Awah Share: Comprehensive Analysis of Ha'il Cement Company

Ha'il Cement Company was established in the 1970s and is one of the leading Saudi companies in the manufacturing and marketing of cement. The company's headquarters is located in Ha'il, and it focuses on producing various types of Portland cement and other cement products that meet the needs of construction projects in the Kingdom. Ha'il Cement's share falls under the materials and basic goods sector – cement and concrete within the Saudi financial market (Tadawul) and carries the symbol 3001. The company is considered a medium player in the sector, with an annual production capacity of approximately 1.5 million tons, playing an important role in supporting infrastructure and urban development projects in the Kingdom, especially in the north. Since its listing on the main market, the company has contributed to the growth of the construction sector, with direct support for major projects such as the Kingdom's Vision 2030. The company features a strong capital base of 1.0 billion SAR, distributed over 100 million shares with a nominal value of 10 SAR per share. This financial structure reflects the company's ability to sustain itself despite sector challenges and increasing competition.

The share of Ha'il Cement Company is traded on the main market in Tadawul under the symbol 3001. The stock occupies a position in the basic materials sector, making it part of the main indicators of the Saudi market's performance, such as the TASI index. The stock's performance reflects the state of the cement sector in the Kingdom, as it is directly affected by fluctuations in demand for building materials and developments in government and private projects. Historically, the stock has experienced moderate price fluctuations, with its price ranging between 11 and 12 SAR in the first quarter of 2024. The liquidity of the stock remains moderate compared to larger companies in the sector, making it more susceptible to the impacts of economic and sectoral factors than some larger firms. All stock data and updates can be accessed via the official stock page on SIGMIX: /stocks/3001/.

Recent financial data for Ha'il Cement Company (Awah share) reflects a stable situation with some challenges. The last recorded share price was approximately 11.60 SAR, with a market value of around 1.136 billion SAR. The company's net profit for the first quarter of 2024 was 15 million SAR, down 19% from the same period last year. Despite this decline, the company's performance showed improvement compared to the fourth quarter of 2023, which ended with slight losses. The approximate price-to-earnings (P/E) ratio is around 46-47 times, which is high and reflects either expectations of profit improvement or a decline in current profits. Regarding distributions, the company announced a cash dividend of 3.5% of the nominal value of the share for the fourth quarter of 2023 profits, representing a cash yield of about 3% at the current share price. The company has not announced new distributions for future periods as of the time of the update due to ongoing acquisition procedures.

The price-to-earnings (P/E) ratio is one of the most important financial indicators used in stock valuation. For Ha'il Cement share, the current P/E ratio is approximately 46-47 times based on 2023 earnings and the current market value. This figure is high compared to the sector average, due to the decline in net profits, which increases the value of the ratio. A high P/E ratio generally indicates that the market expects an improvement in the company's profitability in the future or that the stock is priced above the sector average. In terms of dividend yield, it was around 3% in the last announced distribution, where the company distributed 0.35 SAR per share for the fourth quarter of 2023 profits. This yield represents a relative attraction for investors seeking fixed income, but it is important to note that distributions are limited due to fluctuating profitability.

The company has not released detailed data on sales volume and revenue for the second quarter of 2024, but sector reports indicate that cement sales volumes in Saudi Arabia remained stable at 4.19 million tons by the end of May 2024, with no significant changes from the previous year. Ha'il Cement's market share of this production is likely between 7% and 8%, placing it in a medium rank among local companies. This performance reflects challenges in increasing market share due to intense competition and saturation in some regional markets. At the same time, the company remains capable of meeting local demand for major projects, especially in the north. The stability of sales affects the company's ability to achieve sustainable profits and periodic distributions.

Dividends are an important factor that investors consider when monitoring stocks listed in the cement sector. Ha'il Cement Company announced a cash dividend of 3.5% of the nominal value of the share (0.35 SAR per share) for the fourth quarter of 2023 profits. These distributions were paid to shareholders in March 2024 after being approved at the general assembly. This cash yield is relatively attractive in a sector characterized by medium to low distributions. The company has not announced new distributions for 2024 yet, which is linked to ongoing acquisition procedures by Qassim Cement Company. It is noteworthy that the continuity of distributions is contingent on the company's financial performance and future plans following the merger.

Ha'il Cement share operates in a sector with many major companies such as Qassim Cement (7090), Najran Cement, Yanbu Cement, Saudi Cement, Southern Cement, and others. Qassim Cement is one of the most prominent and largest competitors, currently in the process of acquiring Ha'il Cement. In terms of market capitalization, Ha'il Cement is considered a medium-sized company, with a market value of around 1.1 billion SAR, compared to larger companies in the sector ranging from 4 to 6 billion SAR. The company faces strong competition in pricing and market share, especially as some firms are expanding into exports or increasing production capacity. The performance of Awah share reflects its sensitivity to general sector movements, and limited trading volume increases the stock's sensitivity to news and sector events.

The performance of Awah share is closely linked to several economic and sectoral factors, the most important of which are local demand for cement and major government projects such as "Neom" and housing programs. Energy and fuel prices, along with increased competition following the entry of new production lines, affect production costs and profit margins. Conversely, government policies supporting infrastructure projects provide positive opportunities for the sector in the medium to long term. However, the local market remains relatively saturated, making it difficult to achieve significant growth in sales and profits in the short term. Hence, the importance of studying financial indicators and sector performance before evaluating the stock.

Ha'il Cement share has witnessed pivotal developments in the first half of 2024, the most notable being Qassim Cement Company's announcement of its full acquisition of all Ha'il Cement shares. Trading of Ha'il share was suspended in June 2024 to initiate delisting procedures from the Saudi financial market. Under the acquisition deal, each Ha'il share holder will receive 0.5 shares of Qassim Cement for each share they own. The boards of directors of both companies and the general assemblies approved the deal, paving the way for the merger and Ha'il's integration into a larger entity. Completion of all regulatory approvals and final conditions is awaited before the stock is officially delisted. This step reflects trends in the cement sector towards mergers to enhance efficiency and reduce costs.

The expected acquisition of Ha'il Cement significantly affects the company's shareholders. Upon completion of the deal, Ha'il shares will be exchanged for shares in Qassim Cement according to a specified exchange mechanism. Shareholders will become part of a larger company in terms of production and marketing capabilities, with greater potential for achieving economies of scale and improving profitability. The price of Ha'il share experienced relative stability prior to the acquisition announcement, then trading was suspended after the announcement. It is important for stock followers to understand that Ha'il share will cease trading and be delisted after the merger procedures are completed. Official disclosures should be monitored for details on the transaction timeline and share conversion mechanism.

The Saudi cement sector experienced mixed performance in the first half of 2024, as sales volumes maintained their levels while total profits declined by 11% from expectations in the second quarter. Aggregate profits for sector companies reached about 1.34 billion SAR in the first half, while rising to 2 billion SAR during the first nine months of the year. Intense competition and increased supply are pressing factors on companies' profit margins, despite stable demand for cement. This indicates a competitive environment requiring companies to enhance operational efficiency and seek additional income sources. Mergers and acquisitions come as a tool to adapt to these challenges.

Ha'il Cement Company has a capital base of 1 billion SAR, distributed over 100 million shares with a nominal value of 10 SAR each. The actual number of outstanding shares is approximately 97.8 million shares, according to the latest update on market value and share price. This capital structure reflects the company's ability to implement its operational and expansion plans, despite challenges related to profit levels and market fluctuations. This structure also affects indicators such as earnings per share and cash distribution rates.

To obtain the latest data and reports on Ha'il Cement share (Awah), it is always advisable to rely on official and accredited sources. The official website of the Saudi financial market (Tadawul) is among the foremost, providing real-time data on share price, trading volumes, and regulatory disclosures. The Argaam website is also an important reference for financial news and analytical reports on the company's performance and the sector. Additionally, investors can benefit from financial analysts' reports and follow news from general assemblies and accredited press disclosures. It is crucial to verify the accuracy of information and not rely on rumors or unverified news, especially during major transitions such as acquisitions and mergers.