Qatar National Cement

QATAR NATIONAL CEMENT (QANC.QA)
12-Month Fair Value: QAR 93.6
Recommendation: Reduce – Risk Level 3
Last closing price (20 October 2011): QAR 108

Qatar National Cement published 3Q2011 figures on Thursday after the close of the market. Revenues of QAR 216.4 million were slightly ahead of our estimate of QAR 211 million (2% difference). The company published only a balance sheet and (succinct) P&L, no cash flow statement, so details are very few.

Our central thesis, which is that QNCD’s share price has run ahead of itself following the big jump after the award of the FIFA World Cup, leaving the share unattractively price, still stands, pending discussion with management. We note that revenues were still very much in line with our estimates, and we have no indication yet about what caused the jump in margins. We still think any FIFA World Cup related work is miles away in the future. We maintain our Reduce recommendation, and await further contact with management to publish a fuller update.