Riyadh-Mubasher: MubasherTrade maintained its 'Buy/Moderate Risk' rating for Yanbu Cement, setting the price target at SAR 51.6, with an expected total return of 41%.
The research firm attributed its rating to the growing construction activity, especially as Saudi Arabia has multi-billion dollar construction projects on the table.
It added that the cement industry has benefited from the rapid growth of the construction sector, but recently the kingdom has faced an unprecedented budget crunch after a sharp decline in oil prices to below $50 a barrel.
"Since 1979, YCC has begun to capture leading positions in the western region. In 2015, YCC signed a contract for the establishment of waste heat recovery (WHR) unit which will add efficiency to the grinding process and thus decrease the costs of fuel and energy consumption apart from reducing air pollution," MubasherTrade said.
The cement producer reported an 8.1% year-on-year rise in Q4-15 net earnings to SAR 209 million.
The results beat the research firm's estimate of SAR 157 million (+33%) but came in line with consensus estimates of SAR 208.7 million (+0.2%).
