Saudi Arabia's industrial and non-oil sectors would continue its growth spurred by mining and ceramics manufacturing industry, Al Rajhi Capital said in a report on Saudi industrial companies released on Saturday. The report forecast strong prospects for the gold mining company Ma'aden, which is on a three-year expansion plan. It noted that while debt is likely to jump in 2010 as a result, investors should look six months ahead to 2011 with revenues expected to leap fivefold after the launch of the phosphate operations. Aluminum will follow phosphate, and by the end of 2013, Ma'aden would be one of the leading diversified mine-to-metal companies in the world, the report added. Al Rajhi Capital's set over 20 percent price increase for Ma'aden at SR23.7, and launches coverage of the company with an Overweight rating. Moreover, the report noted that Saudi Ceramic, the only listed ceramics company in Saudi Arabia, has shown good growth over the last couple of years. It noted that the increase in production capacity of ceramic tiles and water heaters by the company, and the continuation of exporting activities should drive further growth over the next three years. The research stressed that the company has high and sustainable profit margins, and a likely increasing focus on ceramic tiles should push margins higher. The report initiates coverage of Saudi Ceramic with an Overweight rating and a target price of SR166.3, or an increase of 19 percent. Commenting on the report, Dr. Saleh Al-Suhaibani, head of Research at Al Rajhi Capital, said: “Our research continues to provide in-depth analysis of key sectors within the Saudi Arabian economy and notable companies within them. Our latest research on the industrial segment of the market, covering Saudi Ceramic and Ma'aden, confirms expected ongoing growth in both the Kingdom's ceramics manufacturing industry, with Saudi Ceramic holding a very strong position as the major local player, as well as further anticipated growth in the mining sector, where Ma'aden continues to be a key player that should help drive Saudi Arabia's industrial and non-oil growth.”
