Riyadh – Mubasher: Al Rajhi Capital said that National Industrialization Company may see more improvement in the coming period due to the lag between TiO2 prices and TiO2 segment revenues because of the tenures of pricing contracts.
“The direction for stock in the near term primarily depends on the outlook for TiO2 prices, which we expect to continue improving in 2017 on tight supply conditions. We believe there is some more scope for improvement in TiO2 price given the tighter supply conditions globally,” the report said.
The research firm noted that further improvements will come primarily from operating leverage as TiO2 price improves, apart from cost of sales, general and administrative expenses were also lower compared to historical trends, which led to the beat at the operating profit level.
Al Rajhi Capital maintained their target price of SAR 15.8 per share and their recommendation on “Neutral” on the stock.
National Industrialization Company posted net profit of SAR 123.4 million for Q4-16, against a net loss of SAR 686.6 million for Q4-15.
