GulfBase GCC Cap Indices
Large Cap3,991 -0.08
Med Cap3,831 -0.01
Small Cap4,863 -0.26
Micro Cap8,466 0.09

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Ticker Price Volume
GFH 0.49 1,642,170
QNBK 133.5 133,285
AMLAK 1.07 4,593,610
DSI 0.37 10,758,890
BKMB 0.37 624,000
SABIC 97.69 2,746,187
AIRARABIA 1.13 3,611,365

Yamamah Cement

Source: NCB Capital

Remains our top pick in cement

We maintain our Overweight on Yamama Cement with upside of 21%. Yamama is well located to take advantage of the increased momentum of the construction sector in 2010, particularly in the Central region. A low cost base and self integrated plant remain key positives for the stock.

• 2010 to be strong, although 2Q10 softer due to weather: We expect revenues to increase by 2% to SR319mn in 2Q10e with net income falling by 0.4% to SR165mn. For April and May, total sales volumes are up 3.3% YoY, as compared to 17.6% up for the sector. 2Q10 is set to be relatively weak for YSCC due to the floods and sand storms seen in Riyadh in April/May which led to intermittent shutdowns in construction projects.

• Valuation at a discount, deserves to be at premium: Yamama currently trades at 10.2x for 2010e P/E, below the industry average of 10.6x. However, we believe its advantageous location and ability to meet new demand will enable it to trade at least at par with the industry average, going forward.

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