SABIC is a leading global petrochemical player, with a broad product range, integrated production flow and low cost feedstock advantage.

NCB Capital’s analysis includes the following highlights:

*NCB Capital believes SABIC has one of the region’s most diversified and strongest product ranges including petrochemicals, fertilizers and metals. Moreover, with its integrated production flow, feedstock cost advantage and wide production base, SABIC is able to post globally leading margins. NCB Capital forecasts SABIC’s overall gross margins at 33.7 percent in 2011 versus 25 percent for global peers.

*Despite the fragility of the global economic recovery, petrochemical demand is growing at a steady pace, led by emerging markets, especially China. With its wide product portfolio and strong presence across geographies, SABIC remains a key beneficiary of this growth. Approximately 50 percent of SABIC’s sales is to emerging markets with 30-40 percent to China alone.

*In 2010, SABIC started operations at Yansab and Sharq’s third expansion project, both in Saudi Arabia, and its petrochemical complex in Tianjin, China, through a JV with Sinopec. These complexes added 8.5 million mtpa to SABIC’s existing base of 61 million mtpa of petrochemical products. The timing of these projects seems ideal as petrochemical demand started picking up during 2010. Commencement of the Saudi Kayan complex in 2011 will add performance chemicals to SABIC’s product mix. NCB Capital expects SABIC’s total petrochemical capacity to increase to 77 million mtpa by 2014.

*NCB Capital initiated coverage on SABIC with an Overweight rating and a price target of SR130.8 per share. SABIC’s strong margin outlook and expanding production base should lead to net income growing 34 percent in 2011 to SR28.6 billion. The stock trades on 2011 P/E and EV/EBITDA multiples of 11.2x and 6.8x, respectively.

NCB Capital was voted best research house in three categories in Euromoney’s annual Middle East research survey for 2010. The bank achieved a total of 10 ranked positions in the 2010 survey, the third highest among all research firms in the region. On the basis of top ranked positions, the firm achieved the second highest total in the region.

NCB Capital was awarded Best Research House in the Cement Sector, Best Research House in the Consumer Goods/Retail Sector and Best Research House in the Food and Agriculture Sector.

Additionally, it was ranked second in oil and natural gas, economics and credit.  It also won third place in strategy and fourth in general industries.

The bank, which provides analysis on the agriculture and food, cement, construction, industrials, petrochemical, consumer goods/retail and utilities sectors, claims it is the only domestically-owned investment bank to offer such a range.