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PETROCHEMICAL INDUSTRIESAlujain CorporationAlso known asAlujainPriceSR19.6Pricing / Valuation as on May 27, 2009Mkt capSR1.4bn ($362.2mn)Sh. outstanding69.2mnKey statistics52 week range H/L (SR) 51.5/9.0Avg daily turnover (mn) SR US$3m 20.97 5.6012m 21.66 5.78Raw Beta 6m 3yr1.33 1.35Reuters2170.SEBloombergALCO ABPrice perform (%) 1M 3M 12MAbsolute (%) 26 93 (60)Market (%) 6 32 (39)Sector (%) 27 59 (52)Website: www alujaincorporation.comValuation multiples2006 2007 2008P/E (x) N/M N/M N/MP/B (x) 2.1 5.1 1.5P/Sales (x) N/M N/M N/MDiv yield (%) 0.0 0.0 0.0Alujain Corporation (ALCO), an industrial investment firm, was established in 1991and promoted by Xenel Industries (one of the oldest conglomerates in theKingdom). The company’s investments include 57.4% stake in NationalPetrochemical Co. (NatPet) and a 93.1% stake in Arab Pesticide Co. (MOBEED).Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn - - - - - -EBITDA SRmn (4) (7) (57) (59) N/M N/MNet Income SRmn 3 0 (40) (65) N/M (367.5)Assets SRmn 702 713 2,747 3,229 17.5 66.1Equity SRmn 691 703 651 515 (20.8) (9.2)Total Debt SRmn - - 1,612 2,123 31.7 -Cash & Equiv SRmn 110 64 226 150 (33.6) 74.1EBITDA Mgn % N/M N/M N/M N/M - -Net Mgn % N/M N/M N/M N/M - -ROE % 0.5 0.1 (5.9) (11.2) - -ROA % 0.5 0.0 (2.3) (2.2) - -Div Payout % - - - - - -EPS SR 0.2 0.0 (0.6) (0.9) N/M N/MBVPS SR 49.9 20.4 9.4 7.5 N/M N/MSource: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncIndustrial Development 100.0 Saudi Arabia 100.0 100.0Weightage (%)TASI (free float weight) 0.26MSCI Saudi (domestic – small cap) 4.42Free float (%)Free float 85.09Relative share price perf.11,000609,000407,000205,0003,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASIALCO (RHS)Top 5 shareholders (%)Safra Company 14.9Khalid Abdul Rahman Saleh Al Rajhi 9.9Source: NCBC ResearchSource: NCBC Research• Business brief: ALCO predominantly invests in the Saudi petrochemical, energy,mining and metals sector. The company transferred its Alfasel propylene productionfacility to the Teldene Polypropylene project, promoted by associate NatPet, in May2006. NatPet owns a SR2.3bn propylene-polypropylene plant, with 400,000 tonnesper annum (TPA) capacity. The company also signed contracts with SABIC andNoble Group for the offtake of production.• Financials: Since ALCO was not operational in 2008, the company does not reportany sales revenues. In 2008, ALCO’s income from other sources declined 51.2% y-oyto SR11.0mn. This coupled with an increase in the operating expenses led to a netloss of SR65.1mn in 2008 compared to a loss of SR39.6mn in 2007.• Recent developments: ALCO declared its 1Q-09 results on April 20, 2009, reportinga loss of SR10.8mn in 1Q-09 compared to SR13.1mn loss a year ago. In April 2009,the polypropylene plant owned by NatPet started operations. The plant is currentlyrunning at a utilization rate of 73% and is likely to reach full capacity by end of May2009. In February 2009, ALCO increased its stake in MOBEED to 93.1% from 25%earlier. The company also signed an agreement with Safra Co. to maintain andoperate MOBEED's facilities. The Board of Directors appointed Mr. Maatouk HasanAhmad and Mr. Khalid Abdulrazzak Al Nafisi to the board in 2009.JUNE 2009ALUJAIN CORPORATION135