Al Anwar Ceramic Tiles SAOG

 Al Anwar Ceramic Tiles SAOG Research Initiation – 6th July 2010 MSM 30 AACT (CMP ) 6,143.48 0.296 12 Months Target 0.368 Key Figures 2008A 2009A 2010E
2011E
Net Sales 11,870 15,887 18,150
22,725
Operating Profit 3,930 5,624 6,201
8,380
EBITDA 4,704 6,409 6,949
9,292
Net Income 3,516 4,952 5,457
7,374
2008A 2009A 2010E
2011E
Key Ratios NPM Investment Rationale. With dominating market share of nearly 60% in the local market, the company has consistently outperformed the MSM30 general index. Despite the slowdown in the economic activity in 2009, AACT operated at almost full capacity and there was little negative impact on the results. in 1Q 2010, the company also kept the production level intact and in line with the 2009 level as the demand for ceramic tiles remains high. 30% 31% 30%
32%
ROE 26.0% 26.8% 22.9%
21.2%
New proposed Capacity expansion of 3 million Sqm ROA 19.9% 22.0% 16.8%
17.7%
2008A 2009A 2010E
2011E
Given the huge gap in demand and supply, the proposed new capacity expansion of additional 3 million sqm per annum is poised to generate better top lineled by volume growth. Valuation EPS 0.035 0.044 0.034
0.035
P/E(x) 8.5 6.7 8.8
8.5
P/BV(x) 2.2 1.8 2.0
1.8
Basic Stock Details 0.296 52Wk high 0.482 162,241.950 52Wk low Market Price Shares O/S ( In,000) Market Cap 48023.620 MSM Ticker AACT 0.222 YTD Change 26.35% Bloomberg AACT OM Reuters AACT. OM 52 Weeks stock performance The realization per unit for the company’s products ”Al Sham” is quite competitive compared to the regional market players as well as the low cost Chinese producers. The realization per unit has been steady and increasing, reflecting reliable demand for the company product on the back of recovery in construction activities. Diversified target market The company’s target market has been predominantly the local market, Oman. Continued support of the government to increase local investment in the industrial sector, in line with its diversification plan, augurs well for the company in future. Also, the company has been able to cover its decreasing sales in UAE through increased consumption in the Saudi market, which is the largest consumer of ceramic tiles in the region. MSM30 Index
06/21/2009
07/06/2009
07/21/2009
08/05/2009
08/20/2009
09/04/2009
09/19/2009
10/04/2009
10/19/2009
11/03/2009
11/18/2009
12/03/2009
12/18/2009
01/02/2010
01/17/2010
02/01/2010
02/16/2010
03/03/2010
03/18/2010
04/02/2010
04/17/2010
05/02/2010
05/17/2010
06/01/2010
06/16/2010
AACT OM Equity
Realization per Sqm is steady amid the slowdown in 2009 33%
30%
28%
25%
23%
20%
18%
15%
13%
10%
8%
5%
3%
0%
‐3%
‐5%
‐8%
‐10%
Initiating valuation at target price of RO 0.368 We initiate the valuation with target price of RO 0.368, which is a potential upside of nearly 24% from the current market price. The stock is currently trading at a P/E of 6.7x and 8.8x its FY2009A and FY2010E earnings. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Nothing in this document should be construed as investment or financial advice, and nothing in this document should be construed as an advice to buy or sell or solicitation to buy or sell the securities of companies referred to in this document. The intent of this document is not in recommendary nature. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. National Bank of Oman has not independently verified all the information given in this document. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. National Bank of Oman, their directors and the employees may from time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to perform investment banking or other services for, or solicit investment banking or other business from, any company referred toin this report. Each of these entities functions as a separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information, which is already available in publicly accessible media or developed through analysis of National Bank of Oman. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. Neither National Bank of Oman, nor its directors or employees shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Al Anw
war Ceram
mic Tiles Research In
nitiation Companyy Overview Set up in 1997, Al An
nwar Ceramiic Tiles (AAC
CT) was the first ceramic tile manufacturer in Oman w
with a capitall of RO 1.8 miillion and a caapacity of 3 m
million sqm per an
nnum.The company's plan
nt was setup in the town of Nizwa witth key technical collaboration c
from Italian
n manufacturers. The co
ompany has been expanding steadily sincee inception, as we have seen expanded capacities in 2004 and 2008. Currently thee company is considering expansion off another 3 m
million Sqm per an
nnum. The present p
installed capacity is approx. 10
0 million sqm
m and with the new expansion it is expectted to reach 13 million sq
qm per annu
um by end 2011. The compaany enjoys clo
ose proximityy to locally available raw materials. Fo
or the production process the plant sourcees most raw m
materials such shale, limestone s
locally via v its miningg rights. At th
he same timee other impo
ortant and silica sand items such as pigmentss, glaze and frits are imported from leading Italian
n and Spanish manufacturers. Thus the company c
ben
nefits from being one of o the lowest costt producers due to the cosst competitiveeness. motes its prod
duct under the brand name of ‘Al Sham
ms’, which is o
one of AACT prom
the more recognized and established brand
ds in the region, given
n the affordabilitty and qualityy of tiles. Sharehollding pattern as on Marrch 2010 Name No of Shares
Percentagge Holding Al Jazeira Servvices 35677.005
22.0% DAMAC Inv. K
Kuwait
16743.369
10.3% Inv. Stabilizatiion Fund
10480.830
6.5% 9604.723
5.9% 9507.378
5.9% DAMAC Inv. UUAE Muscat
DAMAC Inv. M
State general Reserve Fund
Others Shares Outstanding
8955.756
5.5% 53182.911
32.8% 162241.950
88.9% Share H
Holding Structurre
Al Jazeera Services
32.8% 22.0
0%
DAMAC Inv. K
Kuwait
10.3%
%
5.5%
%
5.9% 5.9%
%
Inv. Stabilizattion Fund
6.5%
Equity Reesearch Investmeent Banking: NBO
Al Anwar Ceramic Tiles Research Initiation Installed Capacity & Utilization In 2008, AACT was operating with two production lines with a capacity of approximately 7 million Sq. meters per annum. After Q3’08, AACT added a new production line which gave an additional 3 million Sq. meters per annum taking the total capacity to 10 million Sq. meters per annum. As stated earlier, AACT has recently planned to add a new production line with a capacity of 3 million Sq. meters per annum which would increase the overall ceramic tile production capacity of the company to about 13 million sq. meters per annum making them one of the largest producers in the GCC region. The expansion plan is estimated to cost around RO 8 million which will be funded from a mix of internal accruals and external financing through banks. At the moment, the company’s factory and offices occupy only 20% of the total leased area. Therefore, acquiring land for the expansion plan will not be a problem. 102%
100%
98%
96%
94%
92%
90%
88%
86%
84%
82%
25000
22500
20000
17500
15000
12500
10000
7500
5000
2500
0
2005
2006
2007
2008
Installed Capacity (Mn Sqm)
2009
Revenue(RO Mn)
2010 E 2011 E
Utilized Capacity (%)
Source: Company Reports, NBO Research The company uses both the dry as well as the wet process of producing ceramic tiles. Two of the lines are being engaged with dry process, which gives the company better cost control and improved realization on output. Installed Capacity Utilized Capacity Revenue
Revenue
Realization Net profit
(RO Mn)
Year (Mn Sqm)
(%)
(RO Mn)
Growth
Per Sqm 2005 5500
97.5%
6,767
NA
1.26 1411.81
2006 6500
94.5%
8,051
19%
1.31 1782.72
2007 6500
100.0%
8,774
9%
1.35 2315.70
2008 7500
96.4%
11,870
35%
1.64 3515.88
2009 10000
98.7%
15,887
34%
1.61 4952.44
2010 E 10000
99.0%
18,150
14%
1.75 5456.75
2011 E 13000
88.5%
22,725
25%
1.85 7374.32
Source: Company Reports, NBO Research Equity Research Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Financial Analysis AACT reported a 12% increase in total sales for Q1’10 amounting to RO 4.575 million as compared to RO 4.096 million in the same period last year due to high capacity utilization coupled with the added production resulting from installation of third production line which was completed in the last quarter of 2008. On Q‐o‐Q basis, the company has managed to increase sales by an impressive 25% in Q1’10 from RO 3,654 million in Q4’09. Source: Company Reports, NBO Research The company’s focus on local market was successful in generating higher top line. Contribution from local market in Q1’10 was 60% to the total sales by value as well as volume and the market share of the company increased to nearly 50% in local market. During the year, AACT has managed to improve its output and income owing to growing demand and better product mix and market penetration. During Q1’10, the company operated at full capacity thereby producing 2.50 million sq. meters of tiles, an increase of 7% over the same period last year. 25000.0
35%
34%
20000.0
15000.0
10000.0
19%
14%
9%
5000.0
0.0
2006
2007
2008
Revenue
2010E
2011E
Growth
Equity Research 2009
40%
35%
30%
25% 25%
20%
15%
10%
5%
0%
Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Cost Structure & profitability Raw materials such as silica, sand, limestone, shale (produced locally) and glaze, (imported from Italy, Spain and India) which is a thin shiny coating that represents almost 50% of the direct cost. However, through better sourcing and improved programs, the company managed to reduce manufacturing costs. The company’s advantage against other players in the region is its low cost reach to the raw materials. Hence the company has been able to keep the cost per square meter in a tight range showing an absolute increase of only 5% over 2001 while realizations are 16% higher compared to 2001 levels. The capital expenditure of RO 8 million for the new production line, which will be funded through the company’s internal accruals, seems to be high due to additional civil construction, installation of conveyor belts for the entire facility and hardware to convert natural gas from LPG. The key concern here is the non‐
availability of gas as a fuel for the capacity expansion program which could in turn increase the overall productions costs. However, there are indications that AACT will receive gas supply from the government for its expansion plan. 8000.0
7000.0
6000.0
5000.0
4000.0
3000.0
2000.0
1000.0
0.0
60%
54%
50%
39%
32%
35%
30%
40%
30%
20%
10%
10%
0%
2006
2007
2008
Net Profit
2009
2010E
2011E
Growth
Net income for the first quarter 2010 increased by 14.2% Y‐o‐Y and 30.9% Q‐o‐Q to OMR 1.4 million backed by robust growth in top line as well as improvement in margins. Revenues increased by 25.2% Q‐o‐Q and 11.7% Y‐o‐Y to OMR4.6 million mainly due to higher unit sales. Gross profit margin improved to 52.5% from 48.5% in 4Q2009 and 50.4% in 1Q2009 which is the highest gross margin that the company has achieved. Equity Research Investment Banking: NBO Al Anw
war Ceram
mic Tiles Research In
nitiation Ceramic tiles markett Predominantly GCC hass been the neet importer of o ceramic tiles over the years. y
The GCC ceeramic tiles m
market size iss estimated aat nearly 125 million sqm while the total in
nstalled capaacity is nearly around 80
0 million sqm
m. The majorrity of demand is coming from the Saudi Arrabian and the UAE markeets. Given the huge gap in dem
mand and sup
pply, the industry has been witnessing several cap
pacity expansionss over the lasst few years. This also prrovides a hugge opportunitty for local manu
ufacturers to fill the gap by providing in‐time deelivery and quality products. Market Structu
ure
10%
20%
Local Pro
oducers
70%
Emergin Market Supplierss
Western Players
The industry has registered a CAGR
R of 11% (200
00‐2009) making it one of o the fastest grow
wing marketss in the world
d. Currently tthe GCC tile m
market constitutes only 5% of the world m
markets. We eexpect the op
pening of the real estate ssector to foreign investments coupled witth the increaase in liquidity in the reggional economies will provide ffurther thrust to the indusstry. Domesticc market The Omanii market is drriven by dem
mand primarilyy from the reetail segmentt. The mid‐segmeent retail pro
oduct forms more than 70% 7
of the market m
and this t
is being caterred to by loccal manufactu
urers such ass AACT and Al‐Maha A
Ceraamics. The premiu
um product, w
which forms aaround 10% o
of the overall market, is caatered to by western players. TThe rest of th
he market, w
which is round
d 10‐20%, is being catered to by low cost C
Chinese manu
ufacturers. Favorablle demograp
phic The total G
GCC populatio
on of around 30 million peeople is expeected to doub
ble by 2050. Further favorable demograph
hic factors such as 70% of the totall GCC population being below
w the age of 3
30, increasing number of families and h
higher purchasing power have created a surrge in demand for user ind
dustries. Supply deficiency cre
eates opporrtunity The current boom in the end user in
ndustries has triggered exponential demand growth in the t ceramic and tile markket. Although
h the GCC manufacturers have stepped up
p production,, more than 35‐40% of th
he demand iss currently met m by imports. Th
he major countries that seell their produ
ucts in the GC
CC are Italy, SSpain, China, Indiaa, Indonesia aand Iran. Equity Reesearch Investmeent Banking: NBO
Al Anwar Ceramic Tiles Research Initiation SWOT Analysis Strengths ¾
¾
¾
¾
Building new plant to meet demand Effective capacity utilization. Lower production costs and better realizations Strong Brand equity of Al Shams Threats ¾
¾
¾
Opportunities ¾
¾
Non‐availability of gas as a fuel for its upcoming capacity expansion program Local competition from Al Maha Competition from Chinese low cost players. ¾
¾
Demand in the premium sector Custom duty exemption in the GCC markets. Permitting expatriates to own property Significant investments to boost tourism and leisure industry Weakness ¾
¾
High correlation with construction industry. Sensitivity of average price realization especially in the export segment. Outlook There has been a supply gap in the region which is estimated between 30 million to 40 million square metres on an annual basis. This leaves a huge opportunity for all the players in the GCC to capitalize on. The Construction Industry in the GCC continues to witness satisfactory recovery and the medium term demand view remains optimistic. We expect growing consumption for the company’s products. However increased supplies and price competition from non‐GCC manufacturers, particularly China is also a concern. So while the demand grows, so does supply. Instead of competitive pricing, controlling cost of production remains the key to profitable growth. Equity Research Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Valuation We initiated our valuation for AACT with cost of equity of 13% and a WACC of 12.8%. We assigned the company a the terminal growth rate of 1%. Based on the above mentioned assumptions, we reached a fair value of RO 0.368, which offers a likely upside of nearly 25% from the current market price. Assumptions Risk Free rate (10 yr bond) Risk Premium Beta Cost of Equity WACC 4.1% 9.9% 0.9 13.0% 12.8% Market cap Debt Av cost of debt Market Returns Terminal growth rate 33,119.7 1,126.8 6.0% 14.0% 1.0% DCF Calculation
No of years
Terminal Value Calculation
Terminal Value Growth Rate
Projected Free Cash Flow
Discount Rate (WACC)
Terminal Enterprise Value
Discounted Cash Flows at WACC
Unlevered Free Cash Flow
Terminal Value
Total Discounted Cash Flows
Less Debt
Add cash
Equity Value
Shares in issue
DCF per share
Share Price
Upside/(Downside)
2009A 0 2010E 2011E
1 2
1.0%
6,722.1
12.8%
57,067.1
14,639.1
44,866.9
59,506.0
(1,126.8)
1,279.1
59,658.3
162,241.950
0.368
0.296
24%
Though our valuation is based on a very conservative terminal growth rate of 1%, we believe the price is sensitive to the presence of the increased Chinese players and the capacity expansion in the regional market coming into effect at the same time that AACT is planning its capacity expansion. Equity Research Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Annexure INCOME STATEMENT Revenue Total Turnover % Growth Cost of sales COGS % of sales Gross Profit Gross Profit Margin Other income Operating Expenses General & adm exp Selling & Dist Exp Net Interest Expense Others Total Operating Expenses Profit Before tax EBIT Margin Tax Net Income NI Margin Shares o/s (,000) EPS EBITDA EBITDA margin EBIT Margin 2007A
OMR 000
2008A
OMR 000
2009A
OMR 000
8774.00
8774.00
9%
4747.37
11869.93
11869.93
35%
5935.40
15886.99
15886.99
34%
7937.13
54%
50%
50%
4026.63
46%
5934.53
50%
7949.86
50%
96.3
80.114
97.316
837.27
887.65
13.312
36
1161.25
848.45
23.677
51.309
1317.69
1111.86
5.472
‐11.6
1774.23
2348.70
2084.69
3929.95
2423.42
5623.76
27%
33%
35%
(33.00)
2315.70
26%
(414.07)
3515.88
30%
(671.32)
4952.44
31%
85,759.000
0.027
100,987.000
0.035
111,891.000
0.044
3,043.0
34.7%
27%
4,703.8
39.6%
33%
6,408.9
40.3%
35%
2010E OMR 000 18150.00 18150.00 14% 9067.73 50% 9082.27 50% 72.987 1449.45 1167.45 337.5 0 2954.41 6200.85 34% (744.10) 5456.75 30% 162,241.950 0.034 6,949.2 38.3% 34% 2011E
OMR 000
22725.00
22725.00
25%
11353.40
50%
11371.60
50%
98.53245
1594.40
1225.83
270
0
3090.23
8379.91
37%
(1005.59)
7374.32
32%
210,914.535
0.035
9,291.7
40.9%
37%
Equity Research Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Balance Sheet Fig. in RO ,000 Assets Cash and bank balances Inventories Trade receivables Other receivables Financial assets held ‐ to ‐ maturity Total Current Assets Property, plant and equipment Financial assets available ‐ for ‐ sale Total Assets Liabilities and Shareholders’ Equity Current Liabilities Current portion of Government soft loans Trade and other payables Taxation Total Current Liabilities Non ‐current Government soft loans Deferred Government grant Employee End Service benefits Deferred tax liability Total Liabilities Share capital Legal reserve Retained earnings Proposed bonus shares/Dividend Fair value reserve Total Equity Total Liabilities & Shareholders' Equity 2007A 2008E 2009A 2010E 2011E 589.7 1,415.1 1,847.2 346.7 3,425.2 1,279.1 2,164.4 2,587.9 178.3 107.9 1,211.9 2,197.8 3,667.6 0.0 4,570.7 3,420.7 2,510.8 4,190.0 717.2 5,570.7 6,829.9 3,143.7 4,399.5 898.0 6,620.7 7,623.8 6,317.6 11,647.9 16,409.4 21,891.8 6,233.4 74.2 11,341.2 22.9 10,792.8 34.4 15,968.7 134.4 19,455.3 234.4 13,931.4 17,681.7 22,475.1 32,512.6 41,581.5 308.3 1,255.9 0.0 308.3 2,404.6 342.1 308.3 2,171.7 617.2 350.0 2,237.7 377.2 (350.0) 2,801.7 396.0 1,564.3 3,055.0 3,097.3 2,964.9 2,847.7 793.8 131.0 145.0 217.0 1,286.8 485.6 131.0 201.8 289.0 1,107.4 239.8 68.5 254.1 343.9 906.3 5,000.0 0.0 309.7 429.9 5,739.5 3,000.0 0.0 379.3 537.3 3,916.6 7,172.6 1,000.1 353.7 2,510.4 43.6 8,607.1 1,356.8 3,564.1 0.0 (8.8) 11,189.2 1,850.9 5,428.7 0.0 2.7 16,224.3 2,396.6 5,187.2 0.0 0.0 21,091.5 3,134.0 10,591.8 0.0 0.0 11,080.3 13,519.2 18,471.6 23,808.1 34,817.3 13,931.4 17,681.7 22,475.1 32,512.5 41,581.6 Equity Research Investment Banking: NBO Al Anwar Ceramic Tiles Research Initiation Cash Flow statement Fig. in RO ,000 Cash Flow from Operating Activities Net profit for the year Adjustments for: Depreciation Staff terminal benefits to non‐Omanis charged
Profit on sale of property, plant and equipment
Operating profit before working capital changes
Cash Flow from Investing Activities Net Movement in assets held to maturity Purchase of property, plant and equipment
Proceeds from sale of PPT Purchase of financial assets
Net Cash used in Investing Activities Cash Flow from Financing Activities Dividend paid Change bank borrowings Repayment of Govt. soft loan Net Cash used in Financing Activities Net Increase/ (Decrease) in Cash and Cash eqv.
Cash beginning of the year Cash end of the year 2007A
2008E
2315.7
3567.2
694.3
42.1
‐8.6
773.8
33.1
‐25.0
3043.4
4349.1
‐2925.2
(324.6)
20.2
‐31.7
(3,261.3)
3317.3
(5,671.9)
16.5
0.0
(2,275.5)
0.0
0.0
(308.3)
‐1075.9
0.0
(308.3)
(308.3)
(1,384.2)
277.0
312.7
589.7
689.4
589.7
1,279.1
2009A 2010E 2011E
4952.4 5456.7 7374.3
785.1 748.4 911.8
44.5 55.6 69.6
‐10.6 ‐5.6 8.9
5352.8 6255.1 8364.6
‐4462.8 ‐1000.0 ‐1050.0
(747.9) (5,350.0) (3,650.0)
6.9 2.3 5.9
0.0 0.0 0.0
(5,111.7) (5,910.7) (4,530.1)
0.0 ‐2785.6 ‐3075.3
0.0 5000.0 3000.0
(308.3) (350.0) (350.0)
(308.3) 1,864.4 (425.3)
(67.2) 2,208.8 3,409.2
1,279.1 1,211.9 3,420.7
1,211.9 3,420.7 6,829.9
Key Ratios Credit Statistics: 2007A
2008A
2009A
2010E
2011E
EBITDA /Net Interest Expense 1.3x 1.2x 1.1x 1.1x 1.1x EBITDA‐CapEx /Net Interest Expense 1.4x 2.6x 1.3x 2.0x 1.5x Total Debt/EBITDA Growth Rates and Margins: 0.5x 0.2x 0.1x 0.8x 0.3x 2007A
2008A
2009A
Revenue Growth 9.0% 35.3% 33.8% EBITDA Growth 22.2% 54.6% EBITDA Margin 34.7% 39.6% EBIT Margin 26.8% 33.1% Valuation and Return Metrics 2010E
2011E
14.2% 25.2% 36.2% 8.4% 33.7% 40.3% 38.3% 40.9% 35.4% 34.2% 36.9% 2007A 2008A 2009A 2010E 2011E 11.0x 8.5x 6.7x 8.8x 8.5x 2.3x 2.2x 1.8x 2.0x 1.8x Return on equity 20.9% 26.0% 26.8% 22.9% 21.2% Return on capital employed 19.3% 24.3% 25.5% 18.7% 19.3% P/E P/BV Debt/Equity Return on Assets Equity Research 0.1x 0.1x 0.1x 0.2x 0.1x 16.6% 19.9% 22.0% 16.8% 17.7% Investment Banking: NBO Analysts Aziz Al‐Jahdhami Partha Sarathi Rand Al Shaikh Brokerage Unit Khalid Al‐Sulaimi Hussain Al‐Lawati Murtadha Al‐Ajmi Amur Al Mashani Tel (+968) 24 778329 (+968) 24 778425 (+968) 24 778180 Tel (+968) 24 778697 (+968) 24 778791 (+968) 24 778761 (+968) 24 778790 Email [email protected]
[email protected]
[email protected]
Email [email protected]
[email protected]
[email protected]
[email protected]
Disclaimer: The information and opinions in this report were prepared by the Investment Banking Division of the National Bank of Oman (SAOG) (NBO). This document is for the information and use of the recipient only. It is not to be reproduced or copied or made available to others. Under no circumstances is this report to be considered as an offer to sell or a solicitation to buy any security. NBO from time to time may perform buying or selling operations in the stocks of, or provide investment banking or other services to companies discussed in this report. This report is based on publicly available information. NBO makes every effort to use reliable, comprehensive information, but makes no representation that it is accurate or complete. NBO does not accept any liability for any direct or consequential loss arising from any use of material contained in this report. This report does not provide individually tailored advice. It has been prepared without regard to the individual financial circumstances and objectives of the persons who receive it. NBO recommends that investors independently evaluate particular investments and strategies. Recipients should note that investments in equity shares, preferred shares, bonds similar investments are subject to risks derived from fundamental factors related to the business and interest rates, currency rates, and many other macroeconomic and market factors. This risk includes the risk of complete loss of capital invested. In case any recipient is considering making an investment in any stocks or shares, before doing so it should obtain independent advice from its financial or legal advisors. Opinions in the report are subject to change based on new fundamental information or new analysis of existing fundamental information emerging, or due to a change in market price of the security. NBO reserves the right to alter its views without prior notice and is not under any obligation to publish its revised views or inform the recipients about the same. Investment Banking Department National Bank of Oman SAOG National Bank of Oman SAOG, P.O. Box 751, Postal Code 112 Ruwi, Muscat, Sultanate of Oman, Telephone: +968‐
2477 8000, Fax: +968‐24778420;Email: [email protected] ; http://www.nbo.co.om