Saudi Insurance Sector- Quarterly

Saudi Insurance Sector- Quarterly Q2-2018 Head of Research Talha Nazar +966 11 2256250 t.nazar@aljaziracapital.com.sa

Company Name The Company for Cooperative Insurance Cooperative Insurance Co. Cooperative Assurance Co. Al-Rajhi Company for Cooperative Insurance for Cooperative Insurance Co. Allied Cooperative Insurance Group for Cooperative Insurance Co. Cooperative Insurance Co. Cooperative Insurance Co. Al Sagr Cooperative Insurance Co. Malath Cooperative Insurance Co. Saudi Takaful Co. Cooperative Insurance Co. Sanad Cooperative Insurance Company Walaa Cooperative Insurance Co. Allianz Saudi Fransi Cooperative Insurance Co. Al-Ahlia Insurance Co. The Mediterranean and Gulf Insurance and Reinsurance Co. Saudi Indian Company for Cooperative Insurance Co. Saudi Arabian Cooperative Insurance Company Gulf Union Cooperative Insurance Co. for Cooperative Reinsurance Co. Arabia Insurance Cooperative Company ALAHLI TAKAFUL COMPANY AXA Cooperative Insurance Co. Weqaya Takaful insurance and reinsurance Company CHUBB Arabia Cooperative Insurance Co. Cooperative Insurance Co. Insurance Co. Amana Cooperative Insurance Co. Saudi Cooperative Insurance Co. arine Co. MetLife AIG ANB Cooperative Insurance Co. Aljazira Takaful Taawuni Co. Codes Sanad Walaa Gulf Union AXA-Cooperative Weqaya Takaful Alinma Tokio MetLife

GWP (Gross Written Premiums) in Q2-18 stood at SAR 7.55bn depicting a fall of 14.1% Y/Y. Gross Written Premium NWP (Net Written Premiums) in Q2-18 stood at SAR 6.3bn, depicting a fall of 13.7%Y/Y. NPE (Net Premium Earned) in Q2-18 at SAR 7.3bn showed a decline of 4.4%Y/Y. In Q1-18, Health Sector accounted for 50.3% of the total GWP, followed by Motor which accounted for 32.7% of GWP Market Share 12000 10000 6000 4000 2000 0 30.2% 26.7% 24.2% 24.6% 22.6% 22.7% 21.5% 18.3% 19.3% 16.7% 15.5% 12.2% Q1-2013 11.9% 2.0% -9.5% -2.1% -2.2% -2.6% -2.93% -7.95% 0.77% 32.0% 28.0% 24.0% 2 16.0% 12.0% 8.0% 4.0% -4.0% -8.0% -12.0% BUPA with 26.8% market share in GWP was the biggest player, followed by at 23.3%. Premium Ceded-Industry GWP - LHS % Growth (YoY) - RHS Gainer/Loser: improved its market share from 21.0% in Q2-17 to 26.8% in Q2-18 an improvement of 574bps, followed by which showed an improvement of 124bps. improved its market share from 0.7% in Q2-17 to 2.2% in Q2-18. Retention Ratio: Industry retention ratio stood at 82.7% in Q2-18, as compared to 82.4% in Q2-17. BUPA has the highest retention ratio of 99.0% in Q2-18, Al Rajhi Takaful at 96.2% had the second highest retention ratio. 12,000 10,000 8,000 6,000 4,000 2,000 0 Q1-2013 90% 88% 86% 84% 82% 80% 78% 76% 74% 72% 70% Premium Ceded - LHS Retention Ratio - RHS GWP-Sector WIse NPE-Sector Wise Net Premium Earned 6% 33% 3% Top 5 and Bottom 5- Retention Ratio Gross Written Premium- Market Share Top 5 Gainers and Losers- GWP market Share 10 9 8 7 6 5 4 3 2 1 Bupa Arabia 1 Basis Points 8% Al Rajihi Takaful 50% Malath Health Motor Property/ Fire Protection and Saving Others Chubb Arabia Gulf General Wafa Insurance 32% 34.6% 3.3% 3.7% 2% 3% 8.5% 61% 26.8% 23.3% Health Motor Protection and Saving Accident and Liability Others Others 32.1% 8,000 19.9% 26.9% 27.3% 7,000 23.9% 24.4% 25.1% 27.2% 26.1% 23.8% 24.8% 6.8% 2.2% -4.4% 2.3% 0.8% -2.4% 20.9% 6,000 17.8% 16.9% 5,000 4,000 3,000 2,000 1,000-8.0% 6.0% 4.0% 2.0% -2.0% -4.0% -6.0% -8.0% Q1-2013 5.7% 1.24% 1.12% 0.8% 0.7% NPE -6.2% % Growth (YoY) - RHS -1.7% -1.0% -0.7% 1.4% -4.4% 35.0% 3 25.0% 2 15.0% 1 5.0% -5.0% -1-0.7% Source: Argaam, SAMA

GCP (Gross Claims Paid) in Q2-18 stood at SAR 6.6bn depicting a jump of 0.9% Y/Y. NCI (Net Claim Incurred) in Q2-18 stood at SAR 5.8bn, depicting a rise of 5.5%Y/Y. Market Share with 29.9% market share in GCP the highest claims of SAR 1.97bn, followed by BUPA at 24.9% market share in claims. Aljazira Takaful paid the lowest claims of SAR 2.2mn. In Q1-18, Health sector accounted for the highest share in claims at 67.4%, followed by Motor sector at 28.3%. Metlife had the highest loss ratio of 99% in Q2-18,followed by at 95.0% in Q2-18. Aljazira Takaful had the lowest loss ratio of 7.7%. Aljazira Takaful had the lowest combined ratio of 29%. Gross Claims Paid 7,500 30% 6,000 4,500 3,000 1,500 - Net Claims Paid 7,000 6,000 5,000 4,000 3,000 2,000 1,000-31% 27% 25% 24% 18% 19% 17% Q1-2013 66% 38% 40% 29% 25% 17% 17% -7% Q1-2013 23% 24% 9% 28% 13% Net Claims Paid - LHS 24% 23% 21% 29% 17% 19% Gross Claims Paid - LHS 9% 7% 7% -3% -1% -7% -2% 0.2% -13.2% % Growth (YoY) - RHS % Growth (YoY) - RHS 35% 30% 25% 20% 9% 15% 7% 5% 10% 0.9% 5% 0% -5% -10% 19.7% 5.3% 3.4% 5.5% 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% Claims Market Share-Company wise Claims Market Share-sector wise Claims Paid-Company wise 23% 2% 4% 8% 8% 29.9% 24.9% Others Malath AXA 28% 2% 1% 67% Health Motor Protection and Saving Accident and Liability Others IN MN SAR 2,500 2,000 1,500 1,000 500 - AXA-Cooperative Gulf Union Loss Ratio Combined Ratio 12 10 8 6 4 2 Al Rajhi Takaful AXA 200% 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Gulf Union AXA Source: Argaam, SAMA, AlJazira Capital

Net income for the sector stood at SAR 350.7mn in Q2-18, as compared to SAR 219.9mn in Q2-17, depicting a jump of 59.5%Y/Y. Net income before Zakat stood at SAR 451.0mn, depicting a jump of 45.5%. with net income of SAR 156.3mn, showed a rise of 23.1%Y/Y. In MN SAR Net Income 1,100 700 300 46 (1,141) 11 (100) (74) (500) 215 456 270 28 287 548 172 364 474 894 789 406 310 757 373 135.7 451 Bupa showed the highest surplus, from its insurance operations, at SAR 168.9mn, depicting a rise of 74.1%Y/Y. showed the highest investment income of SAR 100.8mn in the sector, registering a rise of 57.9%Y/Y. (900) (1,300) Net Income-Company wise 150.00 100.00 Aljazira Takaful showed the highest Operating margins at 3.5%, and net margin at 39.9%. Rajhi takaful posted the highest ROE of 31.5% Walaa posted the highest ROA of 7.7 %. In Mn SAR 50.00 0.00-50.00-100.00 AXA-Cooperative Gulf Union Operating Margins-Highest 10 Net Margins-Highest 10 Surplus From Insurance Operations 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Jazira Takaful n Walaa Arabia Shield Trade Union Sagr AXA 45.0% 4 35.0% 3 25.0% 2 15.0% 1 5.0% Jazira Takaful n Walaa Trade Arabia Shield Union Malath In Mn SAR 180 160 140 120 100 80 60 40 20 0-20 AXA-Cooperative ROE-Top 5 /Bottom 5 ROA-Top 5/ Bottom 5 Investment Income 4 1 100 2 5.0% 80-2 -4-6 -8-10 -12 Al Rajihi Walaa Bupa Trade Union MetLife Wafa -5.0% -1-15.0% -2-25.0% Walaa Arabian Shield Bupa Alinma MetLife Wafa In Mn SAR 60 40 20 0 AXA-Cooperative Source: Argaam

had the lowest PE of 6.5x, followed by with a PE of 7.0x. for Cooperative Reinsurance Co has the lowest PB of 0.7x, followed by with a PB of 1.1x Only 4 companies gave out dividends, had the highest dividend yield of 3.7%. Tadawul Insurance Index- 1 Yr Performance 9000 TASI (LHS) Insurance Sector (RHS) 5500 5300 5100 4900 4700 4500 4300 4100 3900 3700 3500-1 Yr Performance 9000 TASI (LHS) (RHS) 115 105 95 85 75 65 55 45 Lowest PE 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Lowest PB 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Arabian Shield WALAA CHUBB AlRajhi Al-Ahlia U C A Sagr Gulf Union CHUBB BUPA-1 Yr Performance Alrajhi Takaful-1 Yr Performance Highest Dividend Yield 9000 TASI (LHS) Bupa (RHS) 125 120 115 110 105 100 95 90 85 80 75 9000 TASI (LHS) Alrajhi takaful (RHS) 90 85 80 75 70 65 60 55 50 45 40 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 3.7% 3.6% 3.0% 2.1% Medgulf-1 Yr Performance Walaa-1 Yr Performance Top 5 Companies-Market Cap 9000 35 9000 35 12,000 30 10,000 TASI (LHS) Medgulf (RHS) 25 20 15 10 TASI (LHS) WALAA (RHS) 30 25 20 In Mn SAR 8,000 6,000 4,000 2,000 - AlRajhi Takaful WALAA

APPENDIX 1 GWP YoY QoQ NWP YoY QoQ NPE YoY QoQ Q2-2017 Q1-2018 Q2-2018 Q2-2017 Q1-2018 Q2-2018 Q2-2017 Q1-2018 Q2-2018 2,104 2,096 1,756-16.6% -16.2% 1,758 1,903 1,397-20.5% -26.6% 1,759 1,832 1,883 7.0% 2.8% 202 246 224 11.0% -8.9% 194 235 213 9.7% -9.1% 113 168 181 60.3% 7.9% 251 104 89-64.7% -14.7% 61 27 28-54.2% 3.3% 146 52 37-75.0% -3 Al Rajhi Takaful 680 1,016 638-6.2% -37.2% 649 985 611-5.9% -38.0% 407 686 719 76.5% 4.8% 48 101 56 17.1% -44.1% 26 63 31 22.8% -5 50 46 39-22.5% -14.4% 102 116 114 11.6% -1.6% 88 105 103 17.4% NM* 110 87 82-24.9% NM* 1,848 2,489 2,020 9.3% -18.9% 1,832 2,472 1,992 8.8% -19.4% 1,939 1,909 1,937-0.1% 1.4% 165 241 93-43.5% -61.2% 114 148 63-44.3% -57.3% 102 122 106 3.3% -13.5% 144 98 84-41.6% -13.9% 133 89 69-47.9% -21.7% 100 117 131 30.7% 11.6% 93 64 78-16.7% 21.0% 68 58 62-9.2% 5.6% 95 42 58-39.1% 36.6% 144 372 130-9.5% -65.0% 127 345 104-18.0% -69.9% 351 227 220-37.3% -3.2% 21 72 38 84.2% -47.1% 18 65 36 101.7% -45.7% 52 43 40-23.7% -8.0% 289 232 221-23.5% -4.9% 245 205 191-22.0% -6.6% 193 189 176-9.0% -6.9% 218 311 248 14.0% -20.1% 173 247 137-20.9% -44.5% 161 200 196 21.7% -2.2% 227 298 225-1.0% -24.7% 134 234 108-19.9% -54.0% 130 166 160 23.3% -3.6% 46 34 43-7.1% 25.9% 43 30 39-9.6% 28.2% 43 37 37-15.5% -1.4% 869 414 278-68.0% -32.8% 702 349 245-65.1% -29.8% 714 586 565-20.9% -3.7% 119 88 23-80.2% -73.4% 73 52 14-80.5% -72.5% 126 101 98-22.4% -3.3% 45 39 36-19.5% -5.6% 34 28 27-19.5% -1.0% 32 34 33 3.0% -4.3% 149 371 213 42.8% -42.6% 105 219 170 62.6% -22.3% 124 130 142 14.6% 9.1% Gulf Union 79 80 50-36.5% -37.5% 53 44 32-38.8% -27.1% 23 56 54 130.2% -4.1% 121 528 62-48.6% -88.2% 89 492 43-51.4% -91.3% 119 143 150 26.0% 5.0% 69 117 77 12.4% -33.9% 46 85 57 23.0% -32.9% 70 73 54-23.8% -26.4% 58 123 49-15.8% -60.1% 10 75 5-52.8% -93.5% 21 21 16-24.3% -24.3% AXA-Cooperative 220 675 184-16.3% -72.7% 195 589 168-14.0% -71.5% 265 323 300 13.5% -6.9% 48 99 53 9.0% -46.7% 28 51 25-9.0% -50.5% 29 27 26-11.1% -2.7% 46 94 73 57.3% -23.2% 23 47 45 91.1% -4.9% 34 29 23-31.8% -19.5% 83 268 164 99.2% -38.7% 42 142 113 166.3% -20.6% 65 74 73 11.9% -1.7% 16 36 35 115.4% -3.6% 6 21 21 249.3% -0.6% 58 14 11-81.6% -24.1% 66 87 51-23.5% -41.9% 65 83 36-44.1% -56.0% 14 34 52 270.2% 55.5% 103 142 101-2.0% -29.0% 25 109 40 58.5% -63.5% 33 32 35 4.0% 9.1% 88 101 26-70.6% -74.3% 63 76 16-74.7% -78.9% 42 55 69 66.1% 25.5% 32 14 16-49.3% 11.9% 13 2 4-72.0% 57.9% 7 9 7-2.9% -18.9% Total 8,794 11,166 7,549-14.2% -32.4% 7,235 9,676 6,246-13.7% -35.4% 7,529 7,665 7,706 2.4% 0.5% Source: Argaam, *NM: Not meaningfull

APPENDIX 2 Gross Claims Paid YoY QoQ Net Claims Paid YoY QoQ Q2-2017 Q1-2018 Q2-2018 Q2-2017 Q1-2018 Q2-2018 1,519 2,206 1,970 29.7% -10.7% 1,449 1,581 1,647 13.7% 4.2% 112 145 129 15.1% -10.9% 129 136 139 8.3% 2.4% 64 54 0-10 -10 (4) 15 2-153.4% -85.1% Al Rajhi Takaful 559 556 515-7.9% -7.3% 583 591 588 1.0% -0.4% 23 20 21-7.2% 7.4% 12 9 13 6.0% 45.4% 73 75 76 4.2% 0.9% 59 69 70 18.2% 0.8% 1,647 1,341 1,642-0.4% 22.4% 1,522 1,728 1,538 1.0% -11.0% 90 68 75-16.2% 11.4% 70 64 67-4.5% 5.3% 61 67 62 1.1% -7.4% 62 62 43-30.7% -30.9% 42 50 47 10.3% -5.4% 28 45 47 70.1% 3.1% 264 169 130-50.8% -23.2% 188 90 96-49.0% 6.4% 26 21 26 1.5% 25.0% 16 8 21 28.9% 147.7% 143 124 115-19.8% -7.4% 118 119 114-2.8% -4.2% 125 120 116-7.4% -3.5% 123 122 126 1.7% 2.9% 147 158 130-11.0% -17.5% 129 123 111-13.8% -9.5% 24 26 27 12.5% 2.5% 28 29 24-14.9% -17.4% 633 553 558-11.9% 0.8% 532 442 367-31.0% -17.1% 149 119 99-33.2% -16.1% 76 80 40-46.6% -49.3% 15 6 16 4.1% 175.5% 25 27 29 14.6% 9.0% 135 110 95-30.1% -14.3% 88 102 116 31.8% 13.0% Gulf Union 47 49 - -10-10 35 28 29-18.8% 1.4% 82 85 92 12.5% 9.2% 92 113 93 1.6% -17.0% 63 47 48-24.3% 2.1% 42 33 35-16.0% 7.8% 35 97 27-21.3% -72.0% 3 75 7 131.8% -91.1% AXA-Cooperative 211 175 266 25.8% 51.9% 267 237 239-10.6% 0.8% 29 14 12-59.0% -17.3% 9 8 8-10.7% -6.8% 35 41 26-26.7% -36.0% 13 14 15 13.6% 5.9% 57 65 62 7.5% -4.8% 48 44 47-1.7% 7.4% 22 10 10-53.8% 2.6% 9 4 4-58.1% -4.8% 23 68 71 206.4% 3.7% 20 119 47 128.4% -60.7% 30 35 46 52.0% 31.1% 20 37 34 68.5% -7.4% 46 74 81 75.2% 8.4% 42 75 51 21.4% -32.7% 2 4 2 36.6% -38.2% 0 0 0-47.3% -5.4% Total 6,534 6,750 6,592 0.9% -2.4% 5,834 6,230 5,807-0.5% -6.8% Source: Argaam, *NM: Not meaningfull

APPENDIX 3 Net income Before Zakat YoY QoQ Net Income YoY QoQ Q2-2017 Q1-2018 Q2-2018 Q2-2017 Q1-2018 Q2-2018 (3.2) (15.6) (1.3) -60.2% -91.7% (3.8) (16.1) (1.8) -53.2% -89.0% 8.9 7.3 6.5-26.6% -11.3% 8.1 7.1 6.3-22.4% -11.3% 248.8 41.9 38.3-84.6% -8.7% 231.0 27.1 24.9-89.2% -8.0% 5.0 10.0 5.3 5.1% -47.2% 3.5 7.8 3.0 NM* -60.8% (417.3) (23.3) (8.6) -97.9% -62.9% (417.3) (25.1) (10.6) -97.5% -58.0% 7.8 9.7 9.6 22.5% -1.3% 6.0 8.1 7.4 22.3% -8.8% 16.2 7.3 9.0-44.1% 23.9% 14.9 5.8 7.5-49.5% 30.1% 35.6 38.7 34.3-3.5% -11.4% 32.2 34.8 30.4-5.8% -12.7% 22.3 13.1 6.7-7 -48.7% 19.4 9.8 3.7-80.9% -62.0% 1.8 0.6 0.4-78.3% -35.3% 0.6 (0.9) (1.1) -289.6% 20.7% 11.5 0.0 0.4-96.4% 1117.6% 9.8 (2.1) (2.0) -120.1% -6.3% 2.9 (31.8) (10.7) -464.6% -66.5% 1.1 (32.8) (10.7) -1100.9% -67.5% Gulf Union 5.8 5.5 (10.7) -285.6% -296.4% 5.8 2.3 (10.7) -285.6% -575.6% 11.1 7.9 7.4-33.6% -6.4% 9.4 6.0 6.0-36.1% -0.1% 4.1 7.2 3.6-13.0% -51.0% 3.4 6.3 3.1-9.5% -50.7% 6.6 2.4 2.9-55.6% 21.4% 6.1 1.9 (0.1) -102.2% -106.9% 3.6 3.8 1.3-64.1% -65.8% 1.6 2.5 (0.3) -117.1% -110.6% 25.1 25.2 25.4 1.0% 0.9% 22.6 20.2 22.4-1.1% 11.1% 12.9 1.3 11.1-14.0% 730.2% 13.1 7.6 9.6-26.8% 26.0% 7.7 16.7 7.9 3.4% -52.3% 6.9 15.4 6.4-6.7% -58.3% (1.8) (6.9) (0.3) -83.8% -95.8% (2.3) (6.2) (1.2) -48.7% -81.1% AXA-Cooperative 14.8 18.2 24.1 62.6% 32.2% 10.8 14.4 17.0 57.2% 18.2% 11.3 0.0 (0.8) -107.2% -2347.2% 9.8 (1.2) (2.3) -123.1% 96.7% 27.8 22.9 16.1-42.2% -29.9% 25.1 19.7 13.0-48.3% -34.1% 7.1 10.5 6.2-13.0% -41.3% 3.9 10.5 1.3-67.2% -87.8% 13.4 7.6 6.4-52.0% -15.3% 9.4 4.6 3.3-65.0% -28.6% 27.4 (7.6) 3.1-88.8% -140.5% 27.4 (9.1) 3.1-88.8% -133.9% 145.8 9.3 178.9 22.7% 1813.4% 127.0 (13.2) 156.3 23.1% -1282.4% 6.9 9.3 1.3-81.3% -86.0% 2.3 5.9 (2.2) -196.2% -137.6% 9.8 10.6 10.3 5.0% -3.5% 8.1 8.7 8.3 2.7% -4.5% (3.5) (103.3) 23.4-774.1% -122.7% (4.1) (103.9) 22.8-660.1% -122.0% 41.1 41.4 52.9 28.7% 27.9% 36.4 37.6 48.5 33.0% 29.1% (7.5) (4.4) (9.3) 24.5% 113.9% (8.5) (5.7) (10.7) 25.0% 87.0% Total 309.8 135.7 451.0 45.5% 232.3% 219.9 47.5 350.7 59.5% 638.3% Source: Argaam, *NM: Not meaningfull

APPENDIX 4 Market Cap PE PB Dividend Yield 6,437.50 M 2.9 - METLIFE AIG ANB 329.76 NM* 2.1-660.10 22.9 1.7 2.33% MALATH INSURANCE 622.00 NM* 1.3-684.00 NM* 1.5-471.60 12.6 1.8-417.00 7.8 1.6 - WALAA 1,066.56 7.1 1.6-549.60 6.5 1.3-639.20 M 1.8-369.00 11.7 1.1 - WAFA Insurance 117.60 M 2.9 -- Gulf Union 187.50 19.1 1.2 -- 404.98 13.1 1.7 2.65% Al-Ahlia 171.20 10.8 1.4 -- 326.00 27.3 2.3 -- 527.35 43.4 2.1 -- 605.00 7.0 1.5 -- 510.40 24.6 1.1 7.14% U C A 440.00 M 1.1 -- 565.38 17.7 0.7 -- 7,872.00 15.5 3.4 1.46% AlRajhi Takaful 2,140.00 10.6 3.1 -- CHUBB 388.00 9.6 1.4 -- AXA Cooperative 1,035.00 14.5 1.9 -- 270.00 23.8 1.4 -- 615.00 7.6 1.4 1.62% 1,384.00 36.8 3.7 -- 414.00 14.2 1.3 -- 482.00 10.5 2.0 -- 228.76 714.9 2.1 -- 208.20 NM* 2.8 -- 574.80 NM* 2.2 -- Sector 31,713.49 13.4 2.1 -- Source: Argaam, *NM: Not meaningful

RESEARCH DIVISION Head of Research Talha Nazar +966 11 2256250 t.nazar@aljaziracapital.com.sa Analyst Sultan Al Kadi, CAIA +966 11 2256374 s.alkadi@aljaziracapital.com.sa Analyst Jassim Al-Jubran +966 11 2256248 j.aljabran@aljaziracapital.com.sa Analyst Waleed Al-Jubayr +966 11 2256146 W.aljubayr@aljaziracapital.com.sa Analyst Muhanad Al-Odan +966 11 2256115 M.alodan@aljaziracapital.com.sa BROKERAGE AND INVESTMENT CENTERS DIVISION General Manager Brokerage Services & sales Alaa Al-Yousef +966 11 2256060 a.yousef@aljaziracapital.com.sa AGM-Head of international and institutional brokerage Luay Jawad Al-Motawa +966 11 2256277 lalmutawa@aljaziracapital.com.sa AGM- Head of Western and Southern Region Investment Centers Mansour Hamad Al-Shuaibi +966 12 6618443 m.alshuaibi@aljaziracapital.com.sa AGM-Head of Sales And Investment Centers Central Region Sultan Ibrahim AL-Mutawa +966 11 2256364 s.almutawa@aljaziracapital.com.sa AGM-Head of Qassim & Eastern Province Abdullah Al-Rahit +966 16 3617547 aalrahit@aljaziracapital.com.sa RESEARCH DIVISION RATING TERMINOLOGY AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory, and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and International markets, as well as offering a full suite of securities business. 1. Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target. Stocks rated Overweight will typically provide an upside potential of over 10% from the current price levels over next twelve months. 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 10% 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 +/- 10% 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. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies. No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations. Asset Management Brokerage Corporate Finance Custody Advisory Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia Tel: 011 2256000 - Fax: 011 2256068 Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37