Cement firms’ Q4 profit likely to remain flat, says Saudi Fransi Cap

Saudi Fransi Capital has said that Saudi cement companies are expected to report a total net income of SAR 1.5 billion in the fourth quarter of 2015— unchanged from the same period last year on low sales prices.

Despite the attractive valuation, the cement sector will remain bogged down in 2016 by low prices because of high stockpiles, expansion projects and slow sales, it added.

Saudi Fransi Capital has recommended a “sell” rating on Tabuk Cement Co., revising the target price to SAR 13.5. It placed an “under review” rating on Yanbu Cement Co and Qassim Cement Co. , while recommending “hold” on the remaining 10 cement companies under its coverage.

Q4-2015 Profit Estimates (SAR mln)
YOY change	Q4-2015	Company
+16%	175	Yamama Cement
+5%	202	Yanbu Cement
+5%	140	Qassim Cement
(-8%)	247	Saudi Cement
+6%	259	Southern Cement
(-12%)	128	Arabian Cement
+34%	63	City Cement
+17%	93	Eastern Province Cement
(-56%)	18	Hail Cement
+32%	27	AlJouf Cement
(-2%)	63	Najran Cement
+134%	59	Northern Region Cement
(-32%)	20	Tabuk Cement

Recommendations
Target price (SAR)		Recommendation		Company
Current	Previous	Current	Previous	Company
63.00	63.00	hold	hold	Arabian Cement
19.00	19.00	hold	hold	Najran Cement
82.00	82.00	hold	hold	Saudi Cement
under review	80.00	under review	buy	Yanbu Cement
41.00	41.00	hold	hold	Yamama Cement
under review	110.00	under review	buy	Qassim Cement
19.00	19.00	hold	hold	Hail Cement
86.00	86.00	hold	hold	Southern Region Cement
40.00	40.00	hold	hold	Eastern Province Cement
17.50	17.50	hold	hold	Northern Region Cement
21.00	21.00	hold	hold	City Cement
16.00	16.00	sell	sell	Tabuk Cement
15.00	15.00	hold	hold	AlJouf Cement

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