SIIG（SIIG AB）：持有：额外原料有增值作用，但细节稀缺

Issuer of report:HSBC Bank plcView HSBC Global Research at:https://www.research.hsbc.com16 -19 June, The May Fair Hotel, LondonGCC Exchanges Conference 2025MAINTAIN HOLDTARGET PRICE(SAR)17.50SHARE PRICE(SAR)16.54(as of29 May 2025)MARKET DATAMarket cap(SARm)Market cap (USDm)3m ADTV (USDm)FINANCIALS AND RATIOS(SAR)Year to12/2024aHSBC EPSHSBC EPS (prev)Change (%)Consensus EPSPE (x)Dividend yield (%)EV/EBITDA (x)ROE (%)52-WEEK PRICE(SAR)Source:LSEGIBES, HSBC estimatesSriharsha Pappu*Head of Chemicals, EnergyTransition CoordinatorHSBC Bank plcsriharsha.pappu@hsbc.com+44 20 7991 9243Akash Choudhary*AssociateBangalore* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/qualified pursuant to FINRA regulationsSaudi Arabia05/24Target price: 17.50 RegisterPREVIOUS TARGET(SAR)17.78UPSIDE/DOWNSIDE+5.8%11,236Free float2,995BBG4RIC12/2025e0.270.440.300.49-10.0-9.10.400.7162.037.43.03.088.937.42.03.211/24High: 24.00 Low: 14.84 Current: 16.54 81%SIIG AB2250.SE12/2026e12/2027e0.771.120.911.27-15.9-12.11.021.2221.614.86.06.721.514.65.88.513.0019.5026.0005/25 2Financial statementsYear to12/2024a12/2025eProfit &loss summary(SARm)Revenue00EBITDA116297Depreciation & amortisation-1-1Operating profit/EBIT115297Net interest2929PBT144326HSBC PBT144326Taxation58-25Netprofit201301HSBC net profit201301Cash flow summary(SARm)Cash flow from operations572244Capex-1-1Cash flow from investment-1-1Dividends-754-340Change in net debt-122821FCF equity571244Balance sheet summary(SARm)Intangible fixed assets00Tangible fixed assets8,3328,359Current assets1,763943Cash & others949129Total assets10,1019,308Operating liabilities238238Gross debt00Net debt-949-129Shareholders' funds9,8359,041Invested capital8,9078,934Ratio, growth and per share analysisYear to12/2024a12/2025eY-o-y % changeRevenueEBITDA-7.6157.1Operating profit-7.6157.9PBT-20.3126.9HSBC EPS80.466.0Ratios (%)Revenue/IC (x)0.00.0ROIC1.83.1ROE2.03.2ROA1.93.1EBITDA margin0.00.0Operating profit margin0.00.0EBITDA/net interest (x)Net debt/equity-9.7-1.4Net debt/EBITDA (x)-8.2-0.4CF from operations/net debtPer share data(SAR)EPS Rep (diluted)0.270.44HSBC EPS (diluted)0.270.44DPS0.500.50Book value13.0313.31Financials & valuation:SIIG Source: HSBCNote:Priced at close of 29 May 2025 Allocation accretive, but detail lackingMore feedstock for SIIGOn 29 May 2025SIIG announced that the company had received approval from the Ministry ofEnergyfortheallocation of additional feedstock for both the cracker–Saudi Polymers–and thestyrene/gasoline units–Saudi Chevron Phillips (SCP) and Jubail Chevron Phillips (JCP). SaudiPolymers willget additional ethane in two tranches:tranche 1 starting in 2025 and tranche 2, alarger piece,in 2029which would require an expansion of the cracker, set to come on-stream in2029. SCP/JCP would receive an additional allocation of natural gasoline resulting in increasedproduction in 2025.Material impact on profitability, but details scantThe company also announced that the additional feedstock would result in an incrementalearningscontribution of SAR470m from 2029. Our current 2028e for net income is cSAR800m,soSAR470m is a step change higher on profitability. That said, the company has said thatit isunable to disclose quantities of feedstock, incremental production volumes or associatedexpansion capexat this time–making the SAR470m number impossible to verify.Up to SAR7 per share in accretionIf weapplythe 15xmultiple we use for SIIG to theSAR470m in additional earnings from 2029anddiscountit back to todayat the 9.5% cost of equity that we apply to most Saudi chemicalcompanies under our coverage, that would berepresent anincremental SAR7 per sharein value.Accretive,but detail scarce…◆SIIGhasannouncedthereceipt of additional ethane and gasolinefeedstock in tranches from nowuntil2029…◆…resulting in an incremental SAR470m in net income from 2029onwards;however,no additional detail was provided◆Reiterate Hold,ethane allocation could be highly accretive but detaillacking;cut TPto SAR17.5 from adjusted SAR17.78SIIG ethane allocation estimatesNetincome, SIIG share470SARmAssuming 80% is from additional ethane1Net income at Saudi Polymers578Net income154USDmEthane margin40%Implied revenue386USDmPolymer prices1,000USD/tonAdditional implied capacity386ktsImpliedethane requirement517ktonsImplied ethane requirement39mmscfdSource: HSBC estimates 3 With the stock up only SAR0.6 on theannouncement–itis clear investors are unwilling to pricein the additional earnings without accompanying detail.We can, with the help of a few simplifying assumptions, however, try and back into the amount offeedstock allocated. Firstly, given the discount on ethane relative to natural gasoline, it is safe toassume that the bulk of the accretion will come from theadditional ethane allocation to SaudiPolymers. Furthermore, given limited room to expand output at the plant straight away and the factthat the earnings contribution number quotedis from 2029–itis also safe to assume tha