Qatar National Bank Financial Services (QNBFS) issued a report on Qatar National Cement (QNCD), stating that QNCD Q1-14 net income rose 9.5% YoY.

Qatar National Cement (QNCD) posted a net profit of QR129.9mn in 1Q2014 vs. estimates of QR120.0mn and QR118.6mn in 1Q2013. Sales increased to QR279.9mn in 1Q2014 from QR267.3mn in 1Q2013, up 4.7% YoY. Cost of sales increased marginally to QR150.2mn vs. QR149.8mn in 1Q2013. Hence, gross profit increased to QR129.7mn vs. QR117.5mn in 1Q2013. Gross margin improved to 46.3% from 44.0% in 1Q2013 (the gross margin was higher than estimates of 45.4%; gross margin was 45.4% in 2013).

“We maintain our Market Perform rating with a fair value of QR137.28. QNCD remains a market leader cashing in on the Qatari infrastructure/construction growth. The company’s focus on Qatar makes it one of the pure infrastructure/construction plays on the Qatar growth story. Although we expect strong earnings growth in 2016 and 2017, we believe the stock given its recent run-up, is fairly valued at current levels”, according to QNBFS.