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RETAILAlkhaleej TrainingAlso known asAlkhaleejPricePricing / Valuation as on May 27, 2009SR48.1Mkt capSR0.7bn ($192.7mn)Sh. outstanding 15.0mKey statistics52 week range H/L (SR) 68.8/23.5Avg daily turnover (mn) SR US$3m 37.07 9.9012m 22.94 6.12Raw Beta 6m 1yr1.39 0.98ReutersBloomberg4290.SEALKHLEEJ ABPrice perform (%) 1M 3M 12MAbsolute (%) 3 54 (23)Market (%) 6 32 (39)Sector (%) 9 20 (16)Website: www alkhaleej.com.saValuation multiples2006 2007 2008P/E (x) - 36.7 11.0P/B (x) - 8.6 2.3P/Sales (x) - 4.4 1.3Div yield (%) - - 1.7Weightage (%)TASI (free float weight) 0.07MSCI Saudi (domestic – mid cap)Free float (%)Free float 41.20Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)Alkhaleej Trng (RHS)Abdul Aziz Rashid Abdul Rahman Al 20.3RashidAbdul Aziz Hamaad Nasser AlBulaihid13.3Ahmed Ali Ahmed Al Shedwy 13.3AlWaleed Abdul Razzaq Saleh Al 11.8DuraianAhmed Mohammed Salim Al Sirry 7.6Source: NCBC Research80604020-Alkhaleej Training and Education Company (Alkhaleej), was established in 1992 andconducts training programs in the fields of IT, electronics, English language, andadministrative and financial services. The company has more than 81 branches inSaudi Arabia and in more than 17 locations in the Middle East.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 213 242 301 346 14.9 17.5EBITDA SRmn 57 58 60 70 15.7 7.1Net Income SRmn 39 37 36 41 13.7 1.8Assets SRmn 178 236 302 357 18.4 26.1Equity SRmn 93 115 154 195 26.3 27.8Total Debt SRmn 25 42 45 89 100.7 53.9Cash & Equiv SRmn 12 8 26 34 29.7 41.1EBITDA Mgn % 26.6 23.8 20.0 20.1 - -Net Mgn % 18.2 15.3 12.0 11.8 - -ROE % 41.6 35.6 26.8 23.5 - -ROA % 21.8 17.9 13.4 12.4 - -Div Payout % 18.6 39.0 - 18.3 - -EPS SR 5.1 4.8 4.7 4.1 (12.6) (6.8)BVPS SR 9.3 11.5 15.4 19.5 26.3 27.8Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncComputer training 63.2Language schools 21.8Other professional training 15.0Source: Company,NCBC Research• Business brief: Alkhaleej executes its training programs through its various divisionsincluding New Horizons Computer Learning Centers (the largest independent ITtraining company), Direct English Centers, Platinum Center for Advanced TrainingSolutions (provides advanced computer courses); Takniat for Training, Business &Professional Development (specializes in management training); Kawader (employsthe graduates of its programs) and E-Learning (provides more than 2000 coursesonline),• Financials: Alkhaleej has recorded a CAGR of 17.5% in revenues over the period2005-08 due to its established training franchise in the Kingdom. The company’srevenues increased 14.9% y-o-y during 2008. The stable revenue growth caused thecompany’s EBITDA margin to remain steady at 20.1%. The company’s net incomerose 13.7% during 2008 to SR41.0mn in 2008.• Recent developments: For 1Q-09, the Company registered a decline in net profit of7% y-o-y to SR10.23mn. In March 2009, CMA approved Alkhaleej request to increaseits capital from SR100mn to SR150mn by issuing one bonus share for every two held.In July 2008, Alkhaleej bought 11% stake in Injuavon Global System for SR5mn. InJune 2008, the company got the market regulator’s approval to increase its capital toSR100mn through a bonus issue of 1:4.JUNE 2009ALKHALEEJ TRAINING155