Is it cheap or expensive right now?

Latest price vs our fair value. A comparison, not a recommendation.

In plain terms: Saudi Basic Industries trades a few percent below our weighted central fair value — roughly fairly valued to modestly cheap, at a cyclical trough in the global petrochemical margin. It is the Gulf's petrochemical champion, ~70%-owned by Saudi Aramco, converting advantaged Saudi gas and naphtha into polymers, agri-nutrients and specialties. 2025 was a genuine trough — Chinese oversupply, weak global demand and a compressed product–feedstock spread pushed the adjusted EBITDA margin to ~15% and produced a large one-off, non-cash writedown on the European assets being divested. The bull case (~SAR 66) is the spread normalising toward a mid-cycle ~19% margin while the low-cost feedstock advantage is credited in full; the cautious case (~SAR 43) is a structurally lower spread — a permanent Chinese-oversupply regime. What moves it is the product–feedstock spread in $/tonne and the timing of the margin-cycle recovery.

Key levels

The 5th–95th and 25th–75th percentile bands from the 50,000-path simulation. Static and pre-computed — independent of the fundamental value.

What drives the odds

50,000 paths, 16 forces: the product–feedstock spread, the oil/naphtha complex and global industrial demand, SAMA/Fed rates via the riyal peg, US real rates, TASI/GCC flows, the base-dividend anchor and Saudi feedstock policy — plus event forces: a petchem cycle turn, prolonged Chinese oversupply, an oil-price shock, a Red Sea/freight disruption, a dividend-policy signal, a plant turnaround or expansion milestone, an earnings/impairment print, and an Aramco-parent action. Details in the methodology.