Saudi Arabia
All Industries –All Sectors
Saudi Arabia
27 February 2017
January 18, 2010
Research Department
ARC Research
Tel +966 11 211 9370, [email protected]
Key themes
Nomu, the newly launched parallel equity market in
the Kingdom went live with all the seven stocks
ending limit up (+20%) on the first trading day. Nomu
offers a new avenue for smaller companies to raise
capital in a more cost effective way compared to the
main market. Launch of Nomu also supports the
Vision 2030 objectives which envisages SME
contribution to increase to 35% of GDP from 20%
currently.
Nomu – Parallel market
Goes live with seven companies
Nomu, the newly launched parallel equity market in the Kingdom went live
with all the seven stocks ending limit up (+20%) on the first trading day. The
parallel market is designed as an alternative platform for companies to go
public with lower requirements compared to the main market. Lower market
capitalization (minimum SAR 10mn) and less stringent listing requirements
makes Nomu an attractive platform for small and medium sized enterprises. In
our view, Nomu offers a new avenue for smaller companies to raise capital in a
more cost effective way compared to the main market. Lower floatation
requirement (20% vs. 30% in the main market) is likely to make Nomu
attractive for family owned companies helping them in enhancing
corporatization and visibility to attract talent. Launch of Nomu also supports
the Vision 2030 objectives which envisages SME contribution to increase to
35% of GDP from 20% currently, and for developing capital markets further
providing additional sources of funding for issuers to access capital. We also
expect Nomu to support private equity investments in the SME sector with an
additional exit route. Investment in the parallel market is restricted to
Qualified Investors given higher risks associated with investments in smaller
companies with lower disclosures. The Nomu listed companies also have an
option to transition to the main market after meeting certain criteria.
Figure 1 Nomu: Valuation snapshot of listed companies
Company
2016 Ann*
M cap (SAR mn) Free float (% )
P/E (x) EV/EBITDA (x)
P/B (x)
RoE
1 Abu moati @
240.0
20.0%
12.4
15.1
1.2
9.7%
2 Al Omran
168.0
20.0%
8.8
8.0
1.4
15.5%
3 Al Samaani
87.8
20.0%
11.3
9.2
5.1
45.4%
4 Arab Sea Information Systems
110.0
20.0%
17.8
15.2
0.6
3.3%
5 Baazeem
394.9
20.0%
12.4
11.0
2.2
18.0%
6 Development works for food
81.3
20.0%
13.2
11.5
6.0
45.4%
7 Raydan
720.0
30.0%
14.8
10.7
1.3
19.9%
Source: Company prospectus, Al Rajhi Capital; Note: * Valuation metrics based on IPO price and 2016
annualized figures; @ Financial year ending March, all figures for financial year ending March 2016
Figure 2 Market cap split of listed Nomu companies
Figure 3 Free float market cap split of listed Nomu companies
Abu moati
13%
Title:
Source:
Al Omran
9%
Raydan
40%
Abu moati
11%
Al Omran
8%
Please fill in the values above to have them entered in your report
Al Samaani
4%
Al Samaani
5%
Raydan
50%
Arab Sea
Information
Systems
5%
Development
works for food
5%
Arab Sea
Information
Systems
6%
Baazeem
22%
Source: Company prospectus, Al Rajhi Capital; Note: Based on IPO price
Baazeem
18%
Development
works for food
4%
Source: Company prospectus, Al Rajhi Capital; Note: Based on IPO price; free float is post dilution
Please see penultimate page for additional important disclosures. Al Rajhi Capital (Al Rajhi) is a foreign broker-dealer unregistered in the
USA. Al Rajhi research is prepared by research analysts who are not registered in the USA. Al Rajhi research is distributed in the USA pursuant to
Rule 15a-6 of the Securities Exchange Act of 1934 solely by Rosenblatt Securities, an SEC registered and FINRA-member broker-dealer.
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Figure 4 Overview of companies listed on Nomu
Company
Sales
Net
(SAR mn) # margin #
Sales Net Profit
CAGR*
CAGR*
Details
1 Abu moati @
440
4.4%
0.4%
-5.4%
Specializes in school and office stationary and supplies, invests in real estate
2 Al Omran
153
12.5%
20.6%
27.3%
Manufacturing of home appliances (including wholesale/ retail trading) and paper
& plastic products
3 Al Samaani
45
17.4%
11.7%
48.0%
4 Arab Sea Information Systems
49
12.6%
-2.9%
-15.2%
333
9.5%
3.5%
-0.4%
40
15.5%
46.4%
NA
315
15.5%
14.7%
19.6%
5 Baazeem
6 Development works for food
7 Raydan
Provides storage systems solutions (via manufacturing/ importing). Only company
to issue new shares (promoters/ existing shareholders did not tender their shares
in IPO)
Services include computer systems, internet services, CCTV systems, connectivity
and monitoring systems
Distributor of consumer products through owning a reputable global and local
brands
Specializes in setting up and managing different restaurants and cafes
Owns and operates banquet restaurants which specialize in Saudi traditional food
(incl. patisserie and sweet factory)
Source: Company prospectus, Al Rajhi Capital; Note: * from 2013-2016 and annualized figures for 2016; # 2016 annualized figures @ Financial year ending March, all figures for
financial year ending March 2016
Nomu – Key Features
Figure 5 Overview
Nomu - Parallel market
Criteria
Admission Document
Modified, less stringent application
Offering Process
Simpler offering process, similar to a private placement
Transition to Main Market
The company must:
1. Be listed on Nomu - Parallel Market for at least 2 years
2. Meet the Main Market requirements
Financial Disclosure
Disclosure of quarterly financial statements within 45 calendar days from the end of the period and year-end financial
statements within 90 calendar days from the end of the period
Material Changes Disclosure
Similar to the Main Market
Source: Tadawul
Figure 6 Criteria for offering & listing processes
Admission requirements
The issuer must be a Saudi joint stock company or a joint stock company which the majority of its capital is owned by citizens of a member state of the Cooperation
Council for the Arab States of the Gulf and enjoys a nationality of one of them
Minimum market cap of SAR 10 million.
At least 20% of shares owned by the qualified public, with no single investor owning more than 5% .
Min 1 year of operational and financial performance.
Financial advisor mandatory, legal advisor optional.
Annual audited financial statements.
Quarterly reviewed financial statements.
Disclosure of material information.
No profitability track record required.
Lock Up Period: 100% of pre-offering investor shares for one year.
If the expected aggregate market value for all shares to be listed exceeds SAR 40 million, at least 50 public shareholders are required. If the expected aggregate market
value for all shares to be listed is less than SAR 40 million, at least 35 public shareholders are required.
Source: Tadawul
Disclosures Please refer to the important disclosures at the back of this report.
2
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Figure 7 Key differences between Main market and Nomu - parallel market
Main market
Nomu - parallel market
Minimum Market Cap
SAR 100 million
SAR 10 million
% Offered
At least 30%
At least 20%
If the expected aggregate market value for all shares to be listed
exceeds SAR 40 million, at least 50 public shareholders are
required.
Public Shareholders
At least 200
If the expected aggregate market value for all shares to be listed is
less than SAR 40 million, at least 35 public shareholders are
required.
Continuous Obligations
Standard disclosure requirements. Disclosure of quarterly financial
statements within 30 calendar days from the end of the period
and year-end financial statements within 90 calendar days from the
end of the period
Daily Fluctuation Limits
±10%
Lighter financial disclosure requirements (with regards to time
permissible to disclose)
Disclosure of quarterly financial statements within 45 calendar
days from the end of the period and year-end financial
statements within 90 calendar days from the end of the period
±20%
Source: Tadawul
Figure 8 Who can invest in Nomu - parallel market?
Investors qualified to invest in Nomu
1. Authorized Persons act for their own account.
2. Clients of a person authorized by the Authority to conduct managing activities provided that this Authorized Person has been appointed as an investment manager on
terms which enable it to make decisions concerning the acceptance of an offer and investment in Nomu - Parallel Market on the client’s behalf without obtaining prior
approval from the client.
3. The Government of the Kingdom, any government body, any supranational authority recognized by the Authority or the Exchange, and any other stock exchange
recognized by the Authority or the Securities Depository Center.
4. Government-owned companies either directly or through a portfolio managed by a person authorized to carry out managing activities.
5. Companies and funds established in a member state of the Cooperation Council for the Arab States of the Gulf.
6. Investment Funds.
7. Qualified Foreign Investors.
8. Any other legal persons allowed to open an investment account in the Kingdom and an account at the Depositary Center.
9. Natural persons allowed to open an investment account in the Kingdom and an account at the Depositary Center, and fulfill any of the following criteria:
a. has conducted transactions in security markets of not less than 40 million Saudi riyals in total, and not less than ten transactions in each quarter during the last
twelve months.
b. the average size of his securities portfolio shall exceed 10 million Saudi riyals during the last twelve months.
c. holds the General Securities Qualification Certificate which is recognized by the Authority.
10. Any other persons prescribed by the Authority.
Source: Tadawul
Disclosures Please refer to the important disclosures at the back of this report.
3
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Nomu listed companies’ overview
Abo Moati

The company specializes in school and office stationary and supplies through its stores
around Saudi Arabia, in addition to real estate investments.

Abo Moati owns 11 bookstores around the kingdom, 2 stores for precision supplies, and 3
stores for Wave trading co (wholesale inks and printers).

Investing in Real estate is one of the strategic activities of the company, and the book
value of the company’s properties exceed SAR111 million.

The company is planning to open new branches in the kingdom and start retailing
accessories.
Figure 9 Abo Moati: Financial summary
Stock data
Income Statement
Issue Price (SAR)
15.0
in SAR '000
No. of Shares before IPO (mn)
16.0
Revenue
Offered shares (%)
20.0
Offered Shares
No. of shares post IPO (mn)
Market cap (SAR mn)
Free Float Market Cap (SAR mn)
Mar-14
growth (%)
3.2
Gross Profit
16.0
margin (%)
240.0
Operating profit
48.0
margin (%)
EBITDA
Key Shareholders post offering (above 10% )
Saeed Omar Basaeed
19.30%
Saad Abdullah Abo Moati
17.77%
Abdullah Saad Abo Moati
14.64%
margin (%)
Net profit
margin (%)
Mar-15
Mar-16 Sept-16 (6M)
517,584
508,202
440,162
19.2%
-1.8%
-13.4%
167,213
58,954
57,107
50,238
17,961
11.4%
11.2%
11.4%
10.7%
31,699
32,287
24,295
6,439
6.1%
6.4%
5.5%
3.9%
33,328
34,123
25,829
7,759
6.4%
6.7%
5.9%
4.6%
26,232
27,545
19,429
5,140
5.1%
5.4%
4.4%
3.1%
Balance Sheet
Key Metrics
in SAR '000
Mar-14
Mar-15
Mar-16 Sept-16 (6M)
Per Share Ratios
EPS (SAR)
DPS (SAR)
1.64
1.72
1.21
0.32
Mar-14
Mar-15
Mar-16 Sept-16 (6M)
13,479
14,718
11,621
27,492
Current Assets
230,650
245,075
226,382
222,097
Property, Plant & Equipment
105,746
117,350
119,393
118,678
24,695
26,141
24,368.38
24,393.20
374,571
403,283
381,764
392,660
156,729
184,183
161,299
173,764
Cash/equivalents
0.00
0.91
0.50
0.00
RoE*
14.7%
14.4%
9.7%
5.0%
Current liabilities
RoIC*
8.8%
8.4%
6.2%
3.2%
Non-current liabilities
39,014
27,884
20,792
14,143
RoA*
7.0%
6.8%
5.1%
2.6%
Shareholders' Equity
178,827
191,216
199,672
204,754
Total
374,571
403,283
381,764
392,660
P/E*
9.15
8.71
Total Debt
169,766
179,287
166,229
157,542
EV/EBITDA*
11.75
11.67
15.10
23.55
Net Debt
156,287
164,569
154,608
130,050
P/B
1.34
1.26
1.20
1.17
Dividend yield*
0.0%
6.1%
3.3%
0.0%
Cash Flow statement
Div Payout Ratio
0.0%
53.0%
41.2%
0.0%
in SAR '000
Return Ratios
Total
Valuation Ratios
12.35
23.35
Leverage Ratios
Debt/ Equity
Other Non-current Assets
0.95
0.94
0.83
0.77
Mar-14
Mar-15
Mar-16 Sept-16 (6M)
Net Cash from Operations
(22,543)
20,771
22,612
Net Cash from Investing
(54,444)
(14,453)
(3,653)
(640)
77,471
(5,080)
(22,055)
(8,748)
1,238
(3,096)
15,871
Net debt/ EBITDA*
4.69
4.82
5.99
8.38
Net Cash from Financing
Net Debt/Equity
0.87
0.86
0.77
0.64
Net change in Cash
484
25,259
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
4
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Al Omran
Al-Omran company was established in 2003 with a capital of SAR 6mn.
The main activities of the company include:

Manufacturing of home appliances and paper & plastic products, and wholesale/ retail
trading in home appliances.

The company has presence in real-estate sector. Activities include buying lands &
managing real estate.

Finally, the company operates in exporting & importing home appliances and electronic
products.
Figure 10 Al Omran: Financial summary
Stock data
Issue Price (SAR)
No. of Shares before IPO (mn)
Offered shares (%)
Income Statement
28.0
1.2
No. of shares post IPO (mn)
6.0
Free Float Market Cap (SAR mn)
2013
Revenue
20.0
Offered Shares (mn)
Market cap (SAR mn)
in SAR 000'
6.0
margin (%)
168.0
Operating profit
33.6
margin (%)
EBITDA
Key Shareholders post offering (above 10% )
Mohammed omran Alomran
40.0%
Mohammed naser Alomran
margin (%)
Net profit
31.9%
margin (%)
Key Metrics
in SAR 000'
2014
2015
2016 9M
Per Share Ratios
DPS (SAR)
116,947
2016 9M
114,641
8.8%
23.5%
21,456
20,570
22,078
24.6%
21.7%
18.9%
22.6%
10,591
8,692
9,066
15,543
25,951
12.2%
9.2%
7.8%
13.6%
12,862
10,823
11,452
17,516
14.8%
11.4%
9.8%
15.3%
9,242
7,409
7,780
14,307
10.6%
7.8%
6.7%
12.5%
2015
2016 9M
Balance Sheet
2013
EPS (SAR)
2015
94,678
growth (%)
Gross Profit
2014
87,049
1.54
0.00
1.23
0.00
1.30
1.00
2.38
2.00
Return Ratios
Cash/equivalents
2013
2014
2,962
3,587
4,447
1,811
Current Assets
67,699
82,590
80,453
101,275
Property, Plant & Equipment
57,664
57,949
57,256
56,640
Other Non-current Assets
Total
3034
4591
6023
5,179
128,397
145,130
143,732
163,094
34,739
RoE*
8.2%
6.2%
6.4%
15.5%
Current liabilities
10,115
21,462
19,894
RoIC*
8.3%
5.7%
6.0%
13.6%
Non-current liabilities
5,089
3,441
2,264
5,145
RoA*
7.2%
5.1%
5.4%
11.7%
Shareholders' Equity
113,193
120,227
121,574
123,210
128,397
145,130
143,732
163,094
2,852
12,817
11,042
21,044
9,230
6,595
19,233
Valuation Ratios
P/E*
Total
18.18
22.68
21.59
8.81
EV/EBITDA*
14.56
17.30
16.35
8.02
P/B
1.48
1.40
1.38
Dividend yield*
0.0%
0.0%
3.6%
9.5%
Div Payout Ratio
0.0%
0.0%
77.1%
83.9%
Net Debt
Cash Flow statement
in SAR 000'
Net Cash from Operations
0.03
0.11
0.09
(110)
1.36
Leverage Ratios
Debt/ Equity
Total Debt
0.17
Net Cash from Investing
Net debt/ EBITDA*
(0.01)
0.85
0.58
0.82
Net Cash from Financing
Net Debt/ Equity
(0.00)
0.08
0.05
0.16
Net change in Cash
2013
3,287
(121)
(1,616)
1,550
2014
2015
2016 9M
(3,529)
12,794
(3,057)
(2,358)
(1,607)
(1,358)
6,513
(10,326)
626
861
1,781
(2,634)
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
5
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Al Samaani
Al Samaani started operations in 1994 with a capital of SAR 100,000 which now reached SAR
9,000,000 .The head office located in Buraydah. Main activities:

The main activity of the company is to provide new solutions for different storage
systems. The company manufactures and imports all types of Shelves and Storage
platforms.

Also, the company expanded operations to manufacture special products to provide
customized storage systems to clients.

In 2017, the company plans to add a new production line costing around SAR 9mn.
Figure 11 Al Samaani: Financial summary
Stock data
Issue Price (SAR)
No. of Shares before IPO (mn)
Offered shares (%)
Income Statement
78.0
in SAR 000'
0.9
2013
Revenue
32,106
20.0
Offered Shares (mn)
0.2
No. of shares post IPO (mn)
1.1
Market cap (SAR mn)
87.8
Free Float Market Cap (SAR mn)
17.6
growth (%)
Gross Profit
15.2%
Abdullah Alsamaani
12.8%
9,100
15,385
12,547
31.9%
37.4%
2,411
3,029
5,469
6,035
margin (%)
7.5%
6.6%
11.3%
18.0%
3,698
4,422
6,917
7,044
margin (%)
11.5%
9.7%
14.3%
21.0%
2,399
2,928
4,808
5,834
7.5%
6.4%
10.0%
17.4%
2015
2016 9M
Net profit
margin (%)
in SAR 000'
2014
2015
2016 9M
Per Share Ratios
DPS (SAR)
33,519
Balance Sheet
2013
EPS (SAR)
5.5%
19.9%
Operating profit
Key Metrics
42.4%
2016 9M
7,275
EBITDA
Mohammed Alsamaani
2015
48,256
22.7%
margin (%)
Key Shareholders post offering (above 10% )
Bandar Alsamaani
28.8%
2014
45,721
Cash/equivalents
Current Assets
2.13
2.60
4.27
5.19
Property, Plant & Equipment
2013
2014
1,009
3,996
1,747
2,006
12,792
21,623
21,544
20,137
6,759
8,250
5,628
5,333
0.00
0.00
1.37
0.00
19,551
29,873
27,172
25,470
RoE*
31.5%
26.0%
41.7%
45.4%
Current liabilities
9,973
17,169
14,615
8,114
RoIC*
29.5%
35.5%
50.8%
51.8%
Non-current liabilities
1,954
1,457
1,039
215
RoA*
12.3%
9.8%
17.7%
30.5%
Shareholders' Equity
7,624
11,247
11,518
17,141
19,551
29,873
27,172
25,470
18.25
11.28
1,216
912
608
Return Ratios
Total
Valuation Ratios
P/E*
EV/EBITDA*
P/B
Other Non-current Assets
Total
36.58
23.27
11.51
29.97
19.46
12.44
9.16
Total Debt
Net Debt
207
7.80
7.62
5.12
Dividend yield*
0.0%
0.0%
1.8%
0.0%
Cash Flow statement
Div Payout Ratio
0.0%
0.0%
32.1%
0.0%
in SAR 000'
2013
Net Cash from Operations
667
Leverage Ratios
Debt/ Equity
0.16
(3,084)
2014
(1,702)
2015
2016 9M
(2,379)
3,650
0.08
0.05
0.02
Net Cash from Investing
(2,464)
(2,905)
1,080
1,216
8,271
(6,979)
2,987
(2,249)
Net debt/ EBITDA*
0.06
(0.70)
(0.16)
(0.18)
Net Cash from Financing
Net Debt/Equity
0.03
(0.27)
(0.10)
(0.10)
Net change in Cash
(581)
304
(1,139)
9,685
(715)
(8,786)
184
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
6
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Arab Sea Information Systems
Arab Sea Information Systems was established in 2001 with a capital of SAR 50mn and now
it doubled to SAR 100mn. The headquarters are located in Riyadh.

The company provides a large number of services such as computer systems and internet
services, CCTV systems, connectivity between military communication systems,
monitoring and remote control systems, and others.

The company provides services in both local and global markets (such as Spain, China,
and Brazil).
Figure 12 Arab sea: Financial summary
Stock data
Income Statement
Issue Price (SAR)
11.0
in SAR 000'
No. of Shares before IPO (mn)
10.0
Revenue
Offered shares (%)
20.0
Offered Shares (mn)
No. of shares post IPO (mn)
Market cap (SAR mn)
Free Float Market Cap (SAR mn)
2013
53,683
2.0
Gross Profit
margin (%)
110.0
Operating profit
22.0
margin (%)
EBITDA
Key Shareholders post offering (above 10% )
Mohammed Al-Suhaibani
37.8%
Beige company
margin (%)
Net profit
21.3%
margin (%)
2015
2016 9M
60,050
10.5%
1.2%
22,359
26,903
25,086
14,140
41.7%
45.3%
41.8%
38.4%
11,444
11,326
6,790
5,043
21.3%
19.1%
11.3%
13.7%
12,092
12,117
7,541
5,579
22.5%
20.4%
12.6%
15.2%
10,148
17,361
5,918
4,644
18.9%
29.3%
9.9%
12.6%
2013
2014
2015
2016 9M
559
540
1,107
114
65,242
60,053
70,468
50,080
106,766
121,737
growth (%)
10.0
2014
59,333
36,805
Balance Sheet
in SAR 000'
Key Metrics
2013
2014
2015
2016 9M
Per Share Ratios
EPS (SAR)
DPS (SAR)
Cash/equivalents
Current Assets
1.01
1.74
0.59
0.46
Property, Plant & Equipment
0.00
0.00
172,008
181,790
185,598
199,472
RoE
6.3%
9.8%
3.3%
3.3%
Current liabilities
9,536
3,385
3,962
10,028
RoIC
6.0%
5.5%
3.0%
2.8%
Non-current liabilities
1,064
1,433
1,518
1,911
RoA
5.9%
9.6%
3.2%
3.1%
Shareholders' Equity
161,408
176,972
180,118
187,533
172,008
181,790
185,598
199,472
Total
Valuation Ratios
P/E*
EV/EBITDA*
Total
10.84
9.09
6.34
9.07
18.59
17.76
14.57
14.77
Total Debt
Net Debt
P/B
0.68
0.62
0.61
0.59
Dividend yield*
0.0%
0.0%
0.0%
0.0%
Cash Flow statement
Div Payout Ratio
0.0%
0.0%
0.0%
0.0%
in SAR 000'
Leverage Ratios
Debt/ Equity
Net Cash from Operations
113847
1,812
0.00
Return Ratios*
Other Non-current Assets
1,283
0.00
(559)
2013
(540)
2014
-
147,580
-
(1,107)
(114)
2015
2016 9M
17,350
22,933
23,361
20,306
(23,102)
(23,258)
(20,804)
150
(30)
(498)
(19)
73
(996)
0.00
0.00
0.00
0.00
Net Cash from Investing
(17,313)
Net debt/ EBITDA*
(0.05)
(0.04)
(0.15)
(0.02)
Net Cash from Financing
-
Net Debt/Equity
(0.00)
(0.00)
(0.01)
(0.00)
Net change in Cash
37
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
7
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Baazeem
The company is a distributor of consumer products through owning a reputable global and
local brands such as Maog cleaning supplies, Rio Mare Tuna and Merito press spray.

Rio Mare and Maog trademarks contributed the largest share in 2015 comprising 32.2%
and 23.6% of total sales respectively.

The company is targeting revenue of SAR 550mn by 2020, and net profit margin of 10%
in addition to continuing the expansion plan to GCC countries, as well as the rest of Arab
and African markets.

In 2013 and 2014, the company distributed cash dividends of SAR13.16mn, and
SAR12.07mn in 2015 (SAR1.19/share).
Figure 13 Baazeem: Financial summary
Stock data
Income Statement
Issue Price (SAR)
39.0
in SAR 000
No. of Shares before IPO (mn)
10.1
Revenue
Offered shares (%)
30.0
Offered Shares(mn)
3.0
No. of shares post IPO(mn)
394.9
Free Float Market Cap (SAR MN)
118.5
margin (%)
Operating profit
margin (%)
EBITDA
Key Shareholders post offering (above 10% )
Salem Saleh Baazeem
39.5%
margin (%)
Net profit
margin (%)
Key Metrics
in SAR 000
2014
2015
9M2016
Per Share Ratios
DPS (SAR)
Cash/equivalents
Current Assets
3.18
3.25
3.65
2.35
Property, Plant & Equipment
1.30
1.30
1.19
0.00
RoE*
21.2%
20.5%
21.2%
18.0%
Current liabilities
RoIC*
19.5%
16.8%
16.0%
13.3%
RoA*
13.9%
13.7%
14.1%
10.7%
12.27
12.00
10.70
12.43
Return Ratios
EV/EBITDA*
P/B
Dividend yield*
Div Payout Ratio
9M2016
249,805
5.4%
8.8%
120,428
128,314
146,580
40.1%
40.5%
42.6%
42.6%
37,396
38,123
41,000
26,510
106,404
12.5%
12.0%
11.9%
10.6%
38,563
39,564
42,259
27,515
12.8%
12.5%
12.3%
11.0%
32,172
32,913
36,907
23,820
10.7%
10.4%
10.7%
9.5%
2015
9M2016
9.44
2.60
9.80
2.46
9.53
11.04
2.27
2.24
171,139
192,092
227,744
9,366
8,998
62109.3 60637.686
9,513
9,056
60007.6
60,558
261,613
297,358
82,956
115,912
Non-current liabilities
3,870
4,673
4,863
5,325
Shareholders' Equity
151,975
160,578
173,793
176,120
231,065
240,775
261,613
297,358
Total Debt
48,181
60,140
66,262
77,677
Net Debt
29,048
51,201
65,034
67,247
3.3%
3.1%
0.0%
Cash Flow statement
32.7%
0.0%
in SAR 000
0.44
10,430
159,590
75,525
40.0%
0.38
1,228
240,775
3.3%
0.37
2014
8,939
75,220
40.9%
0.32
2013
19,133
231,065
Total
Leverage Ratios
Debt/ Equity
Other Non-current Assets
Total
Valuation Ratios
P/E*
2015
344,392
Balance Sheet
2013
EPS (SAR)
2014
316,509
growth (%)
Gross Profit
10.1
Market cap (SAR MN)
2013
300,327
2013
Net Cash from Operations
13,855
2014
(15,179)
(15)
2015
6,734
112
9M2016
(22,445)
Net Cash from Investing
(5,992)
Net debt/ EBITDA*
0.75
1.29
1.54
1.83
Net Cash from Financing
(5,900)
5,000
(3,558)
21,750
(1,098)
Net Debt/Equity
0.19
0.32
0.37
0.38
Net change in Cash
1,963
(10,194)
3,288
(1,793)
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
8
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Development works for food
Established in 2010, the company specializes in setting up and managing different
restaurants and cafes.

Restaurants segment is characterized by diversity, where the company has three different
brand names. “Mahbob” restaurant specializes in shawarma (8 branches ), “Juice time”
for fresh juices (10 branches), and 8 branches for “Bait Katakit” which specializes in fried
chicken (Broasted).

The company has not distributed dividends in 2013-2016 as the company was focused on
its expansion strategy. The company is targeting 110 branches over the next 5 years (from
26 branches currently).
Figure 14 Development Works for Food: Financial summary
Stock data
Issue Price (SAR)
No. of Shares before IPO (mn)
Offered shares (%)
Income Statement
65.0
in SAR 000
1.3
2013
Revenue
12,647
30.0
Offered Shares
0.3
No. of shares post IPO (mn)
1.3
Market cap (SAR mn)
81.3
Free Float Market Cap (SAR mn)
16.3
growth (%)
Gross Profit
29,735
16,337
14,779
39.1%
47.1%
49.7%
(3,480)
759
5,650
4,498
margin (%)
-27.5%
2.6%
16.3%
15.1%
(2,277)
2,059
7,161
5,503
margin (%)
-18.0%
6.9%
20.7%
18.5%
(3,444)
1,013
5,786
4,602
margin (%)
-27.2%
3.4%
16.7%
15.5%
2015
9M2016
Net profit
Key Metrics
16.8%
11,612
Operating profit
20.0%
134.6%
9M2016
4,899
EBITDA
Abdulrahman Naser Al-Asmari
2015
34,663
38.7%
margin (%)
Key Shareholders post offering (above 10% )
Horizon Analytical company
44.0%
2014
29,669
Balance Sheet
in SAR 000
2013
2014
2015
9M2016
Per Share Ratios
EPS (SAR)
(2.76)
DPS (SAR)
0.00
0.81
0.00
4.63
0.00
3.68
0.00
Return Ratios
Cash/equivalents
2013
2014
573
2,118
2,548
Current Assets
2,140
3,502
6,439
9,967
Property, Plant & Equipment
7,386
5,840
6,132
15,561
Other Non-current Assets
Total
0
0
0
4,009
2,987
9,526
9,342
12,571
28,515
7,673
RoE*
NA
13.2%
51.5%
45.4%
Current liabilities
9,199
1,304
887
RoIC*
NA
7.9%
46.0%
36.7%
Non-current liabilities
227
355
448
7,312
RoA*
NA
10.8%
46.0%
21.5%
Shareholders' Equity
100
7,683
11,236
13,530
Total
9,526
9,342
12,571
28,515
80.24
14.04
13.24
Total Debt
8,142
1,251
738
6,825
Net Debt
7,569
Valuation Ratios
P/E*
EV/EBITDA*
P/B
NA
NA
NA
39.04
10.58
11.09
11.46
7.23
6.01
Dividend yield*
0.0%
0.0%
0.0%
0.0%
Cash Flow statement
Div Payout Ratio
0.0%
0.0%
0.0%
0.0%
in SAR 000
Leverage Ratios
Debt/ Equity
0.50
2013
(867)
2014
Net Cash from Operations
(1,844)
2,870
Net Cash from Investing
(3,601)
246
5,392
81.42
0.16
0.07
Net debt/ EBITDA*
NA
(0.42)
(0.25)
0.38
Net Cash from Financing
Net Debt/Equity
NA
(0.11)
(0.16)
0.21
Net change in Cash
(54)
(1,571)
1,545
(1,810)
2015
2,816
9M2016
4,603
-
(1,939)
-
(2,234)
-
431
-
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
9
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Raydan
The company owns and operates banquet restaurants which specialize in Saudi traditional
food , in addition to operating patisserie and sweet factory through Rushah sweets.

Currently, the company is operating 17 branches for Raydan restaurants, representing
91.6% of 2015 sales, and 7 branches for Raushah sweets which represent 8.4% of 2015
revenues.

The company is targeting 50 branches by 2021 and is also planning to expand in the GCC
region over the next five years.
Figure 55 Raydan: Financial summary
Stock data
Income Statement
Issue Price (SAR)
32.0
(in SAR '000)
No. of Shares before IPO (mn)
22.5
Revenue
Offered shares (%)
30.0
Offered Shares(mn)
6.8
No. of shares post IPO (mn)
720.0
Free Float Market Cap (SAR mn)
216.0
margin (%)
Operating profit
margin (%)
EBITDA
Key Shareholders post offering (above 10% )
Mansour Al-Salami
29.4%
margin (%)
Net profit
margin (%)
Key Metrics
(in SAR '000)
2014
2015
9M2016
Per Share Ratios
DPS (SAR)
2015
314,130
9M2016
235,967
22.4%
23.1%
37,718
49,305
69,769
18.1%
19.3%
22.2%
26.7%
26,680
33,360
50,488
40,056
62,891
12.8%
13.1%
16.1%
17.0%
33,788
44,206
65,539
51,852
16.2%
17.3%
20.9%
22.0%
28,511
34,138
50,221
36,600
13.7%
13.4%
16.0%
15.5%
2015
9M2016
Balance Sheet
2013
EPS (SAR)
2014
255,207
growth (%)
Gross Profit
22.5
Market cap (SAR mn)
2013
208,578
1.27
0.73
1.52
1.23
2.23
2.18
1.63
0.00
Return Ratios
2013
2014
Cash/equivalents
16,618
37,178
40,216
Current Assets
34,527
61,253
77,747
63,718
141,567
263,843
254,644
249,894
Property, Plant & Equipment
Other Non-current Assets
Total
5000
4548
4253
22,823
3,626
181,094
329,644
336,644
317,239
61,514
RoE*
25.9%
14.1%
20.6%
19.9%
Current liabilities
67,306
24,752
61,328
RoIC*
16.6%
10.2%
15.7%
19.4%
Non-current liabilities
3,704
62,563
31,798
10,500
RoA*
15.7%
10.4%
14.9%
15.4%
Shareholders' Equity
110,084
242,329
243,518
245,225
25.25
21.09
14.34
14.75
Valuation Ratios
P/E* (x)
Total
EV/EBITDA* (x)
22.15
16.94
11.42
10.71
P/B (x)
6.54
2.97
2.96
2.94
Dividend yield*
Div Payout Ratio
329,644
336,644
317,239
45,000
65,859
68,351
43,013
Net Debt
28,382
28,681
28,135
20,190
2.3%
3.8%
6.8%
0.0%
Cash Flow statement
57.5%
80.8%
97.6%
0.0%
(in SAR '000)
Leverage Ratios
Debt/ Equity (x)
181,094
Total Debt
Net Cash from Operations
0.41
0.27
0.28
0.18
2013
2014
2015
9M2016
33,574
41,169
54,163
Net Cash from Investing
(11,796)
(132,537)
(3,556)
(6,476)
(16,393)
111,928
(49,026)
(60,286)
5,385
20,560
1,581
(17,560)
Net debt/ EBITDA* (x)
0.84
0.65
0.43
0.29
Net Cash from Financing
Net Debt/Equity (x)
0.26
0.12
0.12
0.08
Net change in Cash
49,202
* Based on annualized figures
Source: Company data, Al Rajhi Capital
Disclosures Please refer to the important disclosures at the back of this report.
10
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
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11
Saudi All Industries Sector
All Industries –All Sectors
27 February 2017
Disclaimer and additional disclosures for Equity Research
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appropriate to the stock or sector under consideration, e.g. DCF (discounted cash flow) or SoTP (sum of the parts) analysis.
Please note that the achievement of any price target may be impeded by general market and economic trends and other external factors, or
if a company’s profits or operating performance exceed or fall short of our expectations.
Contact us
Jithesh Gopi, CFA
Head of Research and Financial Institutions
Tel : +966 1 211 9332
Email: [email protected]
Al Rajhi Capital
Research Department
Head Office, King Fahad Road
P.O. Box 5561, Riyadh 11432
Kingdom of Saudi Arabia
Email: [email protected]
Al Rajhi Capital is licensed by the Saudi Arabian Capital Market Authority, License No. 07068/37.
Disclosures Please refer to the important disclosures at the back of this report.
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