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2330

Governance: B

ADVANCED

Advanced Petrochemical Co.

26.50 SAR / Share

As of: May 28, 2026

— P/E Ratio Trailing 12 Months

2.2x P/B Ratio Price to Book Value

— Dividend Yield Annual Dividend / Share

6.89B SAR Market Cap Total Valuation

2.78 Beta Systematic Risk Index

-1.8% Net Margin Net Profit / Revenue

The Story

Advanced Petrochemical is currently navigating a high-leverage transition period, sacrificing short-term net profitability to build a significantly larger production footprint.

Source: Q3 2025 (2025-11-02)

Value Creation +1.0% Excess Return on Capital (Spread between ROIC/ROE and Cost of Capital)

Cash Flow Payback — Estimated years of operating cash flows required to cover Enterprise Value

Performance & Distributions

Dividend Yield Trailing annual dividends paid relative to share price

—

Sustainable Growth Rate Rate at which company can grow internally using reinvested profits

+98.8%

Payout Ratio Percent of net profits distributed as dividends

—

Net Margin Net profit margin generated from total operational revenue

-1.8%

ROIC Return on Invested Capital

8.9%

Market Pricing Multiples

P/E Ratio Market value compared to corporate net earnings

—

P/B Ratio Market capitalization compared to corporate book value

2.2x

EV / EBITDA Operating multiple reflecting core operational leverage

27.2x

EV / SALES Asset pricing multiple relative to total topline revenue

5.5x

Growth Story

Revenue trends for Advanced have shown significant volatility, recovering to 2.91 billion SAR (TTM) after a dip to 2.19 billion SAR in fiscal 2024. This recovery is anchored in a massive reinvestment phase, with TTM capital expenditures reaching 2.23 billion SAR. While the historical sustainable growth rate is calculated at a modest 0.99%, this figure does not yet reflect the capacity of the new PDH and PP project, which successfully commenced operations in July 2025. The company is effectively trading current cash flows for long-term capacity, as evidenced by the expansion of total assets from 8.2 billion SAR in 2022 to over 12.6 billion SAR by late 2024.

Profitability Dynamics

Historically, Advanced has been a value creator, maintaining a 5-year average ROIC of 8.94% against a WACC of 8.01%. However, recent profitability has been severely impacted by non-operating headwinds, including a full 212 million SAR impairment of its South Korean associate, SK Advanced, and continued share of losses from that investment. While the TTM operating margin remains healthy at 11.1%, the net profit margin has slipped into negative territory at -1.8%. This divergence highlights a core business that remains operationally sound but is currently burdened by the financing costs and depreciation associated with its 9.19 billion SAR debt-funded expansion.

Risk & Capital Structure

Beta Systematic market risk indicator relative to the TASI index

2.78

Cost of Equity Minimum required rate of return demanded by shareholders

16.7%

WACC Weighted average cost of total debt and equity funding

8.0%

Debt-to-Equity Ratio Proportion of corporate funding financed by debt creditors

133.4%

Risk Factors

The company's risk profile is centered on its substantial leverage and feedstock dependencies. Total debt has climbed to 9.19 billion SAR, comprising a 3 billion SAR SIDF loan and 6.1 billion SAR in Islamic facilities, primarily to fund the APOC subsidiary. This high debt-to-equity environment is coupled with a beta of 1.08, reflecting market sensitivity to the cyclical petrochemical sector. Specific business risks include the requirement to maintain strict financial ratios following the commencement of new operations and the reliance on Saudi Aramco for propane supply, secured by payment guarantees totaling approximately 191.7 million USD.

Governance Disclosures

Rating: B

We track 5 key governance and oversight matters for this company in our database.

Significance: 6/10 Info Asymmetry

Associate Investment Impairment and Loss Non-Recognition

The Group holds a 30% stake in SK Advanced Co. Limited, which was fully impaired by SR 212 million in 2024. For the nine months ended September 2025, the Group did not recognize its share of losses amounting to SR 114.46 million because the investment's carrying value had reached zero.

Mitigating Factors: The Group has disclosed that it has no legal or constructive obligation to provide further support to the associate under the current agreement.

Significance: 4/10 Entrenchment

Employee Share Incentive and Home Ownership Programs

The Group manages an Employee Share Incentive Program involving the purchase of 1,500,000 treasury shares for SR 79.3 million. Additionally, it maintains a Home Ownership Program (HOP) with outstanding employee loans totaling SR 162.8 million in non-current balances.

Mitigating Factors: The share purchase was approved by the Extraordinary General Assembly and is financed through the Company's own resources.

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In-Depth Analysis