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PETROCHEMICAL INDUSTRIESYanbu NationalAlso known asYANSABPriceSR27.0Pricing / Valuation as on May 27, 2009Mkt capSR15.2bn ($4,055.4mn)Sh. outstanding562.5mnKey statistics52 week range H/L (SR) 64.5/12.5Avg daily turnover (mn) SR US$3m 41.66 11.1212m 54.27 14.49Raw Beta 6m 3yr1.39 1.20Reuters2290.SEBloombergYANSAB ABPrice perform (%) 1M 3M 12MAbsolute (%) 28 66 (55)Market (%) 6 32 (39)Sector (%) 27 59 (52)Website: www.yansab com.saValuation multiples2006 2007 2008P/E (x) 99.2 N/M N/MP/B (x) 2.4 5.2 1.5P/Sales (x) N/M N/M N/MDiv yield (%) 0.0 0.0 0.0Yanbu National Petrochemicals Company (Yansab), with the majority stake ownedby Saudi Basic Industries Corporation (55%) was established in 2006 to set-up afour mn tonnes/year petrochemical complex in the Yanbu industrial city.Company financials2006 # 2007* 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn - - - - -EBITDA SRmn (49) (83) (26) N/M -Net Income SRmn 140 110 (26) N/M -Assets SRmn 7,082 15,309 18,677 22.0 -Equity SRmn 5,753 5,723 5,697 (0.4) -Total Debt SRmn - 8,166 11,797 44.5 -Cash & Equiv SRmn 822 1,694 1,033 (39.0) -EBITDA Mgn % - - - - -Net Mgn % - - - - -ROE % 2.4 N/M (0.4) - -ROA % 2.0 N/M (0.2) - -Div Payout % - - - - -EPS SR 0.2 0.2 (0.0) N/M -BVPS SR 10.2 10.2 10.1 (0.4) -Source: Company, NCBC Research* 2007 figures represents the financial performance for 23 months period ending Dec 31, 2007# 2006 figures represents the financial performance for 11 months period ending Dec 31, 2006Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.90MSCI Saudi (domestic – large cap) 2.89Free float (%)Free float 26.51Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)80604020YANSAB (RHS)SABIC 51.0General Organization for Social 9.2Insurance (GOSI)Source: NCBC Research-Source: Company, NCBC Research• Business brief: Once fully operational the approximately SR18bn complex isexpected to produce ethylene (1,300 thousand tonnes/year—KTA), Propylene (400KTA), Polypropylene (400 KTA), Polyethylene—low-density and high-density—(400KTA each), Mono, Di and Tri Ethylene Glycol (770 KTA, total), Benzene (170 KTA),Butene -1 (65 KTA), Butene -2 (50 KTA), Methyl Tertiary Butyl Ether (20 KTA) andBenzene Toluene Xylene (70 KTA). Operations are expected to commence in 2Q-09,with pre-commissioning of several units under-progress.• Financials: As Yansab is in pre-operating stage for the fiscal period underconsideration, all revenues and expenses are non-operational in nature. Thecompany reported net loss of SR25.6mn in 2008 while it reported a net profit ofSR109.9mn for the 23 months period ending December 31, 2007. Although theoperating expenses declined, the absence of any non-operating income led to the fallin bottom line in 2008.• Recent developments: Yansab’s net loss widened to SR8.2mn in 1Q-09 comparedto SR6.6mn a year ago due to higher corporate expenses. The company expectsoperations at its petrochemical complex to start in 2Q-09, according to anannouncement on March 11, 2009. In January 2009, the company informed that theconstruction work has reached final phase, with 93% completion by 2008 end.JUNE 2009YANBU NATIONAL132