Results Summary of Listed Companies in the Saudi Market

Transcription

1 Top 15 Companies Lowest () Top 15 Companies Highest D/Y () Company P/BV D/Y (%)* Sagr Insurance Saudi Hollandi Bank Arab National Bank Middle East Paper Co Zamil Industrial Bahri Yanbu Cement Co Saudi Ceramics Arabian Cement Yamama Cement The Saudi British Bank Al-Jazira Bank Lazurde Al Tayyar Travel Group Holding Bank Saudi Fransi Source: Bloomberg, AlJazira Capital Company D/Y(%)* Yanbu Cement Yamamah Cement City Cement Co Arabian Cement Saudi Cement Co Saudi Arabian Amiantit Co Najran Cement Qassim Cement Co Eastern Cement Co Saudi Vitrified Clay Pipe Co Southern Province Cement Co Hail Cement Co Arriyadh Development Co National Glass Manufacturing Co Northern Cement Co Source: Bloomberg, AlJazira Capital * Trailing 12 months () Alsagr Co-op Ins, Saudi Hollandi Bank, and Arab National Bank posted the lowest (3.9x-5.5x) in the Saudi market for the trailing 12 months (), followed by Middle East Paper Co. (5.7x). The average for the Saudi market stood at 14.8x. Yanbu Cement had the highest dividend yield (16.9%) during the last 12 months in the Saudi market. The Cement sector dominated the market in terms of dividend yield, with 11 companies ranking among the top 15 companies. Overall, the dividend yield in the Saudi market stood at 4.4%. Lowest 15 Companies Lowest P/BV Highest 15 Companies Accumulated Loss to Capital Company D/Y (%)* Dar Al-Arkan Saudi Arabian Amiantit Co Methanol Chemicals Co ALKHODARI Saudi Real Estate Co Saudi Advanced Industries Jouf Cement Bank Al-Jazira Nama Chemical Aseer Saudi Ceramics Saudi Investment Bank National Gypsum Co Saudi Cooperative Reinsurance AlSorayai Group Source: Bloomberg, AlJazira Capital * Trailing 12 months () Company Bk Value L/C (%) Mohammad Al Mojil Group % Bisha Agri. Development % Al-Baha Development Co % Sanad % Atheeb Telecom % Al Ahlia % Saudi Fisheries Co % Amana Insurance % Malath Insurance % Enaya % Solidarity % Saudi Cable Co % Zain Saudi % Tihama Advertising Co % Saudi Kayan % L /C refers to accumulated losses to capital Source: Bloomberg, AlJazira Capital Dar Alarkan had the lowest P/BV (0.3x) in the Saudi market, followed by Saudi Arabian Amiantit Co.(0.45x). The P/BV for the Saudi market stood at 1.4x. Mohammad Al Mojil Group, Bishah Agriculture Development, Al-Baha Development Co. lost 291.1%, 135.7%, and 123.6% of capital (since inception), respectively. 6 of the top 15 highest accumulated loss to capital are from the Insurance sector. Note: All statistics in this report are based on market close prices on October 30,

2 Best 15 Companies Top price performers Worst 15 Companies Worst price performers Company YTD % Walaa Insurance BCI Yanbu National Petrochemical Advanced Petrochemical National Industrialization Dallah Healthcare Holding National Medical Care Saudi Electricity Company Saudi Arabian Mining Company Saudi Basic Industries Corp Jabal Omar Development Al Rajhi Bank Tawuniya Al Rajhi Takaful Saudia Dairy and Foodstuff Co Source: Bloomberg, AlJazira Capital Company YTD % Al Alamiya Coop Insurance Co Fawaz Abdulaziz AlHokair Saudi Research and Marketing Malath Co-op Insurance Saudi Enaya insurance Takween Advanced Industries AlAbdullatif Indust. Investment United Electronics Co Saudi Paper Manufacturing Co Al Tayyar Travel Group Co Khaleej Training and Education Abdulmohsen Alhokair group Saudi Printing and Packaging AlSorayai Group Al-Hassan Ghazi Shaker Source: Bloomberg, AlJazira Capital Walaa Insurance Company has been the best performing stock since the beginning of 2016 (up 54.8% YTD), followed by Basic Chemical Industries Company - BCI (up 54.6% YTD). The list indicates that just 6 companies have provided price gains of 2 or more, since the start of Al Alamiya Coop Insurance Co. has been the worst performer (down 69.4% YTD), followed by Fawaz Abdulaziz AlHokair (down 67. YTD). The list indicates that 15 companies lost more than 53.5% of their value since the start of the year. Top 15 Companies Weight to the market index Company % of TASI No. of Free Shares (000) Al Rajhi Bank 11. 1, Saudi Basic Industries Corp. 9.2% Jabal Omar Development 5.1% National Commercial Bank 4.2% Saudi Telecom 3.2% Samba Financial Group 3.2% 1, Riyad Bank 2.8% 1, Banque Saudi Fransi. 2.4% Almarai Company 2.4% Savola Group 2.3% Alinma Bank 2.3% 1, Saudi Arabian Mining Co. 2.2% Saudi Electricity Company 2.1% Saudi Arabia Fertilizers Co Makkah Development Co. 1.7% Least 15 Companies Ratio of free to issued shares Company Issued Shares (mn) Free Shares (mn) F/I (%) Kingdom Holding Co. 3, Saudi Telecom 2, % Saudi Electricity Co. 4, % National Petrochemical Co % Saudi Basic Industries Corp 3, % Rabigh Refining & Petrochem % Saudi Hollandi Bank 1, % Saudi German Hospital % Al Hammadi Development Co % Lazurde Company for Jewelry Saudi Ground Services Co Alandalus Property Co Jazira Takaful Al Alamiya % Al Yamamah Steel Industries % F/I refers to free to issued shares Al Rajhi Bank, at 11., has the highest share of the Saudi market, followed by Saudi Basic Industries Corp (9.2%), and Jabal Omar Development Co (5.1%). These three companies account for 25.2% of the market index. The most influential stocks in the Saudi market are from the Banking, Petrochemical, and Telecommunication sectors. Kingdom Holding Co. has the lowest ratio of free-to-issued shares, with just 5. of the shares issued being traded in the market. According to the data, four companies have less than 20. of free floats, as government funds hold a substantial portion of STC and Saudi Electricity. 2

3 Best 15 Companies Return on Equity (ROE) Best15 Companies Return on Assets (ROA) Company YTD % ROE (%) Saudi Airlines Catering Co % Jarir Marketing Co % Al Sagr Co-op Ins Southern Province Cement Co % Saudi vitrified clay pipes co % Bupa Arabia % Saudi Cement Co % Saudia Dairy and Foodstuff Co % Herfy Food Services Co % Al Yamamah Steel % Saudi German Hospital % The Qassim Cement Co % Saudi Ground Services Co % Advanced Petrochemical Co Saudi Company for Hardware % Source: Bloomberg, AlJazira Capital Company YTD % ROA (%) Saudi Airlines Catering Co % Jarir Marketing Co % Southern Province Cement Co % The Qassim Cement Co Saudi vitrified clay pipes co % Saudi Cement Co % Saudia Dairy and Foodstuff Co % Saudi Ground Services Co % Arabian Cement % Yanbu Cement Co % Advanced Petrochemical Co % Saudi German Hospital % Saudi Company for Hardware % Al Yamamah Steel % Saudi Arabia Fertilizers Co Source: Bloomberg, AlJazira Capital On a basis Saudi Airlines Catering Co. has the highest return on equity (RoE) at 48., followed by Jarir Marketing Co. at 46.2%. The top 15 companies have RoE of over 24.2%. Saudi Airlines Catering Co and Jarir Marketing Co. registered the highest return on assets (RoA) in the Saudi market at 32.8% and 28.7% on a basis, followed by Southern Province Cement Co. at 24.5%. The top 15 companies have RoA of over 14.2%. Total net profit for listed companies 40, % 30,000 (SAR Mn) 20,000 10, % -2.1% -11.4% Q42014/2015 Q12015/2016 Q22015/2016 Q32015/ Earnings (Prior Year ) Earnings (Current Year ) % (RHS) Source: Bloomberg, AlJazira Capital The overall net earnings of the companies listed on the TASI declined 1.4% to SAR 27.7bn in from SAR 28.1bn in. Banks and Petrochemicals accounted for 60. of total earnings. SABIC, Saudi Electricity Co., and Al Rajhi Bank were major drivers, accounting for 18.9%, 15.9%, and 7.2% share of earnings, respectively, in. 3

4 Sectors Performance Sector Sector profit to Total Banks & Financial Services 10, , % 36. Petrochemicals 6, , % 24. Cement 1, % 3.1% Retail % 2.4% Energy & Utilities 2, , % 16. Agri & Food 1, , Telecom & IT 1, , % 6.2% Insurance % 3.2% Multi-Investment % Industrial Investment % 0.3% Real Estate Development % 1.1% Transport % Media & Publishing % Hotel & Tourism % 1. Building & Construction % 0.3% Total Saudi Market 28, , % ,000 6,500 6,000 5,500 5, % YTD YTD 2016 Sector Performance YTD TASI Index Performance Hotel & Tourism Media & Publishing Multi - Investments Retail Agri. & Food Telecom & IT Transport Banks Building & Const. Cement Industrial Investment Petchem Insurance Real Estate Energy & Utilities The Saudi market s net profit declined 1.4% to SAR 27.7 in from SAR 28.1bn in. The market s earnings per share () in stood at SAR Index heavyweights Banks & Financial Services and Petrochemicals contributed the most to total earnings (36. and 24., respectively), while the Media & Publishing was the only sector to post losses. The Insurance sector was the best performer in the Saudi market, with a 64.5% increase in net profit at SAR SAR 892.5mn (before ZAKAT) in, compared with a net profit of SAR542.6mn in. This improvement was primarily led by TAWUNIYA Insurance Co, which posted a net profit of SAR in vis-à-vis SAR in. In, only Insurance sector witnessed growth, while the rest fourteen sectors registered decline in net profit. The combined net profit of the total Saudi stock market declined 0.7%, led by higher weightage of the Banks & Financial Services. 4

5 Banking Sector YTD D/Y (%)* 16,000 15,000 14,000 13,000 Alinma Bank ,000 Al Rajhi Bank 1, , % NCB 1, , % ,000 Aug -16 Sep -16 Banque Saudi Fransi 1, , Banking Sector Riyad Bank % Saudi British Bank 1, % YTD 2016 Banking Sector Saudi Hollandi Bank % % Samba Financial 1, , % Arab National Bank % BANK ALBILAD SAIB % Bank AlJazira Total 10, , % % 5% -2% -9% -16% -23% -3 SAIB Bank AlJazira NCB SABB Arab National BSF Saudi Hollandi Samba Bank AlBilad Riyad Alinma Al Rajhi The Banking sector s net profit declined 5.2% to SAR 9.9bn in. The sector s stood at SAR 0.60 per share. Most banking stocks posted a decrease in net profit, with Saudi Hollandi Bank registering the highest decline(down 46.7% ). Heavyweight Al Rajhi Bank s net profit rose 16.7%, while National Commercial Bank s net profit declined 1.6%. Samba Financial Group s net profit declined 2.2%. Riyad Bank and SAIB registered the sector s highest dividend yield at 7.. Key factors that affected the net profit of some companies during in the sector were: Al Rajhi Bank: income increased due to an increase in total operating income by 16.7%, this increase was mainly driven by higher net special commission income and an increase in other operating income and fees income from banking services. Furthermore, the total operating expense increased by 26.7% in. Bank AlJazira: income has decreased by 3% mainly due to increase in operating expenses by 14%. This is primarily due to increase in the net impairment charge for credit losses. For operating income, there is an increase by 8% due to an increase in net trading income, net banking fees and commission income and net exchange income. National Commercial Bank (NCB): income decreased due to the increase in total operating expenses by 18.7% on account of higher impairment charges on financing and impairment charges and a higher other G&A expenses. On the other hand, total operating income increased by 9.5% due to the increase in net special commission income and the increase in income from FVIS investments in Riyad Bank: income decreased because of higher total operating expenses by 16.3%, mainly due to higher G&A expenses. The total operating income saw a marginal decline of 0.4%, mainly due to decrease in fee and commission income and gains on non-trading investments. Saudi British Bank (SABB): The decrease in income was primarily driven by higher operating expenses which increased by 23.3% mainly due to increase in impairment charge for credit losses and G&A expenses, total operating income slightly decreased by 0.1% due to a decrease in fee and commission income, and trading income. Samba Financial Group: income decreased due to increase in total operating expenses by 9.4% as a result of increase in provision for credit and increase in G&A expenses. The decrease was offset by increase in total operating income by 1.5% in 5

6 Petrochemical Sector D/Y (%)* Sahara Petrochemical % Yansab % Saudi Basic Industries 5, , % Advanced Petrochem % Alujain Corporation % National Petrochem % SIIG % SAFCO SIPCHEM (58.9) Rabigh Refining (460.1) (216.7) % National Industrialization (296.3) Saudi Kayan (13.8) Methanol Chemicals (42.9) (39.9) Nama Chemicals Co. (24.0) (32.6) % Total 6, , % ,000 4,800 4,600 4,400 4,200 4,000 3,800 3,600 3,400 3,200 3, SAFCO Nama Petro Rabigh 9.6% YTD Petrochemicals Sector % YTD 2016 Petrochemical Sector 6 SIPCHEM Methanol Alujain National Saudi Kayan SIIG SABIC Sahara Advanced TASNEE Yanbu The net profit of Saudi Arabia s Petrochemical sector slightly declined by 0.1% to SAR 6,627bn in from SAR 6,635bn in. Index heavyweight Saudi Basic Industries Corp and Saudi Arabia Fertilizers Co. reported a decline of 6.8% and 68., respectively. The sector s stood at SAR 0.71 per share. Saudi Arabia Fertilizers, Saudi International Petrochemical Co. (SIPCHEM), and Rabigh Refining Co. were the worst performers in terms of decline in net profit; SAFCO net profit dropped to SAR 181.4mn, while SIPCHEM and Rabigh Refining recorded a loss of SAR 58.9 and 216.7mn respectively. Saudi Arabia Fertilizers Company and Advanced Petrochemical Company had a high dividend yield in the sector at 7.2% and 6.5%, respectively. The following factors impacted the net profit of some companies in the sector during : Advanced: The company s net profit declined 19.7% to SAR 188.4mn in, mainly due to a decrease in polypropylene market prices. Kayan: Kayan posted a net profit of SAR 156.3mn in compared with a net loss of SAR 13.8 in due to an increase in the quantities produced and sold, improved operating performance and lower cost feedstock despite the decline in average selling in most products and a higher financial expenses in. Petro Rabigh: The company s net loss declined 52.8% to SAR in, the drop in net loss primarily to a higher crude oil prices compared to the huge decline for the same period of the previous year, which led to a loss in the inventory carry-over rate. SABIC: SABIC s net profit fell 6.8% to SAR 5,224.3mn the decrease in net income is attributable to lower average sales prices and lower sales quantity and increase in the Zakat provision. SAFCO: SAFCO s net profit declined 68. to SAR 181.4mn in due to a decline in selling prices for the company s products and rising feedstock and electricity costs. SIIG: The company s net profit dropped 21.5% to SAR 162.6mn in.due to a decrease in SIIGs portion of the National Petrochemical Company profits to SAR96mn in the current quarter compared to SAR161mn in. Yansab: Yansab s net profit increased 101.4% to SAR 607.6mn in, driven by an increase in sales volumes and decrease in cost of sales. 6

7 Cement Sector 5,000 4, % YTD D/Y (%)* 4,000 3,500 3,000 Southern Province % Saudi Cement Co % Hail Cement Co % City Cement Co % ,500 Cement Sector Arabian Cement Co % Al Jouf Cement Co YTD 2016 Cement Sector Tabuk Cement Co % Northern Region % Qassim Cement % Yanbu Cement Co % Yamamah Saudi % Eastern Province Najran Cement % Umm Al-Qura Cement (1.7) (4.3) Total 1, % ٠ ١٠-٢٠- ٣٠-٤٠- ٥٠-٦٠- Yamamah Qassim Umm Al Al Jouf Northern Najran Hail Eastern Yanbu Tabuk Saudi Arabian City Southern The Cement sector s net profit decreased 22.5% to SAR 849.6mn in from SAR 1,096.9mn in. The sector s stood at SAR 0.46 per share. 12 companies in this sector registered a decline in profit. Najran Cement Company s profit (down 52.1% ) declined the most, followed by Northern Region Cement (down 42.8% ). However, Hail and Arabian Cement showed an increase of 15.3% and 8.6%, respectively. Key factors that affected the net profit of some companies in the sector during were: Arabian Cement: The company s net profit increased 8.6% to SAR 97.1 in due to an increase of group share in the results of associate company by SAR 1.0mn, and an increase of other net revenues by SAR 5.9mn in. City Cement: City Cement s net profit declined 32.6% to SAR 31.9mn in due to a high cost of sales and Zakat in addition to other expenses despite the increase in sales and a decrease in selling expenses and general and administrative expenses. Hail Cement: The company s net profit increased 15.3% to SAR 20.1mn in due to unrealized investment loss recognized during same quarter last year. Qassim Cement: Qassim Cement s net profit decreased 38.8% to SAR 70.4mn in due to a decline in sales value and volume driven by lower demand of cement, in addition to increase in cost of goods sold due to increase in power and fuel prices and decrease in other income. Saudi Cement: The company s net profit fell 3.8% to SAR 200mn in due to a decrease in sales, increase in Selling and Distribution Expenses and Decrease in other Income. Tabuk Cement: Tabuk Cement s net profit dropped 14.1% to SAR 7.9mn in due to lower average selling price and higher cost of sales and the impact of rising energy prices and the decline in other revenue. Yamama Cement: The company s net profit fell 41.1% to SAR 56.3mn in due to high cost of goods sold as a result of an increase the price of fuel and an increase in depreciation of fixed assets in. 7

8 Retail Sector D/Y (%)* Dallah Healthcare National Medical Care Saudi Automotive % Mouwasat Medical % United Electronics Co % Saudi Co.for Hardware % AlHokair Co % Abdullah Al Othaim % Lazurde Co % Middle East Healthcare % Jarir Marketing Co % Saudi Marketing Co % National Agriculture % Aldrees Co % Al Hammadi % Alkhaleej Co % Fitaihi Holding Group % Total % ,000 12,000 11,000 10,000 9,000 8,000 7,000 YTD 2016 Retail Sector AlHokair Jarir Extra Alkhaleej -34. YTD SASCO Aldrees Al Hammadi THIMAR Retail Sector Saudi Marketing Saudi Company Fitaihi Holding Mouwasat Al Othaim Dallah Care Lazurde Saudi German Saudi Arabia s Retail sector recorded a 5.61% decline in net profit in. profit fell to SAR 671.5mn in from SAR 711.3mn in. The sector s stood at SAR 0.63 per share. Heavyweight Jarir dominated the sector earnings also, the net profit was up 0.7% to SAR 220mn in. However, another heavyweight Fawaz Abdulaziz AlHokair Company s net profit decline 35.6% to SAR 58.7mn in. Dallah Healthcare Holding Company reported the highest growth in earnings at SAR 61.1mn in. In terms of dividend yield, Jarir Marketing Co. topped the sector with a 7.8% yield. The following factors affected the net profit of some of the companies in the sector during : Aldrees: Aldrees net income decreased 42.7% to SAR 18.5mn in due to a fall of transport sector sales and Increase in cost of sales and operating expenses. Al Othaim: The company s net income declined 1.2% to SAR 36.6mn in due to increased S&D, G&A. Dallah Healthcare: Dallah Healthcare s net income rose 128. to SAR 61.1mn in, led by an increase in sales volume, rise in the number of inpatients and outpatients, other revenues increased as a result of realization of gains from sale of some investments. Mouwasat Medical: The company s net income increased 17.2% to SAR 50.3mn in, due to the increase in revenue as a result of growth so contributed by Riyadh branch and with expansion in sub specialty clinics operations in particular. Jarir: Jarir s net income increased 0.7% to SAR 220mn in due to a decrease in non operating expenses. 8

9 Agriculture & Food Industries Sector D/Y(%)* Qassim Agriculture Co SADAFCO % Wafrah for Industry % Halwani Bros % Almarai Company Al-Jouf Agriculture % Herfy Food Services % NADEC Jazan Development % Anaam International % Saudi Airlines Catering % Savola Group % SHADCO Tabuk Agriculture Saudi Fisheries Co % Bishah Agriculture % Total ,500 9,000 8,500 8,000 7,500 7,000 6,500 6,000 5,500-25% -5-75% Jazan Dept. Savola Ash-Sharqiyah -22.6% YTD Agri & Food Sector YTD 2016 Agriculture & Food Industries Sector 25% Herfy Food Saudi Airlines Cat. NADEC Halwani Bros Saudi Fisheries Anaam Qassim Agri Al-Jouf Agri Almarai Wafrah for Industry and Bishah Agri Tabuk Agri SADAFCO earnings of Saudi Arabia s Agriculture and Food sector decreased 20. to SAR mn in from SAR 1,367.4mn in. The sector s stood at SAR 0.58 per share. The sector s weak performance was due to the decline in the net profit of index heavyweights Savola Group (down 53.3% ) and Saudi Airlines Catering Company (down 9.1% ). This decline in the sector s net earnings was partially offset by stable performance of another major player Almarai Co. (up 10. ). Saudi Airlines Catering Co. had the highest dividend yield (7.8%) in the sector. The following factors affected the net profit of some companies in the sector during : Almarai: Almarai s net profit rose 10. to SAR 654.6mn in, driven by The growth in Income for the third quarter of 10. as compared to the corresponding quarter of the previous year is due to a growth in Sales of 2.5%, as a result of continuous growth in the main segments from Dairy & Juice by 1.4%, Bakery by 17.4% and a decrease in Poultry by 9.4%. Saudi Airlines Catering: The company s net income declined 9.1% to SAR 149.6mn in. Total revenue increased by 2.3% with the related growth attributed to Business Lounge (+16.4%) and to Non airline revenue (+12.). Inflight catering revenue decreased by 1.1% mainly due to an end of a contract to export frozen meals. SADAFCO: SADAFCO s net profit surged 7.6% to SAR 73.3mn in, due to increase in net deposit income by SAR 2mn, and 13.5% decrease in cost of sales. Savola: The company s net profit decreased 53.3% to SAR 173.4mn in, mainly due to lower gross profit, higher operating expenses, increased financial charges, higher zakat & tax despite decrease in share of minority and higher share of income from associates. 9

10 Telecom.& I T Sector -20.2% YTD D/Y (%)* Saudi Telecom 2, , % Saudi Zain (0.46) -19.6% Etihad Atheeb Etihad Etisalat Co (0.22) Total 1, , % ,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 Telecom & IT Sector YTD 2016 Telecom.& I T Sector earnings of Saudi Arabia s Telecom sector declined 9.4% to SAR 1,713.6mn in from SAR 1,892.0mn in. The sector s stood at SAR 0.49 per share. Saudi Zain Co. was the worst performer during the quarter, reporting a net loss of SAR 266.7mn in. Key factors that affected the net profit of major companies in the sector during were: Etihad Etisalat: The company posted a net loss of SAR 158.3mn in compared with a loss of SAR 158.2mn in, largely led by the decrease in gross profit by SAR 284 million, which was offset by the decrease in operating expenses reflecting continuous cost optimization efforts Atheeb Telecom Mobile Telecom Mobily STC Saudi Zain: The company s net loss increased to SAR 266.7mn in from a loss of SAR 222.9mn in, mainly due to revenues decreased by 7% reaching SAR 1,634mn which is driven by a decrease in MTR, biometric fingerprint requirement, slow summer season and the decline in number of pilgrims; Gross profits slightly decreased by 0.15% reaching SAR 1,061 million. Saudi Telecom: Saudi Telecom s net profit decreased 7.5% to SAR 2,148mn in due to SAR1,160mn increase in cost of services, and SAR120mn increase in operating expenses during, and SAR192mn decrease in (Losses from investments accounted for under equity method) during the 3rd quarter compared to the same quarter last year 10

11 Insurance Sector D/Y(%) Saudi Indian Company Al Sagr Co-op Ins % Arabia Insurance Coo % Arabian Shield Co-op % Saudi Arabian Co-op % United Cooperative % Buruj Co-op Ins % Al-Rajhi Company % Salama Cooperative % Ace Arabia Allied Cooperative Ins % Al Alamiya % Solidarity Saudi Aljazira Takaful % AXA Cooperative % TAWUNIYA % Allianz Saudi Fransi % Alahli Takaful Co % Bupa Arabia % Sanad Insurance % SABB Takaful % Trade Union Co-op Ins % Amana Cooperative % Gulf General Co-op Wataniya Insurance % MEDGULF % Malath Co-op Ins % Saudi Re Al-Ahlia Insurance Co % Saudi Enaya % Alinma Tokio Marine % Gulf Union Co-op Ins Saudi United Weqaya Takaful MetLife AIG ANB % Total % ,400 1,300 1,200 1,100 1, % YTD % YTD 2016 Insurance Sector Insurance Sector Wataniya Insurance Al Alamiya Insurance Malath MetLife Enaya Insurance Trade Union SABB Takaful ACE Insurance Medgulf Gulf General Allianz Alinma Tokio ALAHLI TAKAFUL Aljazira Takaful Reinsurance Arabian Shield % YTD 2016 Insurance Sector ACIG AXA Insurance SAICO SALAMA Gulf Union Weqaya Sanad Insurance Al-Ahlia Al-Rajhi Insurance United Assur. BURUJ Insurance Bupa Insurance Cooperative Insurance Amana Arabia Solidarity Takaful WAFA Insurance WALAA Al Sagr Insurance The Insurance sector s net profit increased 64.5% to SAR 892.5mn in from SAR 542.6mn in. The sector posted of SAR 0.70 per share during the quarter. Sector heavyweights, Bupa Arabia for Cooperative Insurance s net profit declined 8. to 260.3mn in from SAR 285.7mn in, while The Company for Cooperative Insurance (TAWUNIYA) reported a net profit of SAR 283.2mn in. With 21 of the 35 companies in the sector reporting gains, the sector s overall performance was very strong. In terms of gain in net profit, Trade Union Company for Co- operative Insurance (up 695.3% ), Salama Co-operative Insurance Co (up 506.9% ), and Arabian Shield Cooperative Insurance Company (up 193.9% ), were the best performers. The following factors led to fluctuations in the net profit of some of the companies in the sector during : Tawuniya: Tawuniya s net profit surged 24.8% to SAR 283.2mn in, driven by insurance operation surplus, which grew 13.53% due to a 22.3% increase in premiums earned. Bupa Arabia: The company s net profit declined 8.9% to SAR 260.3mn in due to a an increase in net claims incurred which has resulted in a decrease in net underwriting result by 11% decrease of SAR 68,

12 Energy & Utilities Sector D/Y (%)* National Gas & Indus % Saudi Electricity Co % Total % Source: Tadawul website, AlJazira Capital 7,500 7,000 6,500 6,000 5,500 5,000 4, % YTD Energy & Utility Sector Saudi Arabia s Energy & Utilities sector s net profit increased by 50.1% to SAR mn in from SAR 2,953.5mn in. The sector s was SAR 1.05 per share. Dividend yield for SEC and National Gas was 3.8% and 4.9% respectively. % YTD 2016 Energy & Utilities Sector 2 15% National Gas and Industrialization Co. s net profit declined 6.4% to SAR 30.4mn in, primarily due an increase in destruction of gas cylinders by SAR 5mn, a decline in other revenue by SAR1.4mn and an increase in general and administrative expenses by SAR3.7mn. Saudi Electricity Company net profit increased 50.8%, due to an increase in operating income and improved efficiency of a high fuel prices. 1 5% GASCO Saudi Electricity Hotel & Tourism Sector D/Y (%)* Dur Hospitality Co % Al-Tayyar % Tourism Enterprise % Alhokair % Total % ,000 17,000 15,000 13,000 11,000 9,000 7,000 5, % YTD Hotel & Tourism The net earnings of Saudi Arabia s Hotel and Tourism sector declined 24.3% to SAR 276.4mn in from SAR 365.2mn in. The sector s was SAR 0.74 per share. The sector s earnings were impacted by Tourism Enterprise Co. net profit, which fell 78.4% to SAR 0.5mn. Dur Hospitality Co had a highest dividend yield of 6.8%. Tourism Enterprise Co. registered the sector s highest P/B ratio at 2.3x, followed by Alhokair at 2.1x. % YTD 2016 Hotel & Tourism Sector Tourism Entp Al-Tayyar Al-Hokair -8 Dur Hospitality Co. 12

13 Industrial Investment Sector D/Y(%)* Middle East Paper Basic Chemical % MAADANIYAH % Astra Indust.Group FIPCO % The National Glass % Saudi Chemical Co % Shaker % Takween Advanced Saudi Arabian Mining % AlAbdulllatif % Saudi Pharmaceutical % Saudi Industrial Export Saudi Paper % Al Sorayai % Total % Source: Tadawul website, AlJazira Capital 7,500 7,000 6,500 6,000 5,500 5,000 4, YTD Industrial Investment Sector % YTD 2016 Industrial Investment Sector AlAbdullatif Takween Saudi Paper AlSorayai Middle East Paper Co. Saudi Chemical Shaker Zoujaj Astra Industrial Maadaniyah SPIMACO SIECO Maaden FIPCO Basic Chemical The net earnings of Saudi Arabia s Industrial Investment sector declined 58.6% to SAR 71.9mn in from SAR 173.6mn in. The sector s for the quarter was SAR 0.04 per share. The sector was impacted by index heavy weight Shaker Company s net profit, which declined 94.9% to SAR 2.4mn in from SAR 46.2mn in 3Q2105. Saudi Chemical Company had the sector s highest dividend yield at 7.. Key factors that affected the net profit of some companies in the sector during were: Al Abdullatif Industrial Investment Co.: The company s net profit fell 94.5% to SAR 1.5mn in due to a decline in sales, rise in cost of sales, and an increase in general & administrative expenses. MAADEN: MAADEN s net profit increased 4.6% to SAR 83.6mn in due to a 24% drop in general and administrative expenses and 18% decline in selling, marketing and logistic expenses. income benefited from short term investments which increased by 514%. Saudi Chemical: The company s net profit fell 43.4% to SAR 20.2mn in, led by a decrease in sales and to the increase in expenses resulted mainly from one subsidiary since its plant is still in perpetrating stage. Saudi Paper: Saudi Paper incurred a net loss of SAR 20.7mn in, mainly due to a decrease in sales and export sales. 13

14 Building & Construction Sector D/Y (%)* Bawan Company % Red Sea Housing % United Wire Factories % Al Yamamah Steel Al-Babtain % Saudi vitrified clay Co % Zamil Industrial % SIDC % Electric Industries Co % Saudi Ceramic Co Saudi Steel Pipe Co % National Gypsum Co % Saudi Arabian Amiantit Al-Khodari % Saudi Cable Co Arabian Pipes Co MESC Mohammad Al Mojil Total % ,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 B&C Sector % YTD 2016 Building & Construction Sector % YTD Al-Khodari EIC Saudi Ceramic Gypsum Saudi Steel Pipe SIDC Saudi Cable Zamil MESC Amiantit AL-BABTAIN Vitrified clay Bawan Al Mojil Red Sea Pipes ASLAK Yamamah Steel Saudi Arabia s Building & Construction sector s net profit declined 59.8% to SAR 87.2 in from SAR 216.7mn in. The sector s for the quarter stood at SAR 0.09 per share. Of the 18 companies in the sector, just 8 reported a gain in net profit in, with index heavyweights Saudi Arabian Amiantit Company recorded a loss of 32.9mn in, while Zamil Industrial Investment Company reporting a decline of 30.2%. Saudi Arabian Amiantit Co. had the sector s highest dividend yield at 11.5%. The following factors affected the net profit of some companies in the sector: National Gypsum: National Gypsum s net profit increased 7.4% to SAR 5.0mn in. An increase in gross profit and operating profit and net profit due to increased net sales and lower cost of sales Saudi Ceramic: The company s reported a net loss of SAR 45.8mn in, primarily due to a decrease in sales caused by shrinking local market demand and the reduction in selling prices which led to decrease in gross profit. In addition to increase in General & Administrative expenses and financing cost. United Wire Factories Co.: The company s net profit decreased 32.5% to SAR 14.3mn in from SAR 21.2mn, driven by a decrease in sales, decrease in gross margin and the increase of general and administrative expenses. Zamil: Zamil s net profit decreased 30.2% to SAR 40.1mn in due to lower sales of core products in AC and Steel sectors, and an increase in financial charges, non-controlling interests, taxes and zakat. 14

15 Multi-Investment Sector D/Y (%)* SAIC % SISCO % AlBaha Kingdom Holding Co % Aseer Trading % SARCO Al-Ahsa Development Total ,400 3,200 3,000 2,800 2,600 2,400 2,200 2, % YTD Multi-investment Sector % YTD 2016 Multi-Investment Sector Oct-16 The net earnings of Saudi Arabia s Multi-investment sector declined 58. to SAR 146.4mn in from SAR 348.2mn in. The sector s stood at SAR 0.04 per share in. Saudi Advanced Industries Co. reported the highest earnings growth of 56.5% whereas Kingdom Holding Co. s net profit declined 38.3% Aseer Kingdom Holding SARCO SAIC Al-Ahsa SISCO Al-Baha Aseer Trading, Tourism & Manufacturing Co. had the sector s highest dividend yield at 8.4%. Transport Sector D/Y (%)* National Shipping Co % Saudi Ground Services % Saudi Public Transport % Budget Saudi MUBARRAD % Total Source: Tadawul website, AlJazira Capital 8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000 4, % YTD Transport Sector % YTD 2016 Transport Sector The Transport sector s net profit declined 22. to SAR 643.7mn in from SAR 825.5mn in. The sector s stood at SAR 0.8 per share. 15% Of the 5 companies, 2 registered growth in net earnings, with Saudi Ground Services Co. (up 15.6% ) gaining the most. It was followed by Saudi Public Transport (up 1.3% ). National Shipping Co. had the sector s highest dividend yield at 7.5%. National Shipping Co.: The company s net profit declined 37.6% to SAR 318.3mn in, led by a decrease in average Time Charter Equivalent -15% -3-45% SAPTCO Bahri Budget Saudi Mubarrad Saudi Ground Services Co. (TCE) rate in crude oil transportation spot market during compared to. In addition to a decrease in the company share in profits of Petredec limited (30.3% owned by Bahri). 15

16 Real Estate Development Sector 0.9% YTD D/Y(%)* Arriyadh Development % Emaar Taiba Holding Co % Alandalus Property Co % Dar Alarkan % Saudi Real Estate Co % Makkah Construction * % Jabal Omar ** % Knowledge Economic % Total % *Hijri Calender, ** Hijri Calender 7,000 6,500 6,000 5,500 5,000 4,500 4,000 15% -15% -3 SRECO KEC Taiba Makkah Construction Dar Al Arkan Real Estate % YTD 2016 Real Estate Development Sector Emaar EC Jabal Omar Arriyadh Alandalus Property Co. The net profit of Saudi Arabia s Real Estate Development sector declined 26.9% to SAR 306.3mn in from SAR 419.1mn in. The sector s for the quarter was SAR 0.08 per share. Arriyadh Development Co.(down 45.3% ),Taiba Holding Co. (down 26.4% ), as well as Emaar Company which recorded a net loss of 80.6mn, leading the decline in the sector s net profit in, while gains of Alandalus Property Co. grew by 8.6%. Arriyadh Development Co. had the sector s highest dividend yield at 10.. The following factors affected the net profit of some companies in the sector during : Alandalus Property Co.: The company s net profit rose 8.6% to SAR 26.2mn in from SAR 24.1mn in, led by the increase in rent revenues which led to the increase in gross profit. In addition to the increase in income from investment in associates. Knowledge Economic City: The company reported a net loss of SAR 7.22mn in due to lower revenue. Saudi Real Estate: Saudi Real Estate s net profit declined 48.3% to SAR 19.8mn in from SAR 38.6mn due to financing charges of SAR 16.7mn, and a decline in operating profit which due to a provision for doubtful debts of proving debts of SAR 8.6mn and an increase the studies and consulting expenses of SAR 3mn. 16

17 Media and Publishing Sector Saudi Arabia s Media & Publishing sector recorded loss of SAR 104.6mn in,as compared to profit of SAR 15.72mn in The sector s for the quarter stood at a loss of SAR 0.67 per share. D/Y (%)* Saudi Printing Saudi Research % Tihama Advertising Total Key factors that affected the net loss of some companies in the sector during : 4,000 3,500 3,000 2,500 2,000 1,500 1, % YTD Media Sector % YTD 2016 Media and Publishing Sector -5% -1-15% TAPRCO -2-25% -3-35% SRMG SPPC -4 Saudi Printing and Packaging Co.: The company s reported a loss of SAR 11.88mn in, led by a decrease in gross profit (which was ascribed to a fall in sales due to adverse economic conditions in some overseas markets), lower selling prices due to fall in international oil prices. Saudi Research and Marketing Group: The company reported a net loss of SAR 80.90mn in 3Q2106 due to 10.4% decline in revenue, and a rise in operating cost. 17

18 RESEARCH DIVISION Acting Head of Research Talha Nazar Analyst Waleed Al-jubayr Analyst Sultan Al Kadi Analyst Jassim Al-Jubran BROKERAGE AND INVESTMENT CENTERS DIVISION General Manager Brokerage Services & sales Alaa Al-Yousef AGM-Head of Sales And Investment Centers Central Region Sultan Ibrahim AL-Mutawa AGM-Head of international and institutional brokerage Luay Jawad Al-Motawa AGM-Head of Qassim & Eastern Province Abdullah Al-Rahit AGM- Head of Western and Southern Region Investment Centers & ADC Brokerage Mansour Hamad Al-shuaibi RESEARCH DIVISION AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. RATING TERMINOLOGY 1. Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated Overweight will typically provide an upside potential of over 1 from the current price levels over next twelve months. 2. Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target. Stocks rated Underweight would typically decline by over 1 from the current price levels over next twelve months. 3. Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks rated Neutral is expected to stagnate within +/- 1 range from the current price levels over next twelve months. 4. Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further analysis of a material change in the fundamentals of the company. Disclaimer The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake risks. 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