Saudi Arabian stock report - Saudi Basic Industries
Saudi Basic Industries rises for a second consecutive day, a two-day rise of 0.2% October 19, 2017 15:30 AST
NEWS BITES - MIDDLE EAST & NORTH AFRICA
Saudi Basic Industries Corp. (TASI:2010), Saudi Arabia's largest Petrochemical industries company by market cap, has risen 10.0 hallalah (0.1%) for a second consecutive day on Thursday. This brought its two-day rise to 20.0 hallalah (0.2%), compared with the All Share Index (TASI) which rose 19.0 points (0.3%) in the two days for a relative price change of -0.1%. Cumulative volume in the 2 days was 0.9 times the average 2-day volume of 3.7 million shares. The stock last traded at SAR98.40.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators
SECTION 2 BEARISH SIGNALS
Fundamentals, Overvaluation [compared with sector average], Technicals
SECTION 3 PRICE VOLUME DYNAMICS
Momentum, Moving Annual Return, Beta, Turnover Rate & Turnover Period
SECTION 4 RANKING
Global, Independent Ratings
SECTION 5 FINANCIALS
Financials Summary, Trailing 12 Months Dividends
SECTION 6 PROFILE
Activities, Top Management, Issued Capital
SECTION 7 STOCK BUZZ
Acquisition, Corporate Wire
SECTION 1 SAUDI BASIC INDUSTRIES BULLISH SIGNALS
+ The relative yield of the stock, defined by its yield of 4.1%, divided by average yield of dividend yielding stocks in the All Share Index (TASI) of 3.7% is 109.1%. This suggests the stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.9. Compared with the rest of the market the stock is undervalued.
+ As per the Du Pont analysis, Return on Equity of 10.9% is better than sector average of 9.7%. This is computed as net profit margin of 13.4% times asset turnover [sales/assets] of 0.43 times leverage factor [total assets/shareholders' equity] of 1.9.
1.2 Undervaluation [compared with sector average]:
+ Return on Equity 10.9% [9.7%].
+ Return on Assets 5.6% [4.0%].
+ Return on Capital Employed 7.6% [5.7%].
+ The 4.7% discount to 12-month high of SAR103.27 against the 20.6% premium to 12-month low of SAR81.57 suggests the stock continues to push for new highs.
+ The present value of SAR1,000 (PV1000) invested one year ago in Saudi Basic Industries is SAR1,244, comprising a capital gain of SAR194 and dividend reinvested of SAR50.
|All Share Index (TASI)||1,008||963||1,270|
+ The present value of SAR1,000 (PV1000) invested five years ago in Saudi Basic Industries is SAR1,455, including a capital gain of SAR116 and dividend reinvested of SAR339.
+ 5 years Multiplier in SAR = 1.455x
+ Compound Annual Growth Rate (CAGR) in SAR = 7.8%
Present Value of USD1,000 invested 5 years ago:
+ The present value of USD1,000 (PV1000) invested five years ago in Saudi Basic Industries is $US1,452, including a capital gain of $US113 and dividend reinvested of $US338.
+ 5 years ago USD 1 equalled SAR 3.7495
+ 5 years Multiplier in USD = 1.452x
+ Compound Annual Growth Rate (CAGR) in USD = 7.7%
Oct 19, 2017: USD 1 equals SAR 3.76
1.4 Oversold/Bullish/Support Signals:
+ The Relative Strength Index (RSI) of 28.9 has breached the oversold line of 30, suggesting the price decrease of 3.3% in the last 14 days is unusually high.
1.5 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||SAR263.6 million (US$70.1 million)||In Top 2%|
|Volatility %||0.7||In Top Quartile|
SECTION 2 SAUDI BASIC INDUSTRIES BEARISH SIGNALS
+ Total Liabilities/EBITDA of 5.1 which compares unfavourably with the Joseph Piotroski benchmark of 5.
+ Net profit margin has averaged 12.8% in the last 3 years. This is lower than the sector average of 13.8% and suggests a low margin of safety.
+ Revenue and Net Profit growth have shown signs of deterioration in recent quarters. [Quarter ended, all figures in %]
|Qtr||Revenue Growth||Net Profit Growth||Net Profit Margin|
2.2 Overvaluation [compared with sector average]:
+ Price/Sales of 2.1 [1.9].
+ The price dropped 3.0% in the last month. The fall was on volume of 1.1 times average for month.
SECTION 3 PRICE VOLUME DYNAMICS
+ Volume: there were 2,678,948 shares worth SAR263.6 million (US$70.1 million) traded today. In the past week, volume was 0.9 times average and the shares were down 0.4%. The volume was 0.7 times the average daily trading volume of 3.7 million shares.
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in 2010 would have produced a return of 24.3%.
|2010||Close (SAR)||Dividends (SAR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||82.39||5||(6.8)||5.7||(1.2)|
|2 Yrs ago||88.42||5.5||(16.6)||5.2||(11.4)|
|3 Yrs ago||106.06||5.5||10.5||5.7||16.2|
|4 Yrs ago||96.02||5||8.9||5.7||14.6|
Close 5 years ago SAR88.18
+ Beta: the Beta of Saudi Basic Industries stock is 0.5. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 29.1% (or a turnover period of 3 years 5 months). This average length of ownership of the stock at 2.0 times the average holding period of 1 year 8 months for stocks in the All Share Index (TASI) suggests a larger number of core investors, making a long-term investment safer.
SECTION 4 RANKING
4.1 Global Rank [out of 47,822 stocks] and Rank in the Middle East & Africa Region [out of 2,304 stocks]
|Description||Value||Global Rank||In MEA Region|
|Total Assets (US$)||84.3B||566||11|
|Net Profit (US$)||4.7B||194||6|
|Return on Equity %||10.9||11,680||716|
|Net Profit Margin %||13.4||8,673||653|
|Price to Book||1.8||17,758||1,131|
|PV$1000 (1Year) US$*||1,244||14,141||553|
|US$* Change (1Year) %||21.9||14,895||567|
* 1 year ago USD 1 = SAR 3.76
Oct 19, 2017: USD 1 equals SAR 3.76
4.2 Independent Ratings
Saudi Basic Industries Corp. was ranked 81 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; an improvement over a year from rank 88 in 2014.
It is a new entrant in PwC's list of Top 100 Global companies; ranked 85th by MCap as at March 31, 2015.
It is the 102nd largest by revenue in the FT Global 500.
It is the 176th largest by revenue in the Forbes Global 2000.
It was ranked 415 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 10.4% in Water productivity, 2.1% in Energy productivity and 1.7% in Carbon productivity.
It is placed 110/164 in BSS News Bites' ranking of Saudi Arabian performers in the past year, a percentile ranking of 33.
SECTION 5 SAUDI BASIC INDUSTRIES FINANCIALS
5.1 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||36.1||40.1||50.7|
|Pretax (USD B)||5.5||5.6||6.8|
|Net (USD B)||4.7||5||6.2|
Sales was down 28.7% from US$50.7 billion to US$36.1 billion and Net profit was down 23.6% from US$6.2 billion to US$4.7 billion.
5.2 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (SAR)|
|19 Oct 2017||4|
|19 Oct 2016||5|
|19 Oct 2015||5.5|
|19 Oct 2014||5.5|
|19 Oct 2013||5|
SECTION 6 SAUDI BASIC INDUSTRIES PROFILE
Saudi Basic Industries (SABIC) is a petrochemical company that operates in the non-oil industrial sector worldwide. SABIC operates six core business units. The Basic Chemicals unit products include methanol, ethylene, propylene, benzene, xylene, styrene, crude industrial ethanol, butadiene and butadiene-1. The Intermediates unit produces ethylene glycol, ethylene dichloride, and vinyl chloride monomer and dioctyl phthalate. The polyvinyl chloride (PVC) and Polyester unit provides polymeric materials and allied products. Its main products include polyester, melamine, polypropylene, PVC and polystyrenes. The Fertilizers unit offers ammonia and urea, phosphate and liquid fertilizers. The Metals unit is a supplier of flat steel, long steel and aluminum products. The Polyolefins business unit is a producer of polyethylene (PE), polypropylene (PP) and their by-products.
6.2 Top Management
The chairman is Saud Bin Thenayan Al-Saud and the chief executive officer is Yousef Abdullah Al-Benyan.
6.3 Issued Capital
Based on 3,000,000,000 issued shares the market capitalisation is SAR295.2 billion (US$78.6 billion).
SECTION 7 STOCK BUZZ
August 16: Saudi Basic Industries Corp. announces the latest developments on the completion of its acquisition of Shell Chemical Arabia L.L.C.s shares in Saudi Petrochemical Company (Sadaf)
With reference to SABICs announcement on Tadawul dated Jan 22, 2017, regarding its proposed acquisition of Shell Chemicals Arabia L.L.C.s entire 50% stake in Saudi Petrochemical Company (Sadaf), with a value amounting to USD 820,000,000 including the foreign partners share of the net assets value, SABIC announces that the proposed acquisition was completed on August 16th, 2017. The financial impact of the transaction will be reflected in SABICs results during the 3rd quarter of 2017.
Sadaf produces ethylene, MTBE, styrene and other basic chemicals. The Sadaf complex includes six petrochemical plants, with a total production capacity of more than 4 million metric tons per year. This agreement with Shell Chemicals Arabia L.L.C. follows SABICs strategy to enhance returns of its investments to contribute more effectively in achieving its strategic objectives.
7.2 Corporate Wire
To view Recent Company Headlines, click here
October 09: Saudi Basic Industries Corporation (SABIC) announces the results of its second Extraordinary General Assembly of 2017 (First Meeting)
Saudi Basic Industries Corporation (SABIC) announces the results of its Extraordinary General Assembly held at SABIC HQ, Riyadh, on Sunday, October 8, at 8:30 pm, after the quorum was completed. The attendance recorded was 80.59 % of the capital. The results of the vote on the agenda of the Assembly was as follows:
July 30: Saudi Basic Industries Corp. announces the interim financial results for the period ending on 30-06-2017 (Six Months)
June 21: Saudi Basic Industries announces dividend
Saudi Basic Industries today announced a cash dividend of SAR2.0 per share. The ex dividend date is Monday, July 31, 2017 and it is payable on Thursday, August 17.
June 12: SABIC announces its sustainability report for 2016
SABIC announces its sustainability report for 2016 Saudi Basic Industries Corporation (SABIC) is pleased to announce its Sustainability Report for 2016, in its sixth edition, entitled (Transforming Together). This report reflects the companys successes in many areas in terms of sustainability in 2016 and is another step in its path towards a more sustainable future.
Physical Address: PO Box 5101
State/Province/Country: Saudi Arabia
Exchange: Saudi Stock Exchange (Tadawul)
SA:2010; SAU:2010; AB:2010; 2010.SE