Emaar Properties (EMAAR.DFM)

Transcription

1 Emaar Properties (EMAAR.DFM) Country: United Arab Emirates Exchange: Dubai Financial Market Sector: Construction & Real Estate; Service Local Ticker: EMAAR Reuters Code: EMAAR.DFM Investment Opinion: OVERWEIGHT Last traded Price: AED (as on March 12, 2008) Fair Value: AED Products & Services: Real estate investment, development and property management; health care; education; leisure; retail; hospitality; Financial services. Current Market Price (AED) YTD Stock Performance % -18.5% Outstanding Shares (In million) 6, Market Cap (AED Million) 74, EPS (AED) 1.08 P/E BVPS (AED) 6.00 P/B 2.03 DPS (AED) 0.20 Dividend Yield (%) week High (AED) week Low (AED) 9.75 Source: Dubai Financial Market, Zawya.com Share Price Movement EMAAR vs. DFM Established in Dubai in 1997, Emaar Properties (Emaar) is a powerful global brand name involved in real estate development. The country s plan to spend over USD 1 trillion on leisure projects provides huge opportunity for real estate developers. Emaar s two-pronged strategy geographic and business segmentation will further enhance its revenue growth. On February 12, 2008, the company proposed a 20% cash dividend for the year Over supply of property units in Dubai is expected to continue until 2010; this may negatively impacting the company s top-line. Offsetting Emaar s growth drivers against risk factors, we raise our 12-month price target to AED from AED 16.60, while reiterating our OVERWEIGHT recommendation on the stock. Call us on or us at research@taib.com

2 Background Among the world s largest real estate companies. Forays into various sectors. Established on June 23, 1997 as a public joint stock company, Emaar Properties is one of the world s largest real estate companies. The company is primarily engaged in property investment and development, property management services, education, healthcare, retail and hospitality, as well as investment in financial service providers. Driven by its Vision 2010 to become one of the most valuable companies in the world, Emaar is formulating a new course of growth with a two-pronged strategy - geographical expansion and business segmentation. It has established operations in 17 markets to date. Listed on the Dubai Financial Market on March 26, 2000, Emaar is also a part of the Dow Jones Arabia Titans Index and S&P IFCG Extended Frontier 150 Index. The company is now looking to list shares worth USD 40 billion on the London Stock Exchange. Emaar has strengthened its product sale competencies, market reach and best practices through strategic acquisitions and joint ventures. In 2006, it acquired John Laing Homes, America's second largest privately held home builder, and Hamptons International, UK's premier realtor and property management consultant. It also formed a joint venture with the US-based Turner International to strengthen execution capabilities. In addition, it continues to diversify its presence into other sectors such as education, healthcare and hospitality. It acquired Singapore-based Raffles Campus, a premier education provider through its subsidiary Emaar Education. Emaar teamed up with Giorgio Armani and Accor Hotels to strengthen its presence in hospitality and will launch ten luxury Armani Hotels & Resorts world-wide and 100 Formula 1 budget hotels in India. Further, in October 2007, it entered into a joint venture with Tatweer's Bawadi to develop a USD 16 billion (AED 60 billion) project as part of Bawadi's massive hospitality development in Dubai land. In the same month, Emaar agreed to build four residential and leisure projects around Algiers worth USD 20 billion. Between 2001 and December 31, 2007, Emaar has handed over 21,000 residential units to customers. As of August 31, 2007, the company s land bank comprised million square meters including the joint venture with Bawadi, but excluding Algeria. On July 10, 2007, Moody's Investors Service assigned Emaar a long-term foreign currency rating of 'A3', a long-term local currency rating of 'A3', with a Stable outlook. Standard & Poor s assigned it an A-. A number of corporate laurels. On March 5, 2008, Emaar won the Mohammed Bin Rashid Al Maktoum Business Award (MRM Award), launched by the Dubai Chamber of Commerce & Industry in the Real Estate Development category. The MRM Real Estate Business Development Award recognized Emaar's outstanding achievements in project management and execution, adherence to delivery schedules, and working in association with government authorities for infrastructure development. Further, it was chosen as the Property Company of the Year' for the second consecutive year in 2007 at the Arabian Business Property Awards. It also won the Dubai Quality Award; the ISO 14001:2004 certification for its environment management processes; and the ISO 9001:2000 certification for quality management. It was also ranked in the Top 10 of Standard & Poor's (S&P's) IFCG Extended Frontier 150 Index for frontier equity markets covering constituents from 26 countries. For the year 2007, Emaar recorded a net profit of AED 6.58 billion compared to AED 6.37 billion in the previous year up 3.2%. Consequently, basic earnings per share (EPS) increased to AED 1.08 from AED Board of Directors Emaar s Board of Directors comprises eight members. H.E. Mohamed Ali Alabbar is the Chairman and of the company and Mr. Hussain Al Qemzi is the Vice Chairman. The rest of the board members are: Chaired by H.E. Mohamed Ali Alabbar. Name Mr. Ahmad Jamal Jawa Mr. Salem Rashed Al Mohannadi Mr. Mohammed Ibrahim Al Shaibani Dr. Lowai Mohamed Belhoul Mr. Majid Saif Al Ghurair Mr. Ahmed Thani Al Matrooshi Designation Director Director Director Director Director Director

3 Major Shareholders and Affiliates A publicly held company. Emaar is primarily a publicly held company with the majority stake of 68% held by the public. The balance 32% stake is with the Investment Corporation of Dubai. Foreign ownership is restricted to 49% of the share capital and is open to both GCC as well as foreign investors. Shareholding Pattern 32% 68% Investment Corporation of Dubai Public Emaar, in turn enjoys holdings in a number of companies that operate across various sectors. These are: SUBSIDIARIES / ASSOCIATES / AFFILIATES COUNTRY % SHARE Arabian Ranches UAE % Emaar Dubai UAE % Emaar Education UAE % Emaar Healthcare Group UAE % Emaar Hospitality Group UAE % Emaar Hotels and Resorts UAE % Emaar International UAE % Emaar International Jordan Jordan % Emaar Investment Holding UAE % Emaar Malls Group UAE % Emaar Misr for Development Company Egypt % Emaar Morocco Offshore Morocco % Emaar Syria Syria % Emaar Towers UAE % Emirates Living UAE % Hamptons International Holding United Kingdom % WL Homes [John Laing Homes] United States %

4 The Industry Scenario Real Estate - the centerpiece of UAE s economy. The UAE s real estate sector has become the centerpiece of the economy, driven by rising population, huge inflows of expatriates, and legal and financial deregulations by the government. According to the Ministry of Economy, the country posted real growth at 16% in 2007 over 9.4% in 2006, with gross domestic product (GDP) reaching AED 698 billion. The non-oil sector accounted for 65% of the total GDP, while oil contributed 35% in The economy is anticipated to grow by a further 6.6% this year. Simultaneously, a recent study, conducted by the Research Unit at Mashreq Bank, in conjunction with the Macroeconomic Research Centre, projected the country s population to hit 6.88 million in 2011, as compared to 5.19 million in Dubai alone is anticipated to attract over 50% of the new expatriates. During 2007, the real estate sector contributed 8% to the country s GDP with an investment of AED 25.8 billion. In addition, AED 23.1 billion (16% of total investment) was pumped into the development of infrastructure, including airport expansions, internal and external road networks, bridge and tunnel constructions and communications. According to the Ministry, real estate and construction are anticipated to be the key drivers of economic growth in 2008 as well. The sectors are predicted to grow by 24.4% and 21.6% respectively by 2010, thereby together contributing 23% to the country s economy in comparison with 16% in Oversupply - the sector s bane. Plans to invest USD 1 trillion on leisure projects. As of now, oversupply of completed units is the biggest risk in the UAE. It is estimated that this problem will continue through 2010 in Dubai and beyond 2010 in Abu Dhabi. Assuming that the UAE maintains its existing currency peg for the next 12 months, research firm Al Mal Capital anticipates rental yield to decline over the next four years on the back of real estate price appreciation. Currently, the average rental yield in the UAE stands at 7.7%, which is higher than that of countries with similar income levels. By the end of 2008, the average price of residential property is expected to increase to AED 1,800 per square foot from AED 1,400 in Price appreciation is anticipated to be around 28% in However, it is forecast to slow down to 17% in 2009, as more supply is delivered. Dubai is the largest spender on leisure projects in the Middle East, followed by Saudi Arabia and Abu Dhabi. Real estate projects in Dubai are anticipated to reach USD 310 billion over the next decade, out of which USD 230 billion will be in the property sector. Across the region, more than USD 1 trillion is being pumped into the leisure sector. This forms a substantial proportion of the total investments of USD 3.63 trillion in tourism and transport in the region, encompassing hotels, aviation developments, cruise lines and supporting infrastructure. Several mega projects that are either planned or are already under way in Dubai include the Dubai Waterfront, Burj Dubai, Hydropolis, Old Town, Madinat Al Arab, and the Dubai Marina. However, a shortage of skilled labour is posing a threat to the sector as 160 projects stand delayed. Dubai Population and Tourists/Visitors in millions Hotel Guests Population

5 Positive government policies. Inflation in the UAE is surging on the back of rising house rents and pricey imports, as the currency is pegged to the US dollar. It hit a 19-year high of 9.3% in 2006 and accelerated to 10.9% in In an effort to curb inflation, Dubai and Abu Dhabi reacted by capping rent increases to 5% from 7%. In addition, the ministry has set an inflation target of 5% in In order to control rising costs for building materials, on March 13, 2008, Dubai lifted customs duties on cement and steel. Taking the battle against inflation to the next stage, on March 10, 2008, the government set up a task force to study the possibility of de-pegging the country s currency from dollar. Currently, the UAE has no unified property law governing foreign ownership of real estate. Each emirate has developed its own approach ranging from Fujairah, which does not allow foreign ownership of property, to Dubai, where foreign ownership of freehold interests in real property is allowed. According to the Dubai Property Law, non-nationals and companies are allowed to own only a free hold property or leasehold right over real property for a period of 10 to 99 years. Further, with the exception of certain public joint stock companies, which are listed on the DFM, a company with foreign shareholders is not considered as a UAE national for the purposes of owning property. Peer Analysis (as on 9M 2007) In AED 000 Emaar Properties Union Properties Deyaar Development Aldar Properties Revenue 12,537,184 2,024, , ,837 Net profit 4,838, , ,834 1,413,000 Total Assets 53,015,808 9,891,760 8,062,492 19,084,032 Total Equity 34,148,390 5,019,450 5,976,834 4,558,839 EPS ROA 9.1% 4.8% 2.5% 7.4% ROE 14.2% 9.4% 3.3% 31.0% Asset Structure Total assets surged 31.4%. At the end of 2007, Emaar s total assets climbed 31.4% to AED billion from AED billion in 2006, on account of significant growth in development properties, and property, plant & equipment. Development properties soared 45.6% to AED billion from AED 11.12, thereby accounting for 29.6% of total assets. During the year, the company transferred a plot of land worth AED 1.88 billion at Al Lusaily (UAE) to development properties from investment properties. Consequently, investment properties declined 19.2% to AED 5.64 billion. Capitalizing on high real estate demand, Emaar started the construction of several buildings as investment properties in anticipation of future demand. This investment, included under capital work in progress, amounted to AED 4.16 billion as against AED 2.37 billion, out of which AED million was capitalized as cost of borrowings for the construction of these assets. Consequently, property, plant & equipment surged 77.6% to AED 7.43 billion from AED 4.18 billion. Simultaneously, Emaar s investment in the Emaar MGF Land Limited (India) drove its investment in associates to AED 9.11 billion compared to AED 6.59 billion last year. Assets Structure of Emaar 21.3% 8.6% 10.3% 16.6% 13.6% 29.6% Bank balances and cash Investment properties Development properties Property, plant and equipment Investment in associates Other assets

6 Further in 2007, Emaar s cash & bank balance more than doubled to AED 4.73 billion from AED 2.33 billion. Out of the total cash & bank balance, fixed deposits maturing after three months registered an over nine-fold growth to AED 2.59 billion. This indicates that the company is parking its cash in the form of interest earning fixed deposits which carry interest rate between 5.35% and 5.80% as against 5.60% and 5.75% in For the year, trade receivables increased 54.5% to AED 0.93 billion from AED 0.60 billion. Among the geographic segments, assets allocated to the domestic segment comprised 55.9% of total assets as against 44.1% apportioned to the others. Capital Structure Shareholders equity up AED billion. For the year 2007, Emaar s total equity increased by 21.8% to AED billion from AED billion in Of this, AED 0.65 billion belonged to minority interest holders, representing a 15.2% growth over last year. The company s reserve grew 12.4% to AED billion, while retained earnings climbed 51% to AED billion. The company came out with a 100% right issue in During 2007, million shares were issued to those shareholders who had opted for the additional shares at a premium of AED 4 per share. These shareholders were given the option of paying for the rights in installments up to a maximum of four. Sharing the rewards of its performance among shareholders, on February 02, 2008, Emaar proposed to distribute 20% cash dividends for the year Capital Structure of Emaar in AED billions Share capital Reserves Retained earnings Recent Performance Net profit grew 3.2% in For 2007, Emaar s net profit grew 3.2% to AED 6.58 billion from AED 6.37 billion, mainly driven by a growth in revenues. This resulted in earnings per share of AED 1.08 as against AED 1.05 in the earlier year. However, net profit margin declined to 37.4% from 45.5% on account of a 51.3% increase in selling & general administration expenses. Meanwhile, both return on equity (ROE) and return on assets (ROA) declined to 18% and 12% as against 21.3% and 15.3%, respectively, in Recent Performance of Emaar in AED billions % 20.0% 15.0% 10.0% 5.0% % Revenue Net profit ROA ROE

7 Changing gears from land sale to condominiums. During the year, revenue surged 25.4% to AED billion from AED billion in The increase in revenue can be mainly attributed to the sale of condominiums, which climbed 69.3% to AED 8.67 billion, thereby accounting for 49.4% as compared to 36.6% of total revenues in the earlier year. During the second half of 2007, Emaar announced its intention to cease land sales on account of increased property development. Consequently, sale of land tumbled 50.7% to AED 1.50 billion. In addition, cost of revenues climbed 51.2% to AED billion, as a result of which gross profit margin declined to 39.4% from 49.7%. However, we believe, Emaar s strategy is a step in the right direction as this would enhance the company s profits in the long-term. in AED billions Sale of condominiums Segmental break-up of Revenues Sale of villas Sale of plots of land Others For the year 2007, Emaar s share of profits from associated companies registered an over three-fold growth to AED 0.40 billion from AED 0.13 billion. The company paid taxes amounting to AED million as against AED million, in relation to the group s operation in the USA and the UK. The decline in taxes can be mainly attributed to the reduction in the tax rate to 0.2% from 0.7% in Emaar s Sales Status Sales Status (2007) Units Released (2007) Units Sold (2007) Emaar - the Economic City (Saudi Arabia) Jeddah Gate (Saudi Arabia) Uptown Cairo and Marassi (Egypt) 1, The Eight Gate (Syria) Tinja (Morocco) Tuscan Valley (Turkey) Emaar MGF (India) 1, Total 3,891 2,456 New Projects and Strategy A plethora of projects across the globe. In line with its international expansion strategy, Emaar is strengthening its presence across the world through acquisitions and ventures in prestigious projects, and substantial holdings in successful companies. On March 5, 2008, the company announced that it had entered a 50:50 joint venture with Cham Holding Company (Syria) to launch a new company - Emaar Cham - for the development of mix-use projects. The new company will have a capital of USD 100 million. In the same month, the company announced investment in a mega Kuwaiti project under the build, operate, transfer system - probably the Bubiyan Island project. On February 27, 2008, Emaar signed an agreement with Sham Holding Company to establish a joint project under the name Emaar-Sham Co. with a capital of USD 100 million. The new company will develop a number of housing compounds in several Syrian cities and launch several projects to organize the randomly-built areas in Damascus and the countryside. Earlier, on February 16, 2008, Emaar Turkey acquired 73,571 square meters of prime land in Istanbul for USD 400 million from Toprak Holding (Turkey). However, in February, Emaar MGF Land, a joint venture between Emaar and MGF Development of India, had to withdraw its USD1.64 billion IPO on account of under subscription.

8 Variegated interests from sports marketing to water management. On January 21, 2008, the company's subsidiary, Emaar Education, entered into a partnership with Stryx Sports Marketing SAE to establish the FCBEscola Dubai Soccer Academy, which will be run by coaches from FC Barcelona Football Club. In the same month, another subsidiary, Emaar Malls Group, forged a strategic alliance with SEGA Corporation (Japan) to develop and operate indoor theme parks in the company's malls across the Middle East and North Africa. Further, Emaar IGO issued a Letter of Acceptance to the joint venture between Arabtec Holding and Arabian Construction Company for a contract worth AED 152 million to carry out construction works on the Eighth Gate Development project (Syria) over a period of 20 months. Again in January, Emaar Middle East awarded contracts to two companies - Al Ta afuf and the Saudi Building and Development Management Company - for the development of the water, waste management, drainage and electric supply infrastructure, and walk-ways throughout its Jeddah Gate project in Saudi Arabia. On December 11, 2007, Emaar entered into a joint venture with United Utilities (UK) to establish a new company, Emaar Utilities, to manage water resources and environmental affairs for the latter s projects in Dubai. In the same month, Emaar Healthcare Group announced that it is in the process of initiating partnerships to construct 100 hospitals and 500 health centers. The new project is expected to generate revenues of USD 5 billion over the next 10 years. Again in December, Emaar Industries acquired a 52% stake in Caparol LLC, which plans to invest AED 400 million in acquiring majority stakes in up to four companies in the MENA region in the fields of oil and gas, healthcare, and construction by the end of Caparol also plans to construct a paint production factory that will double its current capacity to 15,000-20,000 tons p.a. The plant is expected to start production within 18 months. Simultaneously, Emaar-MGF, its Indian venture, entered into an MoU with Dubai Aerospace Enterprise (DAE) to tap the burgeoning airport up-gradation market in India. The firm plans to invest more than USD 12 billion in India over the next four to five years. In October 2007, Emaar announced its intention to build four residential and leisure projects around Algiers worth USD 20 billion. It is also considering boosting its investment in the country to USD 30 billion. On March 8, 2008, Emaar announced that it will open a limited sale of commercial space in Downtown Burj Dubai and Dubai Marina from March 10. In the same month, it also opened sales of a limited collection of unique villas and townhomes, located in the established neighborhoods of the Arabian Ranches and The Lakes, and the up-and-coming Umm Al Quwain Marina. Concurrently, it sold a limited collection of luxury waterfront serviced apartments at the 38-storey Dubai Marina Mall Hotel & Serviced Residences, and boutique offices at Marina Plaza. Strategies toward Vision In line with its Vision 2010, Emaar aims to be the world s most valuable company in the next couple of years. The company intends to cover projects worth AED 154 billion (USD 42 billion) over the next four years, of which international projects will account for AED 115 billion. Further, it plans to expand its education and health care operations into the Middle East and the Indian sub continent regions. In addition, it aims to earn 60% - 70% of revenue from international operations and to generate 15% of net profits (2% in 2007) from hotels and malls by The company is targeting a minimum Internal Rate of Return (IRR) of 15% on non-property development projects. Positives Emaar Properties is a powerful brand name, with a size and scale of operations that allow it to undertake giant projects. Its expansion and diversification into key markets and sectors helps the company to grab prestigious projects and capture all-around growth. The country s massive investment in the real estate sector provides abundant opportunity for real estate developers. Negatives Emaar is exposed to execution risks, which may result in delays and cancellations. The government s plan to de-peg the currency from dollar could raise the company s finance cost.

9 Valuation: Discounted Cash Flows Cost of Equity: 10.89% WACC: 10.05% We have used the Discounted Cash Flow (DCF) method to determine our fair value estimate. As inputs for our valuation, we have used the unlevered industry Beta for emerging markets Real estate development of We have derived the equity premium by adding the historical premium of US equities over the risk-free rate and the country premium. We estimate a country premium of 0.90% using Moody s long-term country rating (Aa3 for UAE) and estimating a default spread for that rating, based upon the difference in yields for traded country bonds. As a proxy for the risk-free rate of interest, we have taken the yield on 10-year US treasury notes as the proxy for the risk-free rate of interest. At the time of this report, the 10-year US Treasury bond had a yield of 3.510%. Based on the inputs and the Capital Asset Pricing Model, we arrive at a Cost of Equity of 10.89%. Considering the long-term debts of Emaar, we arrive at the Weighted Average Cost of Capital (WACC) of 10.05%. Investment Opinion Fair Value: AED Investment Opinion: OVERWEIGHT Powered by its Vision 2010, Emaar has developed a new growth strategy through a dual process of geographical expansion and diversifying business segmentation. Consequently, the company is developing new competencies in retail, hospitality, education, healthcare and finance. It is extending its expertise to international markets as well, by replicating the successful business model it has used in Dubai. Currently, the company has operations in 17 markets. With this, the company plans to cover projects worth AED 154 billion (USD 42 billion) over the next four years, of which AED 115 billion will account for international projects. In addition, it aims to earn 60% - 70% of its revenue from international operations and to generate 15% of net profits (2% in 2007) from hotels and malls by Further, the country s massive investment worth USD 1 trillion on leisure projects provides abundant opportunity for the company to enhance its revenue base. However, Emaar operates in key US markets that have been directly affected by the sub prime market weakness, which in turn had an impact on its financials in In addition, it is exposed to project execution risk which could result in delays and cancellations. Further, the UAE government s plan to de-peg the country s currency from the dollar could raise Emaar s finance cost. However, the company s strategy of business diversification, coupled with its past record of successful project execution skills, would help it to maintain its strong track record in the coming years. In 2007, Emaar s stock gained 22.1% versus the DFM s rise of 43.7%. From the beginning of 2008, the stock has lost 18.5% as against a dip of 1.9% in DFM. Considering the above factors, we revise our Fair Value per share upwards by 10.1% to AED from AED (as on May 01, 2007). The stock exhibits a 50.4% potential upside from its closing price of AED (as on March 12, 2008). Therefore, we reiterate our earlier OVERWEIGHT investment opinion on Emaar s stock. Condensed Projections (in AED 000) 2008E 2009E 2010E Total assets 62,461,598 70,581,605 80,463,030 Revenue 21,711,314 27,081,250 33,606,789 Net profit 7,956,054 10,596,230 12,151,098 EPS (AED)

10 FINANCIAL STATEMENTS BALANCE SHEET As on In AED ' Dec Dec 06 %Chg Assets Bank balances and cash 4,726,616 2,329, % Trade receivables 928, , % Other receivables, deposits and prepayments 2,705,232 2,089, % Deposits from share capital of Emaar MGF 0 1,469, % Development properties 16,194,020 11,121, % Securities 4,560,642 2,516, % Loans to associates 537, , % Investment in associates 9,107,297 6,594, % Property, plant and equipment 7,433,222 4,184, % Investment properties 5,635,573 6,970, % Goodwill 2,961,968 2,961, % 54,790,875 41,690, % LIABILITIES AND EQUITY LIABILITIES Trade and other payables 8,825,902 6,265, % Interest bearing loans and borrowings 7,703,753 3,992, % Retentions payable 1,054, , % Provision for employees' end-of-service benefits 18,394 11, % 17,602,609 11,145, % EQUITY Equity attributable to equity holders of the parent Company Share capital 6,091,239 6,075, % Employees' performance share program -1,446-2, % Reserves 16,494,778 14,669, % Retained earnings 13,951,469 9,237, % 36,536,040 29,978, % Minority interest 652, , % TOTAL EQUITY 37,188,266 30,544, % TOTAL LIABILITIES AND EQUITY 54,790,875 41,690, %

11 INCOME STATEMENT For the period ended In AED ' Dec Dec 06 %Chg Revenue 17,565,895 14,005, % Cost of Revenue -10,640,230-7,039, % GROSS PROFIT 6,925,665 6,966, % Other operating income 952, , % Gain on disposal of interest in subsidiary 0 4, % Selling, general & administrative expenses -2,118,590-1,400, % Other operating expenses -536, , % Finance cost -153,895-92, % Finance income 395, , % Other income 683, , % Share of results from associated companies 402, , % PROFIT BEFORE TAX 6,550,812 6,402, % Income tax expense -14,454-47, % PROFIT FOR THE YEAR 6,536,358 6,355, % Attributable to: Equity holders of the Parent 6,575,314 6,371, % Minority interest -38,956-15, % 6,536,358 6,355, % No. of Outstanding Shares ( 000) 6,091,239 6,075,553 EPS (AED) % KEY RATIOS 31 Dec Dec 06 Net profit margin 37.4% 45.5% Shareholders Equity to Total Assets Ratio 66.7% 71.9% Total Debt/Asset ratio 14.1% 9.6% Asset turnover ratio (times) EPS (AED) ROE 18.0% 21.3% ROA 12.0% 15.3%

12 OPINION RATINGS: OVERWEIGHT NEUTRAL UNDERWEIGHT The stock is expected to perform better than the market index; investors may give the stock more weight in their portfolio, than its weight in the overall market The stock is expected to perform in tandem with the market index; investors may give the stock the same weight in their portfolio as in the overall market. The Stock is not expected to perform in line with the market index; investors may give the stock less weight in their portfolio than its weight in the overall market. Call us on or us at DISCLAIMER: All reasonable care has been taken to ensure that the information contained herein is not misleading or untrue at the time of publication, but we make no representation as to its accuracy or completeness. All information is for the private use of the person to whom it is provided without any liability whatsoever on the part of TAIB Securities WLL, any associated company or the employees thereof. Nothing contained herein should be construed as an offer to buy or sell or a solicitation of an offer to buy or sell. The value of any investment may fall as well as rise. Past performance is no guide to the future. The rate of exchange between currencies may cause the value of the investment to increase or diminish. Consequently, investors may not get back the full value of their original investment