JORDAN LAFARGE CEMENT FACTORIES EQUITY VALUATION REPORT

Transcription

1 EQUITY VALUATION REPORT 6th, 2009

2 JORDAN LAFARGE CEMENT FACTORIES EQUITY VALUATION Trading Code JOCM Stock Exchange ASE *Current Price JD 7.14 Fair Price Target JD 8.81 Upside Potential 23.39% Recommendation BUY As of JOCM Share Price (JD) /29/04 8/29/05 4/29/06 12/29/06 8/29/07 4/29/08 12/29/08 8/29/ M09 Sales 204,387, ,312, ,097, ,051, ,145,561 Cost of Sales 114,269, ,468, ,141, ,534, ,926,660 Gross Profit 90,117,383 91,843,884 90,955,183 90,516,747 80,218,901 Net Income 67,072,106 55,166,762 48,200,765 49,347,818 54,579,269 Total Assets 257,403, ,222, ,720, ,629, ,451,695 Total Current Assets 134,117, ,216, ,644,775 99,596, ,463,224 Total Liability 56,429,648 70,706,749 95,412,686 93,120,354 86,665,659 Total Current Liability 47,229,648 62,044,749 82,839,686 74,521,755 68,365,640 Total Equity 200,973, ,515, ,307, ,509, ,786,036 Gross Profit Margin 44.09% 38.38% 35.24% 28.19% 34.70% Net Profit Margin 32.82% 23.05% 18.68% 15.37% 23.61% ROaA 28.11% 22.35% 19.09% 17.84% 25.18% ROaE 43.01% 35.24% 32.77% 33.85% 36.54% Current Ratio Cash to Current Assets 65.37% 50.34% 48.71% 34.36% 46.92% Total Liabilities/Total Assets 21.92% 29.93% 35.51% 32.72% 29.53% Assets Turnover Inventory Turnover Receivables Turnover Payable Turnover

3 Excutive Summery Jordan Cement Factories (JOCM) was the only producer of Cement in Jordan until 2001; when its exclusivity agreement ended. Nonetheless, the company's sales continued to increase over the past few years benefiting from the strong growth in the real estate sector that came with the boom that took off in In 2008, JOCM sales grew by more than 24% as the company remained the main producer of cement in the country. The entry of competition seen from neighboring countries like the Saudi Arabia is expected to pose a threat to JOCM s operations. Moreover, cement imports from oil abundant countries is another risk and challenge the company is forced to deal with given lower energy prices that is projected in the price of the final good; cement. The high energy costs have affected the company's margins and remained the main concern for JOCM as it accounted for 70% of the company's cost of production in To minimize the high fuel costs, JOCM has started studies of the use of alternatives energy sources such as coal, oil shale, petcoke and natural gas. On the upside, and having being part of Lafarge International, the leader in cement production, that has been growing organically and through take over, is of an added value to the company. With Lafarge extending Orascom Cement to its portfolio, it has granted minimized risk to the local production against competition from Egypt. Similar examples apply as well. Global know how and market penetration is another benefit granted under the fledge of Lafarge. The company initiated a plan for early retirement in 2006 to finish in As a result, provisions for end of service indemnity which reached, JD 14.1 million in 2006 and JD million in 2007 have put a pressure on the company's bottom line. JOCM net income have slipped during 2006 and 2007 before recovering in 2008 standing at JD million, compared to JD million recorded during the prior year. 3

4 Cement Industry Global Cement Demand Global cement demand is driven by urbanization of growing markets; hence, 70% of world cement demand is estimated to come from emerging markets. Global cement consumption stood at 2,568 billion metric tons in 2006 to go up to 2,763 and 2,857 metric tons in 2007 and 2008 respectively. The demand for cement grew by 9.9% in 2006 whereas in 2007 it fell to 7.6% followed by another fall in 2008 settling at a lift of 3.4%. In 2006, emerging markets demand for cement grew substantially lead by the real estate boom. The demand in 2008 was affected by global economic slowdown. China, world leader in production and consumption, has a chunky 49% of total global consumption. India came in second in 2008 with 180 million tons. An interesting entry to the top ten cement consumers in 2008 was Vietnam with 50 million tons in consumption and an increase in demand by a hefty 39%; signaling yet potential for growth and investments. China and India have been self sufficient in cement production and consumption. It s worthy of mentioning, that China jumped from consumption of 511 million tons in 1998 to 1,390 million tons in 2008; a growth of 172% while the rest of the world grew from 990 million tons to 1,467 during the same corresponding period, a positive change of 48.18%. North Asia, including China and Japan, comprise 53% of world consumption. Growth in consumption stood as follows for both China and the rest of the world during China 13.3% 10% 5.3% World 7% 5.5% 1.7% Growth in demand was seen and forecasted at 5% annually and for the next 20 years reaching ultimately 3.6 billion tons by Nevertheless, 2009 is expected to face a fall of 3% in quantity demanded. 4

5 Cement and clinkers Exporters and Importers China remained at rank one in 2008 with exports of 26 million tons. The gap between China and following country stood at 14.4 million tons; higher than Japan s own level of exports that reached 11.6 million tons. India came in last on the ladder with exports of 5.6 million tons to be superseded by Egypt that exported 5.9 million tons of cement in In terms of imports, USA went down to 11.4 million tons in 2008 affected by slowdown in construction. Russia came in as a new introduction to the top ten ranking, settling at number two. The USA produced 84 million tons in 2008 but its consumption stood at 5% of total world consumption, down from 9% ten years ago. United Arab Emirates stood at rank five in It is expected to draw down in 2009 and 2010 with a freeze witnessed in the real estate sector over there. Leading Industries Lafarge remains to be the leading cement and clinker world producer. Total combined production capacity for all cement producers is seen at 2,770 million tons. Trade of both cement and clinker was reported at 164 million tons in 2008 with 6% from Of the previous mentioned level, 70 million tons were in clinker. 5

6 Company Snapshot Jordan Lafarge Cement Factories (JOCM), formally known as Jordan Cement Factories, was established in 1951 and registered as a public shareholding company in 1964 with a paid up capital of one million that was gradually raised to the current JD 60,444,460. In 2001, the producing and marketing cement in Jordan concession agreement granted by the government of Jordan to JOCM came to an end. The Government of Jordan took the first step towards privatizing JOCM in 1998 when it divested 33% of the company's shares to Lafarge for an amount of USD 102 million. Lafarge currently holds more than 50% stake in JOCM. Lafarge is considered the world's leading cement manufacturing company with a presence in 79 countries around the world and total sales of more than EUR 19 billion in JOCM has two main plants; one located in al Rashidiyah and the other one in Fuhais. In 2008, Al Rashidiyah Cement plant produced million tons of cement, while Al Fihais cement plant produced million tons. Subsidaries & Affiliates Jordan Lafarge Cement Factories CTS Sudan 99% ownership The Arab Ready Mix Concrete Company 51% ownership The Jordan Ready Mix Concrete Supplies 51% ownership Irbid Ready Mix Concrete Company 51% ownership Aqaba Concrete Company 51% ownership Al Alloul Group 51% ownership 6

7 Company's Ownership As of 3 rd 2009, Jordanian ownership in the company's capital stood at %, while non-jordanian ownership stood at %. French-based Lafarge hold % stake in JOCM equaling million shares. The second main shareholder is the Social Security Investment Unit as it holds a % stake equaling million shares. The company has a free float of about 17.56% equaling million shares. JOCM Ownership Other, 17.56% Lafarge, 50.28% Miloud Chaabi, 10.31% The Social Security Corp., 21.86% 7

8 Lafarge International Lafarge, established in 1833, is present in 79 countries including Jordan. Lafarge ranks first in cement production, second in aggregates and concrete, and third in gypsum with 57% of its business concentrated in the cement industry. The company has been witnessing significant growth through its expansion plans. Last of its expansion plans crystallized with the acquisition of Orascom Cement, and by that, it added 78 million tons to its production capacity through given the total of strategic growth program. As of 2010, 65% of the group s profits will be generated from emerging markets. Lafarge s long term strategy involves cost-cutting of 120 million euro in 2009 and 400 million euro by Nevertheless, the company stated that it intends to keep growing within the emerging market. Millions ( ) Variation Sales 17,614 19,033 8% Current operating income 3,242 3,542 9% Net earnings per share in ( ) None Net income group share 1,909 1,598 None Net debt 8,685 16,884 94% Operating margin 18.4% 18.6% 20 bp Net dividend in ( ) None Free cash flow 1,726 2,113 22% 8

9 4,350 4,300 4,250 4,200 4,150 4,100 4,050 4,000 3,950 3,900 Cement Production (thousand tons) 4,284 4,046 4,070 4, Income Statement Analysis Sales & Gross Profit The company's sales have displayed a steady growth over the past few years fueled by the robust growth in construction activities in the kingdom, which caused shortages in the supply of cement forcing JOCM to import cement from neighboring countries and opened prospects for new businesses to engage in the country. In 2007, JOCM imported 81 thousand tons to cover the shortage. In 2008, the company increased its production capacity and produced 4,284 thousand tons of cement, however, and due to the financial turmoil, local demand for cement slipped by 4% in 2008 as construction activity plunged in the kingdom during the second half of the year. As a result, JOCM covered all the local demand of cement and exported 355 thousand ton of cement. The correlation between cement prices and fuel prices became very evident, especially after the Government decided to float fuel prices. According to JOCM, fuel and energy costs accounted for 70% of the company's cost of production. Local cement prices soared in 2008 before dropping during the last quarter of the year as oil prices softened. In 2008, cement quantity sold to local market descended by 4% to 3,884 thousand tons in comparison to 4,065 thousand tons sold during the prior year, while the exported quantity of cement jumped to 355 thousand tons in 2008 relative to 73 thousand tons in Sales (JD million) M08 9M09 JOCM sales rose by 24.39% during 2008 due to the rise in cement prices and consolidation of Alloul Group in 2008 that engages in ready mix concrete production. Total sales reached JD million at the end of 2008 as opposed to JD million recorded in Cement sales increased from JD million in 2007 to stand at JD million at the end of 2008; posting a rise of 21.56%, while ready mix concrete sales stood at JD million in Total sales to the local market witnessed an increase during 2008 as the drop in quantity sold to local market was offset by the rise in prices. In 2008, local sales grew by 17.59% to reach JD million, while export sales soared by % to reach JD million backed by the hike in quantity exported and the increase in cement prices. During the first nine months of 2009, total sales plummeted by 6.91% to land at JD million as opposed to JD million recorded during the corresponding period of

10 Cost of Goods Sold (JD million) Cost of Goods Sold to Sales 80% 70% 60% 50% Cost of goods sold have displayed an increasing trend over the past few years driven by the increase in sales and the rise in fuel prices, which accounted for 70% of the company's cost of production in The company is studying the use of alternatives energy sources such as coal, oil shale, petcoke and natural gas. Lafarge group energy cost, accounts for around 33% of production cost M08 9M09 40% 30% 20% 10% 0% During 2008, cost of goods sold jumped by 37.93% to reach JD million as opposed to JD million recorded in Cost of goods sold to sales continued its upward trend during 2008 standing at 71.81% relative to 64.76% and 61.62% registered in 2007 and 2006 correspondingly. Such an increase is mainly related to inflated oil prices. On the back of a drop in fuel prices in the first nine months of 2009, cost of goods sold declined by 14.27% relative to the same period of 2008 to land at JD million. Cost of goods sold to total sales also slipped to 65.30% as of September 2009, compared to 70.90% registered in the first nine months of Gross Income (JD million) Gross Margin M08 9M09 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Gross profit recorded a slight fall in 2008 of 0.48% to land at JD million in comparison to JD million recorded during the prior year. Gross profit margin plunged to 28.19% at the end of 2008 versus 35.24% posted in As for September 2009, gross profit enhanced to JD million relative to JD million recorded in 9M08; a growth of 11.00%. Accordingly, gross profit margin stood at 34.70% in 9M09, up from 29.10% registered in 9M08. Expenses Looking at the company's expenses, it can be noticed that selling & distribution expenses posted a notable jump of % during 2008, which is attributed to the rise in fuel prices along with the increase in export sales that resulted in a % rise in transportation charges. Selling & distribution expenses rose from JD million in 2007 to reach JD million at the end of However, during the first nine months of 2009, selling & distribution expenses slipped by 36.20% to stand at JD million, compared to JD million registered in 9M08. This shrinkage can be attributed to the drop in fuel prices and the decline in sales. 10

11 Selling & Distribution Expenses Salaries & Wages 189, ,719 Company's share in Social Security Payment 11,149 12,216 Transportation Fees 1,283,959 3,779,397 Depreciation 343, ,831 Other 236, ,076 Total 2,065,547 4,405,239 9M09 9M08 General & Administrative Expenses (JD million) General & administrative expenses, which was the largest contributor to the company s total expenes in 2008, went up by 27.35% to reach JD million, compared to JD million registered in Salaries & wages inflated by 23.61% during 2008 to reach JD million and to contribute by 25.97% to total G&A expenses. Brand fees JOCM pays to Lafarge increased from JD million in 2007 to reach JD million at the end of During the first nine month of 2009, total G&A expenses went up by 8.89% to settle at JD million In year 2006, the company signed an agreement with Construction Workers Union by which, workers are compensated for a voluntary early retirement. The board of directors drew up a detailed plan that specified the number of staff that will be encouraged to voluntary retire with specified amounts due. The plan initiated in 2006 and is expected to be finalized within In 2008, provision for end of services indemnity declined to JD million relative to JD million and JD million recorded in 2007 and 2006 respectively. In 9M09, provisions for end of services indemnity and provisions for community projects stood at nil relative to JD 3.5 million and JD 7.05 million recorded at the end of 2008 & 9M08 respectively. Such a drop is mainly due to the end of voluntary employment termination plan. Interest Income & Interest Expense Interest income continued its drop during 2008 due to the decline in the company's cash. Interest income slipped to JD million in 2008, compared to JD million registered in 2007; posting a decline of 42.91%. Interest revenues posted an increase during 9M09, mainly due to the rise in the company's cash, to stand at JD 1.25 million as opposed to JD million registered in 9M08; showing an increase of 42.87%. Interest expense soared to JD million in 2008 relative to JD million recorded during the prior year. Such an increase is attributed to the loan agreement the company signed during Interest expense 11

12 stood at JD million at the end 9M09 relative to nil registered in 9M08. The significant jump in interest expense has been brought about from the consolidation of Al Alloul Group that posed in its debt portfolio as of end of 2008 JD million in long term loans, JD in leasing facilities, and JD 1.63 in open credit facilities. Al Alloul has a credit facility ceiling of JD 1.85 million granted by The Arab Bank, JD 0.15 million granted by Audi Bank, and JD million granted by Arab Jordan Investment Bank Net Income (JD million) EPS M08 9M Net Income In 2008, JOCM's net income reported an enhancement for the first time in three years with net income edging up to JD million, or JD per share, as opposed to JD million, or JD per share, registered at the end of 2007; displaying a growth of 2.38%. JOCM net profit stood at JD million, or JD 0.89 per share, at the end of September 2009 in comparison to JD million, or JD 0.69 per share, registered during the corresponding period of Balance Sheet Analysis Assets 9M09 9M Total Assets ( million JD) Total assets displayed an expansion of 5.92% during 2008 backed by the increase in fixed assets. JOCM's total assets grew from JD million in 2007 to reach JD million at the end of During the first nine months 2009, total assets edged up by a humble 3.10% reaching JD million. Property, plant and equipment contributed by 60.61% to total assets in 2008 as it rose by 13.97% settling at JD million as opposed to JD million recorded at the end of the prior year. This increase was driven by the rise in projects under progress and additions to assets resulted from the acquisition of Alloul Group. Al Alloul fixed assets were valued at JD million from a book value of JD 7.32 million. The company grants its employees housing loans with a ceiling of JD 22,000 without interest and cars loans with ceiling ranging between JD 10,000 and JD 35,000. Employees' housing and cars loans stood at JD million at the end of 2008, compared to JD million registered in 2007; showing a decline of 2.91%. During 2008, total current assets descended by 4.82% landing at JD million versus JD million in Such a decline is 12

13 mainly attributed to the 32.86% drop in the company's cash position which stood at JD million in 2008 in comparison to JD million registered in As for the first nine months of 2009, current assets went up by 13.92% backed by the 55.56% rise in the company's cash. Total current assets stood at JD million at the end of September Cash & At Banks 34% Current Assets-2008 Inventory and Spare Parts, Net 54% Cash & At Banks 48% Current Assets-9M09 Inventory and Spare Parts, Net 42% Other Receivables 4% Accounts Receivable 8% Other Receivables 3% Accounts Receivable 7% Inventory & Spare Parts (JD million) M08 9M09 Inventory & spare parts grew in 2008 by JD million, or 16.90%, paced by 23.33% rise in spare parts and supplies and the % increase in finished goods. JOCM's inventory & spare parts increased to JD million in 2008 as opposed to JD million recorded in As for the first nine months of 2009, inventory contracted by 10.22% to land at JD million. Accordingly, inventory contribution to total assets slipped to 16.40% in 9M09 relative to 18.84% and 17.07% registered in 2008 and 2007 correspondingly. Accounts receivables soared during 2008 by JD million, or 248%, reaching JD million in comparison to JD million recorded during the prior year. This jump is mainly attributed to the consolidation of Alloul group. Accounts Receivables Local Sales Receivables 1,033,891 7,657,134 Export Sales Receivables 1,920,688 1,920,688 Related Parties Receivables 1,325,403 1,644,362 Others 177, ,541 Total 4,457,620 11,494,725 Provisions for Doubtful Debts (2,192,981) (3,612,660) Accounts Receivables-Net 2,264,639 7,882,065 13

14 Total Liabilities (JD million) Local sales receivables soared from JD million in 2007 to reach JD 7.66 million at the end of Provisions for doubtful debts rose to JD 3.61 million in 2008, from JD 2.19 million registered in Accounts receivables posted a further increase during 9M09 reaching JD million. Liabilities The company's total liabilities recorded a yearly decline in 2008 of 2.40% settling at JD million with current liabilities shrinking by 10% while non-current liabilities increased by 47.92%. As of the end of 3Q09, total liabilities shrank by 6.93% to stand at JD million M08 9M09 Total Liabilities Accounts payable dropped by JD million during 2008 to reach JD million, compared to JD million registered in Accounts payable share of total liabilities declined to 33.63% in 2008 relative to 36.96% recorded in Looking at accounts payable composites, its can be noticed that commercial payables slipped by 19.79% to land at JD million, while accrued payables rose by 21.76% to reach JD million. Accounts Payable Commercial Accounts Payable 26,722,473 21,433,509 Accrued Payables 7,950,004 9,679,864 Other 482,666 41,388 Related Parties Payable 112, ,513 Total Accounts Payable 35,267,975 31,316,274 The company had been debt free until 2008 s acquisition of 51% of Al Alloul Group when total debt reached JD million, which included total loans of JD million, total leases of JD million and overdraft facility of JD million. 14

15 Total Equity ( JD million) Equity JOCM's total equity stood at JD million at the end of 2008, compared to JD million registered in 2007; showing a lift of 10.50%. Total equity stood at JD million at the end of September M08 9M09 Ratio Analysis Liquidity Current Ratio Quick Ratio M09 JOCM current ratio posted a minimal increase in 2008 after dropping during the prior two years due to the rise in the company's short term obligations, namely, the rise in provisions for end of service indemnity and accounts payable. Current ratio stood at 1.34 times in 2008 as opposed to 1.26 times and 1.65 times recorded in 2007 and 2006 correspondingly. Quick ratio continued its downward trend during 2008 slipping to 0.62 times relative to 0.71 times and 0.94 times registered in 2007 and 2006 respectively. Such a drop is mainly attributed to the decline in the company s cash with its contribution to current assets shrinking to 34.36% in 2008, compared to 48.71% and 50.34% recorded at the end of 2007 and 2006 correspondingly. On the other hand, inventory share of current assets have increased during the past four years settling at 53.83% in 2008 relative to 43.83% recorded in M09 Cash to Current Assets 65.37% 50.34% 48.71% 34.36% 46.92% Inventory to Current Assets 26.92% 42.69% 43.83% 53.83% 42.42% Cash to Current Liabilities % 82.93% 61.53% 45.92% 77.87% 15

16 Debt & Financing Ratios The company had been debt free until 2008 when a JD 3 million loan agreement was signed. The company's balance sheet also included overdraft of JD 1.44 million and total leases of JD million. Debt to equity ratio stood at 1.89% at the end of September 2009 relative to 2.39% recorded at the end of Total debt to assets stood at 1.61% in 2008, before declining to 1.33% at the end of September Cash to debt stood at times as of September 2009, compared to 7.48 times recorded in Profitability 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Gross Profit Margin Net Profit Margin Profitability ratios posted an enhancement in 9M09 after posting a declining trend during the prior three years. Gross profit margin was mainly affected by the increase in cost of sales which came on the back of rising fuel prices. Gross profit margin stood at 34.70% in September 2009 as opposed to 28.19% and 35.24% registered in 2008 and 2007 respectively M09 Net profit margin also posted a descending pattern between landing at 15.37% in 2008 relative to 18.68% recorded in In 9M09, net profit margin stood at 23.61% M09 ROaA 28.11% 22.35% 19.09% 17.84% 25.18% ROaE 43.01% 35.24% 32.77% 33.85% 36.54% ROAE posted a minimal enhancement in 2008 standing at 33.85% relative to 32.77% in 2007, while ROAA continued to downward trend in 2008 landing at 17.84% relative to 19.09% recorded in Efficiency Asset Turnover M09 Assets turnover ratio and fixed assets turnover ratio recorded an improvement in 2008 after declining in the prior year; showing an enhancement in the company's use of its assets to generate sales. Assets turnover ratio stood at 1.13 in 2008, compared to 0.96 recorded in 2007, while fixed assets turnover ratio rose from 1.71 in 2007 to reach 1.86 in

17 Equity turnover ratio also enhanced in 2008 reaching 1.76 relative to 1.52 and 1.31 recorded in 2007 and 2006 correspondingly; indicating the company's enhanced ability to generate sales from its investment in equity. Cash Cycle M09 Inventory Days Average Collection Period Payable Days Cash Cycle The company's cash generation period has been improving over the past four years with cash cycle declining to days at the end of 2008 relative to days and days registered in 2007 and 2006 respectively. The drop in cash cycle is primarily due to the drop in inventory days which stood at days in 2008, compared to days recorded in Price Ratios The company's PE ratio slipped to 5.94 as of the end of November 2009 as compared to 7.90 registered at the end of This drop is attributed to growth in the company's profitability. The company's PBV stood at 2.43 at the end of November

18 Stock Behavior 16 JOCM Share Price (JD) /29/04 8/29/05 4/29/06 12/29/06 8/29/07 4/29/08 12/29/08 8/29/09 In 2008, JOCM share price plunged by 41.10% closing at JD 6.45 relative to a drop of 24.94% registered by the ASE free float index. It is worth noting here that JOCM share price lost 41.36% of its value during the second half of 2008 sliding from JD 11 at the end of June to close at JD 6.45 at the end of the year. As of the end of November 2009, JOCM share price regained 9.30% to close at JD 7.05 relative to a drop of 6.34% registered by the ASE free float index. Total value traded posted a significant plunged during the first eleven months of 2009 as it stood at JD million as opposed to JD million registered during the corresponding period of the prior year; a decline of 83.15%. JOCM share price reached its peak during the first eleven months of 2009 in June 2 nd reaching to JD 7.65 while its lowest price was recorded on May 6 th at JD Closing Price (JD) High Price (JD) Low Price (JD) Average Closing Price (JD) Value Traded 150,480,408 86,817,890 35,299,839 85,088,454 14,079,638 Shares Traded 11,338,027 6,491,840 2,801,500 8,050,715 2,046,891 Number of Transaction 10,176 12,955 6,288 20,031 6,183 Average Value Traded 621, , , ,731 62,299 Average Shares Traded 46,803 27,049 8,949 32,913 9,057 18

19 Valuation The valuation was drawn using the Discounted Cash Flow Model which based on the following integral assumptions: No use of alternative energy sources A minimal growth in sales volume during by 1% to be taken up to 1.5% by 2013 Sale price of JD 69/ton in 2010 and 2011 to grow by 2% annually during 2012 and 2013 Gross profit margin across the years of 28% Five-Year US Risk Free Rate of 2.125% Beta of 0.84 Added sector risk of 5% upon the entry of competition WACC of 12.72% Given the above, the valuation arrived at a mid fair value of JD 8.81 with an upper limit of JD 9.06 and a lower limit of JD The value represents an upside of 23.39% from its closing on 6 th of JD

20 Research Team Riham N. Al-Masri Head of Research Loay Abu Baker Research Associate Hala Kaddoura Junior Analyst Heba Talatini Junior Analyst Disclaimer This report was prepared by Amwal Invest. It is provided for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information contained herein is based upon sources we believe to be reliable, but no representation, expressed or implied, is made with respect to the accuracy, completeness or reliability of the information or the opinions in the report. Amwal Invest accepts no liability for any loss arising from the use of this document. Opinions and estimates constitute our judgment and are subject to change without prior notice. Amwal Invest has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein changes or subsequently becomes inaccurate. This report may not be reproduced or redistributed without the authorization from Amwal Invest. 21