Saudi Basic Industries
Fundamental — what it's worthbottom-up fair value
Built up from an explicit five-year cash-flow forecast, the dividend yield, relative multiples and the asset/replacement base — what is it worth?
Is it cheap or expensive right now?
Latest price vs our fair value. A comparison, not a recommendation.
What it's worth — four lenses
Four independent valuation methods, blended into one weighted central fair value.
| Valuation lens | Per share (SAR) | Weight |
|---|---|---|
| DCF (5-yr FCFF, mid-cycle) — primary | 60.3 | 40% |
| Dividend-yield (normalized) | 56.4 | 25% |
| EV/EBITDA relative (trough floor) | 47.8 | 20% |
| P/B (asset / replacement) | 51.5 | 15% |
| Weighted central fair value | 55.5 | +7% vs spot |
The four lenses span SAR 47.8 (EV/EBITDA on trough earnings, the floor) to SAR 60.3 (the mid-cycle DCF, the top of the cluster) and straddle spot — the asset base and the dividend look cheap, the trough multiple looks full. The product–feedstock spread in $/tonne and whether the margin normalises are the swing factors. Full detail and the four lenses are in the study and the open model.
Technical & price structuretrend, momentum, key levels
Trend, momentum and key levels — what is the price doing now?
What the chart says
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
Volatility & where the case breaks
| Typical daily moveRoughly how far the price swings in an average day (based on a measure called ATR). Bigger means choppier. | ~1.5% |
Monte Carlo — where could the price go?near-term price paths
50,000 simulated futures — near-term price paths, independent of the fundamental value.
The 5th–95th and 25th–75th percentile bands from the 50,000-path simulation. Static and pre-computed — independent of the fundamental levers above.
The exact percentiles
The 5th / 25th / middle / 75th / 95th outcomesLine up all 50,000 outcomes low to high — these are the values at the 5%, 25%, 50%, 75% and 95% marks., from 50,000 paths.
| Timeframe | Rare low (5%) | 25% | Middle | 75% | Rare high (95%) |
|---|
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.
Peer set & risks
Where Saudi Basic Industries sits in its markets
SABIC is the Gulf’s petrochemical champion — polymers, agri-nutrients and specialties — roughly 70%-owned by Saudi Aramco and built on advantaged Saudi feedstock. Peers trade in different currencies and aren’t directly value-comparable, so this is a competitive map, not a price table.
| Arena | SABIC's position | Main rivals |
|---|---|---|
| Global commodity petrochemicals | Top-tier integrated | Dow · LyondellBasell · Formosa Plastics |
| Feedstock cost position | Advantaged (Saudi gas / ethane) | far below naphtha-based peers |
| Polyolefins (PE / PP / MEG) | Major global producer | Dow · ExxonMobil Chemical · LyondellBasell |
| Agri-nutrients (urea / ammonia) | via SABIC Agri-Nutrients | Nutrien · CF Industries · OCI |
| Specialties & engineering plastics | Reshaping (European exit) | BASF · Covestro |
| Ownership / parent | ~70% Saudi Aramco | integrated with the crude major |
The investment debate turns less on any single arena than on the product–feedstock spread and whether the 2025 margin trough normalises as SABIC completes its European divestitures and leans on its feedstock advantage. Minority holders are also price-takers under a 70% strategic parent. Competitive map, not advice.
About this series & how we build these
Want the full study and the spreadsheet?
Full write-up plus the editable Excel model.
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The full study (PDF) and Excel model are available on a computer.
Edition: 7 Jul 2026. Older editions stay in the Library.