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PETROCHEMICAL INDUSTRIESMethanol ChemicalsAlsoknown asChemanolPriceSR13.8Pricing / Valuation as on May 27, 2009Mkt capSR1.7bn ($442.8mn)Sh. outstanding120.6mnKey statistics52 week range H/L (SR) 16.9/9.5Avg daily turnover (mn) SR US$3m 44.94 12.006m 43.40 11.59Raw Beta 6m 3yr0.96 N/AReuters2001.SEBloombergCHEMANOL ABPrice perform (%) 1M 3M 6MAbsolute (%) 11 23 18Market (%) 6 32 19Sector (%) 27 59 40Website: www chemanol.comValuation multiples2006 2007 2008P/E (x) N/A N/A 35.2P/B (x) N/A N/A 1.0P/Sales (x) N/A N/A 2.4Div yield (%) N/A N/A 0.0Methanol Chemicals Company (Chemanol), established in 1989, is a manufacturerof formaldehyde, methanol and derivatives, hexamine, resins and superplasticizers. The company exports about 83% of its products to more than 50countries including UK, France, Germany, South Africa, USA, Canada, and Japan.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 312 376 461 571 23.7 22.3EBITDA SRmn 65 72 61 73 19.7 3.7Net Income SRmn 40 45 25 38 54.9 (1.3)Assets SRmn 427 957 1,301 2,640 102.9 83.5Equity SRmn 182 653 678 1,390 105.0 97.0Total Debt SRmn 180 235 546 1,149 110.3 85.3Cash & Equiv SRmn 24 185 73 379 417.1 152.8EBITDA Mgn % 21.0 19.1 13.2 12.8 - -Net Mgn % 12.7 11.8 5.4 6.7 - -ROE % 23.8 10.6 3.7 3.7 - -ROA % 10.3 6.4 2.2 1.9 - -Div Payout % - - - - - -EPS SR N/A 1.0 0.4 0.5 N/M N/ABVPS SR N/A 14.5 11.3 11.5 N/M N/ASource: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.19MSCI Saudi (domestic)N/AFree float (%)Free float 50.00Relative share price perf.8,0007,0006,0005,0004,0003,000Sep-08 Nov-08 Jan-09 M ar-09 M ay-09TASITop 5 shareholders (%)18141062Chemanol (RHS)Abdullah & Abdul Aziz Kanoo Co. 11.2Zamil Group Holding Co. 11.2Mazen Khalifa Al Ahiq Al Nuaimi & 7.5SonsMohammed Jalal & Sons Co. 5.0Al Mazrooe Holding Co 5.0Source: NCBC ResearchSource: Company, NCBC Research• Business brief: Chemanol produces and supplies methanol formaldehyde and itsderivatives for use across different industries such as agricultural, pharmaceutical,paper manufacturing and construction. The company came out with an Initial PublicOffering (IPO) on the Saudi Stock Exchange in August 2008 in order to finance anexpansion plan involving investment of approximately SR2bn. The total productioncapacity of the company is 484,600 tons of methanol formaldehyde, derivatives andother methanol-based products per year. By 2009, Chemanol expects to have totalinstalled capacity of 1mn tons.• Financials: Chemanol’s revenues grew by 23.7% to SR570.7mn in 2008, while netincome rose 54.9% to SR38.2mn. Hence, the company’s net margin has shownimprovement of 130 basis points y-o-y and stood at 6.7% in 2008. Moreover, thecompany’s cash balance increased from SR73.4mn in 2007 to SR379.4mn in 2008;as the company raised capital through issuance of equity shares in August 2008.• Recent developments: Chemanol declared its 1Q-09 results on April 12, 2009. Netincome declined 37.5% y-o-y to SR5.0mn in 1Q-09. In November 2008, Chemanolannounced the appointment of Mr. Khaled Al Rabiah as the company's chiefexecutive officer (CEO). In August 2008, Chemanol announced its IPO of 50%shares, which adds up to 60.3mn shares at the offer price of SR12.0 per share.JUNE 2009METHANOL CHEMICALS COMPANY136