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Al-Rajhi Capital upgrades Ma’aden to 'Overweight'

Al-Rajhi Capital upgrades Ma’aden to 'Overweight'
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Riyadh-Mubasher: Al-Rajhi Capital has raised Ma’aden's target price to SAR 52, and upgraded its rating to 'Overweight'. 

The research firm said Ma’aden is favourably positioned to capitalise on the kingdom’s vast mineral wealth and is in the process of expanding all its segments.

The company had successfully commenced its aluminium smelter operations last year, while its refinery and rolling mill is currently in the commissioning phase and is expected to be fully operational by 2015-end.

Al-Rajhi Capital remains positive about the performance of the aluminium segment and expects it to stabilise by mid-2016.

Aluminium demand remains healthy and prices are expected to rise steadily this year by 3%, Al-Rajhi said

The company’s phosphate business experienced maintenance shutdowns at its ammonia plant during the first quarter of 2015, without disrupting DAP production. Overall, the operations are stable at the existing phosphate plant.

The company is waiting for the completion of its Wa’ad Al Shamal project, which will double its DAP and ammonia capacities.

Product prices have remained under pressure as declining agricultural prices have reduced plantation activities.

The gold company will add Ad Dhwayhi mine to its portfolio later this year, which will add 180,000 ounces per year.

Al-Rajhi Capital expects the company to sell 222,000 ounces this year.

Ma’aden is one of the think tank's top long-term picks in the Saudi Arabian market, and is one of the 19 stocks added in the MSCI Saudi Arabian Local Index, which is a positive development, Al-Rajhi said.