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BUILDING & CONSTRUCTIONRed Sea HousingAlso known asRed SeaPricePricing / Valuation as on May 27, 2009Mkt capSh. outstandingKey statisticsSR67.3SR2.0 bn ($538.7mn)30.0mn52 week range H/L (SR) 140.0/48.5Avg daily turnover (mn) SR US$3m 25.64 6.8512m 36.02 9.62Raw Beta 6m 2yr1.19 1.13ReutersBloomberg4230.SEREDSEA ABPrice perform (%) 1M 3M 12MAbsolute (%) (3) 8 (33)Market (%) 6 32 (39)Sector (%) 8 19 (53)Website: www rsh com saValuation multiples2006 2007 2008P/E (x) 13.7 17.6 10.3P/B (x) 4.7 3.9 3.3P/Sales (x) 4.0 3.0 2.0Div yield (%) 2.6 2.9 4.7Weightage (%)TASI (free float weight) 0.14MSCI Saudi (domestic – small cap) 1.17Free float (%)Free float 29.96Relative share price perf.11,0009,0007,0005,0003,000M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASITop 5 shareholders (%)Red Sea (RHS)150100Al Dabbagh Holding Co 51.0Mumtaz Foods Co. 5.0The National Scientific Company LTD 5.0Tejariah for Marketing Services and 5.0AgenciesSource: NCBC Research50-Red Sea Housing Services Company was established in Jeddah in 1967. Theobjective was to replicate the American manufactured housing model in SaudiArabia. The company later diversified into manufacturing and propertymanagement, setting up its first manufacturing facility in 1983.Company financials*2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 422 431 690 1,145 65.9 39.5EBITDA SRmn 104 131 159 285 79.6 39.9Net Income SRmn 98 125 117 217 85.8 30.4Assets SRmn 266 489 772 1,012 31.1 56.1Equity SRmn 154 367 529 685 29.5 64.3Total Debt SRmn 5 4 36 99 177.6 170.5Cash & Equiv SRmn 101 193 37 123 229.2 6.8EBITDA Mgn % 24.7 30.3 23.0 24.9 - -Net Mgn % 23.2 29.0 16.9 19.0 - -ROE % 75.5 48.0 26.1 35.8 - -ROA % 39.1 33.1 18.5 24.3 - -Div Payout % 49.7 36.0 51.3 48.4 - -EPS SR 3.3 4.2 3.9 7.2 48.0 30.5BVPS SR 5.2 12.2 19.5 22.8 17.1 64.3Source: Company, NCBC Research* Financial year changed from March to December in 2007Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncOil & Gas / Construction - NA Saudi Arabia 22.3 34.9Mining - NA UAE 38.9 13.0Govt. and Multilateral Organizations - NA Africa 35.0 51.5Manufacturing & Selling 84.4 67.0 Asia - -Rent 15.6 33.0 Middle East - -Other Foreign 3.8 0.7Source: NCBC Research• Business brief: With three manufacturing facilities located in Dubai, Jubail, andAccra (Ghana), Red Sea Housing has the capability to manufacture 920 squaremeters of quality housing a day - which represents an annual production capacity of335,000 square meters. The company serves all types of housing requirements -commercial and residential, temporary and permanent. Red Sea Housing offersspecial services to oil & gas, and mining companies• Financials: In 2008, Red Sea Housing’s total revenues increased 65.9% y-o-y toSAR1,145.1 mn. Net income increased 85.8% y-o-y to SAR217.1 mn led by a declinein selling, general, and administration expenses. Further, other income rose 38.8% y-o-y to SR4.9 mn in 2008. Interest expense more than tripled to SR6.7 mn in 2008.• Recent developments: MESC announced its 1Q-09 results on April 19, 2009. Netprofit for the quarter grew 3.0% y-o-y to SR58.0mn. In August 2008, Red SeaHousing announced its formation of a new subsidiary in Libya. In July 2008, thecompany won a contract worth SR76.7mn to process, deliver and install 1,100residential units for Australia Company.JUNE 2009RED SEA HOUSING235