RESEARCH REPO RT DI STRI BUTED BY

The attached research report and the excerpts

from the research report below were written
entirely by a broker partner of Auerbach
Grayson, and not by Auerbach Grayson.
Auerbach Grayson is distributing/providing this
research report for your consideration.
PREPARED BY
EQUITY RESEARCH

Company Report

Saudi Arabia

Other Specialty Retail

Jarir Marketing Company BUY

October 12, 2023

Operational margins surprise and deliver a strong EPS beat.
Price: SAR 19.00
We raise our TP by 3.8% to SAR 19 and maintain Buy
Bloomberg: > Operational margins surprise and deliver a strong EPS beat. We raise our TP by 3.8%
[JARIR AB] to SAR 19 and maintain Buy;
Market Cap:
USD 4,626.00 m
> Revenues grow +4.8% y/y driven by the computers/video games segments, in line
with market estimates (-2%/-1% vs. BBG/ACe).
Outstanding Shares:
1,200.00 m > Operational margins positively surprise at 12.0% (+4.4ppts/+3.0ppts vs. BBG/ACe;
+0.4ppts y/y) on i) improved sales mix, and ii) reduced promotions/marketing, lifting
Six Month Avg. EBIT by +9% y/y (+54%/+37% vs. BBG/ ACe).
Daily Trading vol.
(USD m): 9.08 > EPS rebounds +8.2% y/y as operational growth filters through, delivering a 41%/20%
52 week High/Low:
strong beat vs. our estimates/street.
SAR 17.62 / SAR 14.00
> We are upbeat about the Q3 rebound in profitability for discretionary retailers and see
Jarir FY 23e EBITm at 9.4% (+60bps vs. previously). We raise our FY 23e EPS by
+9%, with a modest +3% increase for FY 24-25e.

> Jarir trades at FY 23/24e P/E of 17.9x/15.4x, at a c.10% discount to its 3- year
average. We slightly increase our TP by 3.3% to SAR 18.9 and maintain our Buy
rating, with a 31% upside.

> Q3 revenues arrive largely in line with estimates, registering a growth of +4.8% y/y
driven by the PC/video games segment: Q3 revenue came in at SAR 2.64bn,
reflecting a +4.8% y/y growth (+8% q/q with support from back-to-school season), and
coming essentially in line with estimates (-2%/-1% vs. BBG/ACe).

> As per management commentary, growth is supported by several segments, and

computers/video games.

IMPORTANT DISCLOSURE ON LAST PAGE

YOUR LOCAL BROKER

IN OVER 125 MARKETS Auerbach Grayson & Company, LLC
WORLDWIDE 20 West 55th Street New York, NY 10019 Telephone 212 557 4444 Toll-Free 1 800 31world www.agco.com
 Q3 23A Results Review &
Model Update
October 12 2023

Aly Adel Ziad Itani, CFA

aly.adel@arqaamsecurities.com ziad.itani@arqaamcapital.com
+201227884064 +971 4 507 1722
Ziad Itani, CFA

Jarir Marketing Company

Operational margins surprise and deliver a strong EPS beat.
BUY SAR 19.0
We raise our TP by 3.8% to SAR 19 and maintain Buy Retailers / KSA
• Revenues grow +4.8% y/y driven by the computers/video games segments,
in line with market estimates (-2%/-1% vs. BBG/ACe). Bloomberg code JARIR AB
• Operational margins positively surprise at 12.0% (+4.4ppts/+3.0ppts vs. Market index SASEIDX
Target Price 19.0

n
BBG/ACe; +0.4ppts y/y) on i) improved sales mix, and ii) reduced
Upside (%) 31.4

tio
promotions/marketing, lifting EBIT by +9% y/y (+54%/+37% vs. BBG/ ACe).
• EPS rebounds +8.2% y/y as operational growth filters through, delivering a Market data 10/9/2023
41%/20% strong beat vs. our estimates/street.

ibu
Last closing price 14.5
• We are upbeat about the Q3 rebound in profitability for discretionary 52 Week range 14.0-17.8
Market cap (SAR m) 17,352
retailers and see Jarir FY 23e EBITm at 9.4% (+60bps vs. previously). We
Market cap (USD m) 4,626

so str
raise our FY 23e EPS by +9%, with a modest +3% increase for FY 24-25e. Average Daily Traded Value (SAR m) 33.0
• Jarir trades at FY 23/24e P/E of 17.9x/15.4x, at a c.10% discount to its 3- Average Daily Traded Value (USD m) 8.9
year average. We slightly increase our TP by 3.3% to SAR 18.9 and maintain
ay Di
Free float (%) 73%
our Buy rating, with a 31% upside. n
Q3 revenues arrive largely in line with estimates, registering a growth of +4.8% y/y
Gr rch

Year-end (local m) 2022 2023e 2024e 2025e

driven by the PC/video games segment: Q3 revenue came in at SAR 2.64bn, Revenues 9,391.7 10,524.8 11,059.1 11,637.4
reflecting a +4.8% y/y growth (+8% q/q with support from back-to-school season), EBITDA 1,128.8 1,161.8 1,329.8 1,516.0
and coming essentially in line with estimates (-2%/-1% vs. BBG/ACe). As per Net income 969.8 966.7 1,124.1 1,299.5
ch ea

management commentary, growth is supported by several segments, and EPS 0.81 0.81 0.94 1.08
P/E (current price) 17.9 17.9 15.4 13.4
computers/video games. We also suspect a positive impact from 1 week of iPhone
BVPS 1.50 1.53 1.57 1.63
ba s

15 sales (end of Sept). Jarir opened 1 new showroom in Jeddah, bringing the total P/B (current price) 9.6 9.5 9.2 8.9
er Re

number of showrooms to 71 by the end of Sept-23 (total 3 new openings in 9M 23A). EV/EBITDA (x) 16.1 15.7 13.7 12.0
GPm positively surprises at 14.6%, reflecting a strong sequential recovery (+4.7 Div. yield (%) 5.3 5.4 6.2 7.1
FCF yield (%) 11.9 9.6 11.0 12.0
ppts) from a record low in Q2: GP grew 3.3% y/y to SAR 384m, delivering a strong
Net Debt/EBITDA (x) (0.5) (0.5) (0.5) (0.5)
Au CO

beat (+25% vs. ACe) as GPm positively surprises at 14.6% (+3.1ppts vs. ACe). The Net Debt/Capital (%) (29.2) (29.0) (32.0) (35.3)
strong recovery in GPm (+4.7ppts q/q) is due to i) a better sales mix towards higher Interest cover (x) 23.6 21.6 25.2 29.3
margin segments (i.e., stationary on back-to-school season), and ii) reduced sales RoAA (%) 23.2 22.2 25.0 28.2
AG

promotions (discounts at avg 15%-20% for computers and 25%-30% for RoAE (%) 54.3 53.2 60.5 67.7
smartphones during Q3 vs. 25%-35% avg discount in Q2, as implied by Jarir website). RoIC (%) 37.8 37.7 43.0 48.7
The expansion in GPm trickled down to a 0.4ppts y/y (+4.8ppts q/q) expansion in
EBITm to 12.0% (+4.4ppts/+3.0ppts vs. BBG/ACe), further supported by lower selling
and marketing expenses, lifting EBIT by +9% y/y.
EPS delivers a strong beat as operational outperformance filters through. The
reduced sales discounts and better sales mix filtered into a net profit growth of 8.2%
y/y (+90.2% q/q) to SAR 296m, beating estimates (+20%/+41% vs. BBG/ACe). EPS
was also supported by higher auxiliary income.
We lift our FY 23e EPS by +9%, and by 2% for FY24-25e: We continue to expect a
drop in FY 23e GPm as promotions in Q2 weigh down on full-year margins, but at a Price Performance
softer pace (-1.3ppts y/y vs. -3.4ppts previously) following Q3 recovery. We see FY
117 JARIR AB SASEIDX
23e EPS flat y/y on cost optimization initiatives (selling /marketing). We expect
109
operating margins to revert to pre-C19 levels by FY 25e.
101
We slightly increase our TP by 3.8% to SAR 19.0 (+31% vs. CMP) and maintain our 93
Buy rating. Jarir trades at FY23/24e P/E of 17.9x/15.4x, a c.10% discount to its 3-year 85
average (but +10% vs. regional retailers, which we find warranted on superior 77
returns and fast margin repair). We also see support from stable dividend payments Oct-22 Jan-23 Apr-23 Jul-23

at an average 5%-6% yield. While we remain cautious about a soft recovery in school
supplies sales, we are upbeat about market size growth, the introduction of new © Copyright 2019, Arqaam Capital Limited. All Rights Reserved.
SKUs, Jarir’s B/S strength, and reduced competition in the electronics market. See Important Notice.
 October 12 2023

Abacus Arqaam Capital Fundamental Data Jarir Marketing Co

Year-end 2021 2022 2023e 2024e 2025e 2026e
Financial summary
Profitability
Reported EPS 0.83 0.81 0.81 0.94 1.08 1.16
15%
Diluted EPS 0.83 0.81 0.81 0.94 1.08 1.16
10%
DPS 0.79 0.77 0.78 0.89 1.03 1.10
5% BVPS 1.47 1.50 1.53 1.57 1.63 1.68
0% Weighted average shares 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00 1,200.00
2022 2023e 2024e 2025e 2026e
Average market cap 17,352.00 17,352.00 17,352.00 17,352.00 17,352.00 17,352.00
EBITDA Margin Net Margin

Year-end 2021 2022 2023e 2024e 2025e 2026e

Growth Valuation metrics

n
P/E (x) (current price) 17.5 17.9 17.9 15.4 13.4 12.5

tio
20%
P/E (x) (target price) 23.0 23.5 23.6 20.3 17.5 16.4
10% EV/EBITDA (x) (current price) 16.3 16.1 15.7 13.7 12.0 11.3

ibu
EV/EBITDA (x) (target price) 18.9 18.7 18.2 15.9 13.9 13.1
0%
EV/FCF (x) 15.7 20.4 22.5 18.7 16.3 15.2
2022 2023e 2024e 2025e 2026e

so str
Free cash flow yield (%) 16.0 11.9 9.6 11.0 12.0 12.3
Revenues EBIT
Dividend yield (%) 5.5 5.3 5.4 6.2 7.1 7.6
ay Di
Gearing
Year-end 2021 2022 2023e 2024e 2025e 2026e
n
Gr rch

0% -0.4x Growth (%)

-20% Revenues (2.3) 3.3 12.1 5.1 5.2 4.5
-40% EBITDA (7.7) 1.1 2.9 14.5 14.0 6.5
ch ea

-60% -0.6x
EBIT (8.7) 0.1 2.7 16.2 15.6 6.8
2022 2023e 2024e 2025e 2026e Net income (1.1) (2.2) (0.3) 16.3 15.6 6.9
ba s

Net Debt/Capital Net Debt/EBITDA

er Re

Year-end 2021 2022 2023e 2024e 2025e 2026e

Margins (%)
Valuation
Au CO

EBITDA 12.3 12.0 11.0 12.0 13.0 13.3

20x
EBIT 10.6 10.2 9.4 10.4 11.4 11.6
Net 10.9 10.3 9.2 10.2 11.2 11.4
10x
AG

0x
Year-end 2021 2022 2023e 2024e 2025e 2026e
2022 2023e 2024e 2025e 2026e
Returns (%)
P/E P/E Sector
RoAA 24.5 23.2 22.2 25.0 28.2 29.4
RoAE 56.8 54.3 53.2 60.5 67.7 70.0
RoIC 38.7 37.8 37.7 43.0 48.7 51.2
Return
FCF margin 16.0 11.9 9.6 11.0 12.0 12.3
100%

50%
Year-end 2021 2022 2023e 2024e 2025e 2026e
Gearing (%)
0%
2022 2023e 2024e 2025e 2026e Net debt/Capital (24.4) (29.2) (29.0) (32.0) (35.3) (38.8)
Net debt/Equity (24.4) (29.2) (29.0) (32.0) (35.3) (38.8)
ROIC ROE
Interest cover (x) 22.7 23.6 21.6 25.2 29.3 32.0
Net debt/EBITDA (x) (0.4) (0.5) (0.5) (0.5) (0.5) (0.5)

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 2
 October 12 2023

Abacus Arqaam Capital Fundamental Data Jarir Marketing Co

Year-end 2021 2022 2023e 2024e 2025e 2026e
Income statement (SAR mn)
Sales revenue 9,088 9,392 10,525 11,059 11,637 12,165
Company Profile Cost of sales (7,859) (8,104) (9,223) (9,571) (9,956) (10,379)
Jarir Marketing was established in 1974 and Gross profit 1,229 1,287 1,302 1,488 1,681 1,786
primarily engages in the retail and wholesale of IT SG&A (268) (326) (314) (341) (355) (369)
and office products in Saudi Arabia and the GCC EBIT 961 962 987 1,148 1,326 1,417
region. Its inventory includes school supplies, Add back: Dep & Amort. 155 167 174 182 190 197
children’s toys, books, office furniture, engineering
EBITDA 1,116 1,129 1,162 1,330 1,516 1,614
tools, sports and equipment, computer systems and
Associates/affiliates - - - - - -
related software. Jarir operates 71 retail
Finance costs (42) (41) (46) (46) (45) (44)
showrooms spread across >220k sqft of selling
space, along with 5 wholesale showrooms and 7 Other pre-tax income/(expense) 100 57 50 51 52 53

n
sales offices. Saudi Arabia contributes 92% of Profit before tax 1,019 978 992 1,153 1,333 1,426

tio
aggregate sales. Jarir is now second to amazon in Taxes (27) (8) (25) (29) (34) (36)
terms of online customer acquisition in KSA – online Net profit (group) 992 970 967 1,124 1,299 1,390

ibu
sales now constitute >20 % of sales. Minorities - - - - - -
Net profit (parent) 992 970 967 1,124 1,299 1,390
Arqaam adjustments (including dilution) - - - - - -

so str
Ownership structure Arqaam Net profit 992 970 967 1,124 1,299 1,390
Shareholders %
ay Di
Jarir Investment 21.8% Year-end 2021 2022 2023e 2024e 2025e 2026e
Public 78.2%
n Balance sheet (SAR mn)
Gr rch

Cash and equivalents 432 526 530 604 689 785

Receivables 401 488 519 545 574 600
Inventories 1,235 1,319 1,499 1,556 1,618 1,687
ch ea

Tangible fixed assets 1,083 1,015 1,053 1,091 1,125 1,156

Other assets including goodwill 961 908 833 750 658 557
ba s

Total assets 4,112 4,257 4,434 4,545 4,664 4,785

er Re

Payables 1,421 1,477 1,624 1,686 1,753 1,828

Interest bearing debt - - - - - -
Other liabilities 922 979 979 973 959 936
Au CO

Total liabilities 2,343 2,456 2,604 2,659 2,712 2,764

Shareholders equity 1,769 1,802 1,831 1,887 1,952 2,021
Minorities - - - - - -
AG

Total liabilities & shareholders equity 4,112 4,257 4,434 4,545 4,664 4,785

Year-end 2021 2022 2023e 2024e 2025e 2026e

Cash flow (SAR mn)
Cashflow from operations 1,428 999 1,123 1,330 1,511 1,611
Net capex 24 122 (111) (114) (114) (114)
Free cash flow 1,451 1,120 1,013 1,216 1,397 1,497
Equity raised/(bought back) - - - - - -
Dividends paid (948) (924) (938) (1,068) (1,235) (1,320)
Net inc/(dec) in borrowings (100) - - - - -
Other investing/financing cash flows - - - - - -
Net cash flow 335 93 4 74 85 96
Change in working capital 320 (123) (63) (22) (23) (20)

Aly Adel Ziad Itani, CFA

aly.adel@arqaamsecurities.com ziad.itani@arqaamcapital.com
+201227884064 +971 4 507 1722

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 3
 October 12 2023

JARIR AB Q2 23A preliminary results

Revenue: SAR 2,639m (+4.8% y/y, +8.3% q/q, -1.1 vs. ACe)
Gross profit: SAR 384m (+3.3% y/y, +60.5% q/q, +25.3 vs. ACe)
EBIT: SAR 316m (+8.5% y/y, +80.8% q/q, +36.8 vs. ACe)
Net income: SAR 296m (+8.2% y/y, +90.2% q/q, +41.1 vs. ACe)

Exhibit 1: JARIR AB Q2 23ª prelim results

BBG
(SARm) Q3 23A ACe vs. ACe vs. BBG Q3 22A y/y Q2 23A q/q 9M 23A 9M 22A y/y
consensus
Revenue 2,639 2,668 (1%) 2,693 (2%) 2,517 5% 2,436 8% 7,792 6,814 14%
Gross profit 384 307 25% -- n/a 372 3% 240 60% 948 946 0%
EBIT 316 231 37% 205 54% 291 9% 175 81% 755 751 1%

n
Net income 296 210 41% 248 20% 274 8% 156 90% 700 702 (0%)

tio
GPm 14.6% 11.5% 3.1 ppts n/a n/a 14.8% -0.2 ppts 9.8% 4.7 ppts 12.2% 13.9% -1.7 ppts

ibu
EBITm 12.0% 8.7% 3.3 ppts 7.6% 4.4 ppts 11.6% 0.4 ppts 7.2% 4.8 ppts 9.7% 11.0% -1.3 ppts
NPm 11.2% 7.9% 3.4 ppts 9.2% 2.0 ppts 10.9% 0.3 ppts 6.4% 4.8 ppts 9.0% 10.3% -1.3 ppts

so str
Source: Company Data, Arqaam Capital Research, Bloomberg
ay Di
n
Gr rch
ch ea
ba s
er Re
Au CO
AG

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 4
 October 12 2023

Valuation: We raised our 12M TP by 3.8% to SAR 19.0

Exhibit 2: KPIs & DCF valuation summary for Jarir
FY 20A FY 21A FY 22A FY 23e FY 24e FY 25e FY 26e FY 27e
Retail revenue 9,306 9,088 9,392 10,525 11,059 11,637 12,165 12,693
y/y (G) (2.3%) 3.3% 12.1% 5.1% 5.2% 4.5% 4.3%
No. of stores 53 59 59 61 65 69 73 77
Avg Rev / sqm (SAR) 43,303 39,234 40,547 43,508 43,799 44,233 44,449 44,650
Gross Profit 1,329 1,229 1,287 1,302 1,488 1,681 1,786 1,881
GPm (%) 14.3% 13.5% 13.7% 12.4% 13.5% 14.4% 14.7% 14.8%
SG&A (276) (268) (326) (314) (341) (355) (369) (384)

n
SG&A % of top line 3.0% 3.0% 3.5% 3.0% 3.1% 3.1% 3.0% 3.0%

tio
EBIT 1,053 961 962 987 1,148 1,326 1,417 1,497
EBITm (%) 11.3% 10.6% 10.2% 9.4% 10.4% 11.4% 11.6% 11.8%

ibu
EBITDA 1,210 1,116 1,129 1,162 1,330 1,516 1,614 1,702
(-) Rent
so str
(+) other income
(123)
48
(153)
100
(68)
57
(71)
50
(74)
51
(78)
52
(81)
53
(84)
54
ay Di
(-) WC 176 320 (123) (63) (22) (23) (20) (20)
(-) CapEx, net of disposals (95) 24 122 (111) (114) (114) (114) (114)
n
Gr rch

(-) Tax (49) (27) (8) (25) (29) (34) (36) (38)
FCFF 1,166 1,380 1,108 942 1,142 1,320 1,416 1,500
Stub period FCF 206 1,142 1,320 1,416 1,500
ch ea

Discount factors using WACC at 9.9% 0.98 0.89 0.81 0.74 0.67
ba s

PV FCFF 202 1,017 1,070 1,045 1,007

er Re

Terminal value (G @3.70%) 25,010

PV of TV 16,780
Au CO

Sum of PV FCFF 4,340

PV TV 16,780
AG

Enterprise value (EV) 21,120

Borrowings 370
Cash 218
Other (168)
Equity value 20,800
NOSH (m) 1,200
DCF value/share 17.3
12M Target Price (TP) 19.0
Source: Company Data, Arqaam Capital Research

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 5
 October 12 2023

Exhibit 3: We raise our FY 23-25e EPS estimate by 5% as we incorporate Q3 operational recovery

FY 23e FY 24e FY 25e
Income statement (SAR m) Old New %Δ Old New %Δ Old New %Δ
Revenues 10,525 10,525 --% 11,059 11,059 --% 11,637 11,637 --%
Gross profit 1,264 1,302 3% 1,484 1,488 0% 1,677 1,681 0%
EBITDA 1,101 1,162 6% 1,314 1,330 1% 1,500 1,516 1%
EBIT 927 987 7% 1,132 1,148 1% 1,310 1,326 1%
Net Income 886 967 9% 1,096 1,124 3% 1,271 1,299 2%
Revenue growth 12% 12% --% 5% 5% --% 5% 5% --%
EPS growth 8% 9% 1% 10% 10% 0% 11% 11% 0%

Margins Old New %Δ Old New %Δ Old New %Δ

n
GPm 12.0% 12.4% 0.4% 13.4% 13.5% 0.0% 14.4% 14.4% 0.0%

tio
EBITm 8.8% 9.4% 0.6% 10.2% 10.4% 0.1% 11.3% 11.4% 0.1%
EBITDAm 10.5% 11.0% 0.6% 11.9% 12.0% 0.1% 12.9% 13.0% 0.1%

ibu
NPm 8.4% 9.2% 0.8% 9.9% 10.2% 0.2% 10.9% 11.2% 0.2%

so str
Balance sheet (SAR m) Old New %Δ Old New %Δ Old New %Δ
Trade Receivables 519 519 --% 545 545 --% 574 574 --%
ay Di
Trade Payables 1,631 1,624 (0%) 1,686 1,686 (0%) 1,754 1,753 (0%)
Debt n -- -- n/a -- -- n/a -- -- n/a
Equity 1,828 1,831 0% 1,883 1,887 0% 1,946 1,952 0%
Gr rch

Cash flow statement (SAR m) Old New %Δ Old New %Δ Old New %Δ
ch ea

Cash flow from operating activities 1,043 1,123 8% 1,302 1,330 2% 1,482 1,511 2%
Cash flow from investing activities (77) (111) 43% (91) (114) 25% (91) (114) 25%
ba s

Cash flow from financing activities (931) (1,009) 8% (1,116) (1,142) 2% (1,285) (1,312) 2%
er Re

Increase (Decrease) in cash 35 4 (89%) 95 74 (22%) 106 85 (20%)

Leverage and profitability ratios Old New %Δ Old New %Δ Old New %Δ
Au CO

D/E (x) - - 0.0 - - 0.0 - - 0.0

Interest cover (x) 20.3 - n/a 24.8 - n/a 29.0 - n/a
ROE 48.5% 52.8% 4.3% 58.2% 59.6% 1.3% 65.3% 66.6% 1.3%
AG

ROA 20.0% 21.8% 1.8% 24.1% 24.7% 0.6% 27.3% 27.9% 0.6%
RoIC 51.0% 37.7% (13.3%) 60.7% 43.0% (17.7%) 67.6% 48.7% (18.9%)
Source: Company Data, Arqaam Capital Research

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 6
 October 12 2023

Important Notice
1. Author, regulator and responsibility
Arqaam Capital Limited (“Arqaam”) is incorporated in the Dubai International Financial Centre (“DIFC”) and is authorised and regulated by the Dubai Financial Services Authority ("DFSA") to carry on financial services in
and from the DIFC. Arqaam publishes and distributes (i.e. issues) all research.
Arqaam Capital Research Offshore s.a.l. is a specialist research centre in Beirut, Lebanon, which assists in the production of research issued by Arqaam.
2. Purpose
This document is provided for informational purposes only. Nothing contained in this document constitutes investment, legal, tax or other advice or guidance and should be disregarded when considering or making
investment decisions. In preparing this document, Arqaam did not take into account the investment objectives, financial situation and particular needs of any particular person. Accordingly, before acting on this document,
investors should independently evaluate the investments and strategies referred to herein and make their own determination of whether it is appropriate in light of their own financial circumstances and objectives.

3. Rating system
Arqaam investment research is based on the analysis of regional and country economics, industries and company fundamentals. Arqaam company research reflects a long-term (12-month) fair value target for a company
or stock. The ratings bands are:

Buy Total return >15%

Hold 0-15%

n
Sell Total return <0%

tio
In certain circumstances, ratings may differ from those implied by a fair value target using the criteria above. Arqaam policy is to maintain up-to-date fair value targets on the companies under its coverage, reflecting any
material changes to the analyst’s outlook on a company. Share price volatility may cause a stock to move outside the rating range implied by Arqaam’s fair value target. Analysts may not necessarily change their ratings

ibu
if this happens, but are expected to disclose the rationale behind their view to Arqaam clients.

4. Accuracy of information
The information contained in this document is based on current trade, statistical and other public information we consider reliable. We do not represent or warrant that such information is accurate or complete and it
should not be relied upon as such. Any mention of market rumours has been derived from the markets and is not purported to be fact or reflect our opinions. Arqaam has no obligation to update, modify or amend this

so str
document or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. In accordance with Regulation AC of the 1934
Exchange Act, the views expressed in this research report accurately reflect the research analysts’ personal views about the subject securities or issuers and are subject to change without notice. No part of the research
analysts’ compensation is related to the specific recommendations or views in the research report.
ay Di
5. Recipients and sales and marketing restrictions
5.1 Nothing in this document should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction, or to provide any investment advice or
service.
n
5.2 This document is directed at Professional Clients and not Retail Clients within the meaning of DFSA rules. Any investments or financial products referred to herein will only be made available to clients who Arqaam is
Gr rch

satisfied qualifies as Professional Clients. Any other persons in receipt of this document must not rely upon or otherwise act upon it.
5.3 This document is only being distributed to investors who meet certain qualifications and to whom an investment or service may be offered or promoted in accordance with relevant country restrictions. This excludes
the US except for SEC registered broker-dealers (or banks in permissible ”broker” or “dealer” capacity) acting on a principal or agency capacity, and major US institutional investors in accordance with SEC Rules 15a-6(a)(2).
Details of other relevant country restrictions are set out on our website at http://www.arqaamcapital.com/english/system/footer/terms-of-use.aspx. Persons into whose possession this document comes are required to
ch ea

inform themselves about, and observe, such restrictions and should not rely upon or otherwise act upon this document where it is unlawful to make to such person such an offer or invitation or recommendation without
compliance with any authorisation, registration or other legal requirements.
6. Risk warnings
6.1 Any prices, valuations or forecasts are indicative and are not intended to predict actual results, which may differ substantially from those reflected.
ba s

6.2 The value of an investment may go up as well as down. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including, without limitation,
er Re

foreseeable or unforeseeable changes in interest rates, foreign exchange rates, default rates, prepayment rates, political or financial conditions, etc.).
6.3 Past performance is not indicative of future results. Any opinions, estimates, valuations or projections (target prices and ratings in particular) are inherently imprecise and a matter of judgement. They are statements
of opinion and not of fact, based on current expectations, estimates and projections, and rely on beliefs and assumptions. Actual outcomes and returns may differ materially from what is expressed or forecasted. There
are no guarantees of future performance.
Au CO

6.4 Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.
6.5 This document does not propose to identify or to suggest all of the risks (direct or indirect) which may be associated with the investments and strategies referred to herein.
7. Conflict
7.1 Arqaam and its affiliates provide full investment banking services, and they and their directors, officers and employees, may take positions which conflict with the views expressed in this document. Our salespeople,
AG

traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are contrary to the opinions expressed in
this document. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or views expressed in this document.
7.2 Arqaam may have or seek investment banking or other business relationships for which it will receive compensation from the companies that are the subject of this document.
7.3 Facts and views presented in this document have not been reviewed by, and may not reflect information known to, professionals in other Arqaam business areas, including investment banking personnel.
7.4 Emirates NBD PJSC owns 8.32% of Arqaam.
8. No warranty
Arqaam makes no representations or warranties and, to the fullest extent permitted by applicable law, we hereby expressly disclaim any and all express, implied and statutory representations and warranties of any kind,
including, without limitation, any warranty as to accuracy, timeliness, completeness, merchantability, fitness for a particular purpose and/or non-infringement.
9. No liability
Arqaam will accept no liability in any event including (without limitation) negligence for any damages or loss of any kind, including (without limitation) direct, indirect, incidental, special or consequential damages, expenses
or losses arising out of, or in connection with your use or inability to use this document, or in connection with any error, omission, defect, computer virus or system failure, or loss of any profit, goodwill or reputation, even
if expressly advised of the possibility of such loss or damages, arising out of or in connection with your use of this document. We do not exclude our duties or liabilities under binding applicable law.
10. Copyright and Confidentiality
The entire content of this document is subject to copyright with all rights reserved and the information is private and confidential for your own personal use only. This document and the information contained herein may
not be reproduced, distributed or transmitted to any other person or incorporated in any way into another document or other material without our prior written consent.
11. Governing law
English law governs this document and these disclaimers and any dispute in relation thereto shall be exclusively referred to the English Courts.

Jarir Marketing Co © Copyright 2019, Arqaam Capital Limited. All Rights Reserved. See Important Notice. 7
RESEARCH REPORT DISTRIBUTED BY
The attached research report and the
excerpts from the research report found on
the first page were written entirely by a broker
partner of Auerbach Grayson, and not by
Auerbach Grayson

IMPORTANT DISCLOSURE
The attached research report was prepared by the correspondent broker named above, and by the
correspondent broker’s analysts named in the attached report and is dated the date set forth
above. This report was not prepared by Auerbach Grayson & Company.

The correspondent broker and its research analysts are not associated persons of Auerbach Grayson
& Company, nor are they affiliated with Auerbach Grayson & Company. The correspondent broker
named above and its research analysts are not subject to the SEC rules on research analysts. They
are not members of, or registered with, the Financial Industry Regulatory Authority (FINRA). They are
not subject to FINRA’s rules on Debt Research Analysts and Debt Research Reports, Equity Research
Analysts and Equity Research Reports, and the FINRA rules on communications and the attendant
restrictions and disclosures required by those rules.
[If the report is to be distributed to more than Major U S institutional Investors. Auerbach
Grayson & Company accepts responsibility for the contents of this report as provided
for in SEC releases and SEC staff no-action letters.]

All persons receiving the attached report and wishing to buy or sell any of the securities discussed in
the attached research report should do so through a representative of Auerbach Grayson & Company.
Auerbach Grayson & Company will share in the commissions charged for executing such an order.
Auerbach Grayson & Company and its affiliates do not own one per cent (1%) or more of any class of
equity or debt securities of the issuers discussed in the attached report, Auerbach Grayson &
Company and its affiliates have not received any investment banking compensation from any of the
issuers discussed in the attached report in the past twelve months, and do not intend to seek or expect
to receive investment banking compensation from any of the issuers discussed in the attached report
in the next three (3) months. Auerbach Grayson & Company has not acted as manager or co-manager
of any public offering of securities issued by any of the companies discussed in the attached research
report in the past three (3) years. Neither Auerbach Grayson & Company nor any of its officers own
options, rights, or warrants to purchase any of the securities of the issuers discussed in the attached
research report, and Auerbach Grayson & Company and its associated persons do not stand ready to
buy from or sell to any persons, as principal, any of the securities discussed in the attached research
report.

Auerbach Grayson & Company, LLC

20 West 55th Street New York, NY 10019 Telephone 212 557 4444 Toll-Free 1 800 31world web www.agco.com
 Trading +1.212.557.4444 traders@agco.com
Settlements +1.212.557.4478 ops@agco.com
Fax +1.212.557.9066
Toll Free +1.800. 31World

Executive
David S. Grayson Chief Executive Officer 1.212.453.3553 david@agco.com
Angel de la Fuente Managing Director, Head of Equities 1.212.453.3545 adelafuente@agco.com
Kevin Wood Senior Vice President, Head of Trading 1.212.557.4444 kwood@agco.com
Frank Muller Managing Director, Global Operations 1.212.453.3518 fmuller@agco.com

Sales
Richard Cheng Asia Sales 1.212.453.3539 rcheng@agco.com
Hideaki Fukuchi Asia Sales 1.212.453.3541 hfukuchi@agco.com
Abhijit Kukreja Asia Sales 1.212.453.3561 akukreja@agco.com
Ayako Hirose Asia Sales 1.212.453.3251 ahirose@agco.com
Simon Mandel CEEMEA & LATAM Sales 1.212.453.3571 smandel@agco.com
Jinjoo Hong Global Sales 1.212.453.3509 jhong@agco.com
Nicolai Lund Global Sales 1.212.453.3538 nlund@agco.com
Steven Pollicino Africa Specialist Sales 1.212.557.4444 spollicino@agco.com

Trading
Todd Hathaway Asia Trading 1.212.557.4444 thathaway@agco.com
Mike LoPiano Asia Trading 1.212.557.4444 mikelopiano@agco.com
John Krase Emerging Market Trading 1.212.557.4444 jkrase@agco.com
Steven Pollicino Emerging Market Trading 1.212.557.4444 spollicino@agco.com
Geoffrey Gimber US & LATAM Trading 1.212.557.4444 ggimber@agco.com
Paul Kapassakis Western Europe Trading 1.212.557. 4444 pkapassakis@agco.com

Capital Markets
Nikhil Bhatnagar Executive Director of Capital Markets 1.212.453.3573 nbhatnagar@agco.com
Alina Sychova Executive Director of Capital Markets 1.212.453.3579 asychova@agco.com

Trading Desk Hours (New York Time) – Sunday 4:00 pm to Friday 5:00 pm (24 Hours)
*After trading hours, please call 1.212.557.4444 and you will automatically be connected to a trader.

Research
Research Coordinator 1.212.453.3549 research@agco.com
Information Services
Ismael Sadek Information Technology 1.212.453.3512 it@agco.com
Settlement 1.212.557.4478 ops@agco.com

YOUR LOCAL BROKER

IN OVER 125 MARKETS Auerbach Grayson & Company, LLC
WORLDWIDE 20 West 55th Street New York, NY 10019 Telephone 212 557 4444 Toll-Free 1 800 31world web www.agco.com