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REAL ESTATE DEVELOPMENTAlsoEmaar Economic Cityknown asEEC,Emaar ECPriceSR10.2Pricing / Valuation as on May 27, 2009Mkt capSR8.6bn ($2,303.7mn)Sh. outstanding850.0mnKey statistics52 week range H/L (SR) 26.5/7.6Avg daily turnover (mn) SR US$3m 155.87 41.6212m 135.08 36.07Raw Beta 6m 2yr1.10 1.03Reuters4220.SEBloombergEMAAR ABPrice perform (%) 1M 3M 12MAbsolute (%) 15 26 (54)Market (%) 6 32 (39)Sector (%) 11 19 (39)Website: www kingabdullahcity.comValuation multiples2006 2007 2008P/E (x) N/M 735.3 NMP/B (x) 1.6 2.3 0.9P/Sales (x) N/A N/A 74.9Div yield (%) N/A N/A -Emaar the Economic City (Emaar EC) was started in Sep.’06 by Emaar Properties as ajoint venture with Saudi investors to undertake the development of SR100bn KingAbdullah Economic City. The mega project is part of the Saudi government’s plan toattract foreign investments by providing incentives and tax breaks to investors.Company financials2006(14Weeks) 2007 2008YoY(%)CAGR(%)(06-08)Net Revenues SRmn - - 102 NA NAEBITDA SRmn - (157) (375) NM NANet Income SRmn (13) 26 (292) (1,211.1) NMAssets SRmn 8,637 8,748 9,532 9.0 5.1Equity SRmn 8,456 8,483 8,191 (3.4) (1.6)Tot Debt SRmn - - - NA NACash & Equiv SRmn 4,574 640 2,219 246.8 (30.4)EBITDA Mgn % NA NA (368.9) - -Net Mgn % NA NA (287.5) - -ROE % (0.2) 0.3 (3.5) - -ROA % (0.1) 0.3 (3.2) - -Div Payout % - - - - -EPS SR (0.0) 0.0 (0.3) (1,211.1) NMBVPS SR 9.9 10.0 9.6 (3.4) NMSource: Company, NCBC Research; figures for 2006 are from September – December 2006Segment-wise business analysisProduct segment 2008 Geographic 2008%Rev % Net Inc Breakup %Rev % Net IncProperty development 100.0 100.0 Saudi Arabia 100.0 100.0Weightage (%)TASI (free float weight) 0.58MSCI Saudi (domestic – large cap) 1.37Free float (%)Free float 30.00Relative share price perf.11,000309,000207,0005,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASIEmaar E .C (RHS)Top 5 shareholders (%)Modern Daim Real Estate 20.0ME Royal Capital Co. 9.4Emaar Middle East 5.8ME Hollandi 5.8ME Strategic Investments 5.8Source: NCBC ResearchSource: Company, NCBC Research• Business brief: KAEC, the single largest private sector-led project (168 mn squaremeters) in the GCC region, has six key components – the sea port, industrial zone, centralbusiness district, resort district, educational zone and residential communities. In earlyJanuary 2009, Emaar EC signed a deal worth SR120 mn with Freyssinet Saudi Arabia, toconstruct a school in the Esmeralda area of the King Abdullah Economic City• Financials: Emaar EC reported revenues of SR101.6 mn for the first time in 2008.After a net profit of SR26.3 mn in 2007, it incurred net losses of SR292.0 mn in 2008led by increase in operating expenses and decline in investment income. Moreover,since October 2008, work on the KAEC has slowed down led by the global crisis.EBITDA, ROA and ROE have all been in the red in 2008.• Recent developments: Emaar Properties recorded net loss of SR62.3 mn in 1Q 09compared to net loss of SR19.3 mn in 1Q 08 due to an increase in operating costsand a decline in the income from deposits. In April 2009, The Saudi Arabian GeneralInvestment Authority (Sagia) and EEC signed a memorandum of understanding(MoU) with sanofi-aventis to set up an entity in KAEC, the largest private sectordevelopment in Jeddah. In March 2009, the company announced that the sale of itsresidential units in the Economic City achieved a return of more than SR2 bn. InFebruary 2009, SAMA canceled the license granted to the company's subsidiary,Emaar Financial Services.JUNE 2009EMAAR ECONOMIC CITY243