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AGRICULTURE & FOOD INDUSTRIESQassim AgricultureAlso known asGACOPriceSR12.0Pricing / Valuation as on May 27, 2009Mkt capSR0.6bn ($159.5mn)Sh. outstanding50.0mnKey statistics52 week range H/L (SR) 15.5/6.4Avg daily turnover (mn) SR US$3m 47.05 12.5612m 26.77 7.15Raw Beta 6m 3yr0.99 1.24Reuters6020.SEBloombergQAACO ABPrice perform (%) 1M 3M 12MAbsolute (%) 11 35 (22)Market (%) 6 32 (39)Sector (%) 4 21 (22)Website: NAValuation multiples2006 2007 2008P/E (x) NM NM NMP/B (x) 2.6 2.8 0.9P/Sales (x) 16.0 23.1 4.3Div yield (%) NA NA NAWeightage (%)TASI (free float weight) 0.13MSCI Saudi (domestic – small cap) 0.96Free float (%)Free float 100.00Relative share price perf.11,000209,000157,000105,00053,000-M ay-08 Sep-08 Jan-09 M ay-09TASI Qassim Agriculture (RHS)Top 5 shareholders (%)Qassim Agriculture Co. (GACO) was established in 1985 and is headquartered inQassim. The company invests in agricultural businesses and livestock. With theacquisition of the Al Bandaria Group, the company made an entry into the yogurtsegment.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 37 66 49 88 79.6 33.2EBITDA SRmn 10 16 13 1 (91.2) (50.9)Net Income SRmn 72 (55) (3) 0 NM (84.1)Assets SRmn 567 504 498 574 15.2 0.4Equity SRmn 464 407 404 406 0.3 (4.4)Total Debt SRmn 10 8 6 6 2.3 (17.1)Cash & Equiv SRmn 11 52 12 2 (86.2) (46.8)EBITDA Mgn % 25.5 24.0 26.2 1.3 - -Net Mgn % 191.3 (83.2) (5.8) 0.3 - -ROE % 17.4 (12.5) (0.7) 0.1 - -ROA % 14.7 (10.2) (0.6) 0.1 - -Div Payout % NA NA NA 0.0 - -EPS SR 7.2 (1.1) (0.1) 0.0 NM (90.7)BVPS SR 46.4 8.1 8.5 8.1 (4.9) (44.1)Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2007 Geographic 2007%Rev % Net Inc Breakup %Rev % Net IncWheat & Corn Farming 71 Saudi Arabia 100.0 100.0Dates Production 26Dairies Production 3Source: Company, NCBC Research• Business brief: GACO’s main business line involves investment in agriculturalproducts and livestock. In addition, GACO produces 2,500 tons of dates, 25,000 tonsof corn, and 42,000 tons of wheat annually. GACO is also a distributor of dates anddairy products. To meet its internal requirements, the company also invests in theconstruction of cooling stores; transportation; and import of fodder, cereals, andagricultural equipment. GACO has invested approximately SR20mn in Saudi basedcompanies.• Financials: GACO’s revenues grew significantly by 79.6% y-o-y to SR88.4mn in 2008.However, its EBITDA tumbled 91.2% during the year due to increased cost of sales,resulting in EBTIDA margin of 1.3% in 2008 as compared to 26.2% in 2007. GACO’sbottom-line of SR0.3mn turned into positive territory in 2008, after two consecutive yearof losses, driven by higher other non-operating income during the year.• Recent developments: In April 2009, the company reported 80.0% y-o-y decline in1Q-09 net income to SR0.1mn. In December 2008, the company completedacquisition of Al Bandariah Group for SR153.6mn. On July 02, 2008, GACO receivedSource: NCBC Researchsix-year Murbaha facility worth SR 75mn ($20 mn) from Al Rajhi Bank for buyingproperty in Medina and Mekkah. On June 30, 2008, the Company announced itsplans to begin a new SR250mn (USD66.7 mn) poultry project.JUNE 2009QASSIM AGRICULTURE CO.166