Riyadh - Mubasher: Al-Rajhi Capital maintained their target price (TP) for Saudi Arabian Mining Company (Ma’aden) at SAR 40, with a Neutral rating.
Al-Rajhi Capital Research said in a report on Monday that Ma’aden’s Q4 financial results were healthy despite coming in lower than their estimates, mainly due to non-recurring items.
“In our view, given the significant scale of operations, minor quarterly misses are less meaningful as progress in WAS and other company specific operating factors are on track.”
“On the other hand, we believe there may be downside risks in the near term for commodity prices especially Aluminium. After the recent increase in Aluminium price, global companies are operating at healthy margins and possibility of a decline in the near term cannot be ruled out, also aided by a possible decline in coal costs in China,” the report stated.
“For the longer term, we expect rationalization in capacity to continue and assume a long term Aluminium price of $1,750 per tonne.”
As for DAP, which will become the primary contributor to group profits, the research firm forecasts prices around $400 per tonne for the long term due to persisting over-supply and weak demand.
