Saudi Fransi Capital maintains ‘buy’ on Yansab; slashes TP to SAR 40

Saudi Fransi Capital (SFC) has affirmed a “buy” rating on Yanbu National Petrochemical Co. (Yansab) and reduced the target price on the stock to SAR 40 from SAR 56, the brokerage firm said in a report.

The recommendation was based on the expectation that Yansab would maintain its financial position and continue to distribute solid dividends.

The company’s fourth-quarter net profit of SAR 393 million exceeded SFC’s estimate of SAR 251 million, as well as an average forecast of SAR 226 million, the report added.

The petrochemical producer’s profit for the period was 30 percent higher when compared to the previous quarter; an improvement attributed to higher sales volumes and lower prices for feedstock materials.

However, net income fell 51 percent year-on-year (YOY) for the 2015 fiscal year, and 36 percent YOY for Q4-2015.