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BUILDING & CONSTRUCTIONSaudi IndustrialAlso known asSIDCPriceSR11.1Pricing / Valuation as on May 27, 2009Mkt capSR0.4bn ($118.0mn)Sh. outstanding40.0mnKey statistics52 week range H/L (SR) 19.0/6.8Avg daily turnover (mn) SR US$3m 28.14 7.5112m 17.01 4.54Raw Beta 6m 3yr1.34 1.16Reuters2130.SEBloombergSIDC ABPrice perform (%) 1M 3M 12MAbsolute (%) 12 32 (39)Market (%) 6 32 (39)Sector (%) 8 19 (53)Website: www sidc.com.saValuation multiples2006 2007 2008P/E (x) N/M 85.6 N/MP/B (x) 4.6 2.8 1.3P/Sales (x) 2.3 4.4 1.2Div yield (%) - - -Weightage (%)TASI (free float weight) 0.10MSCI Saudi (domestic)N/AFree float (%)Free float 100.00Relative share price perf.11,000209,000157,000105,00053,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASISIDC (RHS)Top 5 shareholders (%)Source: NCBC ResearchSaudi Industrial (SIDC), established in 1992, invests in the industrial sector of KSA.In 1997, the company made its first investment by setting up a ceramic plant inYanbu Industrial City. Since then, SIDC has made several investments in diverseindustries such as spring mattresses and polyester fibers.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 438 430 232 250 8.1 (17.0)EBITDA SRmn 11 18 17 17 2.1 17.9Net Income SRmn (29) (19) 12 (5) NM NMAssets SRmn 657 630 619 478 (22.7) (10.1)Equity SRmn 205 214 363 235 (35.1) 4.8Total Debt SRmn 284 213 120 112 (6.5) (26.6)Cash & Equiv SRmn 14 11 21 24 18.4 20.4EBITDA Mgn % 2.4 4.2 7.4 6.9 - -Net Mgn % (6.6) (4.5) 5.1 (1.9) - -ROE % (11.1) (9.2) 4.1 (1.6) - -ROA % (4.4) (3.0) 1.9 (0.9) - -Div Payout % - - - - - -EPS SR (0.7) (0.5) 0.3 (0.1) NM NMBVPS SR 5.1 5.4 9.1 5.9 (35.1) 4.7Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2007 Geographic 2007%Rev % Net Inc Breakup %Rev % Net IncSponge and matrices 88.9 88.5 Not availableSanitary wares 11.2 (20.6)Others 0.0 32.1Source: Company, NCBC Research• Business brief: SIDC operates through its affiliates. Saudi Ceramic Plant (100%stake), located in Yanbu Industrial City, produces ceramic sanitary ware (annualcapacity of 500,000 pieces) as well as acrylic bathtubs and shower trays (annualcapacity of 100,000 pieces). Arabian Spring and Sponge Mattresses Mfg. Co. (50%stake), formerly known as Sleep High, is a leading manufacturer of spring mattresses.SIDC also has a minority stake in Arabian Industrial Fibers Co. (1.6% stake) whichproduces aromatics (725 kilo tons annually (KTA)), terephathalic acid (350 KTA), andpolyester (150 KTA)• Financials: SIDC’s revenues increased 8.1% y-o-y to SR250.4 mn in 2008. AlthoughSIDC recorded an EBITDA of SR17.4mn, the company incurred a loss of SR4.7mn in2008 compared to a profit of SR11.8mn in 2007. This was mainly due to substantialreduction in other non-operating income and higher minority interest during the year.• Recent developments: SIDC reported a net loss of SR2.8mn in 1Q-09 compared toa loss of SR1.2mn a year ago. In May 2009, the company announced that it hasdefaulted on repayment of the debt it owed to Saudi Industrial Development Fund andhas received a final warning from the Ministry of Finance to settle it. In January 2009,the company announced plans to increase financial guarantees to SME businessesto USD400,000.JUNE 2009SAUDI INDUSTRIAL236