Najran Cement, Saudi Cement, Eastern Province Cement and Yanbu Cement are expected to benefit the most from the lifting of the ban on cement exports, Al-Rajhi Capital said in a note on Saturday.
The Saudi government’s decision to allow Saudi Binladin Group (SBG) to resume bidding for state projects will likely support cement consumption.
The local cement industry is still pressured by lower infrastructure investments, fuel subsidy cuts, higher inventory levels and fierce competition, the brokerage added.
It maintained a “hold” recommendation on Saudi Cement, Arabian Cement, Yamama Cement, Qassim Cement, and Southern Province Cement Co.
It also reaffirmed its “overweight” rating on Yanbu Cement.
Meanwhile, the brokerage raised Yamama Cement and Qassim Cement’s target prices to SAR 29.5 and SAR 69.0, respectively but cut its price estimate for Saudi Cement to SAR 56.0 from SAR 57.0.
In April, Saudi Arabia agreed to lift ban on cement and steel surplus exports under certain conditions set by the Ministry of Commerce and Industry (MOCI).
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Al Rajhi Capital’s recommendations |
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|
Previous target price (SAR) |
Current target price (SAR) |
Previous recommendation |
Current recommendation |
Company |
|
44.0 |
44.0 |
Hold |
Hold |
Arabian Cement |
|
28.9 |
29.5 |
Hold |
Hold |
Yamama Cement |
|
57.0 |
56.0 |
Hold |
Hold |
Saudi Cement |
|
64.0 |
69.0 |
Hold |
Hold |
Qassim Cement |
|
78.0 |
78.0 |
Hold |
Hold |
Southern Province Cement |
|
54.0 |
54.0 |
Overweight |
Overweight |
Yanbu Cement |
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