.6 2.3
Div Yield (%) 1.4 - -
DPS 0.4 - -

5,500
6,000
6,500
7,000
7,500
8,000
15
20
25
30
35
40
TAS Maadaniyah (RHS)

Source: Bloomberg

National Manufacturing Company 35.4
Ahmad S. M. Al Aseeri 7.4


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 500 319 318 361 13.7 (10.3)
EBTDA SRmn 64 38 38 25 (33.0) (26.6)
Net ncome SRmn 40 16 17 3 (80.9) (57.0)
Assets SRmn 544 483 517 525 1.7 (1.2)
Equity SRmn 340 345 349 352 0.9 1.1
Total Debt SRmn 80 73 109 75 (31.4) (2.4)
Cash & Equiv SRmn 13 35 12 12 4.8 (3.5)
EBTDA Mgn % 12.9 11.9 11.9 7.0 - -
Net Mgn % 8.0 4.9 5.3 0.9 - -
ROE % 12.2 4.5 4.8 0.9 - -
ROA % 8.1 3.0 3.3 0.6 - -
Div Payout % 28.9 74.8 - - - -
EPS SR 1.43 0.55 0.59 0.11 (80.9) (57.0)
BVPS SR 12.09 12.26 12.40 12.51 0.9 1.1

177

Saudi Industrial Export Co. (SIEC) exports, imports and
distributes agricultural goods, industrial products and bulk
commodities. SIEC, which operates through its associates
across the globe, has exported over 10 million tons of
products to more than 40 markets. The company's key trading
markets include Europe, Asia, and Africa.
x Business brief
SEC trades in bulk food products (including rice, maize, sugar and edible
oils); fertilizers, minerals, chemicals and petrochemicals; iron, steel and other
metals; and air conditioners, trucks and cables. The company offers various
services to its suppliers and customers, including guaranteed payments,
arms-length marketing, financing, and logistics for land and sea transport.
SEC is investing in distribution channels and warehousing facilities to reach
more manufacturers and customers.
x Financials
SEC's revenues grew 114.4% YoY to 400mn in 2011 due to higher sales
volumes. EBDTA grew 204.2% YoY to SR8.8mn during the year, mainly due
to robust increase in profit margin from the sale of raw materials for fertilizers
in the Chinese market. Net income rose to SR9.2mn in 2011 from SR3.0mn
the previous year, mainly due to an increase in other income from the
transfer of shipping provisions.
The company appointed Mr. Suleiman Bin Abdul Mohsen Uwayd as General
Manager as of May 1, 2011.
SAUD NDUSTRAL EXPORT
ALSO KNOWN AS: SADRAT, SEC
NOT COVERED

STOCK DETAILS
Absolute (3.1) 19.1 50.9
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 60.0 16.0
12M 40.3 10.7
Bloomberg code SECO AB
www.siec.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) - 159.1 51.6
P/B (x) 4.7 4.5 4.1
P/S (x) 4.7 2.6 1.2
Div Yield (%) - - 1.1
DPS - - 0.5

5,500
6,000
6,500
7,000
7,500
8,000
20
26
32
38
44
50
TAS SECO (RHS)

Source: Bloomberg

brahim Oudah Abdullah Al -
Oudah
5.9


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 709 101 187 400 114.4 (17.4)
EBTDA SRmn 22 (3) 3 9 204.2 (25.8)
Net ncome SRmn 14 (6) 3 9 208.2 (13.5)
Assets SRmn 147 128 121 151 24.7 0.8
Equity SRmn 119 103 107 116 8.3 (0.8)
Total Debt SRmn - - - - NM NM
Cash & Equiv SRmn 98 85 26 17 (36.1) (44.6)
EBTDA Mgn % 3.0 (2.5) 1.5 2.2 - -
Net Mgn % 2.0 (5.5) 1.6 2.3 - -
ROE % 11.9 (5.0) 2.9 8.3 - -
ROA % 9.2 (4.0) 2.4 6.8 - -
Div Payout % 75.6 - - 58.4 - -
EPS SR 1.32 (0.51) 0.28 0.86 208.2) (13.5)
BVPS SR 11.02 9.50 9.92 10.74 8.3 (0.8)

178

Filling & Packing Materials Manufacturing Company (FIPCO)
produces bags and other woven polypropylene packaging
products for industriaI and agricuIturaI use. The company's
production facilities located in Riyadh cover an area of 75,000
sq. meters. FIPCO manufactures over 2mn jumbo bags
annually.
x Business brief
FPCO's products include jumbo bags with capacities ranging from 500 to
2,000 kg; container liners used in dry cargo shipping; and sling bags in
varying sizes. The company also produces leno bags for packing fresh
vegetables and fruits; cable fillers for electric cable manufacturers; fabrics for
fire retardants; tents and lumber protection; strapping bands used for boxes;
and agriculture and baler twines for greenhouses and grass baling.
x Financials
FPCO's revenue jumped 20.6% to SR206mn in 2011. EBTDA fell 15.6% to
SR26mn due to an increase in wages and salaries. Furthermore, low priced,
long-term contracts and increased raw material prices exerted downward
pressure on profitability. Net income for the year fell 27.3% to SR16mn.
n October 2011, the company signed a seven-year loan agreement with
Saudi ndustrial Development Fund for SR8.4mn. The loan would be utilized
for the expansion of a bag plant worth SR17.5mn. The company plans to
fund the rest through internal accruals.
FLLNG AND PACKNG
ALSO KNOWN AS: FPCO
NOT COVERED

STOCK DETAILS
Absolute (10.5) (2.2) 28.7
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 71.5 19.1
12M 53.7 14.3
Bloomberg code FPCO AB
www.fipco.com.sa

Free float 85.3

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 23.7 21.7 29.8
P/B (x) 3.7 3.2 3.1
P/S (x) 3.4 2.7 2.3
Div Yield (%) - 2.5 2.5
DPS - 1.0 1.0

5,500
6,000
6,500
7,000
7,500
8,000
20
30
40
50
60
TAS FPCO (RHS)

Source: Bloomberg



Company financials
2008 2009 20010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 178 138 171 206 20.6 5.0
EBTDA SRmn 25 26 31 26 (15.6) 1.6
Net ncome SRmn 18 20 22 16 (27.3) (3.6)
Assets SRmn 139 167 188 200 6.4 13.0
Equity SRmn 96 126 147 150 2.3 15.9
Total Debt SRmn 11 17 16 22 39.0 24.7
Cash & Equiv SRmn 18 13 15 23 53.2 8.0
EBTDA Mgn % 13.9 18.8 18.0 12.6 - -
Net Mgn % 9.9 14.3 12.7 7.6 - -
ROE % 18.8 17.8 15.8 10.6 - -
ROA % 13.5 12.9 12.2 8.1 - -
Div Payout % 0.0 0.0 53.2 73.1 - -
EPS SR 1.52 1.72 1.88 1.37 (27.3) (3.6)
BVPS SR 8.38 10.99 12.76 13.05 2.3 15.9

179

Takween Advanced Industries Co. (TAKWEEN), formerly Al-
Othman Plastic Products Co., was established in 1993. The
company specializes in the production of high quality
packaging for the diary and beverage industries in Saudi
Arabia and the Middle East. In early 2010, TAKWEEN acquired
Advanced Fabrics (SAAF), a non-woven fabrics manufacturer,
and Ultrapak, a PET preforms manufacturer. The company
went public in January 2012 with an IPO of 9mn shares,
accounting for 30% of the total shares outstanding.
x Business brief
TAKWEEN has three business segments: Plastic Packaging, PET Preforms
and Non-woven Fabrics. Plastic Packaging includes polystyrene sheets,
thermoformed polystyrene and high density polyethylene (HDPE) used
mainly in the dairy, food and beverage industries. Preforms are polymers sold
to bottlers for producing bottles. Non-woven Fabrics includes spunbond,
meltblown and composite fabrics, which are used in hygiene products,
industrial and medical applications.
x Financials
The company's net sales for 2011 grew 14% YoY to SR694mn. EBTDA
margin declined to 19.6% from 21.6% in 2010 due to higher cost of goods
sold. Net profit increased 8.2% YoY to SR76mn during the year; however,
net margin declined marginally to 11.0% from 11.6% in 2010.
On March 06, 2012, TAKWEEN announced a cash dividend of 13.5%, or
SR1.35 per share, for 2011.
TAKWEEN ADVANCED NDUSTRES
ALSO KNOWN AS: TAKWEEN
NOT COVERED

STOCK DETAILS
Absolute (16.8) (6.3) -
Market (6.2) 6.2 7.6
Sector (9.8) 5.9 7.5
3M 132.2 35.2
12M - -
Bloomberg code TAKWEEN AB
www.takweenai.com

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 69.8 22.2 20.5
P/B (x) 12.3 4.5 4.0
P/S (x) 11.8 2.6 2.2
Div Yield (%) - - 2.6
DPS - - 1.4

48
53
58
63
68
5,500
6,000
6,500
7,000
7,500
8,000
Feb-12 Mar-12 Apr-12 May-12
TAS Takween (RHS)

Source: Bloomberg

Al-Othman Holding 50.8
Saleh Abdulaziz Al Rajhi and
Partners
13.9


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Revenues SRmn - 132 609 694 14.0 129.4
EBTDA SRmn - 27 131 136 3.4 125.9
Net ncome SRmn - 22 70 76 8.2 84.6
Assets SRmn - 280 729 807 10.7 69.8
Equity SRmn - 127 343 389 13.4 75.2
Total Debt SRmn - 121 283 291 3.1 55.0
Cash & Equiv SRmn - 3 21 41 94.0 284.7
EBTDA Mgn % - 20.2 21.6 19.6 - -
Net Mgn % - 17.0 11.6 11.0 - -
ROE % - - 30.0 20.8 - -
ROA % - - 14.0 9.9 - -
Div Payout % - NA NA 53.2) - -
EPS SR - 0.75 2.35 2.54 8.2 84.6
BVPS SR - 4.23 11.44 12.98 13.4 75.2

180
MAY 2012
Building & Construction
1320 SSP 185
2040 Saudi Ceramics 186
2160 Amiantit 187
2240 Zamil Ind 188
1310 MMG 189
2320 Al Babtain 190
2110 Saudi Cables 191
2200 Arabian Pipes 192
1330 Abdullah A M Al Khodari Sons Co 193
2130 SIDC 194
2090 National Gypsum 195
4230 Red Sea Housing 196
2360 SVCP 197
2370 MESC 198
1301 United Wire Factories 199

Saudi Arabia is the biggest construction market in the MENA
region. The Kingdom's construction sector recovered significantly
after a slowdown in 2010. This was primarily due to the
expansionary government policies, a growing population, and a
resilient economy. Despite many challenges such as increased
competition and price wars, we believe construction companies
performed well in 2011.
The residential construction market in Saudi Arabia strengthened in 2011 as the
focus shifted to affordable housing. Several new affordable housing projects,
including the government's aim to build 500,000 housing units,have been
initiated to address the strong supply gap in low-income housing units.
Meanwhile, the commercial construction segment has recovered due to low
interest rates, high liquidity and a growing economy. The Saudi Arabian
government continued to invest heavily on infrastructure to promote employment
and diversify the economy. Currently, four new economic cities are being
developed in Saudi Arabia which, we believe, would benefit construction related
companies.
The Tadawul-listed companies under the building & construction sector recorded
a strong performance in 2011, with revenues increasing significantly compared
to 2010. However, the sector's ROE stood at 3.0% in 2011, which we believe is
regarded low when compared to the GCC peer average of 12.2%.
Exhibit 110: Revenues of GCC building & construction
companies, 2009-11
companies, 2011
USD mn %

Source: Zawya, Tadawul, NCBC Research Source: Zawya, Tadawul, NCBC Research

The building & construction sector in Saudi Arabia is relatively diversified with
the presence of 15 listed companies. These companies in total account for 2.5%
of the TAS's weight in terms of free float. Saudi Ceramic Co, and Saudi Arabian
Amiantit Co, with a weight of 0.35% each, have the largest weight on the index.

0
1000
2000
3000
4000
5000
6000
2009 2010 2011
KSA UAE Kuwait Oman
0
8
16
24
32
0% 3% 6% 9% 12% 15% 18%
P

/

E
ROE %
KSA UAE Kuwait Oman
MAY 2012
BULDNG & CONSTRUCTON
Strong outlook Focus on residential construction
182
BULDNG & CONSTRUCTON NCB CAPTAL
MAY 2012

Units as stated
Country
% weight in Index
as on 28 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Saudi Ceramic Co 0.35 19.0 21.5
Saudi Arabian Amiantit Co 0.35 4.2 9.1
Zamil ndustrial nvestment Co 0.24 3.3 11.8
AL-Babtain Power & Telecommunication Co 0.22 7.6 12.6
Saudi ndustrial Development Co 0.20 8.4 7.0
Saudi Cable Company 0.19 0.1 0.4
Mohammad Al Mojil Group 0.16 (45.4) (92.3)
Arabian Pipes Company 0.15 (2.5) (0.9)
Abdullah A.M. Al-Khodari Sons Co 0.11 13.3 25.3
Middle East Specialized Cables Co 0.10 (10.5) (39.4)
National Gypsum Company 0.10 27.5 6.5
Saudi Steel Pipe Company 0.10 9.6 7.4
Saudi Vitrified Clay Pipes Co 0.09 31.6 34.2
Red Sea Housing 0.07 10.0 10.8
United Wire Factories Company 0.07 12.5 30.3
The sector's performance improved YoY. Revenues increased approximately
21% to USD5.7bn in 2011 from USD4.7bn in 2010. However, the sector's net
profit fell to USD275mn in 2011 from USD311mn in 2010. Mohammed Al Mojil,
which recorded a significant loss of USD256mn in 2011, has been excluded
from the 2011 figure for fair comparison.
Exhibit 113: Revenues of companies, 2009-11 Exhibit 114: Profitability of SSP relative to sector
average (2009-11)
SR mn %


The sector's P/E and P/BV multiples stood at 21.6x and 2.8x, respectively, in
2011, versus 15.8x and 2.6x, respectively, in 2010. Saudi Vitrified Clay Pipe
Company recorded the highest ROE of 34.2%, while Mohammed Al Mojil Group
reported the lowest ROE of -92.3% during the same period.
0
3000
6000
9000
12000
15000
18000
2009 2010 2011
Amiantit Zamil Specialized Cabl es Saudi Cable Co.
Al babtain Mohamed Al Mojil Saudi Steel Pipe
0%
4%
8%
12%
16%
20%
24%
2009 2010 2011
Sector Average Saudi Steel Pipe
183
BULDNG & CONSTRUCTON NCB CAPTAL
MAY 2012

% %

We believe the outlook for the KSA's building & construction market is positive.
The total value of contracts awarded is expected to increase at a CAGR of 20%
to USD43.8bn by 2013 from USD36.5bn in 2011. The introduction of the new
mortgage law (currently under the King's consideration) is expected to drive the
demand for housing facilities. n 2010, the Kingdom committed to spend about
USD400bn on large infrastructure projects over the next five years. Additionally,
the USD82bn homebuilding fund by the government is expected to provide an
opportunity for the building & construction companies.
We are covering Saudi Steel Pipes (SSP) in the buildings & construction sector.
We are currently neutral on the stock.
Saudi Steel Pipes
(1320.SE)
Neutral 30.1 ncreasing demand for construction projects and higher sales volume from the
small diameter segment (that yield higher margins) would drive revenues.
However, limited demand for medium diameter segment and pressure on its
margins remain a key concern. We believe that positive factors have already
been priced in the current valuation, leaving limited upside potential from
current levels.
Saudi Ceramics
Amiantit
Zamil
Specialized
Cables
Gypsum
Saudi Vitrified
Saudi Cable
Co.
Arabian pipes
Al babtain
Redsea
SDC
Mohamed Al
Mojil
Saudi Steel
Pipe
Al-Khodari
Sons Co
United wire
-27%
-18%
-9%
0%
9%
18%
27%
36%
45%
54%
-0.5 0.5 1.5 2.5 3.5 4.5 5.5
Saudi Ceramics
Amiantit
Zamil
Specialized
Cables
Gypsum
Saudi Vitrified
Saudi Cable
Co.
Arabian pipes
Al babtain
Redsea
SDC
Mohamed Al
Mojil
Saudi Steel
Pipe
Al-Khodari
Sons Co
United wire
-108%
-93%
-78%
-63%
-48%
-33%
-18%
-3%
12%
27%
42%
0.0 1.0 2.0 3.0 4.0 5.0
184

Saudi SteeI Pipe Company (SSP), estabIished in 1980,
manufactures weIded steeI pipes, gaIvanized and non-
gaIvanized pipes, carbon steeI tubes and anguIar tubes. The
company seIIs products in the domestic market and exports
to nearIy 20 countries.
x Business brief
SSP manufactures black and galvanized pipes in small and medium diameter
sizes, and caters to the construction, real estate, and oil & gas markets. The
small diameter production capacity is 80,000 tons per year, while that of
medium diameter is 160,000 tons per year. The company is also expanding
in the large diameter pipes market through a 35% stake in an under-
construction plant in Jubail. The plant would have a capacity of 200,000 tons
per year, and is scheduled to commence in 2012.
x FinanciaIs
Revenues grew 6.1% to SR621mn in 2011 from SR593mn in 2010 due to
higher sales volumes. The total quantity delivered has increased 8.0% YoY
to 142 thousand tons. The adjusted net income declined 21.9% YoY to
SR50mn in 2011 due to an increase in raw material costs and low margin on
sales. We expect net profit to increase significantly YOY in 2012 due to a
non-recurring expense, which the company recorded in 2011 as well as the
increase in the company's financing costs.
On April 9, 2012, the company announced that it signed a SR75mn contract
to purchase welded pipe production machines for its new factory in
Damman's second industrial city with Suithe (Germany) and Mayer Research
Group (taly).
On February 9, 2012, the company received a SR36mn purchase order to
provide GS Engineering & Construction Company (South Korea) with ERW
pipes to be used in Kuwait Oil Company's project in Wara, which would be
delivered during 3Q12. The company also said that the raw materials to be
used would be provided by Saudi Basic ndustries by the end of 1Q12.
CONSTRUCTON ~MAY 2012
SAUD STEEL PPES
ALSO KNOWN AS: SSP
NEUTRAL

STOCK DETAILS
Absolute (14.1) (6.3) (6.3)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 19.0 5.1
12M 10.5 2.8
Bloomberg code SSP AB
www.sspipe.com

Free float 43.6

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 19.7 25.2 16.2
P/B (x) 1.6 1.6 1.6
P/S (x) 2.1 2.0 1.5
Div Yield (%) 6.0 6.0 5.2
DPS 1.5 1.5 1.3

20
22
24
26
28
30
32
5,500
6,000
6,500
7,000
7,500
8,000
TAS SSP (RHS)
Source: Bloomberg

Rabiah and Nassar Group 40.0
Hugh Steel Company Ltd 16.3
Abdulla brahim Al Khareef
Sons Co.
8.8


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn
593 629 837 1,000 6.1 19.0
EBTDA SRmn
98 88 132 170 (10.6) 20.0
Adjusted Net ncome^ SRmn
64 50 78 110 (21.9) 19.8
Assets SRmn
929 959 1,017 1,071 3.2 4.9
Equity SRmn
781 780 794 828 (0.1) 2.0
Total Debt SRmn
29 64 48 41 118.1 11.8
Cash & Equiv SRmn
38 93 105 48 147.2 8.5
EBTDA Mgn %
16.6 14.0 15.8 17.0 - -
Net Mgn %
10.8 7.9 9.3 11.0 - -
ROE %
8.1 6.4 9.9 13.6 - -
ROA %
6.7 5.3 7.9 10.5 - -
Div Payout %
119.5 153.0 85.0 69.5 - -
EPS SR
1.25 0.98 1.53 2.16 (21.9) 19.8
BVPS SR
15.31 15.29 15.57 16.24 (0.1) 2.0

^ SSP reports net income before deducing Zakat and taxes. We present the adjusted net income here (after deducting Zakat and
taxes).
185

Riyadh-based Saudi Ceramic Company (SCC) manufactures
and markets ceramic waII and fIoor tiIes, ceramic road
markers, sanitary ware, and eIectric water heaters. The
company, estabIished in 1977, has five offices in Saudi Arabia
and one in Dubai.
x Business brief
SCC has continually enhanced its production capacity to meet the growing
demand for ceramics and related products. The company's manufacturing
units in Riyadh ndustrial City are spread over 1 million square meters and
comprise four tile factories, one sanitary ware factory, two Frit plants, and two
electric water heater factories. The company's product offerings encompass
tiles (porcelain, ceramic and decorated), squaring and chamfering units,
sanitary ware, electric water heaters, and ceramic road markers.
x FinanciaIs
SCC's revenues grew 13.1% YoY to SR1,221mn in 2011. This was mainly
due to increased production, as a new plant started manufacturing and made
an entry into new markets in the KSA and abroad. EBTDA for the year
increased 11.8% YoY to SR371mn, while net income rose 5.2% YoY to
SR232mn.
On April 09, 2012, the Board at EGM approved an increase in share capital
from SR250mn to SR375mn, distributing bonus shares in the ratio of 1:2.
On February 26, 2012, the company announced that it had signed a six-
months memorandum of understanding with Future Ceramic and Porcelain
Company to evaluate the possibility of a merger between the two companies.
On February13, 2012, the Board approved the addition of a new ceramic tile
production line with a capacity of 4 million square meters. The plant is
expected to be completed by the start of 2013 with a total cost of SR22.5mn.
On completion, the total annual production capacity of the company's tile
plants is expected to reach 64 million square meters.
CONSTRUCTON ~ MAY 2012
SAUD CERAMC
ALSO KNOWN AS: SCC
NOT COVERED

STOCK DETAILS
Absolute (13.8) (2.9) (0.8)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 17.1 4.6
12M 11.2 3.0
Bloomberg code SCERCO AB
www.saudiceramics.com

Free float 62.9

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 17.4 15.5 14.7
P/B (x) 4.0 3.4 3.0
P/S (x) 3.6 3.2 2.8
Div Yield (%) 2.2 2.6 2.6
DPS 2.0 2.3 2.3

85
90
95
100
105
5,500
6,000
6,500
7,000
7,500
8,000
TAS Ceramic (RHS)

Source: Bloomberg

nsurance (GOS)
15.9
Saleh Abdul Aziz Saleh Al Rajhi 14.3
Falcom Financial Services Co. 6.8


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
857 958 1080 1221 13.1 12.5
EBTDA SRmn
264 282 332 371 11.8 12.0
Net ncome SRmn
178 197 221 232 5.2 9.3
Assets SRmn
1,565 1778 1935 2269 17.3 13.2
Equity SRmn
724 859 1004 1147 14.2 16.6
Total Debt SRmn
650 688 761 809 6.3 7.5
Cash & Equiv SRmn
25 36 39 64 64.7 36.4
EBTDA Mgn %
30.8 29.5 30.8 30.4 - -
Net Mgn %
20.8 20.6 20.4 19.0 - -
ROE %
26.6 24.9 23.7 21.6 - -
ROA %
12.5 11.8 11.9 11.0 - -
Div Payout %
35.1 38.0 39.7 37.7 - -
EPS SR
4.74 5.26 5.88 6.19 5.2 9.3
BVPS SR
19.31 22.90 26.77 30.58 14.2 16.6


186

Please refer to the last page for important disclaimer www.ncbc.com

Saudi Arabian Amiantit Company (SAAC) was estabIished in
1968 to manufacture pipes for the IocaI market. The
company's core business activities incIude the manufacture
and saIe of pipe systems; ownership and saIes of pipe
technoIogies, water management consuItancy, and
engineering services; and manufacture and suppIy of poIymer
products.
x Business brief
SAAC has 30 pipe system manufacturing plants, six technology companies,
four material suppliers, and eight supply and engineering subsidiaries. The
company serves the worldwide municipal, civil engineering, industrial, energy
and agricultural markets; thus, it supports global infrastructure development
through an extensive sales and service network in more than 70 countries.
x FinanciaIs
SAAC's revenues increased 15.8% YoY in 2011 to SR3,563mn mainly due to
the increase in productivity. EBTDA margins for 2011 declined to 13.6%
from 17.0% in 2010. Net income dropped 8.4% YoY to SR151mn in 2011
due to lower selling prices amid increased competition.
On March6, 2012, the company announced the start of a trial of water
delivery and sanitation services in the ndustrial City in Riyadh during 1Q12,
and it expects to start the commercial operations by the end of 2012.
Furthermore, the company expects to start providing these services in the
ndustrial City at Al-Qassim in April 2012.
The company, through its fully-owned subsidiary (AmiWater), has entered
into a 49:51 joint venture with PWT (Germany) to establish a new company,
PWT Limited (Saudi Arabia), with a capital of SR5mn. The latter would
establish, operate and maintain water treatment plants.

AMANTT COMPANY
ALSO KNOWN AS AMANTT GROUP, SAAC
NOT COVERED

STOCK DETAILS
Absolute (13.7) (3.0) (2.7)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 61.4 164
12M 28.9 7.7
Bloomberg code SAAC AB
www.amiantit.com

Free float 98.2

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 10.3 12.6 13.7
P/B (x) 1.3 1.2 1.3
P/S (x) 0.6 0.7 0.6
Div Yield (%) 5.6 8.3 6.9
DPS 1.0 1.5 1.3

13
15
17
19
21
23
5,500
6,000
6,500
7,000
7,500
8,000
TAS Amiantit (RHS)

Source: Bloomberg

Al Mawarid nvestment Co Ltd
9.8
Prince Khalid bin Abdullah bin
Abdul Rahman Al Saud
7.4
Abdullah Saleh Abdullah AL
Bassam
5.8


Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
4,026 3,293 3,077 3,563 15.8 (4.0)
EBTDA SRmn
827 827 523 484 (7.5) (16.4)
Net ncome SRmn
235 202 165 151 (8.4) (13.7)
Assets SRmn
4,504 4,056 4,071 4,407 8.3 (0.7)
Equity SRmn
1,487 1,652 1,684 1,635 (2.9) 3.2
Total Debt SRmn
1,609 1,072 1,020 1,446 41.9 (3.5)
Cash & Equiv SRmn
329 425 242 391 61.7 5.9
EBTDA Mgn %
20.5 25.1 17.0 13.6 - -
Net Mgn %
5.8 6.1 5.36 4.25 - -
ROE %
16.8 12.9 9.9 9.1 - -
ROA %
5.5 4.7 4.1 3.6 - -
Div Payout %
24.5 57.0 104.9 95.5 - -
EPS SR
2.04 1.75 1.43 1.31 (8.4) (13.7)
BVPS SR
12.87 14.30 14.58 14.16 (2.9) 3.2


187

ZamiI IndustriaI Investment Co. (ZIIC), estabIished in 1998 and
headquartered in Dammam, is a manufacturing and
fabrication group serving the construction industry. It mainIy
operates in the steeI, HVAC, gIass, insuIation and concrete
sectors.
x Business brief
ZC has manufacturing plants and offices in 55 countries; it exports products
to over 90 markets globally. The company offers products such as air
conditioning, pre-engineered steel buildings, process equipment,
transmission towers, processed architectural glass, and other solutions to the
global construction industry. t operates through Zamil Air Conditioners
(ZAC), Zamil Steel nds (ZS), Zamil Glass ndustries (ZG), and Arabian
Fiberglass nsulation Co. Ltd (AFCO).
x FinanciaIs
ZC's revenues grew 17.7% YoY to SR4,728mn due to an increase in
production volumes. EBTDA margin declined to 8.8% in 2011 compared to
10.4% in 2010 mainly due to ongoing competition and pressure on steel
prices. Net profit fell 27.0% to SR154mn; other income declined and financial
expenses increased.
On February15, 2012, Rabiah-Nassar and Zamil Concrete ndustries, the
company's 50% owned subsidiary, signed a SR245mn contract with Saudi
Oger to manufacture and supply precast villas for the Saudi Arabian National
Guard Housing project. The project is expected to be completed by 3Q13.
On September27 , 2011, Zamil New Delhi nfrastructure Private Limited, the
company's 51% owned subsidiary, was awarded a SR256.8mn contract by
PLG Photovoltaic Limited to establish a 20-megawatt solar plant for the latter,
which would have a positive impact on the company's financial statements in
1H12.
ZAML NDUSTRAL
ALSO KNOWN AS: ZC
NOT COVERED

STOCK DETAILS
Absolute (7.5) (1.0) (8.6)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 12.9 3.5
12M 11.7 3.1
Bloomberg code ZC AB
www.zamilindustrial.com

Free float 75.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 7.8 8.5 11.6
P/B (x) 1.5 1.4 1.3
P/S (x) 0.4 0.4 0.4
Div Yield (%) 5.0 5.0 5.0
DPS 1.5 1.5 1.5

25
27
29
31
33
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS ZC (RHS)

Source: Bloomberg

Zamil Group Holding Co. 19.9


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
4,550 4,204 4,018 4,728 17.7 1.3
EBTDA SRmn
454 441 419 418 (0.1) (2.7)
Net ncome SRmn
225 230 211 154 (27.0) (11.9)
Assets SRmn
5,370 4,663 4,907 6,213 26.6 5.0
Equity SRmn
1,028 1,195 1,289 1,350 4.7 9.5
Total Debt SRmn
2,860 2,039 2,206 3,165 43.5 3.4
Cash & Equiv SRmn
201 354 296 286 (3.5) 12.4
EBTDA Mgn %
10.0 10.5 10.4 8.8 - -
Net Mgn %
4.9 5.5 5.3 3.3 - -
ROE %
23.4 20.7 68.0 46.7 - -
ROA %
4.8 4.6 17.6 11.1 - -
Div Payout %
40.0 39.1 42.6 58.4 - -
EPS SR
3.75 3.84 3.52 2.57 (27.0) (11.9)
BVPS SR
17.14 19.92 21.48 22.49 4.7 9.5


188

Mohammad AI MojiI Group (MMG) provides construction
services in the GuIf region. The company has undertaken
projects mainIy in the oiI, gas and petrochemicaI industries.
MMG aIso offers mechanicaI, eIectricaI, civiI, structuraI and
maintenance services.
x Business brief
MMG is engaged in various construction and engineering projects, including
onshore services such as civil and structural work, and mechanical and
electrical services. t also conducts offshore activities, especially in marine
projects, with the help of various marine vessels. The company owns heavy
machinery, including testing and calibration facilities, and provides equipment
services such as technical and maintenance services for turnkey projects.
Besides this, it offers services in steel fabrication.
x FinanciaIs
Revenue for 2011 increased 22.1% to SR2,113mn compared to SR1,731mn
in 2010. MMG reported a net loss of SR959mn in 2011 against a loss of
SR179mn in 2010 due to an increase in direct costs in excess of approved
budgets for certain ongoing projects.
MMG announced on April 4, 2012, that it received the delivery of three
vessels for its fleet in the Marine Services Department. These vessels would
be used to provide marine support to floating oil & gas platforms of Aramco.
n December 2011, the company signed a 5-year, SR315mn contract with
Aramco to provide marine support for offshore hook-up, upgrade,
modification, installation, and commissioning of floating platforms.
On November 30, 2011, MMG canceled a joint venture planned in May 2010
with Al Rushaid Petroleum nvestment Co., a Saudi oilfield-support company.
On November16, 2011, the BOD of MMG met and approved the appointment
of Mr. brahim Zada as the company's new President and Chief Executive
Officer as a replacement to Mr. brahim Al Shuweir.
n June 2011, the company signed a SR746mn letter of intent with South
Korea's SK Engineering & Construction Co to carry out construction work on
the Wasit gas development project.
MOHAMMAD AL MOJL
ALSO KNOWN AS: MMG
NOT COVERED

STOCK DETAILS
Absolute (3.9 (27.2) (38.1)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 85.8 22.2
12M 40.9 10.9
Bloomberg code MMG AB
www.almojilgroup.com

Free float 46.2

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 46.0 NM NM
P/B (x) 1.0 1.2 3.6
P/S (x) 0.8 1.1 0.9
Div Yield (%) 5.0 5.0 -
DPS 0.8 0.8 -

12
17
22
27
5,500
6,000
6,500
7,000
7,500
8,000
TAS MMG (RHS)

Source: Bloomberg

Mohammed Hamad Abdul Karim
Al Moajil
50.0
Adel Mohammed Hamad Al Moajil 5.3


Company financiaIs
2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Revenues SRmn
3,345 2,216 1,731 2,113 22.1 (2.4)
EBTDA SRmn
850 386 249 (318) NM NM
Net ncome SRmn
666 40 (179) (959) NM NM
Assets SRmn
3,669 3,073 2,944 3,150 7.0 1.2
Equity SRmn
1,902 1,840 1,566 513 (67.2) (47.2)
Total Debt SRmn
0 450 515 1,369 165.8 74.4
Cash & Equiv SRmn
86 41 46 236 411.8 138.8
EBTDA Mgn %
25.4 17.4 14.4 (15.0) - -
Net Mgn %
19.9 1.8 (10.4) (45.4) - -
ROE %
41.7 2.2 (10.5) (92.3) - -
ROA %
22.6 1.2 (6.0) (31.5) - -
Div Payout %
18.8 232.5 NM - - -
EPS SR
5.33 0.32 (1.44) (7.68) NM NM
BVPS SR
15.22 14.72 12.53 4.11 (67.2) (47.2)

Source: Tadawul, Zawya, Company, NCBC Research, * 2008 Financials are for 14 months
189

AI-Babtain Power and TeIecommunication Company (AI-
Babtain) provides outdoor Iighting, transmission and
distribution (T&D), and testing station services to the power
sector. The company aIso designs, manufactures and instaIIs
steeI towers for the teIecommunications sector.
x Business brief
Al-Babtain's T&D portfolio comprises transmission towers of up to 500 kV,
monopoles up to 230 kV, and distribution poles up to 33 kV. The company's
subsidiary, Al-Babtain LeBLANC Telecommunication (100% stake), is a joint
venture with LeBLANC that provides engineering, manufacturing and
installation services for communication towers of various types in Saudi
Arabia, neighboring Arab countries, and North African nations. Also, Al-
Babtain for Operation and Maintenance, a 100% subsidiary of the company,
operates in the petrochemical, oil & gas, cement, industrial, and commercial
segments of structural steel, thus providing engineering and manufacturing
solutions for varied applications.
x FinanciaIs
Despite a higher sales volume, in 2011, revenues increased marginally by
3.8% YoY to SR1,005mn due to lower selling prices amid increased
competition. EBTDA fell 25.1% to SR117mn mainly due to increased prices
of raw material. However, this was marginally offset by measures taken by
the company to reduce the cost of production. The net income for 2011
decreased 1.9% YoY to SR77mn.
On February20, 2012, the company announced the acquisition of shares
worth USD6.1mn in Qatar Engineering and Construction Company, making
its total stake USD13.6mn (9.7%).
On February 01, 2012, Al-Babtain announced that it won the bid (USD9.6mn)
to fully acquire Petitjean SAS, a French company that designs, manufactures
and distributes outdoor lightning and power transmission systems. This
acquisition is expected to contribute 20% in revenues and 2% to net income
from the third year.
AL BABTAN POWER
ALSO KNOWN AS: AL-BABTAN
NOT COVERED

STOCK DETAILS
Absolute (6.1) (0.4) (10.3)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 23.4 6.2
12M 16.3 4.3
Bloomberg code ALBABTA AB
www.al-babtain.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 10.2 14.2 14.5
P/B (x) 1.9 1.8 1.8
P/S (x) 1.0 1.1 1.1
Div Yield (%) 5.7 5.7 5.7
DPS 1.5 1.5 1.5

19
24
29
34
5,500
6,000
6,500
7,000
7,500
8,000
TAS AL Babtain (RHS)

Source: Bloomberg



Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
1,013 1,123 968 1,005 3.8 (0.3)
EBTDA SRmn
210 192 156 117 (25.1) (17.7)
Net ncome SRmn
131 109 78 77 (1.9) (16.3)
Assets SRmn
1,416 1,138 1,290 1,458 13.1 1.0
Equity SRmn
498 581 603 609 1.0 6.9
Total Debt SRmn
602 291 452 594 31.5 (0.4)
Cash & Equiv SRmn
68 51 39 68 73.5 (0.2)
EBTDA Mgn %
20.7 17.1 16.1 11.6 - -
Net Mgn %
12.9 9.7 8.1 7.6 - -
ROE %
28.4 20.3 13.2 12.7 - -
ROA %
10.9 8.6 6.5 5.6 - -
Div Payout %
32.4 58.3 81.4 82.9 - -
EPS SR
3.08 2.57 1.84 1.81 (1.9) (16.3)
BVPS SR
11.73 13.66 14.18 14.33 1.0 6.9

190

EstabIished in 1975, Saudi CabIe Company (SCC) is
headquartered in Jeddah, Saudi Arabia. SCC manufactures
and seIIs cabIes and reIated products. Besides Saudi Arabia,
the company has operations in Lebanon, the US, Turkey, and
Bahrain.
x Business brief
SCC manufactures and markets low, medium and high voltage wires as well
as cables; building wires; insulated power cables; telecommunication cables;
various conductors used for transmission and distribution; copper and
aluminum rods; and polyvinyl chloride. The company also provides turnkey
project services for power and telecom projects, including systems design,
installation, engineering, and testing.
x FinanciaIs
Revenues for 2011 grew 72.3% YoY to SR3.2bn. EBTDA margins grew to
2.0% in 2011 compared to a loss of SR40mn in 2010. The company reported
a net profit of SR5mn in 2011 compared to a net loss of SR88mn in 2010. As
per the company, the growth in revenue and profit was attributed to improved
market conditions and better operational performance in the core cable
business.
On March14, 2012, the company announced that it has been awarded a
USD24mn contract to supply high voltage cables to Comptoir Algrien du
Matriel Electrique et Gazier (Algeria). The cables are to be delivered in 18
months starting October 2012; the effect for the same would be reflected in
4Q12 financial statements.
The company won a SR109mn contract from Solar Electric Power Company
to supply the latter with high voltage cables to be delivered between October
2012 and June 2013. The effect of the contract would be reflected in 4Q12
financial statements.
SAUD CABLE COMPANY
ALSO KNOWN AS SCC, SCC GROUP
NOT COVERED

STOCK DETAILS
Absolute (18.3) 0.8 17.9
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 142.1 37.9
12M 59.4 15.8
Bloomberg code SCACO AB
www.saudicable.com

Free float 81.3

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 13.2 NM NM
P/B (x) 1.1 1.1 1.3
P/S (x) 0.6 0.7 0.4
Div Yield (%) 4.1 4.1 -
DPS 0.8 0.8 -

10
15
20
25
5,500
6,000
6,500
7,000
7,500
8,000
TAS Saudi Cable (RHS)

Source: Bloomberg

Xenel ndustrial Co. 16.6


Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
3,503 2,458 1,857 3,200 72.3 (3.0)
EBTDA SRmn
463 243 (40) 64 NM (48.3)
Net ncome SRmn
212 104 (88) 5 NM (71.1)
Assets SRmn
3,420 3,339 3,643 4,107 12.8 6.3
Equity SRmn
1,050 1,309 1,200 1,021 (14.9) (0.9)
Total Debt SRmn
1,546 1,367 1,817 2,236 23.0 13.1
Cash & Equiv SRmn
122 109 124 93 (24.8) (8.4)
EBTDA Mgn %
13.2 9.9 (2.1) 2.0 - -
Net Mgn %
6.1 4.2 (4.7) 0.2 - -
ROE %
21.0 8.9 (7.0) 0.5 - -
ROA %
6.9 3.1 (2.5) 0.1 - -
Div Payout %
26.9 54.6 NM - - -
EPS SR
2.79 1.37 (1.16) 0.07 NM) (71.1)
BVPS SR
13.82 17.23 15.78 13.44 (14.9) (0.9)


191

Arabian Pipes Company (APC) is the Iargest manufacturer of
medium-sized High Frequency WeIded (HFW) steeI pipes in
the MiddIe East. The company manufactures anti-corrosion
coated HFW pipes for the oiI & gas, petrochemicaI,
agricuIturaI, and construction industries. EstabIished in 1991,
APC has a manufacturing faciIity in Riyadh.
x Business brief
APC's product line includes line-pipe applications (for long distance oil & gas
transportation), structural applications (for construction), general purpose
applications (industrial water and irrigation), standard pressure applications,
and casting applications. APC's total production capacity is 460,000 tons of
steel pipes per annum. t also has a 100% ownership in Arabian Yadong
Coating Company.
x FinanciaIs
APC's 2011 revenues increased 7.4% YoY to SR275mn. EBTDA margins
rose to 18.1% YoY from 13.0%. However, APC reported a net loss of SR7mn
in 2011 against a net loss of SR4mn in 2010 due to higher fixed expenses
(mainly interest expenses, which increased by SR9.6mn compared to last
year) and the decline in investment income.
On January29, 2012, the company announced that the Capital Market
Authority approved the distribution of 26.98% bonus shares, increasing
capital to SR400mn after the issue.
n June 2011, the company announced that it has signed a three-year,
SR500mn contract to produce and supply six-inch welded longitudinal steel
pipes to Petroleum Development Oman (Oman).
Earlier, in January 2011, the company acquired the remaining 50% stake in
Arabian Yadong Coating Company from Yadong Anti-Corrosion Co. Ltd. for
SR9.6mn.

ARABAN PPES
ALSO KNOWN AS: AC, APC, ANABB
NOT COVERED

STOCK DETAILS
Absolute (6.5) (6.0) (9.5)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 32.8 8.8
12M 24.6 6.6
Bloomberg code APCO AB
www.arabian-pipes.com

Free float 85.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 39.6 NM NM
P/B (x) 1.3 1.4 1.4
P/S (x) 2.3 3.9 3.6
Div Yield (%) - - -
DPS - - -

22
27
32
37
42
5,500
6,000
6,500
7,000
7,500
8,000
TAS APC (RHS)

Source: Bloomberg

Abdul Qader Al Mohaidib &
Sons Co.
13.8
Saleh Abdulaziz Babaker &
Sons Co
7.3

Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
817 439 256 275 7.4 (30.5)
EBTDA SRmn
160 91 33 50 49.5 (32.3)
Net ncome SRmn
117 25 (4) (7) 90.8 (138.5)
Assets SRmn
1,635 1,393 1,306 1,377 5.4 (5.6)
Equity SRmn
712 737 733 727 (0.9) 0.7
Total Debt SRmn
883 625 515 537 4.4 (15.2)
Cash & Equiv SRmn
19 34 21 7 (67.0) (28.6)
EBTDA Mgn %
19.5 20.7 13.0 18.1 - -
Net Mgn %
14.4 5.7 (1.4) (2.4) - -
ROE %
17.3 3.5 (0.5) (0.9) - -
ROA %
7.5 1.7 (0.3) (0.5) - -
Div Payout %
- - - - - -
EPS SR
3.72 0.80 (0.11) (0.21) 90.8 (138.5)
BVPS SR
22.60 23.39 23.28 23.07 (0.9) 0.7


192

ABDULLAH A.M. AL-KHODARI SONS CO. (AAMAK) is a major
contractor and infrastructure deveIoper in the region.
Headquartered in AI-Khobar, AAMAK executes projects in
Saudi Arabia and neighboring countries in the MiddIe East.
x Business brief
AAMAK mainly deals in the construction of industrial, civil, residential and
commercial buildings, roads, and building infrastructure as well as operations
and maintenance of municipal areas and institutional sectors. The company
implements general contracting projects, including civil construction, railways,
oil & gas pipelines, water & waste water treatment, electrical works and
heavy steel metal fabrication. t also operates and maintains plants and
facilities, foundations, landscaping, sand stabilizations, and other related
earth works.
x FinanciaIs
AAMAK's sales grew 10.8% YoY to SR1,189mn in 2011. EBTDA margins
declined to 25.0% in 2011 compared to 32.7% in 2010 mainly due to an
increase in manpower cost. Net income decreased 27.4% to SR158mn in
2011 compared to SR218mn in 2010 due to a fall in trading segment profits
and higher selling & marketing expenditure.
n March 2012, the company announced that it signed a 36-month contract
for SR26.8mn with the Ministry of Higher Education for construction of the
Faculty of Engineering for Men (phase 2).
n March 2012, the company signed a contract with the Ministry of Water and
Electricity for SR34.8mn, which is expected to affect the company's financial
statements in 2Q12.
n March 2012, AAMAK announced the signing of the slamic Credit Facilities
Agreement amounting to SR968mn for renewal of existing and new credit
facilities with SAMBA Financial Group.
CONSTRUCTON ~MAY 2012
ABDULLAH A.M. AL-KHODAR
SONS CO.
ALSO KNOWN AS: AAMAK
NOT COVERED

STOCK DETAILS
Absolute (9.5) (4.7) (28.5)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 13.3 3.6
12M 12.7 3.4
Bloomberg code ALKHODAR.AB
www.alkhodari.com

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 9.8 9.8 13.5
P/B (x) 4.2 3.6 3.2
P/S (x) 2.0 2.0 1.8
Div Yield (%) - 4.6 3.0
DPS - 2.3 1.5

45
50
55
60
65
70
75
5,500
6,000
6,500
7,000
7,500
8,000
TAS ALKHODAR (RHS)

Source: Bloomberg

Abdullah A M Al Khodari Sons
nvestment Holding Company
60.0


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,159 1,048 1,074 1,189 10.8 0.9
EBTDA SRmn 419 361 351 297 (15.4) (10.8)
Net ncome SRmn 240 217 218 158 (27.4) (12.9)
Assets SRmn 1,340 1,450 1,826 2,353 28.8 20.6
Equity SRmn 348 506 588 660 12.2 23.8
Total Debt SRmn 642 659 756 939 24.2 13.5
Cash & Equiv SRmn 33 33 71 79 11.0 33.1
EBTDA Mgn % 36.1 34.4 32.7 25.0 - -
Net Mgn % 20.7 20.7 20.3 13.3 - -
ROE % 72.1 50.8 39.8 25.3 - -
ROA % 18.5 15.6 13.3 7.6 - -
Div Payout % - - 44.9 40.3 - -
EPS SR 5.64 5.11 5.13 3.72 (27.4) (12.9)
BVPS SR 8.18 11.91 13.84 15.53 12.2 23.8


193

Saudi IndustriaI DeveIopment Company (SIDC), estabIished in
1992, invests in the industriaI sector of the KSA. The company
manufactures and distributes ceramics such as bathtubs,
sanitary ware and tiIes, home furnishing, and mattresses.
Over the years, SIDC has diversified its investments to cover
spring mattresses and poIyester fibers.
x Business brief
SDC operates through its affiliates. Saudi Ceramic Plant (in which SDC
holds 100% stake) in the Yanbu ndustrial City produces ceramic sanitary
ware (annual capacity of 800,000 units) as well as acrylic bathtubs and
shower trays (annual capacity of 120,000 units). Arabian Spring and Sponge
Mattresses Mfg. Co. (50% stake), formerly known as Sleep High, is a leading
manufacturer of spring mattresses.
x FinanciaIs
SDC's revenues grew 21.1% YoY to SR281mn in 2011. EBTDA increased
80% YoY to SR35mn. However, the company reported net income of
SR23mn, a 75.3% decline compared to 2010. This was mainly attributable to
a gain recorded in 2010 reflecting the sale of its investment in Yansab, which
was not present in 2011.
On April08, 2012, the company's Board approved raising its subsidiary SDC
Commercial nvestment Co's capital to SR10mn from SR1mn. The capital
raise would be undertaken by transferring the company's outstanding debt to
the subsidiary's capital.
On April04, 2012, the company announced that the court had rejected the
lawsuit filed against the company by the former partners in Sleep High Saudi
Arabia and Egypt.

SAUD NDUSTRAL
ALSO KNOWN AS: SDC
NOT COVERED

STOCK DETAILS
Absolute (26.1) (16.2) 28.1
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 121.3 32.3
12M 57.8 15.4
Bloomberg code SDC AB
www.sidc.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 8.1 33.0
P/B (x) 2.7 2.5 2.2
P/S (x) 3.5 3.3 2.8
Div Yield (%) - - -
DPS - - -

7
12
17
22
27
32
37
5,500
6,000
6,500
7,000
7,500
8,000
TAS SDC (RHS)

Source: Bloomberg



Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
250 222 232 281 21.1 3.9
EBTDA SRmn
18 15 20 35 80.3 24.6
Net ncome SRmn
(6) (3) 95 23 (75.3) NM
Assets SRmn
480 504 495 458 (7.3) (1.5)
Equity SRmn
234 291 311 347 11.5 14.0
Total Debt SRmn
112 105 61 56 (8.2) (20.6)
Cash & Equiv SRmn
23 10 47 86 82.3 54.4
EBTDA Mgn %
7.3 6.9 8.5 12.6 - -
Net Mgn %
(2.2) (1.6) 41.0 8.4 - -
ROE %
(1.9) (1.3) 126.4 28.5 - -
ROA %
(1.0) (0.7) 76.2 19.7 - -
Div Payout %
- - - - - -
EPS SR
(0.14) (0.09) 2.38 0.59 (75.3) NM
BVPS SR
5.86 7.27 7.78 8.67 11.5 14.0


194

NationaI Gypsum Company, headquartered in Riyadh,
speciaIizes in the production of gypsum pIasters, pIaster
boards, and Iaminated gypsum tiIes. NationaI Gypsum's
manufacturing pIants are Iocated in Riyadh and Yanbu, whiIe
its branches are situated at Jeddah and Dammam. The
company exports its products worIdwide. NationaI Gypsum
hoIds a 33.3% stake in its subsidiary, Qatar Saudi Gypsum
Company.
x Business brief
National Gypsum has an annual production capacity of 450,000 tons of
gypsum plaster; 12mn square meters of plaster board; 48,000 tons of spray
gypsum and fixing plaster; 0.5mn square meters of gypsum ceiling tiles; and
30,000 tons of gypsum powder.
x FinanciaIs
The company's sales declined 30.2%YoY to SR108mn in 2011. However,
EBTDA margin remained flat at 49% in 2011 compared to the last year. Net
profit fell 43.6% YoY to SR30mn in 2011. The company has attributed the
decline in revenue and net income to increased competition.
On April 01, 2012, the company announced that the AGM approved the
distribution of 12% cash dividends (SR1.2 per share) for 2011.

NATONAL GYPSUM COMPANY
ALSO KNOWN AS NGC, GYPSUM
NOT COVERED

STOCK DETAILS
Absolute (10.4) (14.0) (4.5)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 15.8 4.2
12M 7.3 1.9
Bloomberg code NGCO AB
www.gypsco.com.sa

Free float 52.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 10.7 18.1 32.1
P/B (x) 1.7 2.1 2.1
P/S (x) 4.7 6.2 8.8
Div Yield (%) 8.3 6.7 4.0
DPS 2.5 2.0 1.2

25
30
35
40
5,500
6,000
6,500
7,000
7,500
8,000
TAS Gypsum (RHS)

Source: Bloomberg

Al Manafa nvestment & Real
Estate Development Co.
34.5
Theneyan Fahd Theneyan Al
Theneyan
10.3


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
260 203 154 108 (30.2) (25.5)
EBTDA SRmn
133 104 76 53 (30.4) (26.6)
Net ncome SRmn
112 89 53 30 (43.6) (35.9)
Assets SRmn
602 629 596 553 (7.2) (2.8)
Equity SRmn
539 555 462 453 (2.1) (5.6)
Total Debt SRmn
39 49 44 38 (13.7) (1.1)
Cash & Equiv SRmn
82 106 86 63 (27.2) (8.6)
EBTDA Mgn %
51.3 51.5 49.2 49.0 - -
Net Mgn %
43.2 43.7 34.1 27.5 - -
ROE %
21.1 16.2 10.3 6.5 - -
ROA %
18.7 14.4 8.6 5.2 - -
Div Payout %
70.5 89.4 120.6 128.4 - -
EPS SR
3.55 2.80 1.66 0.93 (43.6) (35.9)
BVPS SR
17.01 17.53 14.60 14.30 (2.1) (5.6)


195

Red Sea Housing Services Company was estabIished in
Jeddah in 1967. The company's objective was to repIicate the
American manufactured housing modeI in Saudi Arabia. Red
Sea Housing Iater diversified into manufacturing and property
management, setting up its first manufacturing faciIity in 1983.
The company manufactures, seIIs and Ieases aII types of
moduIar buiIdings.
x Business brief
Red Sea Housing has three manufacturing facilities - in Dubai, Jubail, and
Accra (Ghana). The company has an annual production capacity of 770,000
square meters of prefabricated buildings per year. Red Sea Housing serves
all types of housing requirements: commercial and residential, temporary and
permanent. Red Sea Housing offers special services to oil & gas and mining
companies; the company's markets comprise Africa, the Middle East, Asia
and South America.
x FinanciaIs
Red Sea's revenues grew 4.1% YoY to SR776mn in 2011. EBTDA margins
declined to 18.6% in 2011 from 21.9% a year ago due to higher installation
and materials cost incurred this year. However, net profit rose 27.6% YoY to
SR78mn in 2011 due to 84.8% increase in rental income and absence of any
provisions for litigations, which had reduced net income last year.
On January 2012, the company announced the distribution of one bonus
share for every three shares held as well as the increase of the share capital
to SR400mn from SR300mn. The Board also recommended the distribution
of SR1.00 per share as cash dividends for 2011.
n August 2011, the company announced a delay in opening its new factory
in Libya, which was earlier planned to start in 2H11. The total cost of the
factory is estimated to be SR61mn, which would increase the company's
production capacity by 37.5% per year.
RED SEA HOUSNG
ALSO KNOWN AS: RSH, RED SEA
NOT COVERED

STOCK DETAILS
Absolute (18.7) (4.9) (22.7)
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 28.5 7.6
12M 16.4 4.4
Bloomberg code REDSEA AB
www.rsh.com.sa

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 10.5 21.2 16.6
P/B (x) 1.9 1.9 1.7
P/S (x) 1.5 1.7 1.7
Div Yield (%) 4.6 2.3 2.3
DPS 1.5 0.8 0.8

27
32
37
42
47
5,000
5,500
6,000
6,500
7,000
7,500
8,000
TAS Red Sea (RHS)

Source: Bloomberg

Al Dabbagh Holding Co. 51.0
Mumtaz Foods Co. 5.0
The National Scientific Company
LTD
5.0
Tejariah for Marketing Services
and Agencies
5.0

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
1,139 852 745 776 4.1 (12.0)
EBTDA SRmn
279 178 163 144 (11.5) (19.7)
Net ncome SRmn
214 124 61 78 27.6 (28.6)
Assets SRmn
1,003 921 1,004 1,281 27.6 8.5
Equity SRmn
682 696 694 742 6.9 2.9
Total Debt SRmn
99 102 106 342 221.9 51.3
Cash & Equiv SRmn
120 47 62 97 58.4 (6.7)
EBTDA Mgn %
24.5 20.9 21.9 18.6 - -
Net Mgn %
18.8 14.5 8.2 10.0 - -
ROE %
35.4 17.9 8.8 10.9 - -
ROA %
24.1 12.8 6.3 6.8 - -
Div Payout %
49.1 48.6 49.2 38.5 - -
EPS SR
5.35 3.09 1.53 1.95 27.6 (28.6)
BVPS SR
17.04 17.40 17.35 18.55 6.9 2.9


196

Saudi Vitrified CIay Pipes Company (SVCP), estabIished in
1977 and headquartered in Riyadh, manufactures vitrified cIay
pipes and fittings as weII as jacking pipes. The company's
annuaI production capacity is 185,000 tons of cIay pipes and
fittings per year. AIong with the IocaI Saudi Arabian market,
SVCP has a presence in internationaI markets, incIuding Arab
countries, the Far East, and Europe.
x Business brief
SVCP manufactures vitrified clay pipes (ranging from 1001200mm) and
jacking pipes (1501000mm). These pipes are used in domestic and
industrial sewage systems as well as for storm water disposal. The main
features of these pipes are strength, durability, and resistance to chemicals
contained in sewage and drainage water. The company has a state of the art
facility in Riyadh with an annual production capacity of 185,000 tons.
x FinanciaIs
SVCP's revenues for 2010 grew by 6.9% YoY to SR261mn on account of
increased production due to efficiency gains in production. EBTDA increased
8.0% to SR107mn. Net income increased 10.8% to SR80mn in 2011 from
SR72mn in 2010 due to lower operating expense and financial charges.
On February 20, 2012, the company announced that it had extended the
memorandum of understanding it had signed with Arabian Company for
Water Pipe ndustry (Acwapipe) to fully acquire the latter's stake through a
share swap deal for a six-month period.

SAUD VTRFED
ALSO KNOWN AS: SAUD VTRFED, SVCP
NOT COVERED

STOCK DETAILS
Absolute (1.4) 18.2 30.9
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 5.3 1.4
12M 4.3 1.1
Bloomberg code SVCP AB
www.svcp-sa.com

Free float 56.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 28.1 15.2 13.7
P/B (x) 5.1 4.3 4.8
P/S (x) 4.9 4.5 4.2
Div Yield (%) 3.1 4.1 6.8
DPS 2.3 3.0 5.0

40
50
60
70
80
90
5,500
6,000
6,500
7,000
7,500
8,000
TAS SVCP (RHS)

Source: Bloomberg

Abdul Latif Al Essa Co. 15.6
Prince Faisal Abdul Aziz Faisal Al
Saud
15.0
Saad Saud brahim Al Sayari 13.3
Al Riyadh nvestment Co. 5.4

Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
258 225 245 261 6.9 0.5
EBTDA SRmn
53 68 99 107 8.0 26.3
Net ncome SRmn
46 39 72 80 10.8 19.8
Assets SRmn
450 478 463 482 4.2 2.3
Equity SRmn
211 217 254 229 (9.9) 2.7
Total Debt SRmn
156 206 167 186 11.5 6.1
Cash & Equiv SRmn
15 45 36 58 62.1 56.2
EBTDA Mgn %
20.5 30.1 40.3 40.8 - -
Net Mgn %
18.0 17.3 29.4 30.5 - -
ROE %
22.8 18.2 122.3 132.0 - -
ROA %
11.9 8.4 61.2 67.5 - -
Div Payout %
72.7 86.5 62.5 94.1 - -
EPS SR
3.09 2.60 4.80 5.32 10.8 19.8
BVPS SR
14.09 14.44 16.95 15.26 (9.9) 2.7


197

MiddIe East SpeciaIized CabIes Co. (MESC) began as a IocaI
manufacturer in Riyadh in 1993. In 2003, MESC acquired
Jordan New CabIe Company, and in 2007, it entered into a
joint venture with Fujikura Company to expand its product
range to Iow and medium voItage power cabIes.
x Business brief
MESC's products (categorized into instrumentation and process control
cables) are used in indoor, outdoor and control room applications; system
cables (data and telephone cables), and power cables (used in applications
requiring greater electrical or electromagnetic protection). The company also
markets specialized cables for harsh environment applications, such as those
in the hydrocarbon industry. MESC has an annual production capacity of
about 30,500 tons of copper and 9,000 tons of aluminum cables. Besides
regional operations, MESC has a presence in 14 countries.
x FinanciaIs
MESC's revenues increased 10.8% YoY to SR1,139mn in 2011. EBTDA fell
35.0% YoY to SR40mn. MESC incurred a net loss of SR120mn in 2011
compared to a net loss of SR95mn in 2010 due to increased competition,
especially in power cables. Also, a charge amounting to SR70.5mn for
impairment of goodwill, related to MESC's investment in Jordan, exerted
pressure on the bottom line.
On March13, 2012, the MESC Board approved the allocation of MESC
Saudi's 4.68% stake in MESC Jordan to the latter's employees. As a result,
MESC Saudi's stake would decline to 49%. The Board also approved of
increasing the capital of MESC Ras Al Khaimah from AED20mn to AED50mn
by capitalizing AED30mn of the loan provided by MESC Saudi.
ME SPECALZED CABLE
ALSO KNOWN AS: MESC
NOT COVERED
Current price 20.6

STOCK DETAILS
Absolute (4.4) 11.7 15.1
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 75.7 20.2
12M 39.7 10.6
Bloomberg code MESC AB
www.mesccables.com

Free float 73.4
VALUATION MULTIPLES
09A 10A 11A
P/E (x) 16.0 NM NM
P/B (x) 1.3 1.9 2.9
P/S (x) 0.8 0.8 0.7
Div Yield (%) 4.9 - -
DPS 1.0 - -
11
14
17
20
23
5,500
6,000
6,500
7,000
7,500
8,000
TAS MESC (RHS)

Source: Bloomberg
Abdul Aziz Mohammed Sulaiman Al
Namlah

26.6
Mansour A. M. Kaaki 6.3


Company financiaIs
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn
1,308 1,034 1,029 1,139 10.8 (4.5)
EBTDA SRmn
245 152 61 40 (35.0) (45.5)
Net ncome SRmn
88 51 (95) (120) NM (210.8)
Assets SRmn
1,615 1,710 1,417 1,382 (2.5) (5.1)
Equity SRmn
507 635 436 279 (36.1) (18.0)
Total Debt SRmn
836 780 809 896 10.7 2.3
Cash & Equiv SRmn
54 35 40 26 (35.3) (21.8)
EBTDA Mgn %
18.7 14.7 5.9 3.5 - -
Net Mgn %
6.8 5.0 (9.2) (10.5) - -
ROE %
18.8 9.0 (17.7) (33.6) - -
ROA %
6.2 3.1 (6.1) (8.6) - -
Div Payout %
54.3 78.0 - - - -
EPS SR
2.21 1.28 (2.37) (3.00) NM (210.8)
BVPS SR
12.66 15.88 10.91 6.97 (36.1) (18.0)


198

United Wire Factories Company ("ASLAK") was estabIished
as a Iimited IiabiIity company in 1990. In 2006, a group of
companies and estabIishments that had extensive experience
in wire manufacturing were merged in one new company,
"ASLAK", thus enabIing the new company to own eight
factories distributed across the Kingdom of Saudi Arabia. The
company was Iater transformed into a pubIic joint stock
company in 2011 and Iisted on the TadawuI Exchange on
August 21, 2011.
x Business brief
ASLAK deals with the manufacture and distribution of steel rebars, bailing
wires, barbed wires, clothes hangers, steel nails, wire mesh, fences and
other related products. t has an annual production capacity of 17,145 tons of
steel; 10,879 tons of steel nails; 9,230 tons of barbed wires; 9,000 tons of
clothes hangers; and 1,642 tons of galvanized wires. t also has the capacity
to produce 15,000 tons of steel rebars per month.
x FinanciaIs
ASLAK's revenues increased 49.9% YoY to SR855mn in 2011. EBTDA
margins declined to 14.2% in 2011 compared to 24.3% in 2010, primarily due
to the increase in raw material prices. The company reported an 8.9% YoY
decline in net profit to SR98mn in 2011.
On March28, 2012, the company announced dividend of SR1.00 per share
for the second half of 2011, making the full-year dividend for 2011 SR1.75
per share.

UNTED WRE FACTORES
COMPANY
ALSO KNOWN AS: ASLAK
NOT COVERED

STOCK DETAILS
Absolute (12.5 (8.3) -
Market (6.2) 6.2 7.6
Sector (11.8) (4.8) (5.5)
3M 69.3 18.5
12M 56.6 15.1
Bloomberg code ASLAK AB
www.unitedwires.com.sa

Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 15.7 12.6 13.9
P/B (x) 4.9 4.2 3.6
P/S (x) 3.3 2.4 1.6
Div Yield (%) - - 4.2
DPS - - 1.8

30
35
40
45
50
55
5,500
6,000
6,500
7,000
7,500
8,000
Aug-11 Nov-11 Feb-12 May-12
TAS United Wire (RHS)

Source: Bloomberg

Mohammed Rashid Mohamed
Rashid.
11.5
Khaled Saad Abdulrahman
Alkanhal
9.0

Company financiaIs
2008* 2009 2010 2011
YoY
(%)
CAGR (%)
(09-11)
Revenues SRmn
455 417 571 855 49.9 43.2
EBTDA SRmn
106 113 139 121 (12.6) 3.7
Net ncome SRmn
69 87 108 98 (8.9) 6.4
Assets SRmn
300 303 384 418 8.7 17.5
Equity SRmn
258 280 329 378 15.1 16.3
Total Debt SRmn
2 2 - - - NM
Cash & Equiv SRmn
69 35 74 79 7.8 50.2
EBTDA Mgn %
23.3 27.0 24.3 14.2 - -
Net Mgn %
15.3 20.9 18.9 11.5 - -
ROE %
26.9 31.1 32.8 26.0 - -
ROA %
23.1 28.7 28.1 23.5 - -
Div Payout %
- - - 57.8 - -
EPS SR
2.14 2.68 3.32 3.03 (8.9) 6.4
BVPS SR
7.94 8.61 10.11 11.64 15.1 16.3

Source: Tadawul, Zawya, Company, NCBC Research , * Financial for 2008 are for 10 months

199
MAY 2012
Real Estate
4090 Taiba 203
4300 Dar Al Arkan 204
4020 Al Akaria 205
4310 KEC Madinah 206
4250 Jabal Omar 207
4100 Makkah 208
4220 Emaar E .C 209
4150 Arriyadh Dev 210

The Saudi real estate sector is likely to continue benefiting from a
large and young population (expected to grow 2.3% annually until
2020), rising number of households, expansion in business activity
and religious tourism in the medium term. n addition, a high
proportion of nationals in the Kingdom's population (69% of the
total population in 2010), vis--vis other GCC countries, is a key
factor driving demand for real estate.
Saudi Arabia's population aggregated 27.3mn in 2010, representing around 63%
of the total GCC population. The Population has been growing 2.7% per year
over the past 20 years which is one of the fastest growth rates in the world.
Exhibit 118: Saudi population is the largest in GCC Exhibit 119: Saudi population by age group
Thousand (person)2010 July data Saudis only (2010 data)

Source: UN, NCBC Research Source: UN, NCBC Research

Residential sector
The supply-demand mismatch in the housing sector widened although growth in
young population and a decline in average household size continue to drive
demand. Saudi Arabia would require an additional 973,000 units over 201015E
and a total of 2.1mn units over the coming decade (215,000 units per year).
However, we believe affordability and lack of access to mortgage credit are the
primary roadblocks impacting demand for housing.
Office sector
Office rental rates in KSA remained relatively stable in 2011. However, as the
over supplied market moves towards more competitive pricing, demand could
potentially increase for high-quality projects in the medium term. n addition,
based on the business volume in Saudi Arabia, the nature of demand and the
current and forthcoming supply of office space, we expect a decline in
occupancy rates across major cities. This could exert downward pressure on
office rentals.
Retail sector
Retail spending, which drives demand for retail spaces, remained strong in 2011
due to population growth and higher household consumption. n Saudi Arabia,
supply of retail space is still very low and rental prices are comparatively lower
compared to other major cities in GCC. Demand for retail space is expected to
increase in tandem with household consumption, which is expected to grow 6
7% per annum over the next few years.
0 5000 10000 15000 20000 25000 30000
Saudi Arabia
UAE
Oman
Kuwait
Qatar
Bahrain
- 2 000 - 1 000 0 1 000 2 000
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80+
85-89
95-99 Female Male
MAY 2012
REAL ESTATE
Growth potential tied to demographics
201
REAL ESTATE NCB CAPTAL
MAY 2012

Hospitality sector
The number of visitors to a particular geographical area is the key driver for the
hospitality sector. The hotel industry in KSA is classified into Riyadh, Khobar,
Makkah and Madinah, which attract higher number of international and GCC
travelers (for business or pilgrimage). On the other hand, Jeddah is frequented
by Saudi nationals for leisure or business and, hence, is more dependent on the
local economy. Given the expected growth in tourist arrivals, the hospitality
sector remains a significant opportunity for investors.
The sector's revenue declined 6.3% YoY to SR5bn in 2011 due to a slowdown in
construction activity. Dar Al Arkan remained the largest player, accounting for
66% of the sector's total revenues during the same year. Emaar's revenues rose
fourfold to SR407.7mn in 2011. Saudi Real Estate Company (revenues fell
38.8% YoY) recorded the sharpest fall. The combined revenues of other smaller
players, including Makkah, Arriyadh and KEC, increased of 44% YoY to
SR636.8mn during the year. Overall, the sector's net income grew to SR1.8bn in
2011 from SR1.3bn in 2010, amid lower operating and maintenance costs.
Exhibit 120: Revenues of companies, 2009-11 Exhibit 121: Profitability of companies relative to the
sector average, 2009- 2011
SR mn %

NCBC Recommendation
We remain fairly optimistic about the Saudi real estate sector's prospects in the
long term. The residential sub-sector is expected to report fastest growth in the
near-term, while the office sub-sector is likely to witness an oversupply.
However, fundamental drivers, including favorable demographics, increase in
business activity and religious tourism, remain intact. We are currently covering
three stocks in the real estate sector: Dar Al Arkan, Taiba and Al Akaria.
Dar Al Arkan
(4300.SE)
Neutral 10.8 Dar Al Arkan is currently developing a number of capital-intensive projects; however,
banks and financial institutions could be reluctant to lend to the company due to
allegations of a crisis on its website. Furthermore, investors' perception, which has
been impacted by weak earnings and lack of transparency over the last few years,
could improve if management provides further insight into its land bank. The stock
outperformed the TAS index, reflecting the limited upside potential.
Taiba
(4090.SE)
Overweight 27.6 With a portfolio of prime assets, expected revenue growth and improvement in
margins, we believe Taiba's fundamentals, including its status as one of the holiest
cities for Muslims, makes the stock an attractive play in the hospitality sector.

Al-Akaria
(4020.SE)
Neutral 27.3 Good earnings visibility, future growth potential and a large land bank are positives;
however, these are partially offset by a low ROE and risk of excess office supply in
Riyadh.

0
1,000
2,000
3,000
4,000
5,000
6,000
2009 2010 2011
Others Dar Alarkan Taiba Al Akaria
0%
10%
20%
30%
40%
50%
60%
2009 2010 2011
Sector Average Saudi Real Estate Taiba Dar Alarkan
202

Taiba HoIding Co (Taiba), estabIished in September 1988, is
based in Madinah, home of the second HoIy Mosque in IsIam.
The company transformed to a hoIding company in 2007 and
transferred most of its assets to its subsidiaries. It currentIy
owns and manages reaI estate properties, hoteIs and resorts
mainIy through its subsidiaries, and is geographicaIIy
concentrated in Madinah and its surrounding cities.
x Business brief
Taiba primarily focuses on the real estate sector; it is a major developer in
the central area surrounding the Holy Prophet's mosque. Taiba's subsidiaries
and associate companies include ARAC and Al Aqeeq. All real estate
functions are run by Al Aqeeq, the real estate arm, and include real estate
development, property sales, rent, contracting and maintenance. The
second-largest revenue source is ARAC, the tourism arm, which owns and
operates properties and resorts in Madinah, Yanbu, Al Ula and Makkah
(under development).
x FinanciaIs
Revenues grew 59.0% YoY to SR394mn for 2011, driven by higher
occupancy rates due to the increased number of Hajj pilgrims. EBTDA rose
137.5% to SR247mn YoY due to improved operational efficiency, gains from
compensation for a plot of land in Al Madinah city, and proceeds from the
sale of Taiba's share of land in Jeddah city. The net income grew 157.1%
YoY to SR237mn in 2011.
On March 18, 2012, Taiba announced that it had filed a lawsuit to appeal
against the compensation value of the land located in the Markaziah area in
Al Madinah.
n February 2012, the company announced a cash dividend of SR0.25 per
share for 1Q12.
REAL ESTATE DEVELOPMENT~MAY 2012
TABA HOLDNG
ALSO KNOWN AS: TABA
OVERWEIGHT

STOCK DETAILS
Absolute (2.9) 17.7 38.7
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 10.2 2.7
12M 5.8 1.6
Bloomberg code TRECO AB
www.taiba.com.sa

Free float 68.99

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 38.5 15.0 10.8
P/B (x) 1.2 1.2 1.1
P/S (x) 14.3 9.0 6.3
Div Yield (%) 4.2 4.2 4.2
DPS 1.0 1.0 1.0

15
17
19
21
23
25
27
5,500
6,000
6,500
7,000
7,500
8,000
TAS Taiba (RHS)
Source: Bloomberg

Masek Holding Company 16.6
Mohammed Salah Hamza Sairafi
7.2
nsurance (GOS)
6.9

Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 248 394 559 463 59.0 23.2
EBTDA SRmn 104 247 370 268 137.5 37.1
Net ncome SRmn 92 237 329 223 157.1 34.3
Assets SRmn 3,610 3,558 3,865 3,949 (1.4) 3.0
Equity SRmn 2,862 2,915 3,093 3,164 1.9 3.4
Total Debt SRmn 2 1 - - (50) NM
Cash & Equiv SRmn 295 52 152 150 (82.4) (20.2)
EBTDA Mgn % 42.0 62.7 66.2 57.9 - -
Net Mgn % 37.2 60.1 58.9 48.2 - -
ROE % 3.3 8.2 11.0 7.1 - -
ROA % 2.6 6.6 8.9 5.7 - -
Div Payout % 162.9 63.4 45.6 67.3 - -
EPS SR 0.61 1.58 2.19 1.49 157.1 34.3
BVPS SR 19.08 19.43 22.62 21.09 1.9 3.4

203

Saudi ReaI Estate (AKARIA) was estabIished in Riyadh in
1976. At present, it generates aII of its revenues from Riyadh.
Despite the good earnings visibiIity, future growth potentiaI
and a Iarge Iand bank, which are positives for the company,
we remain concerned over the Iow ROE as weII as the
considerabIe increase in capex estimates.
x Business brief
AKARA is one of the pioneers in shopping center construction in the GCC. t
also develops housing and office complexes. n addition, the company
partners with international hotel chain operators to develop industrial/science
parks and hotels. AKARA's principal investment holdings include a 25%
stake in Saudi Company for Al Muaiqliah Commercial Center, 15% stake in
United Glass Company, and 10% stake in Dar Al Tamleek Company.
x FinanciaIs
Sales declined 38.8% YoY to SR265mn in 2011 due to a significant drop in
land sales compared to 2010. Net income fell 18.3% YoY to SR150mn;
however, net margin improved from 42.4% in 2010 to 56.6% in 2011. This
was due to higher occupancy rates at the Plaza complex and other
properties.
On April 1, 2012, Saudi Real Estate approved the distribution of 5% cash
dividends for the 2H11, making the full-year dividend SR1.00 per share.
On March 5, 2012, the BOD approved the commencement of the first phase
of infrastructure development for the Al Akaria Village project (size 2.1 million
square meter) in Banban, Saudi Arabia.
REAL ESTATE DEVELOPMENT~ MAY 2012
SAUD REAL ESTATE
ALSO KNOWN AS: REAL ESTATE, AKARA
NEUTRAL

STOCK DETAILS
Absolute (1.8) 5.0 13.1
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 34.9 9.3
12M 12.8 3.4
Bloomberg code SRECO AB
www.al-akaria.com

Free float 30.64

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 17.8 21.8 24.5
P/B (x) 1.0 1.0 1.0
P/S (x) 7.6 12.3 13.0
Div Yield (%) 4.6 3.7 3.9
DPS 1.3 1.0 1.1

20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Real Estate (RHS)
Source: Reuters


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 432 265 251 282 (38.8) (13.3)
EBTDA SRmn 267 187 162 181 (30.0) (12.2)
Net ncome SRmn 183 150 133 152 (18.3) (6.0)
Assets SRmn 3,480 3,397 3,501 3,507 (2.4) 0.3
Equity SRmn 3,203 3,174 3,120 3,145 (0.9) (0.6)
Total Debt SRmn - - 142 101 - -
Cash & Equiv SRmn 159 54 25 28 (66.2) (43.9)
EBTDA Mgn % 61.8 70.7 64.5 64.2 - -
Net Mgn % 42.4 56.6 53.0 53.9 - -
ROE % 5.8 4.7 4.2 4.9 - -
ROA % 5.5 4.4 3.9 4.3 - -
Div Payout % 81.9 80.2 94.7 59.2 - -
EPS SR 1.53 1.25 1.11 1.27 (18.3) (6.0)
BVPS SR 26.69 26.45 26.00 26.21 (0.9) (0.6)

204

EstabIished in 1994, Dar AI Arkan is one of the Iargest reaI
estate deveIopers in Saudi Arabia. The company's main
activities incIude purchase of reaI estate and Iand, and
construction of both commerciaI and residentiaI properties.
The company has four whoIIy-owned subsidiaries: Dar AI
Arkan Investment Co., Dar AI Arkan Projects Co., Dar AI Arkan
Properties Co., and Dar AI Arkan Sukuk Co.
x Business brief
Dar Al Arkan has a long history of developing residential projects across the
Kingdom. Historically, these developments have been small, ranging from
tens to a few hundred units, mainly in Riyadh. However, since 2007, the
company has focused on developing large scale master planned
communities. These include Shams Alriyadh, Al Qasr, and Al-Tilal. Dar Al
Arkan also offers pre-sales, after-sales, and funding services to customers. n
December 2007, the company established Saudi Home Loans Company
worth SR2bn that complements its core business and provides Shariah-
compliant home loans.
x FinanciaIs
Revenues fell 20.0% to SR3.3bn in 2011 from SR4.1bn in 2010 due to lower
revenue from land sales. Net profit declined 25.3% YoY to SR1.1bn in 2011
due to increased political instability across the Middle East region and
disrupted land sales during the year.
On March 09, 2012, Standard & Poor's lowered Dar Al Arkan's rating to B+
from BB-, and kept it on CreditWatch as the agency believes the company
faces refinancing risk. The company has to repay SR4.4bn of debt in 2012.
DAR AL ARKAN
ALSO KNOWN AS: DAAR, DAR AL ARKAN
NEUTRAL

STOCK DETAILS
Absolute (9.7) 34.7 28.7
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 651.5 173.7
12M 224.7 59.9
Bloomberg code ALARKAN AB
www.alarkan.com

Free float 60.86 F

VALUATION MULTIPLES
10A 11A 12E
P/E (x) 8.6 11.6 11.0
P/B (x) 0.9 0.8 0.8
P/S (x) 3.0 3.8 3.3
Div Yield (%) 8.5 - -
DPS 1.0 - -

5
7
9
11
13
15
5,500
6,000
6,500
7,000
7,500
8,000
TAS Dar Al Arkan (RHS)

Source:Bloomberg

Khalid Abdullah Shelash Al Shelash 9.1
Yousef Abdullah Shelash Al Shelash 7.7
Hadhlool Saleh Mohammed Al
Hadhlool
6.2
Majed Abdul Rahman Abdul Aziz Al
Qassim
5.3


Company financiaIs

2010 2011 2012E 2013E
YoY
(%)
CAGR (%)
(10-13E)
Revenues SRmn 4,142 3,313 3,820 4,235 (20.0) 0.7
EBTDA SRmn 1,658 1,278 1,484 1,411 (22.9) (5.2)
Net ncome SRmn 1,456 1,088 1,147 1,135 (25.3) (8.0)
Assets SRmn 23,349 24,101 22,980 21,436 3.2 (2.8)
Equity SRmn 14,500 15,588 15,862 16,769 7.5 5.0
Total Debt SRmn 7,813 7,448 6,035 3,607 (4.7) (22.7)
Cash & Equiv SRmn 1,189 2,506 382 423 110.8 (29.1)
EBTDA Mgn % 40.0 38.6 38.8 33.3 - -
Net Mgn % 35.1 32.8 30.0 26.8 - -
ROE % 10.2 7.2 7.3 7.0 - -
ROA % 6.2 4.6 4.9 5.1 - -
Div Payout % 74.2 - - - - -
EPS SR 1.35 1.01 1.06 1.05 (25.3) (8.0)
BVPS SR 13.43 14.43 14.69 15.53 7.5 5.0

205

KnowIedge Economic City Company was estabIished in
August 2010 with a capitaI of SR3.4bn. Headquartered in
Jeddah, the company is mainIy engaged in managing the
deveIopment of the KnowIedge Economic City (KEC) project
at AI Madinah AI Munawarah with an investment of SR30bn.
x Business brief
KEC Madinah is responsible for developing a sustainable knowledge-based
city and a central business district alongside residential projects in Madinah.
The project comprises 30,000 residential units; 1,200 shops and retail
outlets; a high-speed rail terminal; and a business district comprising
companies from the education, information and communication technology,
health, hospitality and tourism sectors. The company would also undertake
investments in a variety of real estate assets and provide a range of real
estate-related services.
x FinanciaIs
KEC Madinah reported revenues of SR94mn for 2011 with an EBTDA of
SR22mn and a net loss of SR9mn. The company reported a net loss of
SR155mn during the first 17 months of operations as it failed to cover initial
set up costs given the fact that majority of the company's projects are still
under development.
n April 1, 2012, KEC Madinah announced the sale of a 20,276 sq. mtr land
to the nternational Medical Center for a total value of SR 22.8mn, yielding a
profit of SR14mn.
On December 27, 2012, the company signed a SR631.3mn agreement to
acquire Savola's 80% stake in Al-Mujamaat United Company for real estate.
KNOWLEDGE ECONOMC CTY
ALSO KNOWN AS: KEC MADNAH
NOT COVERED

STOCK DETAILS
Absolute 1.2 70.3 143.7
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 262.5 70.0
12M 111.6 29.8
Bloomberg code KEC AB
www.madinahkec.com

Free float 30.06

VALUATION MULTIPLES
08A 09A 10A
P/E (x) - NM NM
P/B (x) - 2.1 2.1
P/S (x) - NM 73.5
Div Yield (%) - - -
DPS - - -

5
10
15
20
25
5,500
6,000
6,500
7,000
7,500
8,000
TAS Knowledge Eco(RHS)
Source: Bloomberg

King Abdullah bin Abdul Aziz
Foundation
29.4
Knowledge Economic City
24.4
Savola Group 6.4

Company financiaIs

2008 2009 2010* 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn - - 0 94 - -
EBTDA SRmn - - (16) 22 - -
Net ncome SRmn - - (146) (9) - -
Assets SRmn - - 3,267 3,286 0.6 -
Equity SRmn - - 3,218 3,225 0.2 -
Total Debt SRmn - - - - NA -
Cash & Equiv SRmn - - 2,031 1,828 -10.0 -
EBTDA Mgn % - - NM 23.7 - -
Net Mgn % - - NM NM - -
ROE % - - (4.5) (0.3) - -
ROA % - - (4.5) (0.3) - -
Div Payout % - - - - - -
EPS SR - - (0.43) (0..03) NM -
BVPS SR - - 9.48 9.50 0.2 -
*2010 financials are for 5-month period

206

JabaI Omar DeveIopment Company (JabaI Omar) is engaged
in reaI estate deveIopment in the JabaI Omar area. In
cooperation with IocaI and internationaI subcontractors, the
company purchases, buiIds, deveIops, manages rent, and
Ieases and seIIs Iand and properties. JabaI Omar's
headquarters are Iocated in Mecca, and was estabIished in
October 2006.
x Business brief
Jabal Omar builds residential towers, hotels, commercial centers, and roads
and parking facilities for pilgrims visiting Mecca. The company's major
venture Jabal Omar project (also known as the Western Gate Road
Development) is scheduled for completion in 2016. The project is a mixed-
use multi-phase project spanning across 2.5 million square meter of
development area located around the Grand Mosque of Makkah. The first
phase of the project is expected to be completed in early 2013 and will
comprise construction of 10 hotels, 86 villas and residential units. The
second phase will be completed by 2014.
x FinanciaIs
Jabal Omar did not record sales in 2011 as its projects were still under the
development phase. The company continued to incur a net loss (SR37mn)
due to lack of operating income and a rise in general & administrative
expenses for development of projects.
On March 25, 2012, Jabal Omar signed a 24-month contract worth SR1.5bn
with Azmeel Contracting and Saudi Arabian Baytur to complete the second
phase of the Jabal Omar Project. The project would be financed through a
rights issue.
On December 3, 2011, the company signed a loan agreement worth SR3bn
with the Ministry of Finance to fund the twin towers and a shopping mall
project. The loan would be repaid in eight years and has a two-year grace
period.
JABAL OMAR DEVELOPMENT
COMPANY
ALSO KNOWN AS: JABAL OMAR , JODC
NOT COVERED

STOCK DETAILS
Absolute 5.0 46.0 38.4
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 189.3 50.5
12M 75.6 20.2
Bloomberg code JOMAR AB
www.jabalomar.com.sa

Free float 54.34 F

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM NM
P/B (x) 2.8 2.8 2.0
P/S (x) NM NM NM
Div Yield (%) - - -
DPS - - -

10
15
20
25
5,500
6,000
6,500
7,000
7,500
8,000
TAS Jabal Omar (RHS)
Source: Reuters

Jabal Omar Establishment
21.2
nsurance (GOS)
9.8
Makkah Construction &
Development Co.
9.9

Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn - - - - NM -
EBTDA SRmn (21) (26) (35) (35) NM) NM
Net ncome SRmn (53) (23) (37) (37) NM NM
Assets SRmn 6,704 6,879 7,607 10,167 (33.6) 14.9
Equity SRmn 6,661 6,638 6,601 9,069 (37.4) 10.8
Total Debt SRmn - - 318 741 (132.7) NM
Cash & Equiv SRmn 946 27 101 1,269 (1156.0) 10.3
EBTDA Mgn % NM NM NM NM - -
Net Mgn % NM NM NM NM - -
ROE % (0.79) (0.35) (0.56) (0.47) - -
ROA % (0.78) (0.34) (0.51) (0.41) - -
Div Payout % - - - - - -
EPS SR (0.06) (0.02) (0.04) (0.04) 0.7 NM
BVPS SR 7.17 7.14 7.10 9.76 37.4 10.8

207

Makkah Construction & DeveIopment Co. (MCDC) was
estabIished in 1989 to deveIop areas around the HoIy Mosque
in Makkah. The company is engaged in the redeveIopment of
the HoIy Haram area. MCDC commenced a residentiaI and
commerciaI compIex, incIuding the JabaI Omar and JabaI
Khandama projects.
x Business brief
MCDC is involved in real estate (investment, construction and development),
property management and hotel management. The company holds 100%
stake in Makkah Hilton & Towers (the 1,400-room hotel) and Makkah
Shopping Center (a three-storied 451 unit shopping center). MCDC also
holds 25% stake in Takief Company. n 2006, MCDC was a founding
member of the Jabal Omar Development Company (9.1% stake) that was
established with a capital of SR5bn. The Jabal Omar project is spread across
an area of 230,000 sq mtrs and includes hotels, commercial centers and
prayer facilities for over 200,000 people.
x FinanciaIs
MCDC's revenues grew 12.6% YoY to SR389mn in 2012, mainly driven by
higher occupancy rates in residential hotels. Net income rose 13.8% YoY to
SR323mn in the same period, primarily due to higher average room rates
realized in the Hajj season and increased rental incomes from shops.
On August 17, 2011, MCDC approved the distribution of SR1.5 per share
cash dividend for the year ending March 31, 2011.
REAL ESTATE DEVELOPMENT ~ MAY 2012
MAKKAH CONSTRUCTON
ALSO KNOWN AS: MCDC
NOT COVERED

STOCK DETAILS
Absolute (0.5) 6.7 20.2
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 6.9 1.9
12M 4.5 1.2
Bloomberg code MCDCO AB
www.mcdc.com.sa

Free float 72.68

VALUATION MULTIPLES
10A 11A 12A
P/E (x) 29.4 22.1 19.4
P/B (x) 1.7 1.8 1.5
P/S (x) 22.5 18.2 16.1
Div Yield (%) 3.9 3.9 -
DPS 1.5 1.5 -

25
30
35
40
45
5,500
6,000
6,500
7,000
7,500
8,000
TAS Makkah (RHS)
Source: Reuters

Saudi Bin Laden Group 10.9
Mohammed Salah Hamza Sairafi 12.2

Company financiaIs*

2009 2010 2011 2012
YoY
(%)
CAGR (%)
(09-12)
Revenues SRmn 291 279 346 389 12.6 10.2
EBTDA SRmn 261 251 317 355 12.1 10.8
Net ncome SRmn 222 213 284 323 13.8 13.3
Assets SRmn 4,124 4,170 3,884 4,280 10.2 1.2
Equity SRmn 3,959 3,750 3,442 4,080 18.5 1.01
Cash & Equiv SRmn 189 131 309 318 3.1 19.0
EBTDA Mgn % 89.8 90.2 91.5 91.1 - -
Net Mgn % 76.3 76.6 82.1 82.9 - -
ROE % 5.4 5.5 7.9 8.6 - -
ROA % 5.1 5.1 7.0 7.9 - -
Div Payout % 111.4 115.9 87.1 - - -
EPS SR 1.35 1.29 1.72 1.96 13.8 13.3
BVPS SR 24.02 22.75 20.89 24.75 18.5 1.0
Source: Tadawul, Zawya, Company, NCBC Research, *Year ending is 31
st
March

208

209

In 2006, Emaar Economic City (Emaar EC), managed by Emaar
Properties, was set up as a joint stock company to develop
the SR188bn King Abdullah Economic City (KAEC). KAEC is
part of the governments initiatives to diversify the economy
and establish new economic, educational, and technology
hubs.
Business brief
KAEC, the single largest private sector-led project in the GCC region (168
million square meters), has six key components: a seaport, an industrial
zone, a residential district, a financial island, an educational zone and a
waterside zone. This mega project is expected to generate about 1-2mn job
opportunities with the residential district expected to house around 2mn
people.
Financials
Emaar ECs revenues grew 348.4% YoY to SR408mn in 2011 due to a land
sale. The company reported a net profit of SR83mn in 2011 versus a net loss
of SR584mn in 2010.
Recent developments
In January 2012, the company sold 500,000 square meters of land in KAECs
Industrial Valley to Tamer Group, a leading healthcare and consumer goods
firm based in Jeddah.

REAL ESTATE DEVELOPMENT MAY 2012
EMAAR THE ECONOMIC CITY
ALSO KNOWN AS EEC, EMAAR EC
NOT COVERED

STOCK DETAILS

Absolute (8.0) 40.7 69.2
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0

3M 417.1 111.2
12M 164.0 43.7

Bloomberg code EMAAR AB
www.kingabdullahcity.com

TASI (free float weight) 0.51
Free float 30.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM NM 124.5
P/B (x) 1.3 1.4 1.4
P/S (x) 39.5 113.1 25.2
Div Yield (%) - - -
DPS - - -

5
7
9
11
13
15
5,500
6,000
6,500
7,000
7,500
8,000
TASI Emaar E .C (RHS)

Source: Reuters
Modern Daim Real Estate 20.0
ME Royal Capital Co. 9.4
Emaar Middle East 5.8
MI Holding Compnay 5.8
ME Strategic Investments 5.8

Company financials

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 102 261 91 408 348.4 58.9
EBITDA SRmn (375) (214) (249) 170 NM NM
Net Income SRmn (292) (309) (584) 83 NM NM
Assets SRmn 9,532 9,305 8,877 13,746 54.8 13.0
Equity SRmn 8,191 7,882 7,298 7,380 1.1 (3.4)
Total Debt SRmn 0 0 0 5,062 NM NM
Cash & Equiv SRmn 2,219 864 339 1,710 404.0 (8.3)
EBITDA Mgn % NM NM NM 41.7 - -
Net Mgn % NM NM NM 20.3 - -
ROE % (3.5) (3.8) (7.7) 1.1 - -
ROA % (3.2) (3.3) (6.4) 0.7 - -
Div Payout % - - - - - -
EPS SR (0.34) (0.36) (0.69) 0.10 NM NM
BVPS SR 9.64 9.27 8.59 8.68 1.1 (3.4)

Arriyadh DeveIopment Company was estabIished in 1994 and
is engaged in the construction of commerciaI, office and
residentiaI buiIdings and compIexes. The company aIso
deveIops pubIic parks, tourist compounds and parking Iots.
x Business brief
Arriyadh is engaged in residential projects such as Sunrise Cities, and
commercial projects such as Attameer Trading Center, Arriyadh
Transportation Center, Technical Service City, Riyadh Hills, and Riyadh Car
Auction (for sale of used cars). The company is also engaged in the
development of market areas such as Batiha Meat & Vegetable Market,
Riyadh Wholesale & Retail Market, and Riyadh Vegetable & Fruits Market.
x FinanciaIs
Arriyadh's revenues increased 20.0% YoY to SR197mn in 2011 due to
revenue growth in the operation & lease segment, and a marked
improvement in operational efficiency and marketing strategy of all projects.
Net income increased 34.7% YoY to SR130mn. Net margins expanded to
66.1% in 2011 compared to 2010.
Arriyadh awarded a SR60mn contract to a local company to develop a
cooling and freezing plant on its land in Riyadh. The plant is expected to
generate SR15mn rental income annually. Additionally, n March 2012,
Arriyadh's board approved distribution of 12.5%, or SR1.25 per share, as
cash dividends for 2011.

REAL ESTATE DEVELOPMENT ~ MAY 2012
ARRYADH DEVELOPMENT
ALSO KNOWN AS: ARRYADH, ARDCO
NOT COVERED

STOCK DETAILS
Absolute (8.7) 12.3 55.2
Market (6.2) 6.2 7.6
Sector (2.6) 31.1 40.0
3M 40.1 10.7
12M 26.9 7.2
Bloomberg code ADCO AB
www.ardco.com.sa

Free float 89.83

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 25.0 24.0 17.8
P/B (x) 1.6 1.6 1.5
P/S (x) 14.9 14.2 11.8
Div Yield (%) 3.2 4.3 5.4
DPS 0.8 1.0 1.3

11
16
21
26
31
5,500
6,000
6,500
7,000
7,500
8,000
TAS Arriyadh Development (RHS)

SOURCE: BLOOMBERG
Development & nvestment Ser
Co.
10.20.
Emar Arabian Shield for nvst Co. 9.60.
Adyaar Holding Co 5.30.


Company financiaIs

2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 140 155 163 197 20.8 12.0
EBTDA SRmn 94 110 118 150 27.6 16.9
Net ncome SRmn 79 93 97 130 34.7 18.0
Assets SRmn 1,593 1,589 1,644 1,667 1.4 1.5
Equity SRmn 1,404 1,422 1,468 1,497 1.9 2.2
Total Debt SRmn - - - - NA NA
Cash & Equiv SRmn 163 8 17 27 65.6 (44.8)
EBTDA Mgn % 67.0 70.6 72.3 76.3 - -
Net Mgn % 56.4 59.6 59.3 66.1 - -
ROE % 5.7 6.6 6.7 8.8 - -
ROA % 5.0 5.8 6.0 7.9 - -
Div Payout % 63.2 80.9 103.5 96.0 - -
EPS SR 0.79 0.93 0.97 1.30 34.7 18.0
BVPS SR 14.04 14.22 14.68 14.97 1.9 2.2

210
MAY 2012
Transport
4030 NSCSA 214
4040 SAPTCO 215
4260 Budget Saudi 216
4110 Mubarrad 217

The Saudi transport sector continued to consolidate in 2011,
reporting a gradual recovery. However, continued uncertainty
about global economic recovery negatively impacted trade flows
and cargo volumes. Nonetheless, the government's commitment
toward building a robust transport infrastructure supported the
recovery in the sector. The government increased its prospective
spending on transport and communication by 40% YoY (or 5.1% of
the total spending earmarked in the 2012 budget). The sector also
benefits from the strong potential of religious tourism as well as
growing demand from the non-oil sector amid the government's
increasing focus on diversification.
Growth in the transport sector remained relatively flat compared to other GCC
countries in 2011. Nonetheless, the sector's ROE stood at 11.2%, higher than
the GCC average of 9.7%, during the same period.
Exhibit 123: Revenues of GCC transport companies,
2009-11
companies, 2011
USD mn %

Source: Bloomberg, NCBC Research; Source: Tadawul, Bloomberg, NCBC Research. Size of the bubble represents market cap.,
as on March 28, 2012

The transport sector has a large number of private players, with just four listed
companies. Among the listed entities, National Shipping Co. of Saudi Arabia
(NSCSA) commands the largest share, accounting for around 58% of the
sector's revenues in 2011.
The sector constituted 1.09% of the total weight in the Tadawul index (as of
March 28, 2012). Among listed entities, NSCSA holds the highest weight
(0.58%) in the index.
Units as stated
Country
% weight in Index
as on 25 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
National Shipping Co. of Saudi Arabia (NSCSA) 0.58 14.5 8.2
Saudi Public Transport Co ( SAPTCO) 0.30 8.1 3.5
Saudi Transport and nvestment Co. (MUBARRAD) 0.13 (283.4) (4.0)
United nternational Transportation Co.Ltd. (BUDGET) 0.09 17.3 21.9
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2009 2010 2011
KSA UAE Kuwait Oman Qatar
-2.0
1.0
4.0
7.0
10.0
13.0
16.0
19.0
0.0 5.0 10.0 15.0 20.0 25.0
R
O
E

(
%
)
P/E (x)
KSA UAE Kuwait Oman Qatar
MAY 2012
TRANSPORT
Sector normalizes amid weak global economic
activity
212
TRANSPORT NCB CAPTAL
MAY 2012

The sector's revenues rose only 2.2% YoY to SR3.4bn in 2011, primarily due to a
substantial decrease in volumes and selling prices by the end of the year. The
sector's two biggest players exhibited mixed performances in 2011 - NSCSA's
revenues fell 3% YoY, while SAPTCO recorded a sharp increase of 8.5% YoY.
Saudi transport and investment Company (MUBARRAD), the smallest player in
the sector, recorded the steepest decline in revenues (down 6.5% YoY) in 2011.
The sector's profitability dipped 39.5% YoY as the shortage of skilled labor and
inherent inflation increased expenses. SAPTCO recorded the highest growth in
net profit (up 30.5% YoY) in 2011, while MUBARRAD reported over tenfold
decrease in profits.
Exhibit 126: Revenue of companies, 2009-2011 Exhibit 127: NSCSA's profitability relative to the sector
avg
SR mn %

Source: Bloomberg, Tadawul, NCBC Research Source: Bloomberg, Tadawul, NCBC Research.

The sector's P/E and P/BV multiples stood at 22.1x and 2.7x in 2011,
respectively (24.0x and 2.6x in the previous year). The transport sector's
average ROE stood at 11.2% in 2011. United nternational Transport Company
Limited reported the highest ROE of 23.2% during the same year.
% %


Although the outlook for the sector remains mixed, a prospective increase in
expansion projects and infrastructure development activities across industries
could support the local freight industry. The Kingdom continues to witness a
steady supply of projects. n December 2011, the Ministry of Transport and
UNDP signed an agreement to develop a transport system in Saudi Arabia; the
project was approved for five years (201216). Also, work on Jeddah's new King
Abdulaziz Airport, six other airport upgrades and 4,200 km of new roads are in
progress. n addition, under the 2012 budget, the government raised the
municipal spending (largely on traffic infrastructure upgrades) by 19% to 4.2% of
the overall proposed spending for 2012.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2009 2010 2011
MUBARRAD NSCSA SAPTCO BUDGET
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
2009 2010 2011
Average NSCSA
BUDGET
SAPTCO
NSCSA
MUBARRAD
-10
-5
0
5
10
15
20
25
0.0 1.0 2.0 3.0 4.0 5.0 6.0
R
O
E

(
%
)
P/B(x)
BUDGET SAPTCO NSCSA MUBARRAD
BUDGET
SAPTCO
NSCSA
-5
0
5
10
15
20
25
30
0 1 2 3 4 5 6
R
O
E

(
%
)
P/B(x)
BUDGET SAPTCO NSCSA MUBARRAD
213

Established in 1979, The National Shipping Company of Saudi
Arabia (NSCSA) provides marine transport services primarily
to oil & gas and chemical sectors. NSCSA offers liner (general
cargo), ship management, and container storage and repair
services.
x Business brief
NSCSA operates a fleet of 34 ships (17 oil tankers, 13 chemical tankers and
four general cargos). The company is likely to add up to 16 chemical carriers
to its existing fleet by 2012. NSCSA operates chemical tankers through
National Chemical Carriers (NCC), its 80% owned subsidiary. Along with
transportation, the company offers ship management services for its own
vessels and other shipping companies through its wholly owned subsidiary,
Mideast Ship Management.
x Financials
NSCSA's sales declined 3% YoY to SR1,991mn in 2011 as three very large
crude carrier (VLCC) time charter contracts owned by NSCSA expired during
the year. The company's EBDTA fell 38.2% to SR433mn and net income
decreased 30.6% to SR288mn mainly due to rising cost of vessel bunkers.
NSCSA and Germany-based RWE Supply & Trading decided to terminate a
three-year contract (expiring on April 24, 2013) on April 21, 2012. RWE
agreed to pay a compensation of SR23.2mn, which would be reflected in
2Q12.
On March 21, 2012, the company signed a contract with QATALUM, an
aluminum company, to transport aluminum shipments from Qatar to the US
for one year. The estimated value of the contract is SR50.6mn
TRANSPORT ~ MAY 2012
NATONAL SHPPNG COMPANY
ALSO KNOWN AS: NSCSA
NOT COVERED

STOCK DETAILS
Absolute (0.6) 17.5 14.4
Market (6.2) 6.2 7.6
Sector (3.1) 22.8 41.6
3M 138.2 36.8
12M 55.8 14.9
Bloomberg code NSCSA AB
www.nscsa.com

Free float 65.9

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 14.6 13.0 18.7
P/B (x) 1.1 1.1 1.1
P/S (x) 3.2 2.6 2.7
Div Yield (%) 5.8 5.8 2.9
DPS 1.0 1.0 0.5

10
12
14
16
18
20
5,500
6,000
6,500
7,000
7,500
8,000
TAS Shipping (RHS)

Source: Reuters



COMPANY FINANCIALS YoY CAGR(%)

2008 2009 2010 2011 (%) (08-11)
Revenues
SRmn 2,595 1,672 2,053 1,991 (3.0) (0.1)
EBTDA
SRmn 1,180 634 701 433 (38.2) (0.3)
Net ncome
SRmn 750 369 415 288 (30.6) (0.3)
Assets
SRmn 9,819 10,339 9,966 10,623 6.6 0.0
Equity
SRmn 5,090 4,987 5,089 5,063 (0.5) (0.0)
Total Debt
SRmn 4,007 4,763 4,143 4,815 16.2 0.1
Cash & Equiv
SRmn 1,059 762 1,086 385 (64.5) (0.3)
EBTDA Mgn
% 45.5 37.9 34.1 21.7 - -
Net Mgn
% 28.9 22.1 20.2 14.5 - -
ROE
% 15.4 7.3 8.2 5.7 - -
ROA
% 8.5 3.7 4.1 2.8 - -
Div Payout
% 63.0 85.3 75.9 54.7 - -
EPS
SR 2.38 1.17 1.32 0.91 (30.6) (0.3)
BVPS
SR 16.16 15.83 16.16 16.07 (0.5) (0.0)


214

Saudi Public Transport Company (SAPTCO) provides bus
transport services for domestic and international travel to
neighboring countries such as Egypt, Syria, Jordan, Kuwait,
Qatar, the UAE, Bahrain, Yemen, Sudan, and Lebanon.
Headquartered in Riyadh, the company has about 161 local
and international agents.
x Business brief
SAPTCO has a fleet of around 3,200 buses, 300 trucks, 5000 cars and 300
trailers. ts operations connect nearly 600 cities, towns and villages across
the Kingdom. The company provides intra-city and inter-city transport
services across Saudi Arabia, and international transport services to 10
neighboring countries. SAPTCO also offers contract and charter
transportation services to schools, colleges and other groups. Furthermore, it
provides special transport services to Mecca and Medina during Hajj and
Umrah seasons. The company also offers premium services between
Makkah and Madinah, Riyadh and Al Khobar, and to Bahrain; SAPTCO is
planning to expand these routes. Additionally, the company provides
advertising space on its buses.
x Financials
SAPTCO's revenue increased 8.6% YoY to SR810mn in 2011 from
SR746mn in 2010.The growth was mainly due to an increase in performance
during Ramadan and Hajj seasons. Net income rose significantly to SR65mn
in 2011 from SR50mn in the previous fiscal year on higher operational
performance.
SAPTCO acquired 150 Travico Mercedes buses (2012 Model) for
SR176.3mn in three batches during September 2011 to February 2012. Out
of these, the last batch of 50 buses was received in February 2012 for
SR58.8mn; the effect of the same would be reflected in 1Q12.

SAUD PUBLC TRANSPORT
COMPANY
ALSO KNOWN AS: SAPTCO
NOT COVERED
Pricing as on 09-05-2012

STOCK DETAILS
Absolute (7.3) 51.4 92.7
Market (6.2) 6.2 7.6
Sector (3.1) 22.8 41.6
3M 111.4 29.7
12M 57.3 15.3
Bloomberg code SAPTCO AB
www.saptco.com.sa

Free float 83.6

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 62.2 39.7 30.6
P/B (x) 1.4 1.4 1.4
P/S (x) 2.6 2.7 2.5
Div Yield (%) - 3.1 3.1
DPS - 0.5 0.5

5
10
15
20
5,500
6,000
6,500
7,000
7,500
8,000
TAS SAPTCO (RHS)

Source: Bloomberg

Suleiman Saleh Suleiman Alamri 5.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 766 752 746 810 8.6 1.9
EBTDA SRmn 181 160 200 216 8.0 6.1
Net ncome SRmn 30 32 50 65 29.8 29.3
Assets SRmn 1,788 1,815 1,794 1,923 7.2 2.5
Equity SRmn 1,414 1,387 1,446 1,448 0.2 0.8
Total Debt SRmn 63 108 51 132 159.4 27.9
Cash & Equiv SRmn 410 311 390 201 (48.5) (21.2)
EBTDA Mgn % 23.6 21.3 26.8 26.7 - -
Net Mgn % 3.9 4.2 6.7 8.0 - -
ROE % 2.1 2.3 3.5 4.5 - -
ROA % 1.6 1.8 2.8 3.5 - -
Div Payout % 207.7 - 124.8 96.2 - -
EPS SR 0.24 0.26 0.40 0.52 29.8 29.3
BVPS SR 11.31 11.10 11.56 11.58 0.2 0.8

215

United International Transportation Co. (Budget Saudi) is the
largest car rental company in the MENA region. It is a
franchisee of Budget International and operates more than
19,361 vehicles, including luxury, 4x4, full-size, intermediate,
compact, and economy cars.
x Business brief
Budget Saudi provides various services such as short-term and long-term car
rentals, chauffeur-driven cars, the CorpRate Program (a corporate client-
oriented service with preferential rates and value additions such as faster
reservations and flexible billing) and Budget Express (loyalty program for
members). The company also offers Hajj & Umrah services for visitors and
pilgrims, Lodge and Drive (accommodation along with car rental), Premier
Limousine Service (chauffeur-driven luxury vehicles) and automotive
maintenance (maintenance facilities, including satellite workshops). Budget
Saudi also sells used cars.
x Financials
The company's sales grew 14.2% YoY to SR583mn in 2011 due to a rise in
short- and long-term leasing revenues. EBTDA too rose 15.6% YoY to
SR377mn during the year compared to SR326mn last year. Net income for
2011 expanded 6.5% YoY mainly due to higher revenue from rentals (long
and short term) and gain from car sales compared to last year.
On March 31, 2012, Budget Saudi extended the Memorandum of
Understanding (MoU) with Tranzlease Holdings (ndia) to acquire a 32.5%
stake in the latter; the MoU was extended by two months, and would end on
May 31, 2012.
On January 29, 2012, the CMA approved Budget Saudi's request to increase
its capital from SR188mn to SR244mn through the issue of one bonus share
for every three shares owned by the shareholders.

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 473 484 511 583 14.2 7.3
EBTDA SRmn 319 324 326 377 15.6 5.7
Net ncome SRmn 84 86 95 101 6.2 6.3
Assets SRmn 729 761 834 1,002 20.1 11.2
Equity SRmn 356 406 464 517 11.5 13.3
Total Debt SRmn 247 224 271 313 15.6 8.1
Cash & Equiv SRmn 10 28 11 27 151.3 39.2
EBTDA Mgn % 67.5 66.9 63.9 64.7 - -
Net Mgn % 17.8 17.7 18.6 17.3 - -
ROE % 25.5 22.5 21.8 20.5 - -
ROA % 11.9 11.5 11.9 11.0 - -
Div Payout % 38.2 42.7 43.4 45.4 - -
EPS SR 3.44 3.52 3.89 4.13 6.2 6.3
BVPS SR 14.58 16.65 19.01 21.19 11.5 13.3
TRANSPORT ~MAY 2012
UNTED NTERNATONAL
ALSO KNOWN AS: BUDGET SAUD, UNTRANS, UTC
NOT COVERED
STOCK DETAILS
Absolute (16.3) 2.8 10.8
Market (6.2) 6.2 7.6
Sector (3.1) 22.8 41.6
3M 12.9 3.4
12M 11.7 3.1
Bloomberg code BUDGET AB
www.budgetsaudi.com

Free float 47.8

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 12.1 10.9 10.3
P/B (x) 2.5 2.2 2.0
P/S (x) 2.1 2.0 1.8
Div Yield (%) 3.5 4.1 4.4
DPS 1.5 1.7 1.9


29
34
39
44
49
54
5,500
6,000
6,500
7,000
7,500
8,000
TAS Budget Saudi (RHS)

Source: Bloomberg

Al Zahid Holding Group 37.7
Abdul Elah Abdullah Mahmood Ali
Zahid
11.6
Mohammed Abdullah Mahmood
Zahid
9.2


216

Saudi Transport and Investment Company (Mubarrad) runs a
land transport business across Saudi Arabia and other GCC
countries. It also deals in the purchase and sale of land,
construction, and management and operation of buildings.
x Business brief
Mubarrad owns a fleet of more than 1,165 vehicles (including truck heads,
reefer trailers, reefer trucks, flat trucks for dry transport and trailers for bulk
transport) for carrying all types of general and industrial cargo. The company
provides services such as handling, warehousing, and delivery of goods and
materials within the Kingdom by road, air or sea. Mubarrad also operates
Express Parcel Services across Saudi Arabia. n addition, the company
constructs, manages and leases cold stores and trailers.
x Financials
Mubarrad's revenue stood at SR42mn in 2011, down 7.1% compared to
2010. Net loss for 2011 increased significantly to SR120mn compared to a
loss of SR6.7mn in 2010. This was mainly due to recognition of losses
amounting to SR104.5mn from investment securities available for sale.
On February 18, 2012, Mubarrad announced the receipt of 27 new trucks;
the impact of this would reflect in the business operations in 2Q12.

MUBARRAD
ALSO KNOWN AS:
NOT COVERED
Current price(SR) 52.0

STOCK DETAILS
Absolute 4.0 15.6 234.4
Market (6.2) 6.2 7.6
Sector (3.1) 22.8 41.6
3M 44.0 11.7
12M 33.5 8.9
Bloomberg code SLTCO AB
www.mubarrad.com.sa

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 180.2 NM NM
P/B (x) 5.6 5.8 6.5
P/S (x) 18.0 20.7 22.3
Div Yield (%) - - -
DPS - - -
Source: Bloomberg

5
20
35
50
65
80
5,500
6,000
6,500
7,000
7,500
8,000
TAS Mubarrad (RHS)

Source: Reuters


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 49 52 45 42 (7.1) (4.8)
EBTDA SRmn 16 17 14 4 (72.3) (37.4)
Net ncome SRmn 11 5 (7) (120) NM NM
Assets SRmn 225 217 197 177 (10.5) (7.8)
Equity SRmn 166 169 162 145 (10.2) (4.5)
Total Debt SRmn 32 19 6 0 NM NM
Cash & Equiv SRmn 6 12 20 4 (77.8) (11.6)
EBTDA Mgn % 31.8 32.0 30.3 0.1 - -
Net Mgn % 22.9 10.0 (14.8) (2.9) - -
ROE % 6.3 3.1 (4.1) (78.3) - -
ROA % 5.0 2.3 (3.2) (64.2) - -
Div Payout % 0.0 0.0 0.0 0.0 - -
EPS SR 0.62 0.29 (0.37) (6.67) NM NM
BVPS SR 9.24 9.36 8.97 8.06 (10.2) (4.5)

217
MAY 2012
Media & Publishing
4210 SRMG 221
4070 Tihama 222
4270 SPPC 223

The media and publishing sector displayed poor performance in
2011, after recording a strong recovery in 2010. Advertising and
educational publishing businesses were resilient, while the
traditional print business continued to decline as the industry
witnessed a structural shift toward digital media. An improvement
in the economy is likely to drive growth, with newer mediums, such
as nternet and mobile, gaining additional attention.
KSA dominates the media and publishing sector in GCCrevenue in KSA
accounted for 84% of the total GCC revenue in 2011. n the Kingdom, the
sector's revenues were flat in 2011, after rising 12.1% YoY in 2010. The sector
traded at an adjusted P/E multiple of 36.6x, which is the highest among GCC
peers.
Exhibit 130: Revenue of GCC print/media,
2009-11
Exhibit 131: Comparison of ROE & P/E of GCC companies,
2011
USD mn %


The media and publishing sector in Saudi Arabia comprises three listed
companies, which collectively account for just 0.46% of the TAS. Among these,
SRMG has the highest weight of 0.19% in the index.
Units as stated
Country
% weight in Index
as of 28 Mar2012
NIM (%),
2011
Avg. RoE (%),
2011
Saudi Research And Marketing Group (SRMG) 0.19 8.8 7.4
Tihama Advertising & Public Relations Co. (Tihama) 0.14 5.9 3.3
Saudi Printing & Packaging Co. (SPPC) 0.13 8.3 4.4
Source: Zawya

Revenue from KSA's media and publishing sector increased a marginal 0.2%
YoY to SR1.6bn in 2011. SRMG's revenue rose 3.5% to SR1.1bn led by higher
demand for advertising and educational publication. The company, being the
largest player, led revenue growth in the industry. SRMG's net income grew
17.6% to SR94.8mn led by lower input costs and gains from a stake sale in
ntigral, a media firm. Since 2009, the company's net income has been rising
steadily, even as other players have reported flat or declining margins. Other
players, SPCC and Tihama, reported a decline in 2011 revenue (0.4% and
0
100
200
300
400
500
2009 2010 2011
KSA Kuwait Bahrain
(30)
(20)
(10)
0
10
20
30
0 25 50 75 100
R
O
E

(
%
)
P/E (x)
KSA Kuwait Bahrain
MAY 2012
MEDA & PUBLSHNG
Shift toward digital media to drive growth
219
MEDA & PUBLSHNG NCB CAPTAL
MAY 2012

19.3%, respectively). The average net income margin in the sector stood at
7.7%, while SRMG led with 8.8%. This is mainly attributed to the company's
success in containing operating costs.
Exhibit 133: Revenue of companies, 2009-11 Exhibit 134: Profitability of SRMG relative to sector
average
SR mn %

n 2011, the sector's adjusted P/E and average P/BV stood at 36.6x and 2.9x
compared to 39.0x and 2.8x, respectively, in 2010. The sector's average ROE
contracted to 5.1% in 2011 from 7.8% in 2010, mainly as Tihama's ROE
declined to 3.3% from 12.6% in 2010.
% %

Source: Tadawul, Bloomberg Source: Tadawul, Bloomberg

0
200
400
600
800
1000
1200
1400
1600
1800
2000
2009 2010 2011
SRMG SPPC Tihama
-1
1
3
5
7
9
11
13
15
2009 2010 2011
Sector average SRMG
SRMG
SPPC
Tihama
0
2
4
6
8
10
12
14
16
0.0 1.0 2.0 3.0 4.0 5.0 6.0
R
O
E

(
%
)
P/B (x)
SRMG
SPPC
Tihama
0
1
2
3
4
5
6
7
8
9
10
0.0 1.0 2.0 3.0 4.0 5.0 6.0
R
O
E

(
%
)
P/B (x)
220

Riyadh-based Saudi Research and Marketing Group (SRMG),
established in 1988, is a leading publishing group. Its
subsidiaries include Saudi Research and Publishing
Company, Saudi Distribution Company, Saudi Specialized
Publishing Company (SSPC), and Al Khaleejiah Advertising
and Public Relations Company.
x Business brief
SRMG is engaged in four key activities publishing (undertakes research
and marketing), advertising (mainly deals with production and marketing of
audiovisual media), printing (prints newspapers, magazines, books and
journals in various languages) and distribution.
x Financials
SRMG's revenues grew 1.1% to SR1,080mn in 2011 due to higher revenue
from advertising (up 5.6% YoY) and education (up 39.1% YoY). EBTDA
margin expanded to 15.1% compared to 13.8% last year. Net income
increased to SR100mn in 2011 compared to SR87mn the year before. This
was primarily owing to capital gains from the sale of the group's share in
ntigral investment, which amounted to SR13.5mn.
n December 2011, SRMG announced that it would sell its full stake (20%) in
ntigral investment to Saudi Telecom Company for a total value of SR90mn.

MEDA ~ MAY 2012
SAUD RESEARCH AND
MARKETNG GROUP
ALSO KNOW AS: SRMG
NOT COVERED

STOCK DETAILS
Absolute 10.4 21.2 38.7
Market (6.2) 6.2 7.6
Sector 3.9 24.0 78.9
3M 11.3 3.0
12M 5.3 1.4
Bloomberg code RESEARCH AB
www.srmg.com

Free float 60.45

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 45.9 23.9 20.8
P/B (x) 1.6 1.6 1.6
P/S (x) 2.1 1.9 1.9
Div Yield (%) 1.9 3.8 3.8
DPS 0.5 1.0 1.0

15
20
25
30
5,500
6,000
6,500
7,000
7,500
8,000
TAS SRMG (RHS)

Source: Reuters

Kingdom Holding Company 29.9
HH Prince Faisal Bin Ahmad Bin
Salman Al Saud
6.8
Mohammed Hussain Ali Al Amudy 5.6
GOS 5.2

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 1,342 969 1,068 1,080 1.1 (7.0)
EBTDA SRmn 306 109 147 163 10.9 (18.9)
Net ncome SRmn 224 45 87 100 14.8 (23.6)
Assets SRmn 2,259 2,153 2,131 2,221 4.2 (0.6)
Equity SRmn 1,376 1,264 1,304 1,284 (1.5) (2.3)
Total Debt SRmn 221 286 211 354 68.1 17.0
Cash & Equiv SRmn 141 66 61 93 53.2 (12.9)
EBTDA Mgn % 22.8 11.3 13.8 15.1 - -
Net Mgn % 16.7 4.7 8.2 9.3 - -
ROE % 16.2 3.4 6.8 7.7 - -
ROA % 10.1 2.1 4.1 4.6 - -
Div Payout % 71.3 88.2 91.8 80.0 - -
EPS SR 2.81 0.57 1.09 1.25 14.8 (23.6)
BVPS SR 17.20 15.79 16.30 16.05 (1.5) (2.3)


221

Tihama Advertising & Public Relations Co., established in
1983, operates the Egyptian Satellite Channel, Al-Hayat
newspaper and Kolness magazine. The company operates
through its subsidiaries - Tihama Distribution Company,
United Journalists, Star Media Co., Saudi Signs Supply Co.,
Intermarkets Riyadh, and Ad Art Medyan.
x Business brief
Tihama has three business segments: Media (comprises newspapers,
magazines, outdoor advertising and a satellite television channel), Public
Relations (includes press files and promotional information services) and
Other Services (video production and distribution of Arabic and American
films in the Middle East). The company also runs a network of bookstores.
Tihama operates in Cairo, Dubai, London and Paris.
x Financials
Tihama's revenue fell 20.8% YoY in 9M12 to SR122mn. Net income for the
same period declined 80% YoY to SR4mn mainly due to increase in rent
expenses of the Cause Way compared to last year and drop in profitability of
an associate company.
On March 05, 2012, Tihama announced liquidating its subsidiary (Saudi
Signs Supply Co.) due to losses, which exceed the shareholders' rights.
On February 11, 2012, the company announced the sale of a 2,100-square
meter parcel of land in Bawadi District, Jeddah for a total value of SR7.35mn,
and at a profit of SR5.81mn.
On December 7, 2011, Tihama signed a 5-year, SR102mn agreement with
New Look Publicity & Advertising Agency to rent all the advertising sites on
120 Sky Ball websites.
MEDA ~ MAY 2012
THAMA ADVERTSNG
ALSO KNOWN AS: THAMA
NOT COVERED

STOCK DETAILS
Absolute 1.5 42.6 126.5
Market (6.2) 6.2 7.6
Sector 3.9 24.0 78.9
3M 50.4 13.4
12M 37.4 10.0
Bloomberg code TAPRCO AB
www.tihama.com

Free float 80.65

VALUATION MULTIPLES
10A 11A TTM
P/E (x) 175.7 52.0 111.8
P/B (x) 5.4 4.9 5.4
P/S (x) 10.4 11.1 7.6
Div Yield (%) - 1.8 -
DPS - 1.5

20
40
60
80
100
5,500
6,000
6,500
7,000
7,500
8,000
TAS Tihama (RHS)

Source: Bloomberg

Bader Fahad brahim Al Dawood 19.3


Company financials
FY09 FY10 FY11 9M12
YoY
(%)
CAGR (%)
(09-11)
Revenues SRmn 142 118 111 122 (20.8) (11.5)
EBTDA SRmn 21 3 6 (1) (110.0) (46.3)
Net ncome SRmn 30 7 24 4 (80.0) (11.3)
Assets SRmn 339 324 314 352 (8.3) (3.8)
Equity SRmn 239 227 249 226 (9.6) 2.1
Total Debt SRmn - - - 12 -
Cash & Equiv SRmn 84 44 20 13 67.5 (50.7)
EBTDA Mgn % 14.7 2.5 5.4 (0.6) - -
Net Mgn % 21.2 5.9 21.3 3.3 - -
ROE % 13.0 3.0 9.9 1.7 - -
ROA % 8.9 2.1 7.4 1.1 - -
Div Payout % 59.8 - 95.0 - - -
EPS SR 2.01 0.47 1.58 0.27 (80.0) (11.3)
BVPS SR 15.93 15.13 16.60 15.07 (9.6) 2.1
Source: Tadawul, Zawya, Company, NCBC Research, Year-ending March 31
222

Saudi Printing and Packaging Company (SPPC), formerly
Madina Printing and Publishing Company, was established in
1963. SPPC undertakes various commercial and package
printing as well as production activities. The company has five
printing houses, and a production area spread across 1.0mn
sq meters.
x Business brief
SPPC offers integrated print production solutions right from pre-press
designing and printing to post-printing binding and packaging. The company
has a capacity of 5,000 magazine copies/hour, 150,000 newspaper
copies/hour, book printing capacity of 6,500 copies/hour and 10,000
sheets/hour. SPPC also has exclusive printing rights for its parent company
and Saudi Research and Publishing Company. ts publications include
Sayidaty, Arrajol, Al Eqtisadiah, Almajalla and Arab News.
x Financials
SPPC's revenue declined 0.4% YoY to SR401mn in 2011. However, EBTDA
for the same period grew 9.0% YoY to SR62mn. Net income increased 2.9%
YoY to SR36mn in 2011 compared to SR35mn in 2010. This was mainly
ascribed to the initiatives taken by the management to reduce expenses and
increase profitability.
n March 2012, SPPC announced that it has signed a Memorandum of
Understanding to acquire a majority interest in Emirates National Factory for
Plastic ndustries LLC. The company further indicated that it intends to
finance this deal through internal accruals and external slamic financing
resources.

MEDA ~ MAY 2012
SAUD PRNTNG AND
PACKAGNG COMPANY
ALSO KNOWN AS: SPPC
NOT COVERED

STOCK DETAILS
Absolute (2.0) 10.7 120.5
Market (6.2) 6.2 7.6
Sector 3.9 24.0 78.9
3M 16.8 4.5
12M 15.4 4.1
Bloomberg code SPPC AB
www.sppc.com.sa

Free float 47.50

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 26.8 49.7 48.3
P/B (x) 2.3 2.3 2.3
P/S (x) 4.9 4.3 4.3
Div Yield (%) - 1.7 1.7
DPS - 0.5 0.5

8
13
18
23
28
33
38
5,500
6,000
6,500
7,000
7,500
8,000
TAS SPPC (RHS)

Source: Bloomberg

Saudi Research and Marketing Grp 42.0
ntellectual Holding Company for
Advertising and Publicity
10.5
Saudi Research and Publishing Co 7.0
Scientific Works Holding Company 7.0


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 465 357 402 401 (0.4) (4.8)
EBTDA SRmn 126 57 62 68 9.0 (18.5)
Net ncome SRmn 151 65 35 36 2.9 (37.9)
Assets SRmn 1,068 1,021 970 1,056 8.9 (0.4)
Equity SRmn 792 765 750 755 0.7 (1.6)
Total Debt SRmn 198 181 116 219 89.5 3.4
Cash & Equiv SRmn 16 19 13 27 105.3 17.9
EBTDA Mgn % 27.0 16.0 15.5 17.0 - -
Net Mgn % 32.4 18.2 8.7 9.0 - -
ROE % 20.2 8.4 4.6 4.8 - -
ROA % 15.6 6.2 3.5 3.6 - -
Div Payout % 59.8 - 85.7 83.3 - -
EPS SR 2.51 1.08 0.58 0.60 2.9 (37.9)
BVPS SR 13.20 12.75 12.50 12.58 0.7 (1.6)


223
MAY 2012
Hotel & Tourism
4010 SHARCO 227
4170 Shams 228

After a sharp fall in 2010, revenues from the hotels & tourism
sector grew strongly in 2011. Average occupancy rose to 59.3%
during Jan-Aug 2011. Average revenue per available room also
increased 19.1% YoY, driven by domestic and international tourist
arrivals. n the coming years, Saudi Arabia is expected to witness
the addition of considerable hotel room capacity, especially in
religious tourism destinations such as Makkah and Medina, which
will likely aid the sector's growth.
The hotels & tourism sector's average ROE stood at 6.7%, slightly below the
GCC average of 7.1%. However, stocks were trading at a higher P/B multiple of
3.6x compared to the GCC average 1.9x.
Exhibit 137: Revenues of hotel and tourism companies in
GCC, 2009-11
Exhibit 138: Comparison of ROE & P/B of GCC companies,
2011
USD mn %

The hotels & tourism sector comprises Saudi Hotels & Resort Areas Co
(SHARCO) and Tourism Enterprises Co. (TECO); both companies account for
0.3% of the TAS.
Units as stated
Country
% weight in Index
as on 25 Mar 2012
NIM (%),
2011
Avg. RoE (%),
2011
Saudi Hotels & Resort Areas Co (SHARCO) 0.24 41.2 9.1
Tourism Enterprises Co. (TECO) 0.06 17.6 4.3
Source: Zawya

The sector's revenues grew 33.7% to SR389.6mn in 2011 from SR291.3mn in
2010. The rise was led by SHARCO, which posted a revenue growth of 34.6%
YoY in 2011 after a sharp fall in 2010. This increase was driven by higher
revenues from all properties as well as gains from the sale of its building in Olya
and commencement of Al-Muthar, a compound residence in Riyadh. SHARCO
reported a net profit of SR153.4mn, up 25% YoY. TECO's revenues rose 18.3%
YoY to SR17.6mn in 2011. The company's net profit doubled over the previous
year to SR3.1bn driven by an improvement in operational efficiency.
0
100
200
300
400
500
2009 2010 2011
Kuwait Oman Bahrain UAE KSA
KSA
Kuwait
Bahrain
UAE
Oman
(5)
0
5
10
15
20
25
(1) 0 1 2 3 4 5
R
O
E

(
%
)
P/B (x)
KSA Kuwait Bahrain UAE Oman
MAY 2012
HOTELS & TOURSM
Capacity additions to drive growth
225
HOTELS & TOURSM NCB CAPTAL
MAY 2012

SR mn %

For 2011, SHARCO's ROE and P/B multiple stood at 9.1% and 1.76x,
respectively, compared to 7.5% and 1.81x in 2010. TECO's ROE stood at 4.3%
(2.2% in 2010). Despite a lower ROE vis--vis SHARCO, TECO's P/B multiple
stood at 5.3x for 2011.
% %


TECO had higher average trading volumes as well as price volatility compared
to SHARCO in 2011.
Exhibit 144: Avg. daily volumes, Jan11 - Dec11 Exhibit 145: Share price movement, Jan11 - Dec11
SR mn Prices rebased to 100 on 1
st
Jan-11


0
200
400
600
800
2009 2010 2011
SHARCO TECO
-30
-10
10
30
50
70
2009 2010 2011
SHARCO TECO
SHARCO
TECO
0
1
2
3
4
5
6
7
8
9
10
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
R
O
E

(
%
)
P/B (x)
SHARCO
TECO
0
2
4
6
8
10
12
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0
R
O
E

(
%
)
P/B (x)
4
34
0
5
10
15
20
25
30
35
40
SHARCO TECO
50
75
100
125
150
Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11
SHARCO TECO
226

Riyadh-based Saudi Hotels & Resorts Areas Co. (SHARCO),
founded in 1979, owns and operates several resorts and
hotels independently and through its subsidiaries Al Khaleej
Resorts Co. Ltd., Riyadh Hotels Co. Ltd., Makkah Hotels Co.
Ltd., Al Nakheel Touristic Area Co. Ltd., Tabuk Hotels Co. Ltd.,
and Madina Hotels Co. Ltd.
Business brief
SHARCO is engaged in travel and tourism activities as well as construction,
ownership, investment and management of hotels, real estate, resorts and
entertainment centers. The company mainly operates through its
subsidiaries: Al Khaleej Resorts Company, and Riyadh Hotels and
Entertainment Company. The company reports revenues under four business
lines: hospitality, real estate, resorts, and entertainment.
x Financials
SHARCO's revenues increased 32.4% to SR372mn in 2011 compared to
SR281mn in 2010. Net income grew 24.7% to SR153.4mn during the year
from SR122.7mn in 2010. The company's performance improved primarily
due to the gain which it received from selling a building in Olya. This was in
addition to the commencement of operations in Al-Mather compound
residence in Riyadh.
SHARCO increased its capital by 44.9% to SR1bn (from SR690.1mn) by
issuing 31mn new shares. Additionally, the company announced that Mr.
Badr Bin Hammoud Al Badr would replace Mr. Abdulaziz Bin Saleh Al Anbar
as Chief Executive Officer (CEO), this became effective on January 1, 2012.

HOTEL & TOURSM ~ MAY 2012
SAUD HOTELS
ALSO KNOWN AS: SHARCO
NOT COVERED

STOCK DETAILS
Absolute (6.5) 9.1 36.5
Market (6.2) 6.2 7.6
Sector (8.7) 6.6 33.9
3M 13.8 3.7
12M 7.8 2.1
Bloomberg code SHARCO AB
www.saudi-hotels.com.sa

Free float 51.81

VALUATION MULTIPLES
09A 10A 11A
P/E (x) 7.6 22.3 17.9
P/B (x) 1.7 1.6 1.6
P/S (x) 3.7 9.8 7.4
Div Yield (%) 5.5 5.5 4.4
DPS 1.5 1.5 1.2

15
20
25
30
35
5,500
6,000
6,500
7,000
7,500
8,000
TAS Hotels (RHS)
Source: Bloomberg

Mohammed brahim Mohammed
Al Essa
26.3
nsurance (GOS)
6.5

Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 294 733 281 372 32.4 8.2
EBTDA SRmn 141 398 145 174 19.7 7.2
Net ncome SRmn 123 381 123 153 24.7 7.5
Assets SRmn 1,953 1,839 1,885 1,962 4.1 0.2
Equity SRmn 1,348 1,625 1,663 1,707 2.7 8.2
Total Debt SRmn 53 50 45 40 (10.1) (8.7)
Cash & Equiv SRmn 26 33 38 48 25.3 22.4
EBTDA Mgn % 48.1 54.3 51.7 46.8 - -
Net Mgn % 41.9 51.9 43.7 41.1 - -
ROE % 11.3 25.6 7.5 9.1 - -
ROA % 7.1 20.1 6.6 8.0 - -
Div Payout % 97.5 39.4 122.2 78.4 - -
EPS SR 1.2 3.8 1.2 1.5 24.7 7.5
BVPS SR 13.5 16.2 16.6 17.1 2.7 8.2

227

Tourism Enterprise Co. (TECO) was established in 1991 to
construct and manage tourist projects. Headquartered in
Dammam, Saudi Arabia, the company primarily focuses on the
ownership and management of the Palm Beach Resort. TECO
offers sports and recreational activities, conference facilities,
cabanas and suites.
x Business brief
Palm Beach Resort, which stretches up to 1,300 meters, includes 165
chalets, and more than 100 suites and cabanas overlooking the Arabian Gulf.
Sports. The recreational facilities include a sports club with a swimming pool
for ladies; sports and fitness center for men; football, tennis, basketball and
squash courts; sauna and steam bath facility; and catering services such as
coffee shops. The Resort offers event facilities such as conference rooms for
up to 120 guests in addition to business lunches and cocktails.
x Financials
TECO's revenues grew 18.2% YoY to SR17.6mn in 2011. This could be
attributed to the better than expected occupancy rates as well as higher
rental income during the year. The company posted a net profit of SR3.3mn
in 2011 compared to SR1.9mn in 2010. TECO's net margin stood at 18.8%
versus 12.7% in 2010.
n December 2011, TECO announced the acquisition of a new building in Al-
Khobar area for a consideration of SR15mn.

HOTEL & TOURSM ~ MAY 2012
TOURSM ENTERPRSE CO.
ALSO KNOWN AS: SHAMS
NOT COVERED

STOCK DETAILS
Absolute (16.5) (2.1) 24.5
Market (6.2) 6.2 7.6
Sector (8.7) 6.6 33.91
3M 61.9 16.5
12M 44.7 11.9
Bloomberg code TECO AB
www.palmbeach-resort.com

Free float 100.0

VALUATION MULTIPLES
09A 10A 11A
P/E (x) NM 209.3 101.5
P/B (x) 4.8 4.7 4.5
P/S (x) 24.2 22.5 19.0
Div Yield (%) - - -
DPS - - -

15
20
25
30
35
40
45
5,500
6,000
6,500
7,000
7,500
8,000
TAS Shams (RHS)

Source: Bloomberg


Company financials
2008 2009 2010 2011
YoY
(%)
CAGR (%)
(08-11)
Revenues SRmn 14.7 13.9 14.9 17.6 18.2 6.2
EBTDA SRmn 4.3 0.9 6.2 8.0 29.7 22.8
Net ncome SRmn 0.2 (3.4) 1.6 3.3 106.3 164.7
Assets SRmn 78.5 74.0 75.3 82.6 9.6 1.7
Equity SRmn 72.6 69.2 71.0 74.2 4.5 0.7
Cash & Equiv SRmn 3.6 4.6 19.2 13.8 (28.1) 57.2
EBTDA Mgn % 29.4 6.3 41.5 45.5 - -
Net Mgn % 1.2 (24.5) 10.7 18.8 - -
ROE % 0.2 (4.8) 2.3 4.5 - -
ROA % 0.2 (4.5) 2.1 4.2 - -
Div Payout % - - - - - -
EPS SR 0.0 (0.3) 0.2 0.3 106.3 164.7
BVPS SR 7.2 6.8 7.0 7.3 2.5 0.7

228
SAUD FACTBOOK - 2012 NCB CAPTAL
MAY 2012

Appendix
Saudi equities fact sheet performance and valuation
Exhibit 146: Performance and valuation
Exchg Close T/O Mkt cap FF Price change TTM (%) Valuation (x) Div yld
code Company name (SR) (SR mn) (SR mn) Wt (%) % last %YTD ROE ROA P/E-TTM PBV# 11 (%)
Banking/Financial
1120 Al Rajhi 74.3 72.7 111,375 10.0 (1.3) 6.8 23.4 3.6 15.1 3.4 4.4
1090 SAMBA 48.2 9.5 43,380 3.7 (1.4) 3.4 16.1 2.3 10.1 1.5 3.4
1050 Saudi Fransi 36.8 1.9 33,268 3.1 (0.5) 9.3 15.5 2.2 11.4 1.7 1.5
1010 RBL 24.2 8.2 36,225 2.9 (0.2) 3.6 10.6 1.8 11.5 1.2 5.4
1150 Al nma Bank 13.0 487.7 19,500 2.3 (4.1) 39.0 2.7 1.4 45.2 1.2 -
1080 Arab National 29.6 2.1 25,160 2.1 - 7.6 13.6 1.9 11.6 1.5 3.4
1060 SABB 35.0 5.5 35,000 2.0 - 14.6 17.9 2.2 12.1 2.0 1.4
1140 Al Bilad 27.2 19.8 8,160 1.1 (0.4) 37.0 10.0 1.3 25.0 2.4 -
1020 BJAZ 25.5 11.7 7,650 0.9 (0.4) 50.4 5.6 0.7 29.5 1.6 2.0
1030 Saudi nvestment 17.0 2.9 9,350 0.9 (2.9) 5.3 8.5 1.4 13.2 1.1 -
1040 Saudi Hollandi 27.6 0.2 10,954 0.5 (1.4) 11.5 14.7 1.8 10.8 1.5 3.0
Petrochemicals
2010 SABC 96.5 359.1 289,500 10.7 (1.8) 0.3 22.6 9.0 9.9 2.1 5.2
2060 ndustrialization 33.1 34.9 22,141 3.3 (1.5) (1.2) 24.1 6.5 9.1 2.0 3.8
2020 SAFCO 179.8 23.5 44,938 2.7 (1.4) 2.1 53.6 46.4 10.9 5.5 7.2
2350 Saudi Kayan 16.5 88.5 24,750 2.5 (1.8) (5.2) (1.6) (0.6) nm 1.6 -
2290 YANSAB 48.7 43.1 27,394 1.8 (0.8) 10.7 35.6 13.8 8.6 2.6 -
2250 SG 23.3 17.3 10,485 1.6 (2.3) 22.6 9.1 2.1 19.8 1.8 4.3
2310 Sipchem 20.0 28.7 7,315 1.1 (1.5) 1.3 13.4 5.3 10.4 1.3 6.3
2260 Sahara Petrochemical 15.4 15.1 6,757 1.0 (1.9) (0.6) 9.7 5.5 16.4 1.3 -
2330 APPC 26.0 34.1 4,264 0.7 (2.6) 5.4 26.7 15.2 8.3 2.1 6.6
2380 Petro Rabigh 21.1 20.9 18,484 0.5 (2.1) (9.2) 0.8 0.1 - 2.3 -
2210 Nama Chemicals 19.6 247.5 2,513 0.4 (2.3) 96.5 (4.8) (3.0) nm 1.6 -
2002 Petrochem 24.0 4.3 11,496 0.3 (2.2) 16.8 (1.4) (0.3) nm 2.5 -
2001 Chemanol 16.7 51.6 2,014 0.3 (2.1) 38.0 4.8 2.3 28.7 1.4 -
2170 Alujain 18.1 25.7 1,249 0.2 (3.0) 3.4 (1.8) (0.3) nm 2.2 -
Cement
3030 Saudi Cement 87.0 14.1 13,311 1.9 (1.1) 20.8 25.0 18.1 16.0 4.1 7.5
3020 Yamamah Cement 47.5 17.1 9,619 1.4 (1.2) 1.8 22.6 19.8 13.0 2.8 5.6
3060 Yanbu Cement 77.5 5.4 8,138 1.1 (2.2) 13.1 19.7 12.2 15.4 2.9 3.2
3050 Southern Cement 98.5 1.4 13,790 1.0 1.5 14.5 34.9 30.8 15.4 5.2 6.3
3010 Arab Cement 56.0 9.8 4,480 0.7 (0.4) 24.7 15.8 9.5 10.9 1.6 5.4
3040 Qassim Cement 76.5 4.5 6,885 0.6 (1.6) 5.2 29.0 26.7 12.5 3.5 7.5
3080 Eastern Cement 52.3 4.3 4,494 0.5 (2.3) (5.9) 17.0 15.5 12.3 2.1 6.7
3091 Al Jouf Cement 17.8 40.3 2,308 0.4 (3.0) 17.5 6.0 4.5 29.4 1.7 -
3090 Tabuk Cement 24.7 1.1 2,223 0.4 (0.8) 9.5 12.5 10.8 16.2 2.0 5.7
3002 Najran Cement 21.5 1,045.7 2,621 0.2 (4.9) 115.0 18.6 12.2 11.2 2.1 -
3001 Hail Cement 20.1 34.7 1,968 0.2 (3.4) 31.4 (4.3) (4.0) nm 2.1 -
Retail
4190 Jarir 150.5 21.2 9,030 1.5 (1.0) 8.1 60.2 32.5 17.6 10.0 4.7
4240 AlHokair 80.3 3.7 5,618 0.5 (3.3) 24.4 31.1 17.5 13.5 3.9 2.5
4002 Mouwasat 49.6 50.2 2,480 0.2 0.8 5.2 23.8 15.8 16.8 3.7 3.0
4001 Al Othaim 84.5 0.5 1,901 0.2 (1.7) (15.5) 30.6 9.5 12.7 3.6 -
4200 Aldrees 33.3 16.2 999 0.2 (1.2) (9.2) 22.0 11.4 11.0 2.3 5.0
4050 SASCO 18.9 29.7 848 0.1 (5.7) 18.2 7.3 6.0 22.5 1.6 2.7
4180 Fitaihi Group 16.8 45.1 921 0.1 1.2 37.0 (6.3) (5.9) nm 1.5 -
4003 United Electronics 86.8 7.6 2,082 0.1 1.8 12.3 38.4 17.4 17.5 5.5 2.9
4290 Alkhaleej Trng 35.6 4.6 890 0.0 (0.6) (2.2) 18.9 10.6 16.4 2.9 1.1
4160 Thim'ar 28.5 19.9 285 0.0 1.1 14.9 17.3 9.8 46.3 7.4 43.9
Energy & Utilities
5110 Saudi Electricity 13.2 41.0 54,791 1.6 - (5.4) 4.3 1.1 24.7 1.1 5.3
2080 GASCO 22.0 3.0 1,650 0.2 - 14.6 11.3 8.2 13.5 1.5 4.5
Agriculture/food
2050 Savola Group 34.9 14.8 17,450 2.2 - 21.6 16.3 6.3 14.5 2.3 3.7
2280 Almarai 68.0 47.7 27,200 1.9 (2.2) 19.5 20.2 9.2 20.9 4.0 1.9
6020 Qassim Agriculture 24.2 26.8 1,210 0.2 (3.0) 8.5 (4.5) (3.2) nm 3.3 -
Note: YTD indicates change in price from close at end of 2011 or the issue price during the PO if listed in this year; # - based on latest available book value
229
MAY 2012

6010 NADEC 28.9 4.2 1,734 0.2 (2.0) (3.0) 9.0 3.9 19.0 1.6 2.6
2270 SADAFCO 55.8 6.7 1,812 0.2 (2.2) 20.7 19.9 13.9 12.6 2.4 -
6090 Jazan Development 18.7 27.3 935 0.2 (3.1) (41.0) (12.1) (10.3) nm 1.8 -
6070 Jouff Agriculture 35.8 6.5 895 0.1 (2.7) (2.5) 14.7 12.9 10.5 1.5 5.6
6002 Herfy Foods 86.0 1.4 2,580 0.1 (2.5) 0.6 35.8 27.0 17.6 5.9 3.5
4061 Anaam Holding 67.0 53.8 730 0.1 (5.3) (2.9) 9.3 5.0 60.7 5.4 -
6050 Saudi Fisheries 30.9 18.3 1,654 0.1 (3.4) (12.0) (8.4) (6.1) nm 4.0 -
6001 Halwani Bros 40.5 1.9 1,157 0.1 (1.5) (26.0) 15.4 12.0 14.4 2.2 4.9
2100 Food Products Co. 28.4 15.1 568 0.1 (0.7) 0.7 5.3 4.9 53.9 2.8 -
6040 Tabuk Agriculture 28.1 6.5 562 0.1 (3.1) (14.8) 8.8 7.6 17.0 1.5 1.8
6060 Sharqiya Dev Co. 49.1 35.2 368 0.1 (4.7) (39.9) (12.2) (9.0) nm 5.2 -
Telecom/IT
7020 Etihad Etisalat 65.3 43.0 45,675 4.5 (2.2) 24.3 29.9 14.3 9.0 2.5 5.0
7010 STC 40.3 26.7 80,600 2.2 (1.5) 19.2 16.7 6.9 10.5 1.7 5.0
7030 Zain KSA 8.5 318.3 11,900 1.0 (4.0) 53.2 (36.9) (7.0) nm 2.8 -
7050 STC 27.2 - 2,720 0.2 - 71.6 - - - - -
7040 Atheeb Telecom 16.7 210.9 668 0.0 (5.4) 115.5 (85.2) (5.0) nm 9.9 -
Insurance
8010 Tawuniya 49.4 3.3 3,705 0.3 (0.8) (4.5) 23.0 5.9 8.4 1.8 7.1
8030 MEDGULF 29.2 17.9 2,336 0.1 (4.3) 4.3 21.4 6.1 9.7 2.0 6.8
8020 Malath nsurance 21.0 42.8 630 0.1 (7.9) 24.3 5.2 1.4 44.7 2.2 -
8040 ALLANZ SF 86.5 65.0 1,730 0.1 5.5 215.7 0.9 0.1 - 10.9 -
8200 Saudi Re 13.3 77.3 1,330 0.1 (5.0) 37.8 (3.6) (2.8) nm 1.4 -
8311 Enaya Co-op ns 34.1 31.3 1,364 0.1 (4.7) 241.0 - - - - -
8290 Solidarity 21.8 36.4 1,210 0.1 (3.8) (4.6) - - nm 2.6 -
8080 SABB Takaful 32.0 32.6 1,088 0.1 (4.8) 4.2 3.1 1.0 - 3.3 -
8130 ATC 58.8 10.6 979 0.1 (2.1) (1.7) (4.8) (1.2) nm 7.2 -
8310 AMANA nsurance 29.7 16.8 950 0.1 (3.6) (13.2) - - nm 3.7 -
8240 ACE Arabia 94.0 4.7 940 0.1 - 69.4 (3.4) (3.1) nm 11.4 -
8210 BUPA Arabia 22.0 8.2 880 0.1 (4.1) (1.6) 8.3 2.5 20.8 1.7 -
8220 Weqaya Takaful 38.4 54.1 768 0.1 (4.5) 20.0 (30.6) (19.4) nm 6.6 -
8230 ARCC 50.8 13.0 1,015 0.1 (4.7) (3.8) (26.0) (5.2) nm 9.3 -
8160 ACC 26.9 16.8 538 0.1 (2.2) 19.8 10.9 2.5 31.1 3.1 -
8090 SANAD 21.9 14.6 438 0.0 (3.5) 0.2 (23.1) (7.5) nm 4.1 -
8060 Walaa nsurance 21.0 16.0 419 0.0 (2.6) 15.4 3.0 1.1 91.5 2.7 -
8140 Al-Ahlia 36.9 17.1 369 0.0 (6.1) 6.0 (13.2) (1.7) nm 11.3 -
8260 Gulf General 35.2 19.3 704 0.0 (2.2) (13.9) (44.5) (15.2) nm 5.3 -
8100 SACO 41.2 23.5 412 0.0 (6.4) 2.7 (11.4) (1.3) nm 6.4 -
8170 Trade Union 23.1 14.4 576 0.0 (4.0) 11.9 8.6 2.7 23.5 2.0 -
8190 U C A 34.4 11.3 688 0.0 (3.6) 12.8 16.6 4.0 13.6 2.2 -
8120 Gulf Union 19.3 10.7 424 0.0 (6.1) 12.6 (34.8) (8.5) nm 2.8 -
8180 Sagr nsurance 24.3 14.3 486 0.0 (3.2) 1.7 13.4 5.8 15.2 1.9 -
8250 AXA-Cooperative 32.4 12.4 648 0.0 (1.2) (11.2) (12.1) (4.0) nm 3.8 -
8270 Buruj nsurance 49.3 35.1 641 0.0 (4.3) (16.4) (20.1) (11.5) nm 7.8 -
8070 Arabian Shield 29.5 28.5 590 0.0 (9.8) 42.5 5.0 2.3 52.8 2.6 -
8280 Al Alamiya 42.0 20.5 840 0.0 (5.6) (0.7) (0.0) (0.0) nm 5.0 -
8300 Wataniya nsurance 82.5 19.4 825 0.0 (2.9) 9.3 12.8 4.1 81.2 9.9 -
8150 ACG 40.5 - 405 0.0 - 1.8 (5.9) (1.2) nm 14.8 -
8050 Saudi Salama 38.5 13.7 385 0.0 (5.2) 6.1 2.6 0.8 - 4.5 -
8110 Saudi ndian 38.6 28.3 386 0.0 (3.0) 0.5 (7.7) (2.0) nm 7.9 -
Multi Investment
4280 Kingdom Holding 11.5 6.5 42,618 0.4 (2.5) 29.9 2.4 1.6 66.6 1.7 4.3
4080 Assir 18.6 38.7 2,351 0.2 (1.6) 19.2 4.3 2.9 23.8 1.0 4.0
2190 SSCO 16.5 84.3 1,122 0.2 (3.5) 24.5 1.5 0.4 - 1.5 -
2030 SARCO 61.3 13.5 919 0.2 (5.0) (22.7) 2.8 2.7 87.3 2.6 0.8
2140 Al Ahsa for Dev. 16.1 40.8 786 0.1 (3.9) 23.0 0.2 0.2 - 1.7 -
2120 Saudi Advanced 20.9 68.4 903 0.1 (8.5) 37.0 1.2 1.1 92.2 1.1 -
4130 Al Baha 20.3 53.4 304 0.1 1.3 15.7 (10.0) (8.0) nm 3.6 -
Industrial Inv
1211 MA'ADEN 30.6 19.5 28,305 1.6 (1.3) 20.9 2.5 1.1 68.5 1.7 -
2230 Saudi Chemical 40.0 29.2 2,530 0.4 (2.4) 1.8 19.7 11.5 9.5 1.9 5.0
2070 SPMACO 43.1 2.3 3,381 0.4 (1.8) 6.9 6.9 5.9 16.0 1.1 4.6

230
MAY 2012

1214 Shaker Group 68.3 1.6 2,389 0.3 (2.5) 11.4 39.9 17.4 13.3 5.0 5.1
1212 Astra nd 39.5 7.9 2,928 0.2 (3.2) 12.2 14.4 8.6 11.7 1.6 4.4
1213 AlSorayai Group 24.6 8.3 737 0.1 (2.6) 4.0 8.7 3.7 19.1 1.6 -
2150 ZOUJAJ 30.0 9.5 900 0.1 (3.8) (16.0) 14.8 13.4 11.1 1.6 7.5
2340 AlAbdullatif 26.8 2.3 2,178 0.1 (2.2) 0.8 13.4 9.8 13.9 1.8 5.6
1210 BC 29.0 6.2 798 0.1 (3.3) 4.7 14.4 8.9 13.6 1.9 3.4
2300 SPM 29.9 3.3 1,121 0.1 (1.3) (8.6) 16.8 6.5 10.7 1.7 4.7
4140 Saudi Export 43.3 35.5 468 0.1 (2.0) 12.5 8.6 7.1 48.7 4.0 1.2
1201 Takween Adv nds 49.8 24.4 1,494 0.1 0.8 91.5 20.8 9.9 19.6 3.8 2.7
2220 Maadaniyah 26.5 22.7 677 0.1 (5.0) (23.0) 0.9 0.6 - 1.9 -
2180 FPCO 38.0 12.0 437 0.1 (2.8) (24.0) 10.8 8.3 27.2 2.9 2.6
Construction
2040 Saudi Ceramics 90.3 4.8 3,384 0.4 (0.8) (9.1) 21.6 11.1 14.6 3.0 2.6
2160 Amiantit 17.0 27.6 1,958 0.3 (4.0) 5.3 9.1 3.6 13.0 1.2 7.4
2240 Zamil nd 28.6 8.7 1,716 0.2 (0.7) (2.1) 11.7 2.8 11.1 1.3 5.2
2110 Saudi Cables 17.4 82.6 1,322 0.2 (2.5) 24.7 0.5 0.1 - 1.3 -
2320 Al Babtain 25.1 3.0 1,070 0.2 - (0.8) 12.2 5.4 14.5 1.8 6.0
2200 Arabian Pipes 30.3 5.6 954 0.1 (2.9) (18.8) (0.8) (0.4) nm 1.3 -
1310 MMG 14.2 30.4 1,769 0.1 (2.7) (41.8) (92.2) (31.5) nm 3.4 -
2130 SDC 18.3 87.1 732 0.1 (5.2) 30.2 - - 29.5 2.1 -
1330 Al-Khodari 37.4 7.9 1,987 0.1 (2.1) (13.0) 25.3 7.6 12.6 3.0 3.2
2360 SVCP 68.3 1.9 1,024 0.1 (2.5) 0.4 34.3 17.5 12.4 4.5 7.3
2370 MESC 19.0 49.2 760 0.1 (6.2) 17.3 (38.5) (8.3) nm 3.1 -
1320 SSP 23.8 3.6 1,211 0.1 (1.0) (18.7) 7.4 6.4 20.1 1.5 6.3
2090 National Gypsum 28.2 2.4 893 0.1 (3.1) 1.1 6.4 5.1 30.3 2.0 4.3
1301 Aslak 39.1 18.3 1,271 0.1 (3.2) (8.4) 30.5 26.9 11.8 3.4 4.5
4230 Red Sea Housing 31.7 11.6 1,268 0.1 (2.2) (3.3) 10.7 6.8 16.4 1.7 3.2
Real Estate
4250 Jabal Omar 19.4 141.1 17,984 1.7 0.3 59.3 (0.5) (0.4) nm 2.0 -
4300 Dar Al Arkan 11.0 810.1 11,826 1.2 (3.9) 51.0 7.4 4.6 10.9 0.8 -
4100 Makkah 38.0 2.9 6,263 0.8 - 8.6 8.4 7.9 20.4 1.8 -
4220 Emaar E .C 11.2 217.5 9,478 0.5 (3.9) 51.7 1.1 0.7 - 1.3 -
4090 Taiba 22.8 5.2 3,413 0.4 (2.8) 18.2 8.1 6.5 14.4 1.1 4.4
4150 Arriyadh Dev 22.5 16.3 2,250 0.3 (2.0) (0.7) 8.8 7.9 17.3 1.5 5.6
4310 KEC Madinah 19.2 88.3 6,515 0.3 (4.7) 74.5 (0.3) (0.3) nm 2.0 -
4020 Al Akaria 27.2 9.0 3,264 0.2 (1.8) 3.8 4.7 4.4 21.8 1.0 3.7
Transport
4030 NSCSA 16.6 32.2 5,213 0.6 (1.2) 36.2 5.7 2.8 18.1 1.0 3.0
4040 SAPTCO 15.0 32.8 1,875 0.3 (3.5) 63.9 4.5 3.5 28.7 1.3 3.3
4110 Mubarrad 50.8 35.9 914 0.2 (1.9) 27.5 (79.9) (65.7) nm 6.3 -
4260 Budget Saudi 40.5 7.9 988 0.1 (2.4) 7.5 20.6 11.0 9.8 1.9 4.6
Media & Publishing
4210 SRMG 25.4 22.2 2,032 0.2 (5.2) 30.6 7.8 4.6 20.3 1.6 3.9
4070 Tihama 81.0 18.9 1,215 0.2 (0.3) 9.5 3.4 2.4 - 5.4 -
4270 SPPC 31.0 26.6 1,860 0.1 1.3 59.0 4.6 3.5 51.7 2.5 1.6
Hotel & Tourism
4010 SHARCO 27.1 2.7 2,710 0.2 (3.2) 20.4 9.1 8.0 17.6 1.6 3.8
4170 Shams 32.1 21 326 0.1 (4.5) 7.4 4.3 3.9 - 4.4 -

231
MAY 2012

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NCBC Investment Ratings
OVERWEGHT: Target price represents expected returns in excess of 15% in the next 12 months

NEUTRAL: Target price represents expected returns between -10% and +15% in the next 12 months

UNDERWEGHT:

Target price represents a fall in share price exceeding 10% in the next 12 months

PRCE TARGET:

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range of company specific and market risks. Target prices are based on a methodology chosen by the analyst as the best predictor
of the share price over the 12 month horizon

Other Definitions
NR:

Not Rated. The investment rating has been suspended temporarily. Such suspension is in compliance with applicable regulations and/or in
circumstances when NCB Capital is acting in an advisory capacity in a merger
or strategic transaction involving the company and in certain other situations

CS:

Coverage Suspended. NCBC has suspended coverage of this company

NC:

Not covered. NCBC does not cover this company

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document constitute NCB Capital's judgment as of the date of production of this document, and are subject to change without notice. Past performance of
any investment is not indicative of future results. The value of securities, the income from them, the prices and currencies of securities, can go down as
well as up. An investor may get back less than he or she originally invested. Additionally, fees may apply on investments in securities. Changes in
currency rates may have an adverse effect on the value, price or income of a security. No part of this document may be reproduced without the written
permission of NCB Capital. Neither this document nor any copy hereof may be distributed in any jurisdiction outside the Kingdom of Saudi Arabia where
its distribution may be restricted by law. Persons who receive this document should make themselves aware, of and adhere to, any such restrictions. By
accepting this document, the recipient agrees to be bound by the foregoing limitations.
NCB Capital is authorised by the Capital Market Authority of the Kingdom of Saudi Arabia to carry out dealing, as principal and agent, and underwriting,
managing, arranging, advising and custody, with respect to securities under licence number 37-06046. The registered office of which is at Al Mather
street in Riyadh, P.O. Box 22216, Riyadh 11495, Kingdom of Saudi Arabia.

NCBC SaudiFactbook 2012

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