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INSURANCEGulf Union Co-opAlso known asGulf UnionPriceSR26.9Pricing / Valuation as on May 27, 2009Mkt capSR0.6bn ($158.0mn)Sh. outstanding22.0mnKey statistics52 week range H/L (SR) 38.0/10.0Avg daily turnover (mn) SR US$3m 44.81 11.9612m 20.57 5.49Raw Beta 6m 1yr1.39 1.28Reuters8120.SEBloombergGULFUNI ABPrice perform (%) 1M 3M 12MAbsolute (%) (25) 66 (4)Market (%) 6 32 (39)Sector (%) (2) 48 (26)Website: NAValuation multiples2006 2007 2008P/E (x) NA NM 163.7P/B (x) NA 6.7 1.4P/Sales (x) NA NA NADiv yield (%) NA NA NAGulf Union Cooperative Insurance Company (Gulf Union) was established in by theGulf Union Insurance and Projects Management Holding Company. It offers Shariahcompliantinsurance products and serves clients in Saudi Arabia as well as clients ofits sister company - Gulf Union Insurance and Risk Management Company.Company financials2007* 2008YoY(%)CAGR(%)(05-08)Net Insurance Premium SRmn - - - -Total Revenues SRmn - - - -Net Income SRmn (22) 2 - -Assets SRmn 208 208 (0.2) -Equity SRmn 198 195 (1.5) -Investments SRmn 203 175 (14.0) -Technical Reserves SRmn - - - -Combined Ratio % - - - -Net Mgn % - - - -ROE % (11.0) 0.9 - -ROA % (10.5) 0.8 - -Div Payout % - - -EPS SR (1.0) 0.1 - -BVPS SR 9.0 8.9 (1.5) -Source: Company, NCBC Research* Figures for FY 2007 are from August- December 2007Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.05MSCI Saudi (domestic – small cap) 0.41Free float (%)Free float 40.00Relative share price perf.11,000409,000307,000205,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASIGulf Union (RHS)Top 5 shareholders (%)Gulf Union Insurance Company 23.5Source: NCBC ResearchSource: NCBC Research• Business brief: Gulf Union is engaged in cooperative insurance and reinsuranceactivities excluding protection and savings insurance. The Company’s productportfolio includes insurance for property, liability, motor, individual, health, and otherrelated cooperative insurance activities. Apart from Dammam, Gulf Union hasbranches in Jeddah, Khobar, and Riyadh.• Financials: The Company recorded a net profit of SR1.7mn during 2008 benefitingfrom higher investment income, as compared to net loss of SR21.9mn in 2007. GulfUnion’s total assets aggregated to SR207.5mn, while shareholder’s equity totaledSR195.2mn at the end of 2008.• Recent developments: Gulf Union reported its 1Q-09 results on April 21, 2009. Thecompany’s net profit plunged 94.3% y-o-y to SR31,957 in 1Q-09. In May 2009, MrAhmed Ali Ahmed Al- Shadwi’s appointment to the company’s board was approved inthe annual general meeting. The Company appointed Abdullah Al Nasser as a ChiefExecutive Officer, with effect from November 16, 2008. On September 11, 2007, GulfUnion’s shares were listed on the Saudi Stock Exchange at SR109.75 against theissue price of SR10. The Company’s IPO was oversubscribed 4.9 times.JUNE 2009GULF UNION197