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PriceSR27.8Pricing / Valuation as on May 27, 2009Mkt capSR0.7bn ($189.7mn)Sh. outstanding25.6mnKey statistics52 week range H/L (SR) 66.3/16.8Avg daily turnover (mn) SR US$3m 62.49 16.6912m 67.38 17.99Raw Beta 6m 3yr1.08 1.11Reuters2220.SEBloombergNMMCC ABPrice perform (%) 1M 3M 12MAbsolute (%) 16 15 (53)Market (%) 6 32 (39)Sector (%) 11 29 (33)Website: www.natmetalco comValuation multiples2006 2007 2008P/E (x) 50.7 42.6 12.6P/B (x) 3.1 3.5 1.6P/Sales (x) 3.2 3.0 1.1Div yield (%) 0.0 1.9 1.8INDUSTRIAL INVESTMENTNational MetalAlso known asNATMETAL,MAADANIYAHNational Metal Mfg & Casting (Maadaniyah) is a manufacturer of steel wire and otherwire products. The company’s plants are equipped with modern machinery for wiredrawing, stranding, galvanizing, and fastener manufacturing. The plant has testingfacilities for chemical, mechanical, and spectrometric analyses.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 203 285 369 500 35.4 35.0EBITDA SRmn 31 37 58 64 11.1 26.8Net Income SRmn 19 18 26 44 69.9 31.4Assets SRmn 230 439 452 544 20.4 33.3Equity SRmn 148 296 317 340 7.4 32.1Total Debt SRmn 50 84 66 80 21.8 17.2Cash & Equiv SRmn 10 29 12 14 12.4 11.7EBITDA Mgn % 15.4 12.9 15.6 12.8 - -Net Mgn % 9.6 6.3 7.0 8.8 - -ROE % 14.1 8.1 8.5 13.4 - -ROA % 8.6 5.4 5.8 8.8 - -Div Payout % 79.4 23.2 - -EPS SR 7.8 1.1 1.3 2.2 71.0 NMBVPS SR 59.0 18.2 15.4 16.6 8.1 NMSource: Company, NCBC ResearchSegment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncWeightage (%)TASI (free float weight) 0.10MSCI Saudi (domestic – small cap) 1.01Free float (%)Free float 64.53Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)10080604020-M aadaniyah (RHS)National Manufacturing Company 35.4Source: NCBC ResearchSource: Company, NCBC Research• Product profile: Maadaniyah has an annual production capacity of 10,000 tonnes(castings), 6,000 units (axles), and 75,000 tonnes (wire). The company specializes inthe manufacture of low relaxation PC strands, high/low- galvanized steel, carbonwires & strands, mattress spring wires, fasteners, welding wires, and steel nails.These products are utilized by various sectors including construction, appliances,electrical cable, building systems, and steel fabrication.• Financials: Maadaniyah’s top-line increased 35.4% y-o-y to SR500.3mn in 2008.This is attributable to the continuous expansion of the production capacity of Al-Jubeilwires plant and the additional sales resulting from the company’s merger in 2006 withArabian Axles Foundries and Spare Parts Co. Company’s net profit grew 69.9% y-o-yto SR44.1mn, and net margin improved to 8.8% in 2008 against 7.0% in 2007.• Recent developments: In April 2009, Maadaniyah announced a 94% y-o-y decline inQ109 net profits to SR1.0mn. In February 2009, the Capital market Authorityapproved the company’s bonus issue of 1:4 shares for increasing its capital toSR255.6mn. In January 2009, the company announced its plan to establish a centerfor upgrading the production facilities of plastics products at an initial cost of overUSD26.7mn. The company plans to raise its annual production capacity ofspecialized wires at the Al Jubail wire plant to more than 110,000 tonnes from 80,000tonnes. Maadaniyah is also closing down some of its secondary plants.JUNE 2009NATIONAL METAL223