Al-Hokair Group - Aljazira Capital

Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
• Hospitality and entertainment business the key – The Company’s main
revenue generators are its hospitality and entertainment businesses
which contribute almost 95% of total revenues. The company has a total
of 28 hotels and 50 parks and entertainment centers across Saudi Arabia
and UAE. It is worth noting that the company owns and manages 13
restaurants, 7 of which are located in within the company’s entertainment
venues.
• Occupancy rate a concern - The tourism industry in Saudi Arabia is
limited to religious tourism and business travel, due to which overall
occupancy is limited in other cities (except for Riyadh, Damamm,
Makkah, Madina, Jeddah) resulting in lower occupancy rates. Riyadh and
Damamm attract most of business travellers, whereas Makkah , Madina
and Jeddah attract the religious tourists. The rest of the country, tourism
activity is considerably low. The company is looking to open 3 new hotels
by the end of 2014 in the cities of Riyadh, Jeddah and Jizan. We believe
for the company to maintain its growth cycle a concentrated effort is
required to open hotels aimed at religious tourism, the cities of Makkah
and Madina, so far the company has no presence in these cities. However
it has strong presence in the city of Jeddah which is very near to Makkah.
Refer to Appendix Graph 2 for futher details on hotels, number of rooms,
and occupancy .
SAR105
12-month price target;
SAR68.75
Current Price:
52.7%
Upside / (downside):
Price Chart
12000
120
10000
100
8000
80
6000
60
4000
40
2000
20
0
42018
42015
42008
42001
41994
41987
41980
41973
41966
41959
41952
41945
41938
41931
41924
41917
41910
41903
41896
41889
41882
41875
41868
41861
41854
41847
41840
41833
41826
41819
• Hospitality business the torch bearer of revenue growth – Hospitality
segment contributed 61% of the total revenue generated by the company.
The company has established 28 hotels including furnished apartments
and resorts with a total room capacity of 3,473 by end of 20131. In
addition, the company also oversees the management of one hotel in
UAE. The company caters to the midscale segment of the sector. Some of
the major brand names under which the company operates are Hilton,
Holiday Inn, Golden Tulip, Tulip Inn and Novotel. The company manages
its hotels under four different types of structures. (i) Hotels managed
by the company according to franchise agreement,(ii) Hotels managed
by international operators according to management agreement, (iii)
Chain of local hotels managed by the company, (iv) hotels managed and
operated by the company on behalf of other parties. For further details
on the management agreements refer to Appendix Table 1.
‘Overweight’
Recommendation
TASI
0
Al Hokair
Key information
Reuters code:
Bloomberg code:
Country:
Sector:
Primary Listing:
M-Cap:
52 Weeks H/L (SAR):
1820.SE
AATD AB
KSA
Hospitality
KSA exchange
SAR3,822mn
102.75/50.25
Abdulmohsen Al-Hokair Group for
Tourism and Development Company was
established for the purposes of set up,
management, operation and maintenance
of amusement parks, entertainment centers,
health and tourist resorts, restaurants,
coffee shops, relaxation centers, gardens,
hotels, furnished apartments, commercial
centers and training and educational
centers.
• JV with Rezidor, key growth driver – Towards the end of 2013 the
company entered into a JV with Rezidor group with the aim to develop
“Radisson Blu” and “Park Inn” brands in KSA. The JV is 60% owned by
Rezidor and 40% by Al Hokair Group. Under the agreement, a number
of company’s hotels will be re-branded into the JV hotel (for a full list of
hotels to be rebranded refer to the Appendix Table 3). In addition the
JV is also expected to enter into an international management contract
through which the JV will manage The “Radisson Blu” and “Park Inn” brands. We believe this will impact the company
positively as with a stronger brand name, occupancy and revenue per room (Revpar) can be expected to improve.
• Entertainment business, rebranding to support growth - Entertainment business contributed approximately 35% to
the top-line in 2013. The company manages 43 locations in KSA and 7 locations in the UAE. The modus operandi for the
business is to open locations in popular malls in the kingdom. The company in alliance with leading mall developers, such
as Arabian Centers, Al Rashid Trading & Contracting Co, Kinan International Real Estate Development and Mohammad Al
Habib Real Estate Co, is aggressively looking to expand its presence. The company has re-branded its entertainment sites
to “Sparkys”. This will also help the company in streamlining its offerings which can result in improved customer loyalty. For
details on customer visits to entertainment sites refer to appendix Graph 3. In addition to the indoor sites the company also
has 6 outdoor parks.
• Financial growth - Based on our estimates, the company’s revenue will increase at a CAGR of 11.2%, during 2013-17; where
the growth in revenues will be primarily driven by the hotels business which is expected to show a CAGR of 14.0%, during
the same period. We expect the company to peak in 2015, since rooms addition during 2014 will be fully operational during
2015. In 2014 and expected 873 room will added. Moreover, we expect stability in the gross and operating margins, as net
income is expected to show a CAGR of 12.2%.
1
1
Refer to Appendix Graph 1
© All rights reserved
Senior Analyst
Analyst
Talha Nazar
Sultan Al Kadi
+966 11 2256115
[email protected]
+966 11 2256374
[email protected]
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Key financial indicators
Company snapshot
2012
2013
2014
2015
2016
2017
Revenues
770.4
7%
178.8
2%
33%
20%
23%
NA*
NA*
NA*
880.1
14%
195.7
9%
30%
19%
22%
NA*
NA*
NA*
977.1
11%
221.4
13%
32%
21%
23%
15.2
2.8
3.6%
1153.8
18%
262.7
19%
31%
21%
23%
14.5
2.8
3.6%
1273.1
10%
283.7
8%
31%
21%
22%
13.5
2.5
3.6%
1380.5
8%
310.5
9%
32%
22%
22%
12.3
2.2
3.6%
Growth (%)
Net Income
Growth (%)
EBITDA Margins
EBIT Margins
Net Profit Margins
PE (x)
PB (x)
Dividend Yield
Source: AlJazira Capital, *Not available, for years 2014 & onwards we used closing price of 18th Oct 2014.
• Investment consideration – By employing DCF valuation methodology, we arrived at a 12-month price target of
SAR105/share for Al Hokair group. This indicates the stock, at a current market price of SAR68.75/share (as of 15th
January 2015), is offering a potential upside of 52.7% and trading at prospective 2015 PE and PBV of 14.40x and
2٫8x, respectively. The company is expected to pay a dividend of SAR 2.5/share, depicting a dividend yield of 3.6%
. We, therefore, initiate our coverage on Al Hokair group with an ‘Overweight’ recommendation.
Key risks to valuation:
• Concentration risk: Revenue sources are concentrated in Saudi Arabia and in specific hotels, where more than 95%
of revenues are from operations in Saudi Arabia while a large percentage of hospitality sector revenue come from
domestic hotels in Al Hokair’s portfolio. The possibility of a domestic sector slowdown would have a meaningful
impact on the company’s cash flows. We do not believe the sector is currently under risk of a slowdown. However,
the company is highly exposed to domestic industry risks.
2
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Valuation Summary
Our DCF based valuation methodology is based on 10-year explicit cash flows to reduce the sensitivity of our valuation to
terminal value with the following key assumptions;
• Terminal growth rate is taken at 3.0%.
• 5-year monthly sector raw beta of 0.798 (Bloomberg); in order to reduce the impact of volatility. Since the stock has
not been listed for a reasonable period of time, therefore the company beta reading are skewed, for that matter we
have considered the sector beta.
• Risk free rate is taken at 2.84%. The calculation of RFR is based on the summation of i) 10-year US government bond
yield of 2.13%; and ii) country default spread (CDS) of 0.7% for Saudi Arabia.
• KSA total market risk premium is taken at 12.6% from Bloomberg. Hence, the equity risk premium is calculated at
9.78%.
• Capital Assets Pricing Model (CAPM) is used to calculate cost of equity at 10.7%.
• Cost of debt is taken at 4.1%.
• Weighted average cost of capital (WACC) is calculated at 9.40%.
DCF based valuation methodology
All figures in SAR Mn, unless
specified
FCF
No of Year
Discounted FCF
Sum OF DFCF
Net Debt
DCF
Price Target
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
278
1
265
215
2
188
241
3
193
274
4
200
315
5
211
329
6
201
358
7
200
383
8
195
391
9
182
536
10
228
Terminal
Value
8618
10
3670
5732
-43
5775
105
Source: Aljazira capital
The table below highlights the sensitivity of Hokair Groups’ DCF based 12-month price target with different terminal
growth & WACC.
Sensitivity analysis
Growth
WACC
1.0%
2.0%
3.0%
4.0%
5.0%
7.4%
120
135
158
193
258
8.4%
102
112
126
147
180
9.4%
88
95
105
118
137
10.4%
78
83
90
98
111
11.4%
69
73
78
84
92
Source: Aljazira capital
3
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Appendix
Graph 1:Hotel Rooms
Hotel Rooms Avaliable
6,000
5,000
4,000
3,000
2,000
1,000
0
2007
2009
2010
2011
2012
2013
2014
2015
2016
2017
No. of available rooms
Source: Al Hokair Group Prospectus, Aljazira Research
Table 1: Management Agreements
1. Hotels Managed by the Company according to franchise agreement: Ownership of the business, management
control and day to day operations remain with the company in return for a franchise fee paid to the international
hotel operator, and other fees against participation in marketing and in the booking system, and overall, they
represent of 1-5% of room revenues. As of 31/12/2013, 15 out of the 28 hotels are company managed according to
this structure. These hotels represent 57.4% of total hotel revenues.
2. Hotels managed by international operators according to management agreement: The company rents and
equips locations and hotels according to the specifications of an international hotel operator who manages the
property and day-to-day operations. The company pays a basic management fee to the international hotel operator
as well as an incentive based fee and complementary fees. These fees represent 5-11% of the gross operating profit.
As of 31/12/2013, 6 out of the 28 Hotels are managed by international hotel operators pursuant to this structure.
These hotels represent 24.6% of total Hotel revenues.
3. Chain of local hotels managed by the company: The company manages and operates a number of hotels
(including furnished apartments. As of 31/12/2013, 7 of the 28 hotels are managed by the company under this
structure. These hotels represent 14.7% of total hotel revenues.
4. Hotels managed and operated by the company on behalf of other parties: the company manages and operates
the day-to-day operations of the hotel based on its expertise on behalf of other parties against 5% of the hotel’s
revenues and earnings. As of 31/12/2013, the company oversees and manages one hotel under this structure: the
Golden Tulip Suites Dubai in the UAE owned by Al Hokair Group Est.
Source: Al Hokair Group prospectus
4
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Graph 2: Hotel Rooms Revenue Constituents
700
64%
600
62%
500
60%
SAR
400
58%
300
56%
200
54%
100
52%
0
50%
2007
2009
2010
2011
Average Daily Rate (SAR)
2012
2013
2014
Room occupancy Rate
2015
2016
2017
Average Revenue Per Room (SAR)
Source: Al Hokair Group Prospectus, Aljazira Research
Table 2: Company hotels
No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
Hotels
Holiday Inn Al Qasr
Golden Tulip Al Nasiriya
Hilton Garden Inn Olaya
Holiday Inn Olaya
Al Andalusia
Al Souleimania Villas
Suite Novotel
Yamama Resort (Chalets)
MENA Riyadh
Al Takhassousi Apartments
TOTAL
Holiday Inn Al Salam
Golden Tulip Jeddah
Tulip Inn Regency(Furnished Apartments)
Al Hamra Pullman
Red Sea Palace
TOTAL
Holiday Inn Khobar
Holiday Inn Corniche
Golden Tulip Khobar
Half Moon Bay Holiday Inn Resort
TOTAL
Novotel Business Park
Tulip Inn Dammam
TOTAL
Hilton Double Tree Dhahran
Golden Tulip Al Jubail
Tulip Inn Yanbu
Tulip Inn Taif
Qasr Al Baha Golden Tulip Hotel and Resort
Golden Tulip Hail
Haql Beach Resort (Sea Chalets)
Golden Tulip Suites
TOTAL Rooms and Suites
Location
Riyadh
Jeddah
Al Khobar
Dammam
Dhahran
Al Jubail
Yanbu
Taif
Baha
Hail
Haql
Dubai
KSA & UAE
Rooms
Suites
Agreement
160
180
152
257
92
60
114
1,015
299
219
162
262
942
97
166
74
60
397
138
138
104
0
6
68
66
50
24
30
2840
43
8
28
41
15
30
55
31
50
17
318
20
0
36
91
15
162
9
20
32
41
102
21
55
76
54
65
45
16
60
31
0
60
989
A*
A*
B**
B**
C***
C***
A*
C***
C***
C***
A*
A*
A*
B**
C***
A*
A*
A*
A*
B**
A*
B**
B**
A*
A*
A*
A*
C***
D****
Source: Al Hokair Group Prospectus ,
* A:Hotels Managed by the Company According to Franchise Agreements,
** B:Hotels Managed by International Operators According to a Management Agreement,
*** C:Al Hokair Group’s Local Brand Hotels and Furnished Apartments Managed by the Company,
5
****D: Hotels Managed by the Company on behalf of Other Parties
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Table 3:Group’s hotels anticipated to be re-branded into JV Hotels
Hotels
Approximate Conversion Date
Golden Tulip Al Khobar
Q4-2014
Golden Tulip Al Nasiria
Q4-2014
Golden Tulip Al Jubail
Q1-2015
Mina Al Riyadh
Q2-2014
Red Sea Palace Jeddah
During Q3-2015
Golden Tulip Qasr Al Baha Hotel and Resort
Q4-2014
Tulip Inn Al Taif
Q3-2014
Tulip Inn Dammam
Q2-2014
Golden Tulip Hail
Q1-2015
Radisson Blu Jizan (under development)
Q3-2014
Source: Al Hokair Group Prospectus
Graph 3: Customer Visits to Entertainment sites
12
40.0
10
35.0
6
30.0
SAR
Million Visitors
8
4
25.0
2
0
20.0
2008
2009
2010
No. of visitors
2011
-LHS
2012
2013
2014
2015
2016
Average amount spent by each Visitor
2017
-RHS
Source: Al Hokair Group Prospectus, Aljazira Research
6
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Financials
Income Statement in mn SAR
REVENUES
Hotels
Entertainment
Others
TOTAL REVENUES
% Growth
DIRECT COSTS
Hotels
Entertainment
Others
TOTAL DIRECT COSTS
GROSS PROFIT
EXPENSES
Selling and marketing
General and administrative
TOTAL EXPENSES
INCOME FROM MAIN OPERATIONS
Share in net results of associates
Financial charges
Other income, net
INCOME FROM CONTINUING OPERATIONS
INCOME BEFORE ZAKAT
Zakat
NET INCOME FOR THE YEAR
% Growth
Balance Sheet in mn SAR
ASSETS
CURRENT ASSETS
Bank balances and cash
Accounts receivable
Prepayments and other current assets
Inventories
Amounts due from related parties
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Investments in associates
Projects under construction
Property and equipment
Goodwill
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
2012
2013
2014
2015
2016
2017
483
273
14
770
7%
553
310
17
880
14%
650
309
18
977
11%
790
343
20
1,154
18%
876
375
22
1,273
10%
935
422
24
1,381
8%
(297)
(172)
(6)
(475)
295
(342)
(206)
(6)
(554)
326
(398)
(200)
(7)
(606)
372
(487)
(222)
(8)
(717)
437
(539)
(245)
(8)
(793)
480
(575)
(274)
(9)
(858)
523
(30)
(112)
(142)
153
28
(4)
7
183
183
(5)
179
2%
(33)
(123)
(156)
169
26
(9)
12
198
198
(3)
196
9%
(37)
(132)
(170)
202
26
(11)
9
226
226
(4)
221
13%
(44)
(149)
(192)
245
26
(13)
10
268
268
(5)
263
19%
(49)
(163)
(211)
269
26
(15)
10
289
289
(6)
284
8%
(52)
(173)
(225)
297
26
(17)
10
316
316
(6)
310
9%
47
35
50
22
4
158
135
40
108
23
23
329
335
46
74
27
23
505
480
55
90
33
23
682
660
63
109
38
23
893
861
70
125
43
23
1,123
89
15
672
39
27
843
1,001
107
79
660
39
886
1,215
107
29
670
39
845
1,350
107
49
668
39
864
1,546
107
59
667
39
873
1,766
107
65
665
39
876
1,999
62
116
69
2.7
250
47
117
105
0.2
269
53
121
126
0.2
300
59
137
145
0.2
341
64
144
171
0.2
379
68
148
192
0.2
409
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
CURRENT LIABILITIES
Accounts payable
Accrued expenses and other current liabilities
Bank borrowings and term loans
Current portion of obligations under
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Term loans
Employees’ terminal benefits
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
SHAREHOLDERS’ EQUITY
Share capital
Statutory reserve
Retained earnings
Proposed Dividend
TOTAL SHAREHOLDERS’ EQUITY
TOTAL LIABILITIES AND EQUITY
130
42
173
423
147
40
187
456
166
40
207
507
196
40
237
578
232
40
273
652
262
40
303
712
408
86
85
578
1,001
550
20
120
69
759
1,215
550
42
182
69
842
1,350
550
68
281
69
968
1,546
550
96
399
69
1,114
1,766
550
127
541
69
1,287
1,999
Cash Flow in mn SAR
Net cash from operating activities
Net cash used in investing activities
Cash flow from Financing Activity
Changes in Cash
Opening Balance of Cash
Murabaha Deposit
Closing Balance of Cash
194
(130)
(26)
37
10
47
196
(239)
39
(3)
47
90
135
348
(70)
(77)
201
135
335
352
(137)
(70)
145
335
480
377
(136)
(61)
180
480
660
416
(141)
(73)
201
660
861
Source: Al Hokair Group Prospectus, Aljazira Research
7
© All rights reserved
Al-Hokair Group
January 2015
Initiation | KSA | Hotel & Tourism Sector
Please read Disclaimer on the back
Ratios
Ratios
2012
2013
2014
2015
2016
2017
Current Ratio(x)
0.6
1.2
1.7
2.0
2.4
2.7
Quick Ratio (x)
0.5
1.1
1.6
1.9
2.3
2.6
Receivables Days Turnover
16.4
16.7
17.0
17.5
18.0
18.5
Inventory Days Turnover
10.4
9.5
10.0
10.5
11.0
11.5
Payables Days Turnover
47.6
30.9
32.0
30.0
29.5
29.0
31%
26%
26%
27%
25%
24%
Liquidity Ratio
Efficency Ratios
Profitability
ROE
ROIC
23%
19%
20%
20%
19%
18%
ROA
18%
16%
16%
17%
16%
16%
Margins
Gross Margins
38%
37%
38%
38%
38%
38%
EBITDA Margins
33%
30%
32%
31%
31%
32%
EBIT Margins
20%
19%
21%
21%
21%
22%
Net Margins
23%
22%
23%
23%
22%
22%
Debt to Equity
35%
33%
35%
35%
36%
35%
Debt to Capital
17%
17%
18%
18%
19%
19%
TIE ( Time Interest Earned)
42.0
21.0
20.6
20.9
19.1
18.5
Leveraging Ratios
Valuations
Dividend Yield
NA*
NA*
3.6%
3.6%
3.6%
3.6%
Book Value Per Share (BVPS)
30.0
24.6
22.1
24.5
28.1
32.1
Market Capitalization(in SAR Mn)
NA*
NA*
3355.0
3822.5
3822.5
3822.5
Enterprise value (in SAR Mn)
NA*
NA*
3312.1
3683.8
3565.4
3415.8
PE (x)
NA*
NA*
15.2
14.5
13.5
12.3
PB (x)
NA*
NA*
2.8
2.8
2.5
2.2
EV/EBITDA (x)
NA*
NA*
10.6
10.2
9.0
7.8
EPS (diluted)
3.3
3.6
4.0
4.8
5.2
5.6
Source: Al Hokari Group Prospectus, Aljazira Research
8
© All rights reserved
RESEARCH DIVISION
Syed Taimure Akhtar
+966 11 2256250
[email protected]
+966 11 2256146
[email protected]
Sultan Al Kadi
+966 11 2256374
[email protected]
BROKERAGE AND INVESTMENT
CENTERS DIVISION
RESEARCH
DIVISION
Senior Analyst
Abdullah Alawi
Analyst
Senior Analyst
Talha Nazar
+966 11 2256115
[email protected]
Analyst
Jassim Al-Jubran
+966 11 2256248
[email protected]
General manager - brokerage services and sales
AGM-Head of international and institutional
AGM- Head of Western and Southern Region Investment Centers & ADC
Ala’a Al-Yousef
brokerage
Brokerage
+966 11 2256000
[email protected]
Luay Jawad Al-Motawa
Abdullah Q. Al-Misbani
+966 11 2256277
[email protected]
+966 12 6618400
[email protected]
AGM-Head of Sales And Investment Centers
AGM-Head of Qassim & Eastern Province
AGM - Head of Institutional Brokerage
Central Region
Abdullah Al-Rahit
Samer Al- Joauni
Sultan Ibrahim AL-Mutawa
+966 16 3617547
[email protected]
+966 1 225 6352
[email protected]
+966 11 2256364
[email protected]
AlJazira Capital, the investment arm of Bank AlJazira, is a Shariaa Compliant Saudi Closed Joint Stock company and
operating under the regulatory supervision of the Capital Market Authority. AlJazira Capital is licensed to conduct
securities business in all securities business as authorized by CMA, including dealing, managing, arranging, advisory,
and custody. AlJazira Capital is the continuation of a long success story in the Saudi Tadawul market, having occupied
the market leadership position for several years. With an objective to maintain its market leadership position, AlJazira
Capital is expanding its brokerage capabilities to offer further value-added services, brokerage across MENA and
International markets, as well as offering a full suite of securities business.
1.
RATING
TERMINOLOGY
AGM - Head of Research
2.
3.
4.
Overweight: This rating implies that the stock is currently trading at a discount to its 12 months price target.
Stocks rated “Overweight” will typically provide an upside potential of over 10% from the current price levels
over next twelve months.
Underweight: This rating implies that the stock is currently trading at a premium to its 12 months price target.
Stocks rated “Underweight” would typically decline by over 10% from the current price levels over next twelve
months.
Neutral: The rating implies that the stock is trading in the proximate range of its 12 months price target. Stocks
rated “Neutral” is expected to stagnate within +/- 10% range from the current price levels over next twelve
months.
Suspension of rating or rating on hold (SR/RH): This basically implies suspension of a rating pending further
analysis of a material change in the fundamentals of the company.
Disclaimer
The purpose of producing this report is to present a general view on the company/economic sector/economic subject under research, and not to recommend a buy/sell/hold for
any security or any other assets. Based on that, this report does not take into consideration the specific financial position of every investor and/or his/her risk appetite in relation
to investing in the security or any other assets, and hence, may not be suitable for all clients depending on their financial position and their ability and willingness to undertake
risks. It is advised that every potential investor seek professional advice from several sources concerning investment decision and should study the impact of such decisions on
his/her financial/legal/tax position and other concerns before getting into such investments or liquidate them partially or fully. The market of stocks, bonds, macroeconomic or
microeconomic variables are of a volatile nature and could witness sudden changes without any prior warning, therefore, the investor in securities or other assets might face
some unexpected risks and fluctuations. All the information, views and expectations and fair values or target prices contained in this report have been compiled or arrived at by
Aljazira Capital from sources believed to be reliable, but Aljazira Capital has not independently verified the contents obtained from these sources and such information may be
condensed or incomplete. Accordingly, no representation or warranty, express or implied, is made as to, and no reliance should be placed on the fairness, accuracy, completeness
or correctness of the information and opinions contained in this report. Aljazira Capital shall not be liable for any loss as that may arise from the use of this report or its contents or
otherwise arising in connection therewith. The past performance of any investment is not an indicator of future performance. Any financial projections, fair value estimates or price
targets and statements regarding future prospects contained in this document may not be realized. The value of the security or any other assets or the return from them might
increase or decrease. Any change in currency rates may have a positive or negative impact on the value/return on the stock or securities mentioned in the report. The investor might
get an amount less than the amount invested in some cases. Some stocks or securities maybe, by nature, of low volume/trades or may become like that unexpectedly in special
circumstances and this might increase the risk on the investor. Some fees might be levied on some investments in securities. This report has been written by professional employees
in Aljazira Capital, and they undertake that neither them, nor their wives or children hold positions directly in any listed shares or securities contained in this report during the
time of publication of this report, however, The authors and/or their wives/children of this document may own securities in funds open to the public that invest in the securities
mentioned in this document as part of a diversified portfolio over which they have no discretion. This report has been produced independently and separately by the Research
Division at Aljazira Capital and no party (in-house or outside) who might have interest whether direct or indirect have seen the contents of this report before its publishing, except
for those whom corporate positions allow them to do so, and/or third-party persons/institutions who signed a non-disclosure agreement with Aljazira Capital. Funds managed by
Aljazira Capital and its subsidiaries for third parties may own the securities that are the subject of this document. Aljazira Capital or its subsidiaries may own securities in one or more
of the aforementioned companies, and/or indirectly through funds managed by third parties. The Investment Banking division of Aljazira Capital maybe in the process of soliciting
or executing fee earning mandates for companies that is either the subject of this document or is mentioned in this document. One or more of Aljazira Capital board members or
executive managers could be also a board member or member of the executive management at the company or companies mentioned in this report, or their associated companies.
No part of this report may be reproduced whether inside or outside the Kingdom of Saudi Arabia without the written permission of Aljazira Capital. Persons who receive this report
should make themselves aware, of and adhere to, any such restrictions. By accepting this report, the recipient agrees to be bound by the foregoing limitations.
Asset Management | Brokerage | Corporate Finance | Custody | Advisory
Head Office: King Fahad Road, P.O. Box: 20438, Riyadh 11455, Saudi Arabia، Tel: 011 2256000 - Fax: 011 2256068
Aljazira Capital is a Saudi Investment Company licensed by the Capital Market Authority (CMA), license No. 07076-37