Gas price revision priced in; maintain Neutral
Cut SAFCO target price by 12% on higher long-term gas prices. Our new forecasts are based on Saudi’s new gas price of USD1.25/mmBtu in 2016, rising to USD3.0/mmBtu as of 2020 in line with Henry hub futures, versus a constant USD2.0/mmBtu assumption before. The 67% y-o-y hike in Saudi feedstock costs from USD0.75/mmBtu (in place since 1998) would raise SAFCO’s cash costs by 13%, shaving SAR145mn off 2016e earnings.
Saudi Arabia Fertilizers Co SJSC is a Saudi Arabia-based company, which is mainly engaged in the manufacture and conversion of urea and ammonia. The Company's objectives are: to produce, process, manufacture and market a range of fertilizers for the local and international market; to produce and manufacture ammonia, urea and market all products for the local and international market, as well as to establish, acquire and operate chemical and non-chemical factories for the purpose of expansion in the Company's activities. The Company has equity interest in: National Chemical Fertilizers Company, which is engaged in the manufacturing and marketing of chemical fertilizers; Arabian Industrial Fibers Company, as well as Yanbu National Petrochemical Company.
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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