SMNPowerHoldingSAOG

UnderTransformation

OfferPrice:RO3.520Outlook:Subscribe

SMNPowerHoldingIPO

SMNPowerHoldingSteadyCashflow,Dividendplay

Outlook:Subscribe

IPORating:Average

Utilitiesplayprovidingfixedreturns

Bestportfoliofitforlowriskappetiteinvestors
Fairvaluefactoringforhigherdividendpayouts

Issueforlowriskappetiteinvestors

September26,2011

Asacombinedentityoftwoprojectcompanies,theSMNPowerHoldingSAOG (undertransformation) owns

thelargestpowergenerationcapacitiesinSultanateofOman.Keypromotersofthecompanyinclude

Kahrabel (fully owned subsidiary of International Power), Mubadala Power Holding Co and the National
TradingCo.

Power demand to remain intact: As per the latest seven year projections (201117) of OPWP, the

averageelectricitydemandinMainInterconnectedSystem(MIS)isestimatedtogrowfrom1,924MW

in 2010 to 3,464 MW in 2017, reporting a CAGR of about 8.8%. Key drivers for demand include the

estimated economic growth, investment in various tourism projects along with the development of

variousindustrialhubsinSohar,SurandDuqm.

Steadycashflowgeneration:AsperthePPA,therevenueofthecompanyisfixedthroughthePower

andwaterPurchaseagreement(PWPA)withthesingleofftaker,OmanPowerandWaterProcurement

Co(OPWP).Owingtothis,webelievethatthecompanyhasastrongrevenuevisibilityprovidingstable

andreliablecashflowgenerationovertheprojectperiod,whichprovidescomforttotheinvestors.

Strong shareholder support: The presence of robust shareholder strength for SMN Power Holding in

the form of International PowerGDF Suez, parent of Kahrabel, which is one of the leaders in global

independent power generation with 72,360 MW (gross) 42,225 MW (net) in operations across the
world. Added, Kahrabel / International Power are the largest private power and water producers in

Oman.

OutlookSteadycashflow,DividendPlay

Overall the stable industry performance along with the steady cash flow generation in the Utilities
KanagaSundar

sectormakestheissueanattractivedividendplay.WeratetheSMNPowerHoldingIPOasanaverage
sundar@gbcmoman.net
+96824790614Ext:534

issueinourratingsalewiththefairvaluefactoringforhigherdividendpayouts.BasedonourValuation

methodologies(DividendDiscountModel),wehavearrivedatourfairvalueofRO3.877forSMNPower.

VijaySridharan

vijay@gbcmoman.net
Werecommendthelowriskappetiteinvestorstosubscribefortheissuewiththemediumtolongterm
+96824790614Ext:533

horizon.We alsobelievethattheissuewould beabestfitforlong only fundsand institutions. We

expect the issue to see limited upside on listing, however considering the dividend yield we
AbdulazizAlLawati

abdulaziz@gbcmoman.net
recommendtosubscribefortheissue.
+96824790614Ext:570

2|PageOmanEquityResearch

SMNPowerHoldingIPO

Index

PageNo

IssueHighlights..
4

ShareholdingDetails..
6

Backgroundofthecompany.
7

EconomicOutlook
8

OmanPowerSectorAnintroduction..
9

InvestmentRationale.
11

RisksandConcerns.
14

ConcernsonPostPPAvaluation.
15

ValuationsandRecommendations.....
16

Outlook...
20

FinancialSummary..
21

3|PageOmanEquityResearch

SMNPowerHoldingIPO

OfferDetails

Table1:TermSheet

IssueDetails
NameoftheCompany
AuthorizedCapital
NominalValue
IssuedandPaidCapital(Pre&PostIPO)
NumberofSharesOfferedforsubscription
PurposeoftheIPO

Allocation

ProposedAllocation

OfferPriceforeachShare
Source:IPOProspectus,GBCMResearch

KeyTerms

Totalforeignownershipfollowinglistingshallnot

exceed70%ofthepaidupsharecapital.

AllGCCnationalsaretreatedasOmaninationalsin
respectofownershipofandtradinginshares.
CategoryI RetailInvestors

60%oftheOffer(4.192millionshares),forindividuals

andjuristicpersonsapplyingforamaximumof5,000

Shares.

CategoryIIInstitutionalInvestors

40%oftheOffer(2.795millionShares),forindividuals

andjuristicpersonsapplyingformorethan5,100

Shares.

AnyundersubscriptioninanyCategoryshallbecarried

overtotheotherCategory

RO3.520OfferpriceofRO3.500plus20Baizas
towardsIssueExpenses

4|PageOmanEquityResearch

SMNPowerHoldingSAOG(undertransformation).The

companyistheholdingcompanyofthetwopower

projects.

RO70.00million
RO1.000

RO19.964million

35%(6.987millionshares) oftheCompanystotalshare

capitalaspertheobligationsstipulated.
ComplywiththelistingobligationsstipulatedinPFA
Requires35%availableforpublicsubscription

OpentoOmaniandNonOmaniInvestors

TermSheetdetailscontd

IssueDetails
TotalOfferSize

MinimumLimitfortheSubscription

MaximumLimitfortheSubscription

OfferOpeningDate
OfferClosingDate
ApprovalofCMwithregardstoallotment
ListingofSharesinMSM

SellingShareholders

SubscriptionBanks

Source:IPOProspectus,GBCMResearch

SMNPowerHoldingIPO

KeyTerms

RO24.595million

CategoryI:100Sharesandinmultiplesof100
thereafter

CategoryII:5,100Sharesandinmultiplesof100

thereafter

Allotmentwouldbeonaproportionatebasis

CategoryI:5,000Shares

CategoryII:10%ofthetotalOffersizerepresenting

698,725shares

Allotmentwouldbeonaproportionatebasis

11September2011

10October2011

22October2011

25October2011

KahrabelFZE(47.5%oftheoffershares)
MubadalaPowerHolding(47.5%oftheoffer)
NationalTradingCo(5%oftheoffer)

BankMuscat

NationalBankofOman

OmanArabBank

5|PageOmanEquityResearch

SMNPowerHoldingIPO

%Holding

ShareHoldingPatternPreIPO

S.No

Shareholder

KahrabelFZE

47.50%

MubadalaPowerHolding

36.63%

MDCIndustryHolding

10.88%

NationalTradingCo

5.00%

Source:IPOProspectus,GBCMResearch

ShareHoldingPatternPostIPO

S.No

Shareholder

%Holding

KahrabelFZE

30.88%

MubadalaPowerHolding

20.00%

MDCIndustryHolding

10.88%

NationalTradingCo

3.25%

Public

35.00%

Source:IPOProspectus,GBCMResearch

Graph1:PreIPOShareholding

Graph2:PostIPOShareholding

5.00%
30.88%
10.88%
35.00%
47.50%

36.63%
20.00%

3.25%
10.88%

KahrabelFZE

MubadalaPowerHolding

MDCIndustryHolding

NationalTradingCo

KahrabelFZE

MubadalaPowerHolding

MDCIndustryHolding

NationalTradingCo

Public

Source:Prospectus,GBCMResearch

6|PageOmanEquityResearch

SMNPowerHoldingIPO

Backgroundofthecompany

SMN Power Holding SAOG (under transformation) is the holding company which owns two major power
projects in Oman namely Rusail Power Company (RPC) and SMN Barka Power Company (SMNBPC).As a
combinedentity,theSMNPowerownsthelargestpowergenerationcapacitiesinSultanatecurrently.Key

initial promoters of the power projects include Kahrabel (fully owned subsidiary of International Power),

Mubadala Power Holding Co and the National Trading Co. As part of a privatization plan in 2006, the
company
had purchased the assets of RPC unit from the Government of Oman (EHC and Ministry of

Finance),
which is relatively an old one. On the contrary, SMN Barka is a newly built unit which had

commencedoperationsinNov2009.

BoththeprojectshavebeenformedundertheBuild,OwnandOperate(BOO)scheme.AsperOmanPower

and Water Procurement Co (OPWP) statistics, the overall installed power capacity of the two power

companiescombinedformsabout35% ofthe totalcapacity ofthe countrysMain Interconnected System

(MIS).Thecompanyalsorepresentsabout33%ofthetotalgeneratedpowerinOmanfor2010,formingthe

biggestone.Aspertheprospectus,for2010thenewplantSMNBarkaoperatedatanaverageavailabilityof

powerofabout92.07%andtheplantloadfactor(PLF)wasat37.5%.WhilefortheRPCPlant,theaverage

availabilitywasat90.8%andthePLFwas59.3%.

SMNPowerHoldingStructure
PowerCapacityof

RusailPowerCo

SMNPower

HoldingSAOG

SMNBarka
PowerCapacityof678MW

WaterCapacityof26.4MIGD

Source:Prospectus,GBCMResearch

Purposeoftheoffer

The holding company plans to go for the IPO to comply with the specified obligations under the project
foundersagreement(PFA)whichrequires35%oftheshareholdingavailableforpublicsubscription.

Proceedsoftheoffer

TheIPOrepresentsapureofferforsalewiththesharesoffereddonotrepresentanyissuanceofnewshares

by the company. The totalproceeds of the offer whichincludes the premium wouldbe going only to
the
666MW

sellingshareholders.Thereby,theproceedsfromtheIPOwouldnothaveanimpactonthefinancials.

7|PageOmanEquityResearch

SMNPowerHoldingIPO

EconomicOutlook

OmanEconomicGrowthremainsstable

The continuance of robust Government spending towards the development of Infrastructure has led to

incrementalallocationoffundstokeysectorsespeciallytheUtilitiesprojects,whichwouldbethedriversfor

economicgrowth.ThestabilityinOmanseconomyoverthepreviousyearshasledtohigherprivatesector

investmentsinvariouscriticalsectorslikeOil&Gas,Banking,diversifiedindustriesandthePowerandwater
arena.Added,theprevailinghigheroilpricesalongwiththeGovernmenteffortstakentowardsthenewjob

creationwouldinturnkeepupthesteadyGDPgrowthmomentumcontinuingoverthecomingyears.

ThethrustonthedevelopmentofdiversifiedincomeespeciallythenonoilcontributiontoGDPhasledto

hugeprojectinvestmentsinIndustrialhubs;Oil&Gasrelatedindustriesandalsotheinvestmentintourism

sector. We have also seen the Governments commitment towards the development of local human

developmentbyincrementalallocationstohealth,educationandotherpersonalsectors,whichwebelieve
would be critical in the longer term. Omans Eighth five year plan too targets continuance of stable

economicgrowththerebyachievingthelongtermobjectivesofOmanVision2020strategy(19962020).

ThrustremainsofProjectspend

Eighth Five Year plan is anticipated to give local economy the right stimulus by offering development

orientedgrowthtocontinueoverthecomingyears.Thesustainablelevelsoffiscalspendingandtheclear

focusonnewjobcreationisanticipatedtobringinlongtermbenefitstowardsachievingstabilityingrowth.

ThepresenceoffavorabledemographicsandthecontinuanceofInfrastructurespendisbelievedtoattract
foreign investments in wide variety of industries moving ahead. Economic Diversification efforts and the
creationofworkforceareexpectedtoleadinconsumptionleadgrowthmovingforward.Withtheconsensus

oil price estimates of above USD 90 per barrel in FY2011E, we believe that the project investments

undertakenbyGovernmenttogoonastrongerpaceofgrowth.

OmanNominalGDPGrowthTrend
30,000

ROMlns

25,000
20,000
15,000
10,000
5,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009P 2010f 2011p 2011b 2011o

GDPatmarketprices 7,639 7,671 7,807 8,343 9,487 11,883 14,151 16,111 23,288 18,020 21,552 21,813 23,589 25,440
GrowthRate

40%
30%
20%
10%

0%

10%
20%
30%

50%

26.5%

Source:MoNE,GBCMResearchEstimates

0.4%

1.8%

6.9%

13.7% 25.3% 19.1% 13.8% 44.5% 22.6% 19.6%

1.2%

9.5%

18.0%

8|PageOmanEquityResearch

SMNPowerHoldingIPO

OmanPowerSector AnIntroduction

OverallDemandforelectricityinOmanhasbeengrowingatabout67%perannuminrecentyears,fuelled

byrobustindustrialactivityandsteadyeconomicgrowth.AspertheOPWP,around2,100to3,000MWof

additional power generation resources to be added to Main Integrated System (MIS) by 2015E. Overall

annual Power consumption is estimated to increase by about 8% every year till 2020, which shows the

stableindustrynature.Governmenthasplannedanaggravatedprogrammetocatertothegrowingdemand

forPowersector.

Omanis alsothefirstcountryintheregiontohavea conceptofprivatepowertherebyproviding hostof

new opportunities for private sector players towards Sector development. This led to the entry of global

like AES, International Power and Suez Energy (largest investor in Oman Power Sector). The first
majors

publiclyownedpowerplantinOmantobetransferredtotheprivatesectorwastheAlRusailfacility(thisis

partofSMNPowerHolding)soldtoSuezandMubadalaDevelopmentworthc.$550millionin2006.

PowerDemandgrowthremainssteady

The Main Interconnected System (MIS) covers major portion of Sultanate comprising of several power

generation facilities including SMN Power Barka and Rusail Power. Currently there are nine power

generationcompanies,threedistributionunits,onetransmissioncompanyandaruralfirmcoveringremote

areas. Over the last ten years, the overall electricity demand in MIS has grown by 79% annually. During

2010,thedemandhasincreasedby7%YoY.

Withthecontinuinginvestmenttowardsthedevelopmentofdiversifiedeconomicgrowth,webelievethat

the demand for power would grow at a stable pace going forward. According to OPWP data, the overall

powerdemandintheMISgrewataCAGRof9%over2005to2010whichismainlyonthebackofstronger
economicgrowth,increasingpopulationandthedevelopmentofnewindustrialandtourismprojects.

MISElectricityDemandProjections

CAGRof8.8%over2010to2017E

7,000
6,000
5,000
4,000
3,000
2,000
1,000

2010

2011E

2012E

2013E

Avergedemand(MW)

2014E

2015E

2016E

2017E

PeakDemand(MW)

Source:OPWP,GBCMResearch

9|PageOmanEquityResearch

SMNPowerHoldingIPO

AverageDemandtogrowby8.8%CAGRover20102017E

As per the latest seven year projections (201117) of OPWP, the average electricity demand in MIS
is
estimatedtogrowfrom1,924MWin2010to3,464MWin2017,reportingaCAGRofabout8.8%.Keydrivers

for demand include the estimated economic growth, investment in various tourism related projects along

withthedevelopmentofvariousindustrialhubsinSohar,SurandDuqm.TheupcomingtwonewIPPs(Sohar

IIandBarkaIII)arescheduledtobecommissionedinphasesduring2012and2013.Thiswouldadd495MW
in 2012 and 250 MW in 2013 with the total addition of 1,490 MW. On the other hand, the new SurIPP

(installedcapacityof1,500to1,200MW)isexpectedtobeoperationalbyend2013.Governmenthasalso

initiatedstudiestowardstheinvestmentinSolarPowergeneration,whichcouldbebeneficialinlongerrun.

2011
2012
2013
2014
2015
2016
2017

CurrentContractedCapacity (MW)

Ghubrah
475
475
325
235
235
235
235

Rusail

WadiAlJizzi

Manah
AlKamil
Barka1
Sohar1
Barka2
Sohar2
Barka3
Total

687
325
273
297
450
590
710

3,807

687
245
273
297
450
590
710
495
495
4,717

687
245
273
282
435
590
679
745
745
5,006

687
245
273
282
435
590
679
742
742
4,910

687
157
273
282
435
590
678
740
740
4,817

687
157
273
282
435
590
678
739
739
4,815

687
157
273

435

590
678
738
738

4,531

Source:OPWP,GBCMResearch

DemandfordesalinatedWatercontinuestogrow

AccordingtoOPWPstatistics,theoveralldemandforpotableandindustrialwaterintheMISisexpectedto

growfromabout163millionm3/annumin2010to278millionm3/annumin2017,reportingaCAGRof8%.

Thegrowthindemandisonbackoftheassumptionsofincrementalpopulation,steadyeconomicgrowthand

alsothechangeinpolicytowardsloweringtherelianceofgroundwaterresourcesmovingahead.SMNPower
BarkacomesundertheBarkaZonewherethedemandisestimatedtogrowby8%CAGRover201017E.The

BarkaZoneislocatedbetweenSoharZoneandGhubrahZoneallowingPAEWtotransferwithinthezones.

Figuresin000m3/day
PeakWaterDemand
GhubrahZone
BarkaZone
SoharZone
SurZone
AdDuqmZone

2010 2011E 2012E

258
177
83
40
1

270
197
101
45
3

TotalAllZones

559

616

Source:OPWP,GBCMResearch

2013E

2014E

2015E

2016E

2017E

CAGR(201017E)

284
219
121
52
6

299
243
122
59
12

314
269
139
67
14

330
299
168
76
16

330
303
174
77
18

330
307
214
79
21

3.6%
8.2%
14.5%

10.2%
54.5%

682

735

803

889

902

951

7.9%

10|PageOmanEquityResearch

SMNPowerHoldingIPO

InvestmentRationale

LeadershippositioninOman

and
Currently, SMN Power Holding is the largest power company in terms of installed electricity capacity
MW,
generated output in Oman. Overall installed capacity of the holding company stands at about 1,343

comprisingofSMNBarkawiththecapacityof678MWandRusailPowerwithacapacityof665MW,formingc.
35%ofOmanstotalinstalledelectricityMIScapacity.Whilethe120,000m3/daywatercapacityofSMNBarka

formsabout20%ofthewaterdemandintheMainSupplyZone.Thepresenceofhighercapacityisbelievedto

provideeconomiesofscaleinthelongerrun,whichwebelievewouldapositiveone.

Asofnow,boththeprojectcompaniesofSMNPowerHoldingoperateunderhigherefficiency,whichiscritical

for the steady revenue growth. With regards to SMN Barka, the reliability factor stands at 98.8% and the

availabilityforpowerisat92.7%levels(end2010),whilethewaterreliabilityandavailabilityisabout90.3%and

84.3%respectively.InthecaseofRusailPower,thereliabilityisat97.7%andavailabilityisat90.8%(end2010).

Robustshareholdersupport

The presence of strong shareholder strength for SMN Power Holding in the form of International PowerGDF

Suez,parentofKahrabel,whichisoneoftheleadersinglobalindependentpowergenerationwith72,360MW

(gross)42,225MW(net)inoperationsacrosstheworld.Added,Kahrabel/InternationalPowerarethelargest

private power and water producers in Oman with the equity participation in Sohar IWPP, Al Rusail, Barka 2

IWPP,AlKamil,AlSuwaidi(underconstruction)andAlBatinah(underconstruction).SMNalsohasthebackupof

Mubadala,theregionalleaderinthePowersectorandtheOmaniestablishmentNationalTradingCo.

Kahrabelisexpectedtomaintainabout22.75%ofequityineachoftheprojectcompaniesuntilNov2013which
the
come under the PFA. The major shareholders have developed a wider knowledge of the sector through
implementationofvariousindependentpowerandwaterplantsacrosstheglobe,whichwebelievewouldgive

theholdingcompanyexpertiseintheeffectiveimplementationandefficientoperationofboththeplants.

MajorPlantCapacitiesinMIS

Contract
PlantOwner
PlantStatus
PlantType
Capacity
Developer

Expiry

RusailPower
Operational
OCGTNaturalgasfired
666MW
Kahrabel
2022
SEI(Divestedto

UnitedPower
Operational
OCGTNaturalgasfired
280MW
2020
MENAIF)

AlKamilPower
Operational
OCGTNaturalgasfired
285MW
Inter.Power
2017
AES(Divestedto

ACWAPower
Operational
CCGTNaturalgasfired
427MW/20MIGD
2018
ACWA)

SoharPower
Operational
CCGTNaturalgasfired
585MW/33MIGD
Kahrabel
2022

SMNBarkaPower Operational
CCGTNaturalgasfired
678MW/26.4MIGD
Kahrabel
2024
AlBatinahPower
Construction CCGTNaturalgasfired
744MW
Kahrabel
2028

AlSuwadiPower
Construction CCGTNaturalgasfired
744MW
Kahrabel
2028

Source:OPWP,IPOProspectus,GBCMResearch

11|PageOmanEquityResearch

SMNPowerHoldingIPO

Revenuevisibilityremainsstrong

As per the PPA, the revenue of the company is fixed through the Power and water Purchase agreement

(PWPA)withthesingleofftaker,OPWP.Intermsofoperatingcosts,thefuel(naturalgas)isthemajorone

which is chargeable to OPWP on an actual usage basis. We believe that the other costs especially the

operations and maintenance charges, general and admin costs, depreciation, finance and tax rate remain

mostlypredeterminedforthe projectcompanies. Owing to this, we believe thatthe company hasa strong

revenuevisibilityprovidingstableandreliablecashflowgenerationovertheprojectperiod,whichprovides

comforttotheinvestors.

Overalloutputoftheinstalledcapacitiesoftheprojectcompanieswouldbecontractedthroughasinglelong

termPWPAeach.Theagreementontheofftakegiveslowrisktopriceandvolumewiththerevenuedirectly

linkedtotheavailabilityoftheplantwiththetariffsbeingfixedduringPPA.Thesamewouldbevalidtillthe

expiry of the PWPA period for Rusail Power which is at March 2022 and for SMN Barka the same is at

November 2024. We also believe that the total electricity and desalinated water demand is anticipated to

growonastablephaseoverthecomingyearsdrivenbyeconomicgrowth,developmentofnewindustrialand

tourismprojects.

Securedoperationalandmaintenancecosts

The project companies (RPC and SMNPBC) has secured long term operation and maintenance contract

towards the generation of electricity and production of water for supply to OPWP from Suez Tractebel

Operations and Maintenance LLC (STOMO). This would ensure efficient management of spare parts, tools,

materials and consumables required for the operation and maintenance (O&M) of the project companies.

STOMOisrequiredtooperateandmaintaintheSMNBarkaPlantuntil31stMar2024,whiletheagreementto
st

operateandmaintaintheRPCPlantistill31 Mar2022.WebelievethepresenceofsecuredO&Magreement
gives comfort to the investors towards the efficient running of the plantoperations, which is critical in the
longrunofpowerplant.Added,thisisexpectedtolowertheoperationalriskoftheprojectsintheformof

anyunexpectedincreaseinoperatingandmaintenancecosts.

CommittedGassupplyagreements

BoththeprojectcompaniesofSMNPowerHoldingusenaturalgasastheprimaryfueltobothoftheplants.

Thecompaniesgetacommittedsupplyofgas(subsidizedpriceatUSD1.5perMMBTU)overtheperiodofthe
the
PWPA based on the longer term contracts (Natural gas sales agreement NGSA) entered by both

companieswiththeMinistryofOilandGasofOman.However,thecompaniesusedtohaveastrategicback
upoffueloilinventorytocoveruptothreedaysofoperationsinemergency.Added,asperthePWPAthe

projectcompaniesdoesnotcarrythefuelpriceriskwiththeincrementalfuelcostsbeingpassedontothe

OPWPtillthePWPAperiod,whichwouldkeeptheoperationalcostsincontrollablelimits.

12|PageOmanEquityResearch

SMNPowerHoldingIPO

Hedgingmechanismtoprotectagainstchangesininterestrates

The project companies (RPC and SMN Barka) has its interest rate set based on 6 months LIBOR (London

Interbank offer rate) and the interest rate volatility is hedged by interest rate swaps as per the hedging

policyofthecompany.Aspartofitsinteresthedging,boththeprojectcompanieshavehedgedat95%levels

currently(increasedfrom80%to95%levelsinMarch2009)untilMarch2013,whichalsofulfilsthefacilities

agreements.

AsfarasRPCisconcerned,theprojectcompanyhasenteredintoaninterestrateswapagreementinNov

2008increasingthehedgedamountto95%from80%forfouryearstillMar2013atafixedrateof3.30%

per annum. While SMNBPC has also entered into new hedging agreement increasing the amount hedged

from80%to95%ofthetermloanfortheperioduntilMar2013atafixedrateof3.36%perannum.This
wouldinturnimprovethestabilityincashflowstoshareholdersintheformofdividends.Onbackofthis,

webelievethedividendoutflowtotheshareholderswouldnothavemajorimpactduetofinancialcoststill

Mar2013.

13|PageOmanEquityResearch

SMNPowerHoldingIPO

RisksandConcerns

EPCrelatedClaims

Duringlatelastyear,SMNBarkahasreachedanagreementwithitsEPCpartner,Doosantowardsthedelay

liquidatedclaimsforfailuretoachievethescheduledEarlyPowerandCommercialOperationDates.Bothof

themhavereachedanagreement(inprinciple)forfinalsettlementwiththebasisthatDoosanwouldpayto
SMN Barka about USD 27 million in respect of delay liquidated damages under the EPC contract and has
agreed to relinquish all costs claims to an extent of USD 38 million. As of now quoting prospectus, SMN
BarkaisalsoassistingDoosanstowardsobtainingadditionalmonetaryrelieffromOPWP.Themanagement

ofthecompanybelievesthisclaimnottohaveanynegativefinancialimpactgoingforward.

OPWPrelatedClaims

AsaresultofdelaysinachievingtheCommercialOperationsdatesoftheBarkaIIProject,SMNBarkafacesa

claim by the OPWP under the PWPA. OPWP claims liquidated damages to an extent of USD 19.3 million.

AlthoughthecompanybelievesthatOPWPmaynotwaivetheintegralityofclaimswithrespecttoliquidated

damages,theyareoptimisticthatadditionalrelieffromOPWPmaybeobtained.Nevertheless,thecompany
is also confident that it will be made whole for the full amount because any amount at which afinal
settlementshallbereachedwithOPWPshouldberecoveredbytheSMNBarkathroughabacktobackclaim

againstDoosan.ThesamewouldhaveaneutralimpactonSMNPowerfinancials.

MinistryofOilandGasrelatedClaims

SMN Barka also has a claim arising under the SMN Barka NGSA which is towards the failure to meet the

scheduledfirstgasdeliverydatewhichresultedinadelaytotheProjectofabout61days.Thetotalclaim

amountstoUSD8.47million,aswellasrelatedcostsofaboutUSD6.82million.SMNBarkaisconfidentthat

thesamewouldbemadecompletelyforthefullamountoftheclaimsbecauseanyamountwhichcannotbe
recoveredfromMOGshouldcorrespondtothedelaybyDoosan.

RPCrelativelyoldplant

OneoftheprojectcompaniesofSMNPowerHoldingisRusailPowerwhichwebelieveisrelativelyanold

plantwiththegasturbinesinstalledinfourphasesbetween1984and2000.Thisfacilitywasboughtbythe

company in 2006 as part of Government privatization process. Added, the company has spent significant

initialexpendituretowardsincreasingtheperformanceoftheplant.In2010,RPChasperformedatechnical

studytoassessthelifespanofthreetransformersinRPCandhasmadeprovisionstoanextentofRO1.34

million, over the remaining period of PPA period, from 2010 to March 2022. We believe that any further
expensestowardstheRPCcouldimpactthecashflowoftheprojectcompanymovingforward.

14|PageOmanEquityResearch

SMNPowerHoldingIPO

ConcernsonPostPPAvaluation

UnlockingValuebeyondPPA

TheoperatingcashflowsoftheprojectcompanyhavebeenestimatedwiththecertaintyforthePPAperiod

whichisNov2024forSMNBarkaandMar2022forRPC.TheprojectionsforpostPWPAperiodcashflowshave
the
been provided by IPA, an independent consultant (Source: Prospectus). Further quoting the prospectus,

estimated cash flows post PWPA involve assumptions including demand for power and water, available

capacities,alternativesources,tariffs,availabilityofgas,pricingofgas,offtakearrangementsetc(18different
scenarios). The offer has been valued based on the assumptions and estimates for cash flows given by the
independent consultant. As per the prospectus, the projections have been incorporated for the expected

capex and dividend distributions. We perceive the concern of the post PPA valuation in terms of various

dynamicmarketfactorsprevailingduringthatperiod,whichmightimpacttheprojectvalueunlockingbeyond

PPAperiod.

ValuationpostPPA

Asper IPA +Water Economics report, there would bea significant valuefrom the Plantspost PWPA period
either by extending the offtake agreements under the single buyer approach or by operating in liberalized

marketsforpoweranddesalinatedwater.Aspertheprospectusquotingtheindependentadvisors,thebase

caseaverage
annual EBITDA projected by IPA for RPC from the expiry of the PPA period to 2039 is RO 11.8

millionandforSMNBarkafromtheexpiryofthePWPAperiodto2045isRO39.8million.Webelievethatthe

concernremainsintheformofseveralalteringissuesduringthepostPWPAperiodintheformofavailability
etc,
of Gas, pricing of Gas for the project beyond PPA, inflationary scenarios, adverse refurbishment costs
whichcouldimpactthevaluationsofthecompany.

15|PageOmanEquityResearch

SMNPowerHoldingIPO

ValuationsandRecommendation

DividendDiscountModel

As of now, the project companies have not distributed any dividends since the completion under the

financingagreements,whichwereachievedonAug2011.Asperthecompany,thefirstinterimdividendis

estimated to be paid by end of Nov 2011, representing a dividend per share of RO 0.193. The second

dividend of RO 0.250 baiza (expected to be announced in Mar 2012) would be paid for the 2011E retaining

earningsbasedonthecashflowpositionattheendofMar2012.Postthis,thecompanyexpectstopaythe
dividendstwiceinayear,oncefortheperiodendedSeptemberandoncefortheperiodendedMarch.

Withthepresenceofrelativestabilityincashflowgeneration(dividendoutflow)andtheprevailingofftake

agreementwiththesinglebuyer,webelievethattheprojectionsofthecashdividendcanbetheaptonefor

thevaluations.WehaveusedtheDividenddiscountmodel(DDM)forourvaluationbasedontwodifferent

scenarioswiththebasescenarioconsideringthedividendssimilartotheoneestimatedintheprospectus.

Ontheotherhand,wehavearrivedataprobablescenariowherewehavereducedourdividendpayoutto

about90%levelsbeyond2012E(Pleasefindthedetailedvaluationsheetinthenexttwopages).

CashSweepfacilitymightimpactdividends

Asperthefacilitiesagreement,theprojectcompanyRPCwouldhaveitscashsweepprepaymentofstarting

fromthe30Sep2016until31Mar2022(endoftermloan).FortheSMNBarka,cashsweepprepaymentof

the Loan will apply starting from the 30 Sep 2018 until the end of the term of the Loan 31 Mar 2024.

However,
if the project companies are able to refinance the loan before the commencement of the cash

sweep,thedividenddistributiontotheinvestorswouldbepossiblesubjecttofreecashavailability.

16|PageOmanEquityResearch

SMNPowerHoldingIPO

DividendDiscountModel(DDM)ValuationMethodology

BaseCaseScenario

Assumedthedividendpayouttoremainatthesamelevelswhichismentionedintheprospectus

DDMModelBaseCase
FY2011E* FY2012E* FY2013E* FY2014E* FY2015E*

NetProfitRO000's
3,775
6,245
7,256
7,637
8,518

Payout(%)
234.3%
121.5%
104.6%
99.3%
89.1%

DPSRO
0.443
0.380
0.380
0.380
0.380

DivYieldonOfferPrice
12.6%
10.8%
10.8%
10.8%
10.8%

ExpectedDividends(RO000's)
8,844
7,586
7,586
7,586
7,586

NPVofExpectedDividends
8,399
6,523
5,907
5,348
4,843

Assumptions
CostofEquity
10.4%

TerminalGrowthRate
0.00%

NPV(TerminalValue)RO000's
46,386

Fairvaluepershare(RO)
3.877
OfferPrice(RO)
3.520

Upside(%)
10.1%

Source:GBCMResearchEstimates;*ConsideredtheMarchdividendsasthepreviousyearpayment

*DividendforMarchisexpectedtobepaidfrompreviousyearretainingearningsbasedoncashflowpositionattheendoffirstquarter

InthebasecasescenarioofourDDMvaluationmodel,wehaveassumedadividendpayouttoremainatthe

samelevelsmentionedintheIPOprospectusfrom2012Eto2015E.Onthis,wehavearrivedatafairvalueof

RO3.877.WehaveassumedCostofEquityofabout10.4%levelsandalsoestimatedzeroterminalgrowth.In

our valuation model, we have used the BETA of 0.68 (Source: Bloomberg) taken based on the comparable listed

playerACWAPowerBarka.

SensitivityAnalysis(FairValueRangesbetweenRO3.692toRO3.945)
CostofEquity

TerminalGrowth
10.0%
10.3%
10.4%
11.0%
11.5%
12.0%

0.0%
4.038
3.945
3.877
3.692
3.541
3.403

0.5%
4.168
4.067
3.994
3.794
3.633
3.485

1.0%
4.312
4.203
4.123
3.907
3.733
3.575
1.5%
4.474
4.354
4.267
4.032
3.844
3.674

SensitivityAnalysis(%ChangefromOfferPrice)

CostofEquity

TerminalGrowth
10.0%
10.3%
10.4%
11.0%
11.5%
12.0%

0.0%
14.7%
12.1%
10.1%
4.9%
0.6%
3.3%
0.5%
18.4%
15.5%
13.5%
7.8%
3.2%
1.0%

1.0%
22.5%
19.4%
17.1%
11.0%
6.1%
1.6%
1.5%
27.1%
23.7%
21.2%
14.5%
9.2%
4.4%
Source:GBCMResearchEstimates

17|PageOmanEquityResearch

SMNPowerHoldingIPO

ProbableScenario

Wehaveassumedthedividendpayouttoremainatabout90%levelsstarting2012Etill2015E,which

islowerascomparedtothecompanyprojectionsgivenintheprospectus.

DDMModelProbableScenario
FY2011E* FY2012E* FY2013E* FY2014E* FY2015E*

NetProfitRO000's
3,775
6,245
7,256
7,637
8,518

Payout(%)
234.3%
90.0%
90.0%
90.0%
90.0%

DPSRO
0.443
0.282
0.327
0.344
0.384

DivYieldonOfferPrice
12.6%
8.0%
9.3%
9.8%
10.9%

ExpectedDividends(RO000's)
8,844
5,621
6,530
6,873
7,666

NPVofExpectedDividends
8,399
4,833
5,084
4,846
4,894

Assumptions
CostofEquity
10.4%

TerminalGrowthRate
0.00%

NPV(TerminalValue)RO000's
46,874

Fairvaluepershare(RO)
3.753
OfferPrice(RO)
3.520

Upside(%)
6.6%

Source:GBCMResearchEstimates;*ConsideredtheMarchdividendsasthepreviousyearpayment

*DividendforMarchisexpectedtobepaidfrompreviousyearretainingearningsbasedoncashflowpositionattheendoffirstquarter

InourprobablecasescenarioofDDMvaluationmodel,wehaveassumedadividendpayoutof90%from2012E

to2015E.Onthis,wehavearrivedatafairvalueofRO3.753.Wehaveassumedcostofequityof10.4%anda

terminalgrowthrate ofzero. Inourvaluationmodel,we haveusedtheBETAof 0.68 (Source: Bloomberg) taken

basedonthecomparablelistedplayerACWAPowerBarka.

SensitivityAnalysis(FairValueRangesbetweenRO3.567toRO3.821)
CostofEquity

TerminalGrowth
10.0%
10.3%
10.4%
11.0%
11.5%
12.0%

0.0%
3.914
3.821
3.753
3.567
3.417
3.279

0.5%
4.045
3.945
3.871
3.671
3.509
3.362

1.0%
4.191
4.081
4.002
3.785
3.611
3.453

1.5%
4.354
4.234
4.147
3.911
3.723
3.553

SensitivityAnalysis(%ChangefromOfferPrice)

CostofEquity

TerminalGrowth
10.0%
10.3%
10.4%
11.0%
11.5%
12.0%

0.0%
11.2%
8.5%
6.6%
1.3%
2.9%
6.9%
0.5%
14.9%
12.1%
10.0%
4.3%
0.3%
4.5%

1.0%
19.1%
16.0%
13.7%
7.5%
2.6%
1.9%

1.5%
23.7%
20.3%
17.8%
11.1%
5.8%
0.9%

Source:GBCMResearchEstimates

18|PageOmanEquityResearch

CompanyComparableValuations

Company

SMNPowerHolding*

P/E

FY10

FY11E

18.6

SMNPowerHoldingIPO

Cash
P/BV
DividendPayout
DividendYield

Dividend

FY11E
FY10 FY11E FY10 FY11E
FY10
FY11E
FY10

2.1

0.443

234.3%

12.6%

AESBarka
5.3
5.3
1.4
1.3
0.095 0.125
73.5%
95.8%
6.9%
9.1%

AlKamilPower
6.3
6.1
0.9
0.9
0.080 0.160
31.1%
60.4%
4.9%
9.9%

UnitedPower
7.7
8.2
0.6
0.6
0.200 0.120
151.6%
96.6% 19.6% 11.8%

SoharPower
10.0
9.5
1.5
1.5
0.160 0.160
97.5%
93.1%
9.7%
9.7%

Source:CompanyReports,GBCMResearchEstimates;Closingpriceupdatedasof25Sep2011

*ForSMNPowerConsideredtheMarchdividendsasthepreviousyearpayment;*DividendforMarchisexpectedtobepaidfrompreviousyear

retainingearningsbasedoncashflowpositionattheendoffirstquarter

*SMNPowerFY2011EarningsincludesoneoffexpensesformingaboutRO0.124/share;NormalizedEPSfor2011EworksouttobeRO0.313,Onthe

basis,thecompanytradesatPEof11.2X,whichisstillexpensivetothecomparables.

On a PE (FY11E EPS) and PBV (FY11E BV) basis, the SMN Power Holding IPO issue looks pretty expensive as
comparedtothelistedpeergroup.Thetotalprofitofthecompanyisestimatedtoremainlowerfor2011Eand
2012Eonthebackofoneoffanticipatedexpenses (NonrecurringitemspersharestandsatboutRO0.124bz).EPSis
estimated to normalize beyond 2012. The existing listed comparable players clearly remain cheaper at the
currenttradinglevels.

EstimatedaverageOmanUtilitiessectordividendyieldfor2011Eworksoutbeabout10%levelsascomparedto

the estimated dividend yield of 12.6% for SMN Power Holding Co. We believe that the issue commands a
premiumowingtothepresenceofhigherdividendspostIPOperiod.

DividendPayoutratioofSMNPowerHoldingremainshigherduringtheinitialyearswiththecompanypayingout
fromitspreviousyearretainedearnings.Theriskremainsintheformofanyunexpectedcostsinthedueclaims
and the higher maintenance costs / unscheduled outages which could lead to decline in earnings moving
forward,therebyimpactingthedividendpayouttothenewshareholders.

19|PageOmanEquityResearch

OutlookSteadycashflow,DividendPlay

SMNPowerHoldingIPO

OverallthestableindustryperformancealongwiththesteadycashflowgenerationintheUtilitiessectormakes

theissueanattractivedividendplay.WeratetheSMNPowerHoldingIPOasanaverageissueinourratingsale

with the fair value factoring for higher dividend payouts. Based on our Valuation methodologies (Dividend
wehavearrivedatourfairvalueofRO3.877forSMNPower.
DiscountModelBasescenario),

We recommend the low risk appetite investors to subscribe for the issue with the medium to long term

horizon.Wealsobelievethattheissuewouldbeabestfitforlongonlyfundsandinstitutions.Weexpectthe

issuetoseelimitedupsideonlisting,howeverconsideringthedividendyieldwerecommendtosubscribefor

theissue.

Onarelativevaluationbasis,theexistinglistedcomparableplayersremaincheaperthanSMNPower.However,

wemaynotabletoaccumulatethesecountersinthemarketbecauseoftheilliquidnatureinthesecondary

market.Hencewerecommendtheinvestorslookingatadividendyieldstorymaycapitalizethroughsubscribing

for the
issue. We also feel that the stock might find support with the higher dividend yield protecting the
downsidefromtheofferprice.

20|PageOmanEquityResearch

SMNPowerHoldingIPO

IncomeStatementHighlights

FiguresinRO000s
2007
2008
2009
2010

RevenueGroup
24,969
30,814 36,310 78,322

Operatingcosts
(21,869) (25,764) (29,868) (49,525)

Grossprofit
3,100
5,050
6,442
28,797

G&Aexpenses
(686)
(580)
(547)
(1,142)

OperatingProfit(EBIT)
2,414
4,095
4,886
19,771

Financecharges
(3,286)
(4,256) (8,341) (15,511)

Profit(loss)beforetax

(872)
(161)
(3,455)
4,260
andextra.items

Profit(loss)beforetax
(819)
139
15,865
4,197

Netprofit(loss)
(921)
(31)
13,741
1,189

Source:CompanyProspectus,GBCMResearch

CashFlowHighlights

FiguresinRO000s
2007
2008
2009
2010

Cashfromoperations
8,225
(6,663) 42,342
22,640

Provisionforre.costs
4,740

Financechargespaid
(3,133)
(3,978) (7,074) (15,244)

Incometaxpaid
(147)
(65)
(148)
(159)

Otherincomes

300
5

Netcashfromoperations
9,685
(10,406) 35,125
7,237

Netcashfrominvesting
(145,650) (68,903) (46,737) 3,989

Repaymentoftermloans

Interestpaid

Proposeddividends

Shareholderloans

Netcashfromfinancing
138,599
77,863
16,961
11,825

Netchangeincash
2,634
(1,446)
5,349
23,051

Cashatthebeginning

2,634
1,188
6,537

Cashattheendoftheyear
2,634
1,188
6,537
29,588

2011E

2012E

2013E

2014E

2015E

79,342

83,026

85,335

87,700

90,201

(52,531) (54,314) (56,572) (59,041) (61,847)

26,811

28,712

28,763

28,659

28,354

(8,257)

(8,278)

(8,295)

(8,313)

(8,333)

18,554

20,434

20,468

20,346

20,021

(13,594) (13,044) (12,190) (11,633) (10,303)

4,960

7,390

8,278

8,713

9,718

4,960

7,390

8,278

8,713

9,718

3,775

6,245

7,256

7,637

8,518

2011E

2012E

2013E

2014E

2015E

17,560

33,422

32,088

32,209

32,140

(206)

17,663

(131)

33,503

(139)

31,973

(134)

32,080

(133)

32,004

335

(263)

(388)

(308)

(31)

(11,282)
(13,742)
(3,845)

(28,413)
(10,415)
29,588
19,173

(11,966) (12,591) (13,119) (13,566)

(12,737) (12,000) (11,516) (10,083)
(8,784) (7,586) (7,586) (7,586)
(9,957)

(43,444) (32,177) (32,221) (31,235)

(10,204)
(592)
(449)
738
19,173
8,969
8,377
7,928
8,969
8,377
7,928
8,666

Source:CompanyProspectus,GBCMResearch

21|PageOmanEquityResearch

BalanceSheetHighlights

FiguresinRO000s
2007

Financeleasereceivables
48,243

Property,plantandequip
114,934

Deferredtaxasset
92

Others

InvestmentinJV

Goodwill
15,889

Totalnoncurrentassets
179,158

Inventories
2,673

Tradeandotherreceivables
934

Financeleasereceivables
3,778

Cashandbank
2,634

Totalcurrentassets
10,019

Totalassets
189,177

Equityandreserves

Sharecapital
500

Legalreserve

Retainedearnings
(921)

Shareholdersfunds
(421)

Hedgingdeficit
(3,322)

Totalequity
(3,743)

Liabilities

Longtermloan
173,489

Shareholderloans

HedgingInstruments
3,679

Totalnoncurrentliabilities
179,137

Cur.portionlongtermloan

Tradeandotherpayables
13,783

Shareholderssub.loan

Totalcurrentliabilities
13,783

Totalliabilities
192,920

Totalequityandliabilities
189,177

Source:CompanyProspectus,GBCMResearch

SMNPowerHoldingIPO

2008

2009

2010

2011E

2012E

2013E

2014E

34,088

46,290

43,134

40,305

40,357

37,333

30,636

26,957

186,910

231,448

223,523

215,514

207,500 199,479 191,450

183,411

4,657

1,406

1,551

1,445

1,084

975

865

756

646

250

250

250

250

250

15,739

15,739

15,739

15,739

15,739

15,739

15,739

15,739

255,002

291,872

281,012

272,944

261,797 250,421 238,831

227,003

2,660

2,794

2,689

2,689

2,689

2,689

2,689

2,689

8,522

42,320

40,243

42,604

7,508

8,009

8,425

8,583

4,120

6,389

5,249

1,262

6,537

29,588

19,172

8,969

8,376

7,928

8,665

16,564

58,040

77,769

64,465

19,167

19,073

19,042

19,938

271,566

349,912

358,781

337,409

280,964 269,494 257,873

246,941

500

500

500

19,964

19,964

19,964

19,964

19,964

543

1,168

1,893

2,657

3,509

(952)

12,622

13,811

13,668

10,504

9,448

8,735

8,816

(452)

13,289

14,478

34,175

31,636

31,305

31,356

32,289

(37,742)

(17,189)

(23,827)

(23,827)

(38,194)

(3,900)

(9,349)

10,348

(23,827) (23,827) (23,827)

7,809

7,478

246,032

228,701

240,117

240,578

7,529

229,055 216,885 204,163

(23,827)
8,462

190,969

9,957

42,667

19,412

27,080

27,080

27,080

27,080

27,080

27,080

292,306

252,158

273,338

285,593

265,494 254,394 242,795

230,849

5,247

40,080

11,282

12,207

61,574

53,788

41,468

7,661

7,622

7,549

7,630

29,722

17,454

101,654

94,792

41,468

7,661

7,622

7,549

7,630

309,760

353,812

368,130

327,061

273,155 262,016 250,344

238,479

271,566

349,912

358,781

337,409

280,964 269,494 257,873

246,941

22|PageOmanEquityResearch

2015E

SMNPowerHoldingIPO

RatioAnalysis

Keyratios
2007
2008
2009
2010
2011E

Profitabilityratios

GrossProfitMargin
12.4%
16.4%
17.7%
36.8%
33.8%

EBITMargin
9.7%
13.3%
13.5%
25.2%
23.4%

6.3%
PBTMargin
3.5%
0.5%
9.5%
5.4%

NetProfitMargin
3.7%
0.1%
37.8%
1.5%
4.8%

11.0%
ReturnonEquity
218.8%
6.9%
103.4%
8.2%

ReturnonAssets
0.5%
0.0%
3.9%
0.3%
1.1%

PerShareRatio

EPS
(1.842) (0.062) 27.482
2.378
0.189

BookValuepershare
(0.842) (0.904) 26.578
28.956
1.712

0.443
Dividendpershare

Investmentratios**

Price/Earnings
(1.91)
(56.77)
0.13
1.48
18.62

2.06
Price/Bookvalue
(4.18)
(3.89)
0.13
0.12

Dividendyield(%)

12.6%

234.3%
DividendPayoutRatio
0.0%
0.0%
0.0%
0.0%

Activity&Efficiencyratios

Assetturnover
0.13
0.11
0.10
0.22
0.24

29.51
Inventoryturnoverratio
9.34
11.58
13.00
29.13

DaysofInventory
44.61
37.68
34.14
19.82
18.68

195.99
DaysReceivables
13.65
100.95 425.41
187.54

DaysPayables
230.04 172.94 752.46
396.42
288.13

(73.45)
CashConversioncycle
(171.78) (34.31) (292.90) (189.06)

Liquidityratio

Quickratio
0.53
0.80
0.54
0.79
1.49

1.55
Currentratio
0.73
0.95
0.57
0.82

Leverageratio

Debt/Equityratio
(412.1) (555.9)
20.2
17.4
7.0

Source:CompanyProspectus,GBCMResearchEstimates;CalculatedonOfferpriceofRO3.520

2012E
34.6%
24.6%
8.9%
7.5%
19.7%
2.2%

0.313
1.585
0.380

11.25
2.22
10.8%
121.5%

0.30
30.88
18.07
33.01
51.48
(0.41)

2.15
2.50

7.2

2013E

33.7%
24.0%
9.7%
8.5%
23.2%
2.7%

0.363
1.568
0.380

9.68
2.24
10.8%
104.6%

0.32
31.73
17.35
34.26
49.18
2.43

2.15
2.50

6.9

2014E

2015E

32.7%
23.2%
9.9%
8.7%
24.4%
3.0%

31.4%
22.2%
10.8%
9.4%
26.4%
3.4%

0.383
1.571
0.380

0.427
1.617
0.380

9.20
2.24
10.8%
99.3%

8.25
2.18
10.8%
89.1%

0.34
32.61
16.62
35.06
46.67
5.02

0.37
33.54
15.87
34.73
45.03
5.57

2.17
2.52

2.26
2.61

6.5

5.9

23|PageOmanEquityResearch

SMNPowerHoldingIPO

StockRatingMethodology:

BuyUpsidemorethan20%
AccumulateUpsidebetween10%and20%
NeutralUpsideordownsidelessthan10%
ReduceDownsidebetween10%and20%
SellDownsidemorethan20%
NotRatedStocksnotinregularresearchcoverage

|InstitutionalBrokerageTalalAlBalushi,(+968)24790614560|InstitutionalSalesHunainaBanatwala,(+968)24790614559|

Disclaimer: This document has been prepared and issued by Gulf Baader Capital Markets SAOC ("the Company") on the basis of publicly
availableinformation,internallydevelopeddataandothersourcesbelievedtobereliable.Whileallcarehasbeentakentoensurethatthe
facts stated are accurate and the opinions given are reasonable, neither Gulf Baader Capital Markets SAOC nor any employee shall be in
anywayresponsibleforthecontentsofthisreport.TheCompanymayhaveapositionandmayperformbuying/sellingforitselforitsclientsin
anysecuritymentionedinthisreport.Thisisnotanoffertobuyorselltheinvestmentsreferredtherein.

24|PageOmanEquityResearch