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HOTELS AND TOURISMTourism Enterprise CoAlso knownasShamsPriceSR36.4Pricing / Valuation as on May 27, 2009Mkt capSR0.4bn ($98.7mn)Sh. outstanding10.2mnKey statistics52 week range H/L (SR) 39.1/9.5Avg daily turnover (mn) SR US$3m 95.20 25.4212m 35.55 9.49Raw Beta 6m 3yr-0.48 1.26Reuters4170.SEBloombergTECO ABPrice perform (%) 1M 3M 12MAbsolute (%) 39 23 23Market (%) 6 32 (39)Sector (%) 21 26 (9)Website: www palmbeach-resort.comValuation multiples2006 2007 2008P/E (x) NM NM NMP/B (x) 6.0 6.8 2.2P/Sales (x) 41.5 37.3 10.7Div yield (%) 0 0 0Tourism Enterprises Co. (TECO) was established in 1991 to construct and managetourist projects. Headquartered in Dammam Saudi Arabia, TECO has soleownership of the Palm Beach Resort® since its establishment in 1995. TECO offersvisitors sports and recreational facilities, conference facilities, cabanas and suites.Company financials2005 2006 2007 2008YoY(%)CAGR(%)(05-08)Net Revenues SRmn 10 10 13 15 11.1 15.5EBITDA SRmn 4 3 5 3 (29.9) (5.2)Net Income SRmn (1) (8) 2 (0) NM (32.7)Assets SRmn 97 90 79 79 (1.1) (6.8)Equity SRmn 81 73 73 73 (0.1) (3.3)Total Debt SRmn 5 2 - 0 - (100.0)Cash & Equiv SRmn 18 19 3 4 17.5 (41.9)EBITDA Mgn % 41.1 27.6 36.0 22.7 - -Net Mgn % (10.9) (80.5) 16.0 1.7 - -ROE % (1.3) (11.6) 2.9 .34 - -ROA % (1.1) (9.4) 2.7 .31 - -Div Payout % - - - - - -EPS SR (0.5) (0.8) 0.2 (0.03) (114.8) (60.6)BVPS SR 39.7 7.1 7.2 7.2 (0.1) (43.5)Source: Company, NCBC ResearchSegment-wise business analysisProduct segment 2007 Geographic 2007%Rev % Net Inc Breakup %Rev % Net IncHotels and Resort 100.0 100.0 Saudi Arabia 100.0 100.0Weightage (%)TASI (free float weight) 0.08MSCI Saudi (domestic)N/AFree float (%)Free float 100.00Relative share price perf.11,000409,000307,000205,000103,000-M ay-08 Aug-08 Nov-08 Feb-09 M ay-09TASIShams (RHS)Top 5 shareholders (%)Source: NCBC ResearchSource: Company, NCBC Research• Business brief: The Palm Beach Resort stretches up to 1,300 meters with 165 firstclassChalets, more than 100 Suites and Cabanas overlooking the Arabian Gulf. Thesports and the recreational facilities includes a ladies sports club with swimming pool,men's sports and fitness center, football, tennis, basketball and squash courts, asauna and steam bath, a swimming pool for children, gardens for families and a 24-hour security service.• Financials: In 2008, the company’s total revenues increased 11.1% y-o-y. However,it reported a net loss of SR0.3 million in 2008 mainly due to a decline in gross profitcoupled with lower income from other sources.• Recent developments: The company announced its 1Q-09 results on April 19, 2009.TECO recorded a gain of SR0.1mn in 1Q-09 compared to a loss of SR0.2mn in theyear ago period. On February 03, 2008, the company announced the failure of apreviously signed agreement of the merger of Tourism Enterprises Co. with ArabianCommercial Projects for Travel Company, Al Qafila for Toursim and Travel, andPlage Remal Resort.JUNE 2009TOURISM ENTERPRISE CO259