Saudi Arabian stock report - Saudi Basic Industries
UPDATE: Saudi Basic Industries underperforms 85% of the market June 22, 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 decreased SAR1.73 (1.7%) from its last trading session of June 21 to close at SAR102.33. Compared with the All Share Index (TASI) which rose 90.8 points (1.2%) in the day, the relative price change was -2.9%. The fall was exacerbated by average volume of 1.1 times the average daily volume of 6.1 million shares. In the Saudi Arabian market of 167 stocks traded today, the stock has a 4-day relative price strength of 15 indicating it has underperformed 85% of the market. A price fall combined with a low relative strength is a bearish signal.
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.
1.2 Overvaluation [compared with sector average]:
+ Price/Sales of 2.3 [2.0].
1.3 Low Performance Indicator:
|Description||Value||Rank In Market|
|Price Change %||-1.7||In Bottom 4%|
SAUDI BASIC INDUSTRIES BULLISH SIGNALS
+ The relative yield of the stock, defined by its yield of 3.9%, divided by average yield of dividend yielding stocks in the All Share Index (TASI) of 3.0% is 130.3%. This suggests the stock is undervalued in dividend yield terms.
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 1. 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 8.7%. 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.
2.2 Undervaluation [compared with sector average]:
+ Return on Equity 10.9% [9.3%].
+ Return on Assets 5.6% [4.0%].
+ Return on Capital Employed 7.6% [5.7%].
+ The 2.9% discount to 12-month high of SAR105.40 against the 34.6% premium to 12-month low of SAR76.0 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 SAR1,301, comprising a capital gain of SAR245 and dividend reinvested of SAR56.
|All Share Index (TASI)||1,089||1,081||1,137|
+ The present value of SAR1,000 (PV1000) invested ten years ago in Saudi Basic Industries is SAR1,388, including a capital loss of SAR90 and dividend reinvested of SAR478.
+ 10 years Multiplier in SAR = 1.388x
+ Compound Annual Growth Rate (CAGR) in SAR = 3.3%
Present Value of USD1,000 invested 10 years ago:
+ The present value of USD1,000 (PV1000) invested ten years ago in Saudi Basic Industries is $US1,386, including a capital loss of $US92 and dividend reinvested of $US478.
+ 10 years ago USD 1 equalled SAR 3.7509
+ 10 years Multiplier in USD = 1.386x
+ Compound Annual Growth Rate (CAGR) in USD = 3.3%
Jun 22, 2017: USD 1 equals SAR 3.76
2.4 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||SAR672 million (US$178.9 million)||In Top 2%|
|Price/MAP50||1.04||In Top Quartile|
|Price/MAP200||1.09||In Top Quartile|
PRICE VOLUME DYNAMICS
+ Volume: there were 6,566,984 shares worth SAR672 million (US$178.9 million) traded today. In the past week, volume was 1.2 times average and the shares were up 3.4%. The fall was exacerbated by average volume of 1.1 times the average daily volume of 6.1 million shares.
3.2 Moving Annual Return
|2010||Close (SAR)||Dividends (SAR)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||82.17||5.5||(18.2)||5.5||(12.8)|
|2 Yrs ago||100.5||5.5||(12.6)||4.8||(7.8)|
|3 Yrs ago||115||5||23.7||5.4||29.0|
|4 Yrs ago||93||5||1.1||5.4||6.5|
+ Beta: the Beta of Saudi Basic Industries stock is 0.6. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
3.4 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 33.7% (or a turnover period of 2 years 11 months). This average length of ownership of the stock at 1.7 times the average holding period of 1 year 8 months for stocks in the All Share Index (TASI) suggests a larger number of core investors, making a long-term investment safer.
4.1 Global Rank [out of 47,401 stocks] and Rank in the Middle East & Africa Region [out of 2,287 stocks]
|Description||Value||Global Rank||In MEA Region|
|Total Assets (US$)||84.4B||525||10|
|Net Profit (US$)||4.7B||175||4|
|Return on Equity %||10.9||11,356||721|
|Net Profit Margin %||13.4||8,423||661|
|Price to Book||1.9||18,878||1,199|
|PV$1000 (1Year) US$*||1,299||12,033||364|
|US$* Change (1Year) %||26.5||12,868||391|
* 1 year ago USD 1 = SAR 3.75
Jun 22, 2017: USD 1 equals SAR 3.76
4.2 Independent Ratings
Saudi Basic Industries Corp. was ranked 81 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; an improvement over a year from rank 88 in 2014.
It is a new entrant in PwC's list of Top 100 Global companies; ranked 85th by MCap as at March 31, 2015.
It is the 102nd largest by revenue in the FT Global 500.
It is the 176th largest by revenue in the Forbes Global 2000.
It was ranked 415 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 10.4% in Water productivity, 2.1% in Energy productivity and 1.7% in Carbon productivity.
It is placed 29/163 in BSS News Bites' ranking of Saudi Arabian performers in the past year, a percentile ranking of 82.
SAUDI BASIC INDUSTRIES FINANCIALS
5.1 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||36.1||40.1||50.7|
|Pretax (USD B)||5.5||5.6||6.8|
|Net (USD B)||4.7||5||6.2|
5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-
Saudi Basic Industries Net Profit down 5.0%
+ EBIT Margin up from 14.1% to 15.7%.
+ EBIT to total assets up from 6.4% to 6.6%.
+ Cost of Goods Sold to Sales down from 70.9% to 69.2%.
+ Profit before tax to Sales up from 14.1% to 15.7%.
+ Total liabilities to Total assets down 5.6% from 0.4 to 0.3.
+ Other non-current assets to Total Assets up from 6.5% to 6.8%.
+ Net profit down 5% from SAR18.8b ($US5.0b) to SAR17.8b ($US4.8b)
+ Total revenue down 9.8% from SAR150.6b ($US40.1b) to SAR135.8b ($US36.2b).
+ Total revenue to total assets down from 0.5 to 0.4.
+ Administration expenses to Sales up from 9.3% to 9.5%.
+ Current ratio down 4.1% from 2.2 to 2.1.
+ Working capital to total assets down from 15.2% to 14.0%.
+ Total current assets to Total Assets down from 28.2% to 26.9%.
+ Non-current inventory to Total Assets down from 7.5% to 7.3%.
+ Total Liabilities to EBITDA of 5.1 compares unfavourably with the Joseph Piotroski benchmark of <5. However, it has improved by 9.9% from the previous year's ratio of 5.7.
+ Tax expenses to Sales up from 1.4% to 2.3%.
+ Total non-current assets to Total Assets up from 71.8% to 73.1%.
+ Fixed Assets to Total Assets up from 52.8% to 53.6%.
5.3 Trailing 12 Months Dividends
|Trailing 12 Months To||Value (SAR)|
|22 Jun 2017||4|
|22 Jun 2016||5.5|
|22 Jun 2015||5.5|
|22 Jun 2014||5|
|22 Jun 2013||5|
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 SAR307 billion (US$81.7 billion).
To view Recent Company Headlines, click here
June 21: Saudi Basic Industries announces dividend
June 12: SABIC announces its sustainability report for 2016
June 05: Sabic backs Madinah education academy
May 10: Saudi's SABIC 'very positive' on 2017 despite oil market uncertainty
May 01: Saudi Basic Industries Corp. announces the interim financial results for the period ending on 31-03-2017 (Three Months)
Physical Address: PO Box 5101
State/Province/Country: Saudi Arabia
Exchange: Saudi Stock Exchange (Tadawul)
SA:2010; SAU:2010; AB:2010; 2010.SE