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PETROCHEMICAL INDUSTRIESNama Chemicals CoAlsoknown asNAMAPriceSR11.7Pricing / Valuation as on May 27, 2009Mkt capSR1.5bn ($399.8mn)Sh. outstanding128.5mnKey statistics52 week range H/L (SR) 28.8/7.4Avg daily turnover (mn) SR US$3m 63.41 16.9312m 57.94 15.47Raw Beta 6m 3yr1.23 1.27Reuters2210.SEBloombergNAMA ABPrice perform (%) 1M 3M 12MAbsolute (%) 26 40 (53)Market (%) 6 32 (39)Sector (%) 27 59 (52)Website: www nama com saValuation multiples2006 2007 2008P/E (x) 82.7 72.3 N/MP/B (x) 2.3 2.7 0.7P/Sales (x) 4.6 4.8 1.8Div yield (%) 0.0 0.0 0.0Nama Chemicals Company (NAMA) was established in 1992. The companydevelops, owns, and operates industrial projects within the chemical andpetrochemical sectors. NAMA functions via its affiliates - Arabian Alkali Company(55,000mta capacity) and Jubail Chemical Industries Company (60,000mta capacity).Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 293 395 513 622 21.2 28.6EBITDA SRmn 17 40 50 27 (46.8) 17.1Net Income SRmn 30 22 34 (68) (298.0) (231.4)Assets SRmn 1,087 1,115 1,751 2,545 45.4 32.8Equity SRmn 686 784 922 1,557 69.0 31.4Total Debt SRmn 193 254 696 800 15.0 60.6Cash & Equiv SRmn 172 94 82 487 497.9 41.5EBITDA Mgn % 5.7 10.0 9.8 4.3 - -Net Mgn % 10.2 5.6 6.6 (10.9) - -ROE % 4.4 3.0 4.0 (5.4) - -ROA % 2.9 2.0 2.4 (3.1) - -Div Payout % - - - - - -EPS SR 2.3 0.3 0.4 (0.7) N/M N/MBVPS SR 52.8 11.6 12.0 12.1 N/M N/MSource: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008Epoxy, Caustic Soda 100.0%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.33MSCI Saudi (domestic)N/AFree float (%)Free float 100.00Relative share price perf.11,000309,000207,000105,0003,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASINAMA (RHS)Top 5 shareholders (%)Ahmed Hamad Al Gosa bi Co. 7.4Source: NCBC ResearchSource: Company, NCBC Research• Business brief: Arabian Alkali is one of the largest caustic soda producers in theMiddle East. JANA produces epoxy resins and markets them under the brand namesof RAZEEN and ARALDITE. NAMA is currently setting up the Hassad PetrochemicalsCompany that will manufacture different types of chemicals to supply both thesubsidiaries.• Financials: In 2008, the company‘s sales increased 21.2% y-o-y to SR621.8mn.However, the company reported a net loss of SR67.5mn in 2008. This was due to anincrease in the cost of goods sold and higher selling, general and administrativeexpenses.• Recent developments: NAMA declared its 1Q-09 result on April 21, 2009, reportinga loss of SR32.4mn in 1Q-09 against a net profit of SR12.3mn a year earlier. OnMarch 4, 2009, the company announced that the experimental operations at itsSR1bn Hassad plant would complete soon. In January 2009, NAMA’s subsidiary,JANA received a SR210mn loan from the Saudi Industrial Development Fund. Theloan amount will be used for the expansion of the epoxy factory in order to double itsproduction capacity to 120,000 tons per annum by end of 2011. In November 2008,the company hiked its capital to SR1,285.2mn from SR765mn through a rights issue.JUNE 2009NAMA CHEMICALS COMPANY134