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INSURANCEMedgulfAlso known asMedgulf SaudiPriceSR20.8Pricing / Valuation as on May 27, 2009Mkt capSR1.7bn ($444.3mn)Sh. outstanding80.0mnKey statistics52 week range H/L (SR) 35.5/13.0Avg daily turnover (mn) SR US$3m 17.00 4.5412m 12.34 3.29Raw Beta 6m 2yr0.88 0.94Reuters8030.SEBloombergMEDGULF ABPrice perform (%) 1M 3M 12MAbsolute (%) (9) 22 (22)Market (%) 6 32 (39)Sector (%) (2) 48 (26)Website: www medgulf com.saValuation multiples2006 2007 2008P/E (x) NA NM NMP/B (x) NA 5.4 1.7P/Sales (x) NA NA NADiv yield (%) NA NA NAMediterranean & Gulf Insurance & Reinsurance Co. (MEDGULF) is a subsidiary ofthe Medgulf Group, a leading insurance and reinsurance company in the MiddleEast operating in Saudi Arabia, Bahrain, Lebanon, Turkey, Jordan, UAE, and UK.Established in 2006, it currently operates through its offices in Jeddah and Khobar.Company financials2007 2008YoY(%)CAGR(%)(05-08)Net Insurance Premium SRmn NA NA - -Total Revenues SRmn NA NA - -Net Income SRmn 7 (3) NM -Assets SRmn 807 807 (0.1) -Equity SRmn 807 791 (1.9) -Investments SRmn 758 773 2.0 -Technical Reserves SRmn NA NA - -Combined Ratio % NA NA - -Net Mgn % NA NA - -ROE % 0.8 (0.3) - -ROA % 0.8 (0.3) - -Div Payout % NA NA - -EPS SR 0.09 (0.03) - -BVPS SR 10.1 9.9 (1.9) -Source: Company, NCBC Research, figures for FY2007 are from April- December 2007.Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.08MSCI Saudi (domestic – small cap)Free float (%)Free float 22.57Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)40302010MEDGULF (RHS)Mediterranean and Gulf Insuranceand Reinsurance – Bahrain32.0Saudi Investment Bank 21.1Source: NCBC Research-Source: Company, NCBC Research• Business brief: MEDGULF offers various insurance products such as aviationinsurance, banker’s blanket bonds, burglary insurance, contractor’s all risk insurance,credit insurance, employer’s liability insurance, fidelity guarantee insurance, marinecargo and hull insurance, and motor insurance. The company also providesinsurances for fire and allied perils, life, medical, personal accident, product andprofessional liability, property all-risk, public liability, workmen’s compensation, (cashin transit and in vault). MEDGULF offers a one-stop solution by providing insuranceand reinsurance services along with risk management and third party administration.• Financials: MEDGULF reported net loss of SR2.5mn in 2008 due to poorperformance of investment portfolio and increased G&A expenses in Q4-08. Therewas also a year-on-year marginal decline in total assets and shareholders’ equity,which aggregated to SR806.5mn and SR790.8mn respectively in 2008.• Recent developments: MEDGULF declared its 1Q-09 results on April 21, 2009. Thecompany’s net profit plunged 66.8% y-o-y to SR1.3mn during the quarter. In April2009, Mr. Nahmeh Sabbagh’s appointment to the company’s board was approved inthe annual general meeting. The Company’s shares were listed on the Saudi StockExchange on May 8, 2007, at SR42 against the issue price SR10.JUNE 2009MEDGULF189