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REAL ESTATE DEVELOPMENTArriyadh DevelopAlso known asARDCOPriceSR13.0Pricing / Valuation as on May 27, 2009Mkt capSR1.3bn ($347.1mn)Sh. outstanding100.0mnKey statistics52 week range H/L (SR) 24.8/8.7Avg daily turnover (mn) SR US$3m 21.13 5.6412m 25.34 6.77Raw Beta 6m 3yr0.88 1.17Reuters4150.SEBloombergADCO ABPrice perform (%) 1M 3M 12MAbsolute (%) 28 35 (43)Market (%) 6 32 (39)Sector (%) 11 19 (39)Website: www.ardco.com.saValuation multiples2006 2007 2008P/E (x) 30.7 34.7 12.2P/B (x) 1.4 1.8 0.7P/Sales (x) 17.5 19.2 6.9Div yield (%) 2.6 2.0 5.2Weightage (%)TASI (free float weight) 0.29MSCI Saudi (domestic – small cap) 2.97Free float (%)Free float 99.97Relative share price perf.11,000309,000207,0005,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASI Arriyadh Development (RHS)Top 5 shareholders (%)Emaar Arabian Shield Investment Co. 9.6Adyar Holding Co. 7.4Source: NCBC ResearchArriyadh Development Company (ARDCO) is engaged in the construction ofcommercial, office and residential buildings as well as complexes for the purpose ofsale, lease or management. ARDCO also develops public parks, tourist compounds andparking lots. The company, headquartered in Riyadh, was established in 1994.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 106 110 128 140 9.8 9.7EBITDA SRmn 69 71 83 94 13.4 10.9Net Income SRmn 62 63 71 80 12.8 9.0Assets SRmn 1,551 1,536 1,577 1,565 (0.8) 0.3Equity SRmn 1,347 1,355 1,377 1,405 2.0 1.4Total Debt SRmn - - - - NA NACash & Equiv SRmn 12 5 22 163 632.2 NMEBITDA Mgn % 64.9 64.5 65.0 67.1 - -Net Mgn % 58.1 57.0 55.5 57.0 - -ROE % 4.7 4.7 5.2 5.7 - -ROA % 4.1 4.1 4.5 5.1 - -Div Payout % - 79.6 70.7 63.3 - -EPS SR 0.6 0.6 0.7 0.8 12.4 8.8BVPS SR 13.5 13.6 13.8 14.0 2.0 1.4Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2007 Geographic 2007%Rev % Net Inc Breakup %Rev % Net IncCommercial & Institutional Const 95.8 97.0 Saudi Arabia 100.0 100.0Land Subdivision 4.2 3.0Source: Company, NCBC Research• Business brief: ARDCO has been involved in residential projects such as SunriseCities and commercial projects such as Attameer Trading Center, ArriyadhTransportation Center, Technical Service City, Riyadh Hills and Riyadh Car Auction(project in used car selling). The company has also been engaged in thedevelopment of market areas such as Batha Meat & Vegetable Market, RiyadhWholesale & Retail Market and Riyadh Vegetable & Fruits Market.• Financials: Despite the current global crisis, on y-o-y basis, the company’s revenuesincreased 9.8% in 2008. The company’s net profit grew by 12.8% y-o-y in 2008.ARDCO has reported a CAGR of 9.7% in revenues since 2005 led by steady growthin sales and rising population driving demand for housing. Moreover, the net profitmargin has also been maintained between 55-58% over the years.• Recent developments: In April 2008, ARDCO announced 18% y-o-y growth in Q109 net profit to SR22 mn. In November 2007, ARDCO announced that Urbis-JHD(Australia) had entered the previously signed SR6.3 mn contract to develop the Al-Dahira project in Riyadh. The other parties to this contract include RetirementInstitution, the Public Institution for Social Security, Saudi Maakaliyeh Center, SaudiReal Estate Company, Dar Al Arkan Real Estate Development Company, FAS SaudiHolding Company, and Solidere International.JUNE 2009ARRIYADH DEVELOPMENT COMPANY245