Neutral on full valuation
The stock trades at above-peer-average multiples, limited catalysts. We assign a Neutral rating to Petrochem at a 12-month target price of SAR16.0/share, in line with the current share price. We view the market valuation as reflective of the company’s risk/reward profile and see limited short-term positive catalysts for the stock. We look for a 24% y-o-y drop in 2016 EBITDA amid a generally lower price environment for basic chemicals, coupled with higher feedstock prices following the government’s budget announcement.
National Petrochemical Co SJSC (Petrochem), is a Saudi Arabia-based joint stock company that operates in the petrochemical sector. The Company is engaged in the development, establishment, operation, management and maintenance of petrochemical, gas, petroleum and other industrial plants; wholesale and retail trading in petrochemical materials and products, and owning land, real estate and building for the Company's benefits. The Company invests in its subsidiaries: Saudi Polymers Company, which is focused on the production of petrochemical products, such as Ethylene, High Density Polyethylene (HDPE), Low Density Linear Polyethylene (LDLPE), Hexene, Polypropylene (PP) and General Purpose Poly Styrene (GPPS) and High Impact Poly Styrene (HIPS) in its plants in Jubail Industrial City, and Gulf Polymers Distribution Company FZCO. The Company is a subsidiary of Saudi Industrial Investment Group (SIIG).
CI Capital is a diversified financial services group and Egypt’s leading provider of leasing, microfinance, and investment banking products and services.
Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that include global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors.
CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt’s first licensed MFI, Reefy.
The Group has over 1,700 employees, led by a team of professionals who are among the most experienced in the industry, with complementary backgrounds and skill sets and a deep understanding of local market dynamics.
CI Capital has been recognized as the “Best Investment Bank in Egypt” by EMEA Finance for four years running from 2013-2016, and by Global Finance in 2014 and 2015.
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