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CEMENTTabuk CementAlso known asTCCPriceSR22.0Pricing / Valuation as on May 27, 2009Mkt capSR2.0bn ($528.7mn)Sh. outstanding90.0 mnKey statistics52 week range H/L (SR) 38.3/16.3Avg daily turnover (mn) SR US$3m 6.40 1.7112m 5.08 1.36Raw Beta 6m 3yr0.60 0.85Reuters3090.SEBloombergTACCO ABPrice perform (%) 1M 3M 12MAbsolute (%) 0 17 (41)Market (%) 6 32 (39)Sector (%) (6) 19 (44)Website: www tcc-sa.comValuation multiples2006 2007 2008P/E (x) 13.4 17.2 11.4P/B (x) 3.5 3.7 1.7P/Sales (x) 7.6 11.1 6.1Div yield (%) 0.0 5.9 7.6Weightage (%)TASI (free float weight) 0.42MSCI Saudi (domestic – small cap) 4.13Free float (%)Free float 94.69Relative share price perf.11,000409,000307,000205,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITabuk Cement (RHS)Founded in 1994, Tabuk Cement Company (TCC) is the smallest cement company inKSA in terms of market capitalization. In 2008, the company produced 1.1mn tonnesof cement at its plant located in the north-west region of the country. TCC’s strategiclocation enables it to cater to the demand for cement in the northern regions.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 304 380 341 291 (14.7) (1.5)EBITDA SRmn 219 276 263 196 (25.5) (3.7)Net Income SRmn 154 218 220 157 (28.9) 0.5Assets SRmn 1,035 1,154 1,366 1,226 (10.3) 5.8Equity SRmn 824 838 1,031 1,052 2.0 8.4Total Debt SRmn - - - - - -Cash & Equiv SRmn 9 10 3 2 - -EBITDA Mgn % 72.2 72.7 77.2 67.5 - -Net Mgn % 50.8 57.2 64.6 53.9 - -ROE % 18.9 26.2 23.6 15.1 - -ROA % 14.4 19.9 17.5 12.1 - -Div Payout % 90.4 0.6 102.0 86.1 - -EPS SR 11.1 3.1 2.5 1.7 (28.9) -BVPS SR 58.9 12.0 11.5 11.7 2.0 -Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncSaudi Arabia 100.0 100.0Source: Company, NCBC Research• Business brief: TCC held 3.9% market share of the domestic cement market in2008, (in terms of sales volumes), a decrease from 5.1% in 2007. The company hasa 3.37% stake in Industrialization & Energy Services Company, a support servicesand product manufacturing company catering to the energy sector.• Financials: Sales fell 14.7% y-o-y to SR290.9 mn in 2008. This could be ascribed toa 15.1% y-o-y decline in the sales volumes to 1.2 mn tonnes. TCC reported EBITDAmargin of 67.5% in 2008, a 971 basis points decline over the previous year. Declinedsales and higher expenses associated with revamping of the production line led to afall in the bottom-line. Net income fell 28.9% y-o-y to SR156.8 mn in 2008.Consequently, company’s net margin stood at 53.9% in 2008 from 64.6% in 2007.Top 5 shareholders (%)Khaled Saleh Abdul Rahman AlShethriSource: NCBC Research6.7• Recent developments: In April 2009, TCC announced a 33.8% decline in net profitsto SR33.5mn driven by a decline in sales as well as cement prices during the period.In February 2007, the company announced plans to construct a new production linewith a daily capacity of 5,000 tonnes. On February 11, 2007, the Capital MarketAuthority agreed to increase TCC’s capital from SR700 mn to SR900 mn by issuingbonus shares.JUNE 2009TABUK CEMENT145