)عينصتلا( ةينطولا عينصتلا ةكشر ...mec.biz/term/uploads/KT6Q1_2060-09-12-2011.pdf · 1 2011 برمسيد 9)عينصتلا( ةينطولا عينصتلا ةكشر

91 ديسمبر 2011

شركة التصنيع الوطنية )التصنيع(

إنتاج مادة TiO2 يشكل درعا واقيا في مواجهة التقلبات الراهنة

بصمات واضحة في أسواق انتاج الTiO2 الإقليمية والعالميةنتيجة هو المادة انتاج هذه في البارز الحضور هذا .TiO2ال بمادة الإقليمي السوق تزود التي الوحيدة الشركة »التصنيع« هي مشاركتها بنسبة %66 من حصص شركة »كريستال غلوبل«، وتعتبر هذه الأخيرة ثاني أكبر منتج لمادة الTiO2 في العالم حيث تجاوز

العائد الإجمالي لهذه الشركة 2,2 مليار دولار عام 2010.وتشغل شركة »كريستال غلوبل« 8 مصانع لإنتاج مادة الTiO2 حول العالم بحيث انها تؤمن هذا المنتج الصبغي الى ما يزيد عن 70 بلدا حول العالم. ونظراً للشراكة الاستراتيجية في شركات »بيماكس« Bemax و »أي.تي.بي« ITP مقرونة بعملية الشراكة الأخيرة التي تمت مع شركة »أوتوتك« Outotec فإن سياسة التكامل العامودي في انتاج مادة الTiO2 التي تنتهجها »كريستال غلوبل« حَرِية بأن تحسن وتعزز بصورة ملحوظة الموقع التنافسي للشركة، وذلك لأن تكلفة انتاج الTiO2 لديها هي الأقل مقارنة مع الشركات الأخرى

المنتجة لهذه المادة في العالم مما يعزز أيضاً موقع الشركة في السوق العالمي.

الركائز التي يُعتمد عليها في الإنتاج تؤشر الى مزيد من النموتتحكم بإمدادات الTiO2 للأسواق الإمكانات المحدودة لمخزون خامات معدن التيتانيوم، فالمخزون العالمي اليوم من هذا الخام منخفض قليلا عن الطلب العالمي، ويتوقع أن يزداد العجز خلال السنوات القادمة. ولذلك فإنه أصبح من الصعب تلبية الطلبات الجديدة بالإمكانات المتوفرة حالياً. ومع تنامي العجز في مخزون خام التيتانيوم، بالإضافة الى ضيق السوق، يتوقع أن تبقى الضغوطات لرفع اسعار الTiO2 محصورة ضمن حدود الأمد القريب. ولقد شهدت الأسواق مثل هذا الضغط في السابق حيث ارتفعت اسعار ال

TiO2 منذ الفصل الثاني لعام 2010. ومنذ أول السنة حتى تاريخه ارتفعت اسعار الTiO2 بما يقارب %40 مسجلة مكاسب ملحوظة TiO2مقارنة مع العوائد التي تأتي بها المنتجات الكيماوية الإخرى في القطاع. وعلى هذا فإنه في مثل هذه الظروف التي يتبوأ فيها ال

.TiO2المرتبة المتقدمة في مبيعات شركة »التصنيع« فإن الشركة مهيأة للإستفادة من هذا النمو المتوسط الأجل في صناعة منتج ال

خليط متنوع من الإنتاجتعتبر شركة »التصنيع« واحدة من أكبر شركات التصنيع في المنطقة، فلقد مضى على وجودها ما يزيد على 25 عاما. ولقد سجلت الشركة حضوراً قويا في مختلف الأسواق التي تشمل الTiO2 و »بوليبروبلين« و »بوليثيلين«، الى جانب الأسواق الصناعية الأخرى مثل البطاريات السائلة، ومنتجات البلاستيك والرصاص. ولذلك فإنه مع تصدر الTiO2 المبيعات في شركة »التصنيع« فإن العوائد الأخرى للشركة، التي تقدر بما يزيد عن %45 من إجمالي المبيعات، نابعة في الحقيقة من خطوط انتاج أخرى. وبناء عليه فإنه بمثل هذا التنوع في الإنتاج، فإن

الضعف في الطلب وفي الأسعار في مكان ما تعوض عنه قوة في الطلب وفي الأسعار في مكان آخر.

إداء قوي سيّما بعد الأزمة المالية العالميةفي هذا السياق العالمي، وبالرغم من عمليات البيع الكبيرة التي شهدتها اسواق الأسهم العالمية، الى جانب التقلبات المستمرة في الأسواق المالية، فإن شركة »التصنيع« حققت عوائد على السهم بلغت من أول السنة حتى تاريخه %25 وكانت هذه النسبة هي الأعلى في العالم متقدمة على كبار المنتجين العالميين لمادة الTiO2 أمثال »دوبون« DuPont و »ترونوكس« Tronox . إن هذه العوائد السخية التي حققتها شركة »التصنيع« وسط هذه الأسواق المتقلبة خلال السنوات القليلة الماضية، تؤشر الى الموقع المالي القوي للشركة الى جانب وجهة النمو الإيجابي النابع من الحضور القوي للشركة في اسواق انتاج »ثاني أوكسيد التيتانيوم« الإقليمية والعالمية، دون إغفال جاذبية العائد

على الدخل النابعة من الإستمرار في دفع التوزيعات النقدية خلال السنوات الماضية.

توقع حصول زيادة في قيمة العائد على السهمفي ظل هذا النمط التشغيلي المؤاتي، ومع التحسن المستمر في سعر المنتج الصبغي الTiO2، مقرونة بموارد أخرى متنوعة من إيرادات التشغيل، فإنه من المتوقع أن ترتفع قيمة الأسهم التي يحملها المساهمون. وهكذا فاستناداً الى القيمة العادلة المقدرة للسهم بـ 56,3 ريال

سعودي، فإن شركة »التصنيع« تقدم للمستثمرين إرتفاعاً محتملاً يصل الى %44,0، ونحن نوصي بشراء السهم.

التقديرات المالية

إداء السهم

تصنيف بلومبرغ

مؤشرات

معلومات عن السهم

NIC AB الرمز

49.2 المستهدف للسعر الوسطي معدل حسب بلومبرغ )س.ر.(

21,795 القيمة السوقية )س.ر. بالملايين(

5,812 القيمة السوقية )د.أ. بالملايين(

557 عدد الأسهم )بالملايين(

54% التداول الحر

1,263 المعدل الشهري للسيولة )س.ر. بالملايين(

45.1 أعلى سعر خلال 52 أسبوع )س.ر.(

25.6 أدنى سعر خلال 52 أسبوع )س.ر.(

الملكية

38% المؤسسات الخاصة

8% صناديق التأمين

54% الجمهور

التحليل المالي

رين داغرمحلل مالي رئيسي

[email protected]

CFA ، يوسف نظاممدير البحث الإستثماري

[email protected]

2014 م 2013 م 2012 م 2011 م 2010 السنة

24,691,923 العائدات )س.ر. بالآلاف( 15,989,374 20,405,751 21,813,198 22,208,220

3,685,442 صافي الدخل )س.ر. بالآلاف( 1,472,606 2,611,090 2,832,799 3,082,824

6.61 ربحية السهم )س.ر.( 2.64 4.68 5.08 5.53

4.50 3.25 3.00 2.25 1.00 نصيب السهم من الربح )س.ر.(

5.9 7.1 7.7 8.3 9.4 مكرر الربحية

11.5% 8.3% 7.7% 5.8% 4.0% العائد النقدي

1.4 1.6 1.7 2.1 1.5 مكرر القيمة الدفترية

39.1 س.ر. السعر الحالي

56.3 س.ر. السعر المستهدف

شراء التصنيف

1

EQUITY RESEARCH

December 9, 2011

ENTITY OF AUDI SARADAR GROUP

CURRENT PRICE SAR 39.1

FAIR VALUE SAR 56.3

RATING BUY

HIGHLIGHTS A TiO2 PLAY: A SHIELD AMIDST CURRENT VOLATILITYA SOLID FOOTPRINT IN THE REGIONAL AND GLOBAL TiO2 MARKETTasnee is the region’s only supplier of titanium dioxide (TiO2), whereby its solid presence in the TiO2 industry is a result of its 66% share in Cristal Global. Cristal Global, with 2010 total revenues exceeding $2.2 billion, is the second largest producer of TiO2 worldwide. The company operates eight TiO2 production plants across the globe, providing this pigment in more than 70 countries around the world. With its strategic ownership in Bemax and ITP, coupled with the latest partnership with Outotec, Cristal Global’s vertical integration of TiO2 production is poised to largely improve, enhancing further the company’s competitiveness as one of the world’s lowest cost producers of TiO2 and in turn strengthening further its footprint in the global market.TiO2 FUNDAMENTALS POINTING TO FURTHER GROWTHThe supply of TiO2 is highly constrained owing to the tight market of the feedstock titanium ore. Global supply of ore today is slightly below the global demand, with the deficit expected to significantly widen along the years. Accordingly, new demand for TiO2 is becoming harder to satisfy with the current available capacity. With the growing shortage in titanium ore and a very tight TiO2 market, upward pressure on TiO2 prices is expected to remain in the near term. This pressure has already been witnessed over the past, with TiO2 prices surging since the second quarter of 2010. On a YTD basis, TiO2 prices have risen by close to 40%, a notable gain especially when comparing the returns on other chemicals in the wider sector. As such, with such an environment intact and with TiO2 leading the sales of Tasnee, the company today is well-positioned to capitalize on this medium-term growth outlook for the TiO2 industry.OFFERING A DIVERSE PRODUCT MIXTasnee is among the largest industrial companies in the region, being operational for more than 25 years. The company has established a strong presence in various markets including the TiO2, polypropylene and polyethylene markets, alongside other industrial markets such as liquid batteries, lead and plastic products. Therefore even with TiO2 leading the sales of Tasnee, the remaining revenues for the company (estimated to exceed 45% of total sales) actually stem from other product lines. Accordingly, with such a product mix in place, demand and pricing strengths in one market can compensate for any demand and pricing weaknesses in others. OUTPERFORMER-POST LATEST FINANCIAL CRISISWithin a global context, and despite the global sell-off in equity markets and the persisting volatility in the financial markets, Tasnee’s generated stock returns of 25% YTD were the highest in our universe of peers, beating the world’s largest TiO2 producers DuPont and Tronox Inc.. Tasnee’s generous returns, amid such volatile markets over the past few years, highlight the strong financial position the company possesses, together with its positive growth outlook stemming from its solid footprint in the regional and global TiO2 market. Not to mention its attractive income return, stemming from its stable dividend payment stream over the past years.IN ANTICIPATION OF GENERATING FURTHER SHAREHOLDER VALUEWith a favorable TiO2 business model and with a continuously improving pricing environment for the pigment, combined with various other sources of operating income, Tasnee’s shareholders’ value is expected to increase. Thus, with an estimated fair value of SAR 56.3/share, Tasnee offers investors upside potential of 44.0%. We initiate a BUY recommendation on the stock.

FINANCIAL DATA

Ownership Structure

Private Enterprises 38%

Social Insurance 8%

Public 54%

Tasnee Stock Performance

Bloomberg Consensus

Stock Data

Ticker NIC AB

Bloomberg Median TP (SAR) 49.2

Market Cap (SAR mn) 21,795

Market Cap (USD mn) 5,812

Number of Shares (mn) 557

Free Float 54%

Avg Mon Liquidity (SAR mn ) 1,263

52 week High (SAR) 45.1

52 week Low (SAR) 25.6

2010 2011E 2012E 2013E 2014E

Sales Revenues (SAR 000) 15,989,374 20,405,751 21,813,198 22,208,220 24,691,923

Net Income (SAR 000) 1,472,606 2,611,090 2,832,799 3,082,824 3,685,442

EPS (SAR) 2.64 4.68 5.08 5.53 6.61

DPS (SAR) 1.00 2.25 3.00 3.25 4.50

BVPS (SAR) 16.62 19.08 22.47 24.63 28.01

PE 9.4 8.3 7.7 7.1 5.9

Dividend Yield 4.0% 5.8% 7.7% 8.3% 11.5%

PB 1.5 2.1 1.7 1.6 1.4

EQUITY RESEARCH

NATIONAL INDUSTRIALIZATION CO. (TASNEE)

INITIATION OF COVERAGE

COMPANY COVERAGEReine DagherSenior Equity [email protected] Nizam, CFAHead of Equity [email protected]

2

INITIATION OF COVERAGE

December 9, 2011

TASNEE EQUITY RESEARCH

INVESTMENT CASE

CRISTAL GLOBAL_REGION’S ONLY ACCESS TO TiO2

Tasnee is the region’s only supplier of TiO2. This pigment is manufactured globally, however by very few specialist producers. Tasnee’s presence in the TiO2 industry is a result of its 66% share in Cristal Global, an industrial conglomerate operating globally. Cristal Global, with 2010 total revenues exceeding $2.2 billion, is the second largest producer of TiO2 worldwide after DuPont de Nemours (DuPont), and is the only producer of TiO2 in the region. The company operates eight TiO2 production plants across the globe, providing this pigment in more than 70 countries. Cristal Global’s vertical integration of TiO2 production has been improving significantly over the years. In 2008, it acquired Bemax Resources Ltd., one of the world’s leading producers of TiO2 feedstock. It also acquired during that year International Titanium Powder (ITP), an exclusive producer of Armstrong Process1 metal powders. In early November 2011, Cristal Global partnered with Outotec to construct an ilmenite processing plant (processing capacity of 800 thousand tons) in Yanbu Saudi Arabia, expected to be operational in the fourth quarter of 2013. With its strategic ownership in Bemax and ITP, coupled with the latest partnership with Outotec, Cristal Global’s vertical integration of TiO2 production is poised to largely improve, enhancing further the company’s competitiveness as one of the world’s lowest cost producers of TiO2.

TiO2 FUNDAMENTALS POINTING TO FURTHER GROWTH

TiO2 is the whitest kind of pigment that exists today. It is largely used in the production of paints, (c60%), followed by plastics (c20%), paper (c12%) alongside many other products such as inks, pharmaceuticals and textiles2. The supply of TiO2 is highly constrained owing to the tight market of the feedstock titanium ore. Global supply of ore today is slightly below the global demand, translating into a deficit of close to 500 thousand tons. However, this deficit is expected to significantly widen along the years to around 4 million tons by year 20203. This expanding deficit is largely a result of the insufficient investments in mines, the depletion of ore bodies and the long time it takes for project start-ups to materialize. Therefore, rising ore prices are expected to continue through at least the year 2012, whereby some industry players are even expecting “ore costs to double in 2012”4. As such, with an increasingly tight feedstock market, capacity expansions in the TiO2 industry are becoming extremely challenging.

With the limited available capacity, new demand for TiO2 is becoming harder to satisfy. The highly constrained TiO2 market is further exacerbated given the fact that these relatively few key producers are already operating close to full capacity (>95%) and that no major new supply is expected before 20155. Even with those additions taking place, most market players do not believe the new output will be sufficient to close the present foreseeable supply gap. Out of the key players in the industry (namely DuPont, Kronos, Tronox, Huntsman and Ishihara Sangyo Kaisha), only DuPont is undergoing a capacity expansion of 350 thousand tons, scheduled for completion by year-end 20146.

As for the new demand for TiO2, it is stemming largely from the increasing use of the pigment in emerging economies as living standards evolve. The significant room for demand growth in these countries can be deduced from simply observing the huge gap in TiO2 consumption/capita between developed and developing economies. For example, China’s annual consumption/capita of TiO2 is below 1kg, opposed to close to 4kg in developed countries7, signalling the demand growth potential for TiO2 if living standards in this vast economy continue to improve.

1 Armstrong Process patented and proprietary technology was developed in 1997 by ITP. This tech-nology primarily aims at lowering the production costs of titanium products

2 Cristal Global3 TZ Minerals International, cited by Tronox4 Statement by CFO of Huntsman Corp., cited by Bloomberg news article, November 22, 20115 Bloomberg news article, November 22, 20116 ICIS, September 20117 Iluka Resources Ltd., cited by Bloomberg article, November 22,2011

FOOTNOTES

3

INITIATION OF COVERAGE EQUITY RESEARCH

December 9, 2011

TASNEE

As such, with the growing shortage in titanium ore and a very tight TiO2 market, upward pressure on TiO2 prices is expected to remain in the near term. This pressure has already been witnessed, with TiO2 prices surging since the second quarter of 20108. Price increase announcements by key producers such as DuPont, Cristal Global and Tronox Inc. have been continuous, with the latest increase announced by DuPont in November (effective January 1 2012). On a YTD basis, TiO2 prices have risen by close to 40%9, a notable gain especially when comparing the returns on other chemicals in the wider sector. As such, with such an environment intact and with TiO2 leading the sales of Tasnee, the company today is well-positioned to capitalize on this medium-term growth outlook for the TiO2 industry.

EXPOSURE TO PRICE SWINGS MITIGATED BY INCLUSION OF TIO2

The inclusion of TiO2 in Tasnee’s portfolio will play a significant role in mitigating the company’s exposure to price swings, as specialty chemicals are less cyclical than traditional or commodity petrochemicals. With such a weak macroeconomic outlook in place, given increasing US and European recession risks combined with a possibilty of a hard-landing in China, the outlook for traditional petrochemicals is tilted towards bleakness. As such, and as specialty chemicals producers are relatively immune to cyclical changes, be they in the economy as a whole or in the supply-demand dynamics, having the TiO2 exposure provides a major hedge to Tasnee’s returns. Not to mention, that the basic or traditional petrochemical market is threatened by an excess oversupply, a threat not present in the TiO2 market.

OFFERING A DIVERSE PRODUCT MIXTasnee is among the largest industrial companies in the region, being operational for more than 25 years. The company has established a strong presence in various markets including the TiO2, polypropylene and polyethylene markets, alongside other industrial markets such as liquid batteries, lead and plastic products. For 2010, the industrial segment contributed to 64% of Tasnee’s sales, with the remainder generated by the petrochemical segment. It is worthy highlighting that TiO2 sales (accounted as part of the industrial segment) represented c52% of Tasnee’s total revenues and c81% of the industrial segment revenues. The remaining 19% of the industrial sales mainly pertained to batteries, lead and plastic sheets sales. As for the petrochemical segment, with a 35% share of Tasnee’s total revenues, the products which led the petrochemical sales were polyethylene (HDPE and LDPE) and polypropylene with a share of c24% and c19%, respectively, of the company’s total sales10.Therefore even with TiO2 leading the sales of Tasnee, the remaining revenues for the company (estimated to exceed 45% of total sales) actually stem from other product lines. Accordingly, with such a product mix in place, demand and pricing strengths in one market can compensate for any demand and pricing weaknesses in others.

OWNERSHIP STAKES IN INDUSTRY LEADERS

Tasnee has acquired ownership stakes in leading names in Saudi Arabia, in the region and globally. Among the most notable companies Tasnee has invested in are:

1 Cristal Global: a leading player in the TiO2 industry --> on a regional and global level 1 Rasass: a leading player in the lead industry --> on a regional level1Battariat: a leading player in the battery industry --> on a regional level1Maadaniyah: a leading player in the steel wire industry --> on a country level1Rowad: a leading player of specialized engineering plastic sheets --> on a country level

8 ICIS9 ICIS-LOR, cited by Bloomberg article, November 22, 201110 Company reports, ASIB estimates

FOOTNOTES

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December 9, 2011

TASNEE

DERIVING ITS REVENUES FROM ACROSS THE GLOBE

Tasnee’s revenues are derived from a highly-diversified geographical base. The region contributing largest to Tasnee’s sales is East Asia, followed by Europe. It is important to highlight that not one single country accounts for more than 20% of the company’s overall revenues, thus minimizing the country risk Tasnee might face in light of any developments in that one country. Furthermore, the local market’s contribution of 12% to Tasnee’s top line figures plays positively owing to Saudi Arabia’s relatively lower risk profile vis-à-vis its neighboring countries in the region.

Chart 1: Geographical Breakdown of Sales Revenues

Source: Company Report 2010

A WIDE SHAREHOLDER BASE-A STRATEGIC EDGE

Close to 47% of the company is owned by a number of reputable financial, corporate and social enterprises. This well-diversified ownership structure, embedding 7 different major shareholders, provides Tasnee with a strategic edge especially in the Gulf region. Moreover, its healthy free float of close to 54% ensures reasonable liquidity for the public.

Chart 2: Shareholder Base

Source: Tadawul as of December 8, 2011

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December 9, 2011

TASNEE

ATTRACTIVE SET OF MULTIPLES

Despite its stock price appreciation of 25% YTD, Tasnee’s multiples still stand as attractive when compared to its regional and global peers, which include major TiO2 producers such as Kronos Worldwide and Tronox Inc.. Tasnee trades at 9.6x its trailing earnings, as opposed to a peer average of 9.7x regionally and 8.7x globally. Based on estimated 2011 earnings, Tasnee trades at 8.3x earnings vis-a-vis a peer average of 8.8x regionally and 9.1x globally. Additionally, from an EV/EBITDA valuation perspective, given the various capital structures within our peer universe, Tasnee trades at a multiple of 6.4x versus an average of 7.1x regionally and 6.2x globally, based on trailing EBITDA. The discount to its counterparts widens when comparing the multiple based on the estimated 2011 EBITDA. Tasnee trades at a multiple of 5.5x its estimated 2011 EBITDA, opposed to a peer average of 6.8x regionally and 6.1x globally. This discount to peers is not justified given that Tasnee offers a highly unique product whose pricing oulook is continuously improving, while benefiting from a vertically-integrated model with secured feedstock. Not to mention the company’s production cost advantage, in light of its access to subsidized feedstock in the Kingdom, especially when compared to global players of whom many rely on naphtha-based plants.

Tasnee is also regarded as a high-dividend play. Despite its ongoing and significant expansions for the past years, and in spite of any market or economic conditions, the company was able to maintain a very stable dividend stream. Tasnee has been paying dividends for the past 5 consecutive years, reflecting the financial strength embedded in the company’s business model, together with a strong commitment to the company’s dividend policy. The company’s pay-out ratio over the past 5 years has averaged 75%, with 2010 recording the lowest pay-out in these years (c 38%). Tasnee has an estimated 2011 dividend yield of 5.8%, opposed to an average of 1.6% globally and 4.4% regionally. This compares favorably with US Treasury yields of 2.0% (10-year) and 3.0% (30-year).

Chart 3: Peer Positioning

Source: Bloomberg

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December 9, 2011

TASNEE

Moreover, Tasnee today is trading at the lower end of its 5-year range, providing an attractive entry point. This is also below its 5-year historical average of 19.58x and at almost par with 2010 level.

Chart 4 : Tasnee’s 5-Year Historical PE’s

Source: Company Reports, Bloomberg

OUTPERFORMER-POST LATEST FINANCIAL CRISIS

On an annual basis, Tasnee has outperformed MENA equity markets ever since the global recovery that followed the 2008/9 global financial and economic crisis. With gains of 131% and 42% for the years 2009 and 2010, respectively, Tasnee’s returns have been exceptional, refflecting the significant shareholder value the stock holds. On a YTD basis, Tasnee has gained 25%, outperforming regional markets.

Chart 5: Market Returns

Source: Bloomberg

Within a global context, and despite the global sell-off in equity markets and the persisting volatility in the financial markets, Tasnee’s generated stock returns of 25% YTD were the highest in our universe of peers, beating the world’s largest TiO2 producers DuPont and Tronox Inc.. Tasnee’s generous returns, amid such volatile markets over the past few years, highlight the strong financial position the company possesses, together with its positive growth oulook stemming from its solid footprint in the regional and global TiO2 market. Not to mention its attractive income return, stemming from its stable dividend payment stream over the past years.

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December 9, 2011

TASNEE

Chart 6 : Stock Returns YTD

Source: Bloomberg

IN ANTICIPATION OF GENERATING FURTHER SHAREHOLDER VALUE

Enjoying a vertically integrated business model and secured access to ore feedstock, the growth outlook for Tasnee’s key strategic business unit stands very favorable especially in light of the positive pricing environment forTiO2. Add to that the fact that Tasnee also generates a significant portion of its income from various subsidiaries and affilitates, where most represent industry leaders in the Kingdom and in the region. Accounting for these solid fundamentals in place and for the company’s growth outlook, given its strong financial position, an increase in shareholder value is expected. Accordingly, we have estimated Tasnee’s fair value at SAR 56.3/share, offering investors upside potential of 44.0% (based on the closing price of SAR 39.1/share).

INVESTMENT RISKINCREASE IN THE PRICE OF FEEDSTOCK (ETHANE GAS)

Ethane prices in Saudi Arabia are expected to increase over the coming few years, with market estimates pointing to a range of $1.25-1.50/mmbtu. Some market players are even expecting gas prices to near $2/mmbtu. However, with the many initiatives in place by Saudi Aramco to reach a solution for keeping the gas feedstock largely subsidized and readily available, we expect the gas price increase to be gradual and not to exceed the market expectations. Nevertheless, any price increase in gas feedstock will affect SEPC’s bottom-line figures, given its feedstock mix of 64% ethane and 36% propane11. Accordingly, any upward revision to gas feedstock prices will impact Tasnee’s valuation. Below is a sensitivity analysis of Tasnee’s base case valuation to an increase in the gas price.

Chart 7: Sensitivity Analysis

$0.75 $1.00 $1.25 $1.50 $1.75 $2.00

Estimated Target Price (SAR) 68.4 64.6 59.9 58.1 56.5 49.8Source: ASIB estimates

11 ASIB estimatesFOOTNOTES

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December 9, 2011

TASNEE

COMPANY PROFILE

Tasnee was established in June 1985 with a paid-up capital of SAR 300 million. The company’s initial business line was the production of downstream products (such as batteries and plastic sheets) but through years integrated backwards into petrochemicals.

Tasnee’s principal activities are as follows:

1 Investments in the industrial field (example: the titanium dioxide business, liquid batteries business, lead, metals, plastics…)

1 Production of petrochemicals and chemicals (ethylene, polyethylene, propylene and polypropylene)

1 Investments in the engineering and mechanical industries

1 Management of acquired industrial projects

For the nine months ending September 2011, the petrochemical segment contributed to 52% of Tasnee’s total sales12, the industrial segment13 contributed 47% with the remainder generated by the head office activities14.

Chart 8: Subsidiaries15

Segment Tasnee’s Ownership Stake (Rounded)

Al-Rowad National Plastic Co. Industrial 100%

National Industrialization Petrochemical Marketing Co. Head Office 100%

National Worldwide Industrial Advancement Ltd. Co. Head Office 100%

National Gulf Company for Petrochemical Technology Head Office 100%

National Industrialization Company for Industrial Investments Head Office 100%

Saudi Global Makasib for Trading and Industry Head Office 100%

National Petrochemical Industrialization Co. Head Office 100%

National Operation and Industrial Services Co. Head Office 85%

National Batteries Co. Industrial 80%

Saudi Polyolefins Co. Petrochemical 75%

National Lead Smelting Ltd. Co. Industrial 75%

National Titanium Dioxide Ltd. Co. Industrial 66%

Tasnee & Sahara Olefins Co. Petrochemical 61%

National Inspection and Technical Testing Co. Ltd. Head Office 68%

TUV-Middle East Head Office 68%Source: Company Report

12 Based on gross sales figures prior to eliminations13 The industrial segment mainly encompasses the production of TiO2, rutile feedstock, liquid batteries, lead and specialized plastic sheets14 Head office activities mainly represent the company›s investments and the technical services offered15 These are the subsidiaries whose accounts are consolidated with the accounts of TasneeFOOTNOTES

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1 National Titanium Dioxide Co. (Cristal)

Cristal is based in Jeddah, Saudi Arabia. It owns and operates production facilities in the US, Europe, Australia and Saudi Arabia. Cristal owns 100% of Cristal Inorganic Chemicals, Cristal Australia and Cristal USA. It has nine manufacturing plants and around 4,000 people around the world. The total TiO2 production capacity of its eight manufacturing plants, outside Saudi Arabia, is close to 700 thousand tons. These plants were acquired in 2007, from Lyondell, for $1.2 billion. As for its ninth plant in Yanbu Saudi Arabia that has been operational since 1991, the company is expanding its designed annual production capacity to 180 thousand tons (from 120 thousand tons). Overall, Tasnee’s annual production capacity of TiO2 should reach close to 880 thousand tons.

1 Saudi Polyolefins Co. (SPC)

SPC, based in Jubail Industrial City, began commercial production in July 2004. It completed its expansions in 2010, which resulted in an increase of polypropylene output of 38%. The propane dehydrogenation and polypropylene complex of SPC was the first petrochemical complex that Tasnee inaugurated, however in partnership with Basell. The plant began commercial operations in July 2004. SPC has an annual production capacity of 455 thousand tons of propylene and 720 thousand tons of polypropylene.

1 Tasnee & Sahara Olefins Co. (TSOC)

TSOC is based in Riyadh. TSOC has the following affiliates through which it operates.

- Saudi Ethylene and Polyethylene Co. (SEPC): SEPC, a partnership between TSOC (75%) and Basell (25%), is one of Tasnee’s largest projects. The ethylene plant has an annual production capacity of 1 million tons of ethylene and 285 thousand tons of propylene. The annual production capacity of the polyethylene plant is 400 thousand tons of HDPE and 400 thousand tons of LDPE. Commercial production began June 2009.

- Saudi Acrylic Acid Company (SAAC): SAAC a partnership between TSOC (65%) , Tasnee (13%) and Sahara Petrochemicals Co. (22%) with the aim to own and manage the acrylic acid and derivatives project (expected start-up date first quarter of 2013). During July 2009, SAAC formed the Saudi Acrylic Monomer Co. with a share of 75% and in partnership with Dow Chemical Co. (25%), for the production of acrylic acid and butialite acrylate. The integrated complex to be developed will include three production facilities which will produce acrylic monomers (acrylic acid and butialite acrylate), butanol and super absorbent polymers products. It is expected to have an annual production capacity of 360 thousand tons of acrylic acid and related esters.

1 National Lead Smelting Co. (Rasass)

Rasass, the leading lead producer and provider in Saudi Arabia and the region, operates through two factories (Riyadh and Jeddah). It has an annual production capacity of around 46 thousand tons. Rasass also owns 100% equity interest in Technical Tetravalent Co. for Lead Recycling.

1 Al Rowad National Plastic Co. (Rowad)

Rowad is one of the leading producers of specialized engineering plastic sheets (polymer products) in the Kingdom and enjoys production diversity owing to its participation in several projects. The company has an annual production capacity of 40 thousand tons of plastic sheets. Rowad owns 70% of Rowad International Geosynthetics Co. and 50% of Rowad Global Packaging Co.. The latter is expected to begin production at its BOPP16 plant towards the end of the current year. The BOPP plant has a production capacity of 30 thousand tons.

1 National Batteries Co. (Battariat)

Battariat is one of the leading producers of auto batteries in the region, with an annual production capacity of over 2.3 million tons of automotive batteries.

16 Bi-Axially Oriented Polypropylene FOOTNOTES

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VALUATION

For valuing Tasnee , we used a combination of two methodologies: the Free Cash to the Firm (FCFF) model, and the relative valuation methodology (using two different earnings multiples).

We expect the favorable demand for TiO2 to continue amidst the improvement in the living standads of the emerging countries, and with the tight ore feedstock market, we expect TiO2 prices to remain high for the medium-term. And as specialty chemicals are less cyclical than traditional or commodity petrochemicals, we expect the strength in the TiO2 business to offset any extended demand and pricing weaknesses in Tasnee’s polyolefins business. Moreover, we accounted for Tasnee’s expansions such as: the BOPP project (c30 thousand tons) expected to go online towards the end of the current year; the polyol project (c120 thousand tons) expected to go online by 2013 and its acrylic acid and derivatives project (c360 thousand tons) expected to start-up in early 2013. We also accounted for the notable cost savings that will be incurred in the TiO2 segment, once the ilmenite-processing plant goes online in the fourth quarter of 2013 (however we will assume the cost impact to take effect in 2014).

FCFF VALUATION

With a cost of equity of 15.0% and a cost of debt of 4.5% , a weighted average cost of capital of 10.4% was derived and used in discounting the projected free cash flows. Based on a long-term expected profitability of 7% and a retention rate of 32%, a perpetual growth rate of 2.4% was derived. The profitability accounted for the attractive outlook of the TiO2 industry, along with a premium added to emphasize the company’s competitive profile as a low-cost producer of key products such as the white pigment and its range of polymers. Using the above variables, we obtained an estimated fair value of SAR 68.4 /share for the base case scenario.

(SAR 000) 2010 2011 E 2012 E 2013 E 2014 E

Net Income 1,472,606 2,611,090 2,832,799 3,082,824 3,685,442

Change in Working Capital 638,852 1,458,641 515,748 100,616 (792,598)

Non-Cash Charges 1,303,538 1,258,776 1,581,285 1,597,102 1,771,751

Capex 1,288,610 1,005,864 1,757,962 1,789,797 1,989,963

Interest Expense 669,938 711,736 717,616 624,643 501,186

Free Cash Flow to the Firm 1,518,620 2,117,097 2,857,991 3,414,156 4,761,015

Present Value of FCFF 1,916,995 2,343,264 2,534,686 3,200,519

Present Value of Terminal Value 40,612,298

Intrinsic Value of the Firm 50,607,763

Net Debt 12,468,171

Intrinsic Value of Equity 38,139,592

WACC 10.44%

Terminal Growth Rate 2.4%

Shares Outstanding (000) 557,425

NAV (SAR) 68.4

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Using the FCFF valuation, a scenario analysis was also conducted. The best case and worst case scenarios mainly focused around a more bullish outlook on the TiO2 and crude oil markets and vice versa. The following fair values were obtained.

Weight Fair Value/Share (SAR)

Weighted Fair Value/Share

(SAR)

Final Fair Value/Share

(SAR)

Best-case Scenario 10% 74.5 7.5

64.5Base-Case Scenario 60% 68.4 41.1

Worst-Case Scenario 30% 53.3 16.0

With the weights detailed above attributed to each scenario, a final fair value of SAR 64.5/share was derived using the FCFF valuation. Thus, with a closing price of SAR 39.1/share, Tasnee offers an upside potential of 65.0%.

SENSITIVITY ANALYSIS

The data table below presents a sensitivity analysis to our price target valuation, for the base-case scenario, assuming various growth and discount rates. Our calculated fair value of SAR 68.4/share, for the base case scenario, was based on a WACC of 10.4% and a terminal growth rate of 2.4%.

WACC

8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12% 12.5%

Term

inal

Gro

wth

Rat

e

1.5% 94.7 85.8 78.1 71.4 65.4 60.1 55.4 51.2 47.4 43.9

1.6% 96.3 87.2 79.3 72.4 66.3 60.9 56.1 51.8 47.9 44.4

1.7% 98.0 88.6 80.5 73.4 67.2 61.7 56.8 52.5 48.5 44.9

1.8% 99.8 90.1 81.8 74.5 68.2 62.6 57.6 53.1 49.1 45.4

1.9% 101.6 91.6 83.1 75.6 69.1 63.4 58.3 53.8 49.7 45.9

2.0% 103.4 93.2 84.4 76.8 70.1 64.3 59.1 54.4 50.3 46.5

2.1% 105.3 94.8 85.7 78.0 71.2 65.2 59.9 55.1 50.9 47.0

2.2% 107.3 96.4 87.2 79.2 72.2 66.1 60.7 55.8 51.5 47.6

2.3% 109.4 98.1 88.6 80.4 73.3 67.0 61.5 56.6 52.1 48.1

2.4% 111.5 99.9 90.1 81.7 74.4 68.0 62.3 57.3 52.8 48.7

2.5% 113.7 101.7 91.6 83.0 75.5 68.9 63.2 58.0 53.5 49.3

2.6% 116.0 103.6 93.2 84.3 76.6 69.9 64.0 58.8 54.1 49.9

2.7% 118.3 105.6 94.8 85.7 77.8 71.0 64.9 59.6 54.8 50.5

2.8% 120.8 107.6 96.5 87.1 79.0 72.0 65.9 60.4 55.6 51.2

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RELATIVE VALUATION

Using two different earnings multiples, we valued Tasnee on an equal basis with comparable peers in the region and worldwide. Tasnee should be trading at a premium to regional counterparts given mainly its exclusive and significant exposure to TiO2, a product expected to sustain its pricing strength in the near-term. Not to mention also its largely diversified income stream, an advantage shared by very few counterparts in the region. Furthermore, Tasnee should be trading at a premium to global peers given that the company benefits from a notable feedstock advantage in the production of chemicals, in addition to also being a relatively low cost producer of TiO2.

P/E MULTIPLE

Tasnee’s counterparts trade at an average of 9.4x estimated 2011 earnings, opposed to Tasnee trading at 8.3x its estimated 2011 earnings, implying an unjustified discount to its competitors. Based on the peer average forward P/E of 9.4x, a fair value of SAR 43.9/share was derived, based on our 2011 earnings per share (EPS) estimate of SAR 4.7, thus offering an upside potential of 12.2% for the company’s stock.

Current PE PE 11 E PE 12 E PE 13E PB DY (%)

Kronos Worldwide Inc 7.5 6.4 5.3 5.5 2.3 6.0

Tronox Inc NA 6.7 4.6 NA 2.3 NA

Dow Chemical Co. 9.6 10.1 9.5 7.7 1.6 3.0

BASF SE 7.9 8.3 9.4 8.7 2.2 4.2

LyondellBasell Industries NV 6.2 6.4 7.3 6.2 1.3 15.5

Celanese Corp 10.5 9.2 9.2 8.0 4.6 0.5

EI du Pont de Nemours & Co 11.3 11.5 10.6 9.4 3.8 3.5

Eastman Chemical Co 8.5 8.2 8.2 7.7 2.7 1.9

Clariant AG 8.7 7.8 8.7 7.1 1.0 NA

Braskem SA NA 7.8 8.9 6.9 1.0 6.9

Huntsman Corp 8.0 5.8 5.1 4.1 1.3 4.0

Westlake Chemical Corp 8.6 10.0 11.4 8.9 1.6 0.7

Sinopec 7.3 7.5 6.9 6.5 1.3 3.5

Formosa Chemicals &Fibre Corp 9.5 10.4 10.4 9.3 1.8 9.3

Ishihara Sangyo Kaisha Ltd 5.3 NA 6.7 5.3 0.8 NA

Reliance Industries Ltd 11.7 11.9 10.8 10.0 1.5 1.1

Sabic 9.7 8.9 8.5 8.3 2.2 4.4

Industries Qatar 9.6 8.9 8.1 7.4 3.0 5.9

Sidpec 7.2 7.6 8.5 7.3 3.1 11.6

Sipchem 11.4 10.4 8.8 7.5 1.4 NA

Tasnee 9.6 8.3 7.7 7.1 2.2 5.8

Sahara Petrochemical Co 12.3 11.4 10.1 8.3 1.5 NA

Yansab 8.2 7.5 7.4 6.9 2.5 NA

Advanced Petrochemicals Co 8.1 7.5 9.1 8.2 2.1 6.8

Global Average* 9.0 9.4 8.8 8.0 2.0 4.1

Source: Bloomberg, ASIB estimates* Market-cap weighted averages

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EV/EBITDA MULTIPLE

The average EV/EBITDA of Tasnee’s peer group is 6.4x, in line with Tasnee’s EV/EBITDA. On a forward basis (2011E), Tasnee’s peer group trades at an average EV/EBITDA of 6.2x versus Tasnee’s EV/EBITDA of 5.5x. Accordingly, based on an average EV/EBITDA of 6.2x, a fair value of SAR 49.2/share was obtained, resulting in an upside potential of 25.7%.

(SAR 000)

EBITDA 2011E 7,121,989

Enterprise Value 44,465,508

Net Debt as of YE11 E 11,161,652

Minority Interest as of YE11 E 5,896,490

Market Capitalization 27,407,366

Shares Outstanding (000) 557,425

NAV per Share (SAR) 49.2

FINAL VALUATION

Attributing a 50% weight to the FCFF valuation and a 40% weight to the EV/EBITDA comparative valuation, with the remaining weight to the PE comparative valuation, a final fair value of SAR 56.3/share was derived for Tasnee, offering an upside potential of 44.0% (based on the closing price of SAR 39.1/share).

Fair Value (SAR) Weight

FCFF Valuation 64.5 50%

Relative Valuation

P/E 43.9 10%

EV/EBITDA 49.2 40%

Final Fair Value (SAR) 56.3

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1 Global economic slowdown

1 Sharp drop in crude oil prices

1Squeeze of SEPC’s margins with an increase in the ethane feedstock price

1Inability to secure additional gas feedstock for any future projects

1 Increase in regional and global competition in key products

1 Further anti-dumping duties levied by key importing nations

1 Delays in start ups of expansionary projects

THREATS

1 Tightly constrained global supply of titanium dioxide

1No signs of signifcant investments inTiO2 capacity for near-term

1Sustained pricing strength of TiO2

1Increase in cost efficiency in TiO2 production chain with the ilmenite processing plant

1Sustained pricing strength in crude oil prices

1Sustained macro-economic growth to be reflected in sustained petrochemical demand

1Continued investments in R&D

1Appetite for further acquisitions

1Investments in the Kingdom’s refining sector

OPPORTUNITIES

WEAKNESSES

1Tight cash liquidity

1Highly leveraged book

1World leader in TiO2

1Largely diversified product base

1Various sources of income

1Secured gas feedstock for existing plants from Saudi Aramco

1Distinguished international/national partners

1World-scale plants and world-class technology

1Heavy investments in downstream industries

1Proximity to end-markets

1Strong commitment to innovation

1Robust financial position

1Geographic diversity of sales

STRENGTHS

SWOT ANALYSIS

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APPENDIX A: PROJECTED INCOME STATEMENT

(SAR 000) 2010 2011E 2012E 2013E 2014E

Sales 15,989,374 20,405,751 21,813,198 22,208,220 24,691,923

Cost of Sales (11,449,325) (12,942,692) (13,973,743) (14,023,900) (15,432,452)

Gross Profit 4,540,049 7,463,059 7,839,455 8,184,319 9,259,471

Selling & marketing expenses (730,490) (932,256) (996,557) (1,014,604) (1,128,074)

General & administrative expenses (763,094) (827,786) (884,881) (900,906) (1,001,660)

Share in net income of associates 18,419 12,116 17,768 16,101 15,328

Income from operations 3,064,884 5,715,132 5,975,785 6,284,911 7,145,065

Investment income and other 252,368 148,081 114,225 95,964 105,095

Impairment charges (11,163) - - - -

Financing charges (669,938) (711,736) (717,616) (624,643) (501,186)

Provisions for discontinued operations - (149,998) - - -

Income before zakat, income tax and minority interest

2,636,151 5,001,480 5,372,393 5,756,232 6,748,973

Zakat and income tax on subsidiaries (65,074) (153,484) (165,053) (177,495) (190,874)

Minority interest (1,081,325) (2,064,856) (2,217,908) (2,376,094) (2,793,223)

Income before zakat 1,489,752 2,783,139 2,989,432 3,202,644 3,764,876

Zakat (17,146) (172,049) (156,632) (119,820) (79,434)

Net Income 1,472,606 2,611,090 2,832,799 3,082,824 3,685,442

EPS (SAR) 2.64 4.68 5.08 5.53 6.61

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APPENDIX B: PROJECTED BALANCE SHEET(SAR 000) 2010 2011E 2012E 2013E 2014E

Cash and cash equivalents 3,886,113 4,528,464 4,448,085 3,798,635 3,338,705

Accounts receivable 3,262,860 4,458,792 4,766,329 4,852,643 4,316,279

Inventories 2,889,216 3,417,258 3,689,486 3,702,729 3,259,703

Prepaid expenses ,other assets 582,187 529,652 548,300 553,380 543,777

Total current assets 10,620,376 12,934,166 13,452,201 12,907,387 11,458,465

Investments in available for sale securities 194,184 378,821 286,503 332,662 309,582

Investments in associated companies and other 387,712 387,594 460,876 534,158 607,440

PPE, net 18,059,375 16,733,447 19,435,049 23,922,571 25,407,496

Projects under progress 1,125,958 3,878,856 4,067,939 6,039 6,039

Intangible assets, net 3,592,250 3,271,551 2,950,852 2,630,153 2,309,454

Other non-current assets 766,086 562,597 601,895 582,246 592,071

Total non-current assets 24,125,565 25,212,866 27,803,114 28,007,829 29,232,082

Total Assets 34,745,941 38,147,032 41,255,314 40,915,217 40,690,547

Short-term facilities and Murabaha 2,030,747 1,470,172 1,627,576 1,784,980 1,748,146

Current portion of long-term loans 1,384,668 1,461,101 2,206,979 2,684,757 3,162,535

Current portion of obligations under capital

lease contracts

187,500 187,500 187,500 468,750 187,500

Accounts payable 824,889 1,037,688 1,120,353 1,124,374 927,979

Accrued expenses and other liabilities 1,680,286 1,895,742 2,044,497 2,051,733 2,254,952

Total current liabilities 6,108,090 6,052,203 7,186,905 8,114,594 8,281,112

Long-term loans 11,353,278 12,758,843 11,985,198 9,300,441 6,137,906

Interest-rate swaps 344,986 346,838 333,249 341,691 340,593

Obligation under capital lease contracts 1,031,250 843,750 656,250 187,500 -

End-of-service indemnities 140,391 228,670 244,442 248,869 276,702

Other non-current liabilities 1,371,008 1,385,747 1,378,378 1,382,062 1,380,220

Total non-current liabilities 14,240,913 15,563,849 14,597,516 11,460,563 8,135,420

Share capital 5,067,532 5,067,532 5,067,532 5,067,532 5,067,532

Share premium 1,303,244 796,491 1,049,868 923,179 986,523

Statutory reserve 496,537 757,646 1,040,926 1,349,208 1,717,753

Change in fair value of investments 126,959 80,348 103,654 92,001 97,827

Retained earnings 2,036,969 3,081,405 3,931,245 4,856,092 5,593,180

Proposed dividends 506,753 1,254,206 1,672,275 1,811,631 2,508,413

Other reserves (276,347) (403,137) (339,742) (371,440) (355,591)

Total shareholders' equity 9,261,647 10,634,491 12,525,757 13,728,204 15,615,637

Minority interests 5,135,291 5,896,490 6,945,137 7,611,856 8,658,378

Total Equity 14,396,939 16,530,981 19,470,893 21,340,060 24,274,015

Total Liabilities and Equity 34,745,941 38,147,032 41,255,314 40,915,217 40,690,547

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TASNEE

Downside -30% -10% +10% +30% Upside

SELL REDUCE HOLD ACCUMULATE BUY

FAIR VALUE DEFINITION

RATING GUIDE

ISSUER

It is an unbiased estimate of the 12-month potential market price of the stock

BUY: Upside potential in share price is more than 30%

ACCUMULATE: Upside potential in share price is between 10 and 30%

HOLD: Upside or downside potential in share price less than 10%

REDUCE: Downside potential in share price is between 10 and 30%

SELL: Downside potential in share price is more than 30%

Audi Saradar Investment BankAudi Saradar Investment Bank SAL • Lebanese joint stock company with a registered capital of 10,000,000,000 Lebanese Pounds • Commercial Registrar in Beirut: 30812 • Holding number 33 on the Central Bank’s Banks List.

Address: Bank Audi Plaza • Bab Idriss • Beirut 2021 8102 Lebanon • P.O. Box 11-2560 • Beirut 1107 2808 • Lebanon. Phone: +961 1 964072 • Fax: +961 1 970403 • Email: [email protected]

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DISCLAIMER

“All rights reserved. This research document (the “Document”) is prepared by Audi Saradar Investment Bank SAL (“ASIB”), being an entity of Audi Saradar Group, for the use of the clients of ASIB and/or the clients of any entity within the Audi Saradar Group.

This Document is disclosed to you on a confidential basis. Receipt and/or review of this Document constitute your agreement not to copy, modify, redistribute, retransmit, or disclose to others the contents, opinions, conclusion, or information contained in this Document prior to public disclosure of the same by ASIB or the Audi Saradar Group or without the express prior written consent of ASIB.

This Document is not intended for dissemination, distribution to, or use by, any person or entity in any country or jurisdiction which would subject ASIB or any entity within the Audi Saradar Group, to any registration or licensing requirements within these jurisdictions or where it might be considered as unlawful. Accordingly, this Document is for distribution solely in jurisdictions where permitted and to persons who may receive it without breaching any applicable legal or regulatory requirements. In any case, this Document shall not be distributed in the Republic of Egypt.

Your attention is drawn to the fact that you should not access this Document if the regulations of your country of citizenship and/or residency or any applicable regulations prohibit it. In any case, persons who are subject to any restrictions in any country, such as US persons are not permitted to access information contained herein.

Neither the information, nor any opinion expressed herein constitutes an offer or an invitation or a recommendation to make an offer, to buy or sell any security or other investment product related to such security or investment. This Document provides general information only, is not intended to provide personal investment advice or recommendation and does not take into account the specific investment objectives, financial situation and the particular needs of any specific person who may receive it. You should seek financial, legal or tax advice regarding the appropriateness and suitability in investing in any security, other investment or investment strategy discussed or forecasted in this Document.

You should carefully read the definitions of the Rating Guide provided in this Document. In addition you should read this Document in its entirety and not conclude its contents from the ratings solely.

The information herein was obtained from various public sources believed in good faith to be reliable. Neither ASIB nor any entity within the Audi Saradar Group represents that the information contained in this Document is complete, accurate or free from any error and makes no representations or warranties whatsoever as to the data, information and opinions provided herein.

This Document and any information, opinion and prospect contained herein reflect a judgment at its original date of publication by ASIB and are subject to change without notice. ASIB and/or any entity within the Audi Saradar Group may have issued, and may in the future issue, other research documents that are inconsistent with, and reach different conclusions from, the information, opinions and prospects presented in this Document.

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