Listed Companies

September 2015
Content

Foreword 2
The Iranian Economy 3
Iran Equity Market 4
Top 40 Listed Companies 7

Persian Gulf Petrochemical Industry Group 8 Gol-E-Gohar Mining & Industrial Co. 48
Marun Petrochemical Co. 10 Mobin Petrochemical Co. 50
Tamin Petroleum & Petrochemicals Investment Co. 12 Chadormalu Mining & Industrial Co. 52
Mobile Telecommunication Co. of Iran 14 Tejarat Bank 54
Telecommunication Co. of Iran 16 Civil Servants Pension Fund Investment Co. 56
Parsian Oil & Gas Development Co. 18 Tehran Refinery 58
Bank Mellat 20 Informatics Services Corporation 60
I.R.Iran Shipping Lines 22 Iranian Investment Petrochemicals Group 62
Ghadir Investment 24 Zagros Petrochemical Co. 64
MAPNA Group 26 Iran Khodro Industrial Group Co. 66
Bandar Abbas Refinery 28 Khorasan Steel Complex Co. 68
Bank Pasargad 30 Parsian Bank 70
Iran National Copper Industries Co. 32 Tosee Melli Group Investment Co. 72
Jam Petrochemicals 34 Khouzestan Steel Co. 74
Mobarakeh Steel Co. of Esfahan 36 Kharg Petrochemical Co. 76
Middle East Mines Industries Development Holding Co. 38 Amir Kabir Petrochemical Co. 78
Pardis Petrochemical Co. 40 SAIPA Group 80
Omid Investment Management 42 Mines and Metals Development Investment Co. 82
Isfahan Refinery 44 Karafarin Bank 84
Bank Saderat 46 Behran Oil Co. 86

About Us 88

Iran Top 40 Listed Companies 1

Foreword
Following the historic agreement As the Center for a New American
between Iran and the P5+1 group of Security stated in its recent report,
countries on July 14, the enthusiast with the expected removal of all
investors from all around the world financial, energy and trade sanctions,
have visited Iran to assess the market “Iran would be able to at least double
first hand. its energy trade over the next several
In this regard, the administration of years and would likely initiate a major
President Hassan Rouhani is already production expansion, focused in the
working on models for the much long term on natural gas development
needed economic plans. and refined petroleum product and
petrochemical export.”
Coming out of more than three
decades of isolation, the Iran’s economy Back in 2007, Goldman Sachs named
is undergoing the indispensable Iran among the list of “Next 11” most
reforms as the government and other promising emerging markets. In its
state institutions like parliament recent report, the World Bank has
have been trying to pave the way for also forecasted a jump to 5% of GDP
foreign investors. growth for Iran in 2016 if the country’s
For instance, the government sanctions are removed.
has offered to sell state assets As many foreign investors are lining
to foreigners as a step to cut the up to enter the Iranian market, Mofid
administration’s role in the economy Securities and Pouya Finance have
and pledged a tight monetary policy. jointly prepared the “Iran Top 40”
The Central Bank of Iran has also report to give a better picture of the
introduced a bill, allowing foreign Iranian capital market to investors.
banks to open branches in the country The “Iran Top 40” listed in the 40
without having a local partner and biggest companies listed on Tehran
further pledged to unify varying rates Stock Exchange (TSE) and Iran
of foreign currencies in the next Iranian Farabourse (IFB), ranked by market
calendar (starting March 21, 2016). capitalisation as they alone represent
Iran’s Securities and Exchange nearly 70% of the total market cap of
Organization (SEO) which serves as all listed companies in Iran.
the country’s financial supervisory We proudly continue to provide this
authority, has also sought to build clear and empirical data in order to
a trading platform conforming to help the investors make the right
international standards. Under its new decisions for their future investment or
structure, Tehran’s stock exchange has participation in the Iranian market.
been equipped with online trading, an
arbitration board to fast-track disputes,
enhanced investor protection, digital Hamid Azarakhsh
signature, surveillance mechanisms as Chairman of the Board
well as post-trade systems. Mofid Securities

2 Mofid Securities (en.emofid.com)

the Iranian Economy
Iran is the second largest economy toward reducing the deficit of the youth population (ages 20-24
in the Middle East and North Africa Targeted Subsidies Organization years) with 26.5%. The incidence of
(MENA) region after Saudi Arabia, with (TSO) which still remains substantial underemployment has also become
an estimated Gross Domestic Product (estimated at 1.3% of GDP). A second highly prevalent. The weakness seen
(GDP) of USD 406.3 billion in 2014 phase of subsidy reform is being in the labor market is particularly
(World Bank). considered which would improve noteworthy given that only 38% of the
It also has the second largest the targeting of the cash transfers to population is economically active.
population of the region after Egypt, low-income households. In 2005, poverty was 1.45% in Iran
with more than 78.6 million people With aim of improving the prospects using a poverty line of USD 1.25 per
of which majority of them are highly for the economy, the Iranian day (PPP). World Bank projections
educated. government has announced several estimate that only 0.7% of the
According to a United Nations measures including: raising the population (or half a million people)
Development Program (UNDP) productive capacity of the non-oil lived under this poverty line in 2010,
report, Iran rivals Poland in education segments of the economy, giving although a large proportion of people
participation (expected years of greater autonomy to the Central Bank, are living close to it. Indeed, raising
schooling is about 15), outperforming broadening the tax base, stabilizing the poverty line by USD 0.5 (from
Russia, Turkey, South Africa, and and unifying the domestic currency USD 2 to USD 2.50 and from USD
Tunisia. in the market and opening up the 3 to USD 3.50) could put 4%-6%
oil sector to foreign companies for of the population —over 4.5 million
The country ranks second in natural
investment and technical assistance. people—in poverty. This suggests that
gas reserves and fourth in proven
The economy has also benefitted many individuals are vulnerable to
crude oil reserves. The country has a
from the real exchange rate changes in their personal disposable
strong, but often overlooked, industrial
depreciation through improved income and to the persistent rise in the
base. Iran is the 3rd producer of
international competitiveness in the cost of living.
cement and 14th producer of steel
in the world. It is also the largest agriculture, manufacturing, and non-oil According to the World Bank, the
automotive producer in the Middle exports. Data from Iran’s Customs Iranian economy rebounded out of
East. Administration show that Iran’s non-oil recession, with growth estimated
exports rose 24.2% in the first ten at 3.0% in 2014 compared to a
Unlike the majority of Persian
months of the current Iranian calendar contraction of 1.7% in 2013. In fact,
Gulf Arab countries which are still
year (i.e., March 21-January 20, 2015) despite being under sanctions for
struggling with the challenges
compared to the same period last year. decades, Iran is the world’s 18th largest
of diversification, real estate,
Furthermore, the depreciation of the economy by purchasing power parity.
manufacturing, transport, trade,
real exchange rate has improved the Many experts say if it was not for the
restaurants and hotels, and
competitiveness of the agriculture, sanctions, Iran could have easily been
construction account for a combined
manufacturing, and non-oil exports a G-20 economy.
70 percent of the real GDP in Iran.
sectors, as well as of the hydrocarbons The World Bank’s 2015 forecast, which
The Iranian government has industry. Inflationary pressures on the assumes continuously low oil prices
implemented a major reform of its economy have eased from a year- and a marginal decline in oil export
indirect subsidy system on key staples on-year peak of 35% in 2013 to 15% in volumes, suggests that the economy
such as petroleum products, water, 2014. will expand by 0.6% while the inflation
electricity and bread, which has
Unemployment remains elevated and is expected to remain relatively
resulted in a moderate improvement
is expected to be a central challenge contained at 17.3%.
in the efficiency of expenditures and
for the government. According to
economic activities. The overall indirect
the Statistical Center of Iran, the
subsidies, which were estimated
unemployment rate was estimated
to be equivalent to 27% of GDP in
at 10.8% in July 2015. Unofficial
2007/2008 (approximately USD
sources, however, estimate the overall
77.2 billion), have been replaced by a
unemployment rate to be as high
direct cash transfer program to Iranian
as 20%. The unemployment rate
households. Domestic fuel prices have
is particularly worrisome among
risen in parallel, thereby contributing

Iran Top 40 Listed Companies 3

Iran Equity Market
Tehran Stock Exchange (TSE) and Iran Farabourse (IFB) are the two main stock exchanges of Iran. Total market
capitalization of TSE and IFB is about $ 110 billion (as of 31 July 2015) on combined basis. There are 535 listed companies in
TSE and IFB classified in 40 different industries, making the duo the most diversified market in the region.
Among the top 10 industries, the Chemicals is by far the largest industry in terms of percentage of the total market cap
followed by Banks and Basic Metals (Chart 1). These three industries together make up 50% of the market. The current
average P/E (TTM) ratio for TSE and IFB (as of 31 July 2015) is 5.54.

Chart 1: Iran Equity Market Top 10 Industries by Market Cap (# of Listed Companies)

27% 14 9 7 6 6 4 3 3 3 18

Total Market Cap

110 B USD
27% Chemicals (#49)
14% Banks & Financial Intermediaries (#28)
9% Basic Metals (#31)
7% Petroleum Products (#14)
6% Conglomerates (#4)
6% Telecom (#2)
4% Metallic Ores (#12)
3% Vehicle (#33)
3% Transportation (#9)
3% Investment Companies (#27)
18% Others (#326)

4 Mofid Securities (en.emofid.com)

Iran Equity Market—CONTINUED

Iran Top 40 Listed Companies

The market cap of Iran’s 40 largest companies on the TSE and IFB exceeds 75 billion USD. The top 40s (Table on the next
page) make up more than two third of the total market capitalization (Chart 2) with average free float of 8.7 percent.

Chart 2: Iran Equity Market 40s

69% 31%

69% Top 40 Companies

31% Others (#495)

Top 40s are classified in 12 industries and again the chemicals is by far the largest followed by Banks and Basic Metals (Chart 3).

Chart 3: Top 40 Companies by Indusry (# Companies)

35% 13 11 8 8 8 5 4 3 222

Market Cap
76 B USD
35% Chemicals (#10)
13% Banks & Financial Intermediaries (#6)
11% Basic Metals (#5)
8% Conglomerates (#4)
8% Telecom (#2)
8% Petroleum Products (#4)
5% Metallic Ores (#3)
4% Transportation (#1)
3% Engineering (#1)
2% Vehicle (#2)
2% Utility (#1)
1% IT (#1)

Iran Top 40 Listed Companies 5

Rank Top 40 Companies Industry Market Cap (M USD)
1 Persian Gulf Petrochemical Industry Group Chemicals 8,236
2 Marun Petrochemical Co. Chemicals 4,178
3 Tamin Petroleum & Petrochemicals Investment Co. Chemicals 3,345
4 Mobile Telecommunication Co. of Iran Telecom 3,209
5 Telecommunication Co. of Iran Telecom 3,028
6 Parsian Oil & Gas Development Co. Chemicals 2,898
7 Bank Mellat Banks & Financial Intermediaries 2,814
8 I.R.Iran Shipping Lines Transportation 2,685
9 Ghadir Investment Conglomerates 2,616
10 MAPNA Group Engineering 2,359
11 Bandar Abbas Refinery Petroleum Products 2,309
12 Bank Pasargad Banks & Financial Intermediaries 2,298
13 Iran National Copper Industries Co. Basic Metals 2,232
14 Jam Petrochemicals Chemicals 2,166
15 Mobarakeh Steel Co. of Esfahan Basic Metals 2,129
16 Middle East Mines Industries Development Holding Co. Basic Metals 2,029
17 Pardis Petrochemical Co. Chemicals 1,725
18 Omid Investment Management Conglomerates 1,680
19 Isfahan Refinery Petroleum Products 1,624
20 Bank Saderat Banks & Financial Intermediaries 1,622
21 Gol-E-Gohar Mining & Industrial Co. Metallic Ores 1,608
22 Mobin Petrochemical Co. Utility 1,438
23 Chadormalu Mining & Industrial Co. Metallic Ores 1,415
24 Tejarat Bank Banks & Financial Intermediaries 1,378
25 Civil Servants Pension Fund Investment Co. Conglomerates 1,242
26 Tehran Refinery Petroleum Products 1,182
27 Informatics Services Corporation IT 1,178
28 Iranian Investment Petrochemicals Group Chemicals 1,036
29 Zagros Petrochemical Co. Chemicals 1,027
30 Iran Khodro Industrial Group Co. Vehicle 1,025
31 Khorasan Steel Complex Co. Basic Metals 921
32 Parsian Bank Banks & Financial Intermediaries 852
33 Tosee Melli Group Investment Co. Conglomerates 848
34 Khouzestan Steel Co. Basic Metals 831
35 Kharg Petrochemical Co. Chemicals 804
36 Amir Kabir Petrochemical Co. Chemicals 743
37 SAIPA Group Vehicle 717
38 Mines and Metals Development Investment Co. Metallic Ores 711
39 Karafarin Bank Banks & Financial Intermediaries 710
40 Behran Oil Co. Petroleum Products 688

Total 75,536

6 Mofid Securities (en.emofid.com)

TOP 40
Listed COMPANIES

Notes:
• All the financial data provided in this report has been prepared by Pouya Finance (a data
processing company subsidiary to Mofid). For more information on data calculation please contact
[email protected]
• All information are as of 31 July 2015
• All values and returns are in Iranian Rial unless otherwise stated (Such as Market Cap)
• The effective exchange rate is 33,030 Iranian Rials per USD (as of 31 July 2015)
• Forward EPS is estimated by the companies not by analysts
• All prices in charts have been adjusted by capital raise and dividend paid
• All numbers for “Industry” are combination of TSE and IFB companies

Iran Top 40 Listed Companies 7

01 Persian Gulf Petrochemical Industry
Group (TSE:PKLJ)
As the largest listed company in TSE in terms of market value, PKLJ is the
largest petrochemical company in Iran and the 2nd largest producer of
chemical products after Saudi Arabia’s SABIC in Middle East.

Persian Gulf Holding is the largest listed company in Tehran By possessing more than 9% of the Iranian equity
Stock Exchange (TSE) in terms of market value with market value, direct and indirect investments in over 80
roughly 9% of the TSE’s total value. The company has been active petrochemical companies, diverse activities of its
one of the top Iranian companies in regards to profitability, subsidiaries and their potentiality for public offering of
sales, and export value over the recent years. shares in Iranian equity markets, Persian Gulf Holding enjoys
Persian Gulf Holding is a large and diverse complex made various privileges. A hub of petrochemical complexes
up of a number of petrochemical, commercial, and utility adjacent to the Persian Gulf and easy access for transitory
companies out of which the Petrochemical companies of purposes, possession of Fajr and Mobin Petrochemical
Bandar-e Imam (as the largest petrochemical company companies as suppliers of utilities services to petrochemical
in Iran), Buali Sina, Arvand, and Shahid Tondgooyan are complexes are also among the privileges Persian Gulf
located in Mahshahr Petrochemical Special Economic Holding holds.
Zone (PETZONE), on the Persian Gulf coast, south west The required feedstock for complexes subsidiary to
of Iran. Nouri and Pars Petrochemical Companies which Persian Gulf Holding is Liquid feed. This is while products
are also located in the Pars Special Economic Energy of some complexes are used to feed the others. Thus,
Zone (Assaluyeh) account for the highest sales and the feed shortage in upstream companies entails production
highest profit of the holding, respectively. Fajr and Mobin cut in downstream ones, affecting the profitability of the
Petrochemical Companies supply utilities services to whole complex. Moreover, given the significant share of
petrochemical complexes of the group, while Petrochemical export sales in the company’s total sales, fluctuation in the
Commercial Company (PCC) conducts a major part of exchange rate may leave serious impacts on profitability of
domestic/overseas marketing and sales of the group’s the Holding company.
products. Shares of Persian Gulf Holding were offered to public in
With chemical production capacity of 20 Mtpa, Persian Tehran Stock Exchange (TSE) for the first time in April
Gulf Holding is the second largest producer of chemical 2013. Its top shareholders are Justice Share*, National
products after Saudi Basic Industries Corporation (SABIC) Petrochemical Company (NPC) and Oil Industry Staff
in the Middle East. Heavy end, reformate, light end, LPGs, Saving Pension Fund with 40%, 21%, and 17% respectively.
and styrene monomer make the largest share of the
company’s sales. More than half of the holding’s sales
comes from export, often carried out through Bandar-e
Imam, Pars, and Nouri Petrochemical Companies. While
Iran’s Petrochemical exports reached US $14 billion during
the previous Iranian calendar year (started March 21, 2014),
Persian Gulf Holding with petrochemical export of US $6 Fiscal Year Ends 21 Jun 2016
billion secured a market share of more than 40% during that
IPO Date 16 Apr 2013
period.

* Under the “Justice Shares” scheme, ownership of dozens of state-owned companies have been transferred to public ownership since
2006. The move which benefited millions of low-income families was in line with implementation of the country’s privatization plan. The
aforementioned transfer is financed by the dividends and the shares are assignable to the others no earlier than the full settlement.

8 Mofid Securities (en.emofid.com)

Persian Gulf Petrochemical Industry Group—CONTINUED

Last Close 10,975 Market Cap (M USD) 8,236 No. of Shares (B) 24.8
Free Float % 4 EPS (TTM) 1,628 EPS (FWD) 2,094
P/E (TTM) 6.74 P/E (FWD) 5.24 NAV 11,066
Beta —

Chart (Percent) Return %

160 Return 1Yr. -21.23
Return 3Yr. -
3Yr. Avg. -
70

52 Week Range 9,600 - 15,270

-20
Jul 2013 Jan 2014 Jul 2014 Jan 2015 Jul 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 82.22 Dividend Payout Ratio (LFY) 71.43
Sales - 3Yr. Growth Rate - Dividend Payout Ratio 3Yr. Avg. -
EPS (LFY) vs FYE 1Yr. Ago 104.08 Dividend Yield 7.72
EPS - 3Yr. Growth Rate - Valuation
Dividend (LFY) vs FYE 1Yr. Ago 1,269.86 P/B 4.49
Dividend - 3Yr. Growth Rate - P/S 7.29
P/NAV 0.99
NAV/B 4.53

Income Statement (Trillion Rials) Portfolio (Percent)

40
92% Chemicals
7% Utility
1% Other
20

0
2011 2012 2013
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP margin 108.20 - 101.67* Current Ratio 1.17 - 1.10
OP Margin 99.05 - 98.96* Quick Ratio 1.16 - 0.99
ROA 31.14 - 35.96 Cash Ratio 0.01 - 0.15
ROE 76.47 - 104.64

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.59 - 0.55
Debt to Equity Ratio 1.43 - 1.50
LT Debt Ratio 0.00 - 0.04
Interest Coverage Ratio - - 48.83

* Only petrochemical investment companies are included.

Iran Top 40 Listed Companies 9

02 Marun Petrochemical Co. (IFB:PMRZ)

Marun Petrochemical Company is one of the largest olefin complexes in

the world with annual production capacity of 1.1 Mtpa ethylene.

With annual production capacity of 1.1 Mtpa ethylene, The export products are sold based on the global price and
Marun Petrochemical Company (MPC) is one of the largest the earned foreign currency is exchanged at free market
olefin complexes worldwide. The company is made up of rates. The domestic products are sold either through the
two complexes including ethane recovery and heavier gas Iran Mercantile Exchange or over the counter on global
derivatives unit, located near Ahvaz, which feeds olefin prices. The ethane separated from natural gas, as the
complex via a 95 km pipeline; and the second unit as complex’s feedstock, comprises more than 90% of direct
olefin unit along with units of high density polyethylene, consuming materials cost and is purchased on the price
polypropylene, ethylene oxide, ethylene glycol and the set by the Iranian Ministry of Petroleum factoring in dollar
other utilities services which are located in Mahshahr official exchange rate.
Petrochemical Special Economic Zone. The first unit as well The company enjoys large quantities of feedstock with
as high density polyethylene unit went on stream in 2005, competitive prices. Having access to open seas has
while the other units made their production debut in 2006. made transportation of export products easier for Marun
Receiving 25 Mcm natural gas daily from oil-rich Khuzestan Petrochemical. The MPC also owns 40% of shares in the
Province, the complex’s first unit is capable of separating petrochemical projects of Salman Farsi and Bushehr. Until
1.9 Mtpa ethane (and heavier gases) from natural gas. the previous Iranian calendar year (started March 21, 2014),
The second unit enjoys a production capacity of 1.1 Mtpa the Salman Farsi Petrochemical project, with potential
ethylene, 0.2 Mtpa propylene, 0.3 Mtpa high density production capacity of 0.45 Mtpa polypropylene, had
polyethylene, 0.3 Mtpa polypropylene, and 0.443 Mtpa witnessed a 10% progress. The project is slated to come
ethylene glycol. MPC also owns 64% of shares of Laleh on stream in 2017. Bushehr Petrochemical project also with
Petrochemical Company. Being fed by MPC with 0.31 Mtpa potential production capacity of 1.65 Mtpa methanol, 1 Mtpa
ethylene, Laleh Petrochemical has a production capacity of ethylene, 0.3 Mtpa polyethylene, and 0.554 Mtpa ethylene
0.3 Mtpa low density polyethylene (LDPE). glycol has moved forward with 17% progress during the
The company has almost exercised its full nominal capacity previous Iranian calendar year and is set to go operational in
in terms of producing and selling the products, with only two phases in 2017 and 2018.
a 10% gap in producing ethylene. A major part of ethylene The largest shareholders of MPC are Justice Shares,
turns into other products such as polyethylene within the Armed Forces Social Security Investment Company and
production chain, and the surplus is sold. Polyethylene Oil Industry Staff Saving Pension Fund with 30, 23 and 20
accounts for more than 25% of the company’s sales out of percent respectively.
which one third is sold domestically via the Iran Mercantile
Exchange and the rest is exported. Sold surplus ethylene
comprises 25% of sales volume of which over 80% is sold
to Laleh Petrochemical Company and the rest goes to
domestic petrochemical companies. Polypropylene makes
20% of the company’s sales while roughly one third of the Fiscal Year Ends 20 Mar 2016
product is exported. Ethylene glycol also makes up 20% of
IPO Date 27 Dec 2011
sales out of which more than a half is exported.

10 Mofid Securities (en.emofid.com)

Marun Petrochemical Co.—CONTINUED

Last Close 34,500 Market Cap (M USD) 4,178 No. of Shares (B) 4.0
Free Float* % — EPS (TTM) 7,756 EPS (FWD) 5,802
P/E (TTM) 4.45 P/E (FWD) 5.95 Beta 1.21

Chart (Percent) Return %

450 Return 1Yr. 28.90
Return 3Yr. 353.28
3Yr. Avg. 65.50
200

52 Week Range 27,766 - 40,050

-50
May 2012 Feb 2013 Nov 2013 Jul 2014 Apr 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 2.80 Dividend Payout Ratio (LFY) 103.71
Sales - 3Yr. Growth Rate 41.91 Dividend Payout Ratio 3Yr. Avg. 99.65
EPS (LFY) vs FYE 1Yr. Ago -15.41 Dividend Yield 21.28
EPS - 3Yr. Growth Rate 42.20 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -8.75 P/B 11.99
Dividend - 3Yr. Growth Rate 49.15 P/S 2.70

Income Statement (Trillion Rials) Sales (Thousand Tone)

50 700

25 350

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Olefins Glycols PP HDPE Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 60.59 66.82 48.54 Debt Ratio 0.78 0.21 0.55
GP Margin 56.31 66.30 46.87 Debt to Equity Ratio 3.49 0.27 1.50
OP Margin 51.93 61.09 44.15 LT Debt Ratio 0.05 0.03 0.04
ROA 63.30 64.79 35.96 Interest Coverage Ratio 35.04 - 48.83
ROE 287.48 83.73 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 5.50 13.93 5.86 Current Ratio 0.91 3.18 1.10
Receivable Turnover 7.08 3.90 6.58 Quick Ratio 0.78 2.78 0.99
Asset Turnover 1.04 0.95 0.62 Cash Ratio 0.31 0.47 0.15

* IFB does not publish free float of listed companies

Iran Top 40 Listed Companies 11

03 Tamin Petroleum & Petrochemicals
Investment Co. (TSE:PTAP)
TAPPICO is the 2nd largest holding in Iran’s stock exchange market. The compa-
ny holds over 10% of the total petrochemical production capacity of Iran.
TAPPICO has 49% share of Persian Gulf Star Oil Company which is the largest
gas condensate refining project in Iran to go on stream by March 2016.

Tamin Petroleum & Petrochemicals Investment Co TAPPICO has a diverse income basket. A considerable
(TAPPICO) was established in 2011 as a merger of Tamin Oil amount of TAPPICO’s income comes from Marun and Jam
and Gas Company and Tamin Chemical and Petrochemical Petrochemicals (olefin producers), Fanavaran and Kharg
Investment Company. The shares of TAPPICO were offered Petrochemicals (methanol producers), and Khorasan
in Tehran Stock Exchange (TSE) for the first time in July 9, Petrochemical Co. (urea producer) which are included in
2013. The Social Security Investment Company with more gas petrochemical industry with feedstock prices set by
than 83% ownership is the largest shareholder of TAPPICO. the government. Another major part of TAPPICO’s income
As the second largest holding in the Iranian stock exchange comes from companies in oil sector such as Pasargad Oil
market, TAPPICO holds ownership of nearly 40 companies Co. (bitumen producer) and Iranol oil Co. (industrial oil
in petrochemical, oil and gas, rubber, and cellulose of which producer) as well as refineries.
almost half of shares are of management type. Chemical TAPPICO has plans on merging cellulose companies into
producers make up over 80% of TAPPICO’s portfolio. a cellulose holding and selling it later. Improvement of
TAPPICO holds more than 10% of total petrochemical international relations, ease of restrictions in goods and
production capacity of Iran. money transfer, and increase of gas production through
TAPPICO also owns 8.5% of Persian Gulf Petrochemical launching new phases in South Pars gas field have
Industry Group which is the largest listed company. It also strengthened subsidiaries to TAPPICO which are mostly
holds 49% of Persian Gulf Star Oil Company (PGSOC) which producers of export petrochemical products, and will
is considered as the most important non-listed investment increase total profitability of the whole complex.
of the company. PGSOC, the largest gas condensate
refining project in Iran, would have a 360 TBD refining
capacity and is projected to go operational by March 2016
with refining capacity of 120 TBD in the initial phase. Two Fiscal Year Ends 21 May 2016
other phases are also planned to come on stream later with
IPO Date 9 Jul 2013
time intervals of five months.

12 Mofid Securities (en.emofid.com)

Tamin Petroleum & Petrochemicals Investment Co.—CONTINUED

Last Close 2,540 Market Cap (M USD) 3,345 No. of Shares (B) 43.5
Free Float % 6 EPS (TTM) 505 EPS (FWD) 580
P/E (TTM) 5.03 P/E (FWD) 4.38 NAV 3,270
Beta —

Chart (Percent) Return %

120 Return 1Yr. -13.65
Return 3Yr. -
3Yr. Avg. -
50

52 Week Range 2,031 - 5,299

-20
Sep 2013 Mar 2014 Aug 2014 Jan 2015 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 116.09 Dividend Payout Ratio (LFY) 56.89
Sales - 3Yr. Growth Rate 104.24 Dividend Payout Ratio 3Yr. Avg. 83.58
EPS (LFY) vs FYE 1Yr. Ago 119.38 Dividend Yield 13.99
EPS - 3Yr. Growth Rate 104.96 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 40.00 P/B 2.39
Dividend - 3Yr. Growth Rate 81.41 P/S 4.35
P/NAV 0.78
NAV/B 3.08

Income Statement (Trillion Rials) Portfolio (Percent)

40
81% Chemicals
15% Drilling
2% Petroleum Products
20 2% Other

0
2010 2011 2012 2013
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP margin 86.52 - 101.67* Current Ratio 0.31 - 1.10
OP Margin 99.69 - 98.96* Quick Ratio 0.31 - 0.99
ROA 30.65 - 35.96 Cash Ratio 0.06 - 0.15
ROE 48.36 - 104.64

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.52 - 0.55
Debt to Equity Ratio 1.10 - 1.50
LT Debt Ratio 0.17 - 0.04
Interest Coverage Ratio 0.62 - 48.83

* Only petrochemical investment companies are included.

Iran Top 40 Listed Companies 13

04 Mobile Telecommunication Co. of Iran
(TSE:HMRZ)
As the largest mobile operator in the Middle East, MCI is also ranked first
among Iranian operators with more than 63 million subscribers.

Mobile Telecommunication Co. of Iran (MCI) is the first Voice services and data services comprise 66% and 22%
Iranian mobile phone operator as well as the largest of MCI’s revenue respectively. Approximately 50% of MCI’s
operator in the Middle East. Following its spun off from the costs is related to its payments to Telecommunication
Telecommunication Co. of Iran (TCI), MCI was established Infrastructure Company (TIC). The network utility expense
in July 2003. Later in December 2010, the MCI offered for domestic and foreign mobile phone companies
5% of its shares to the public for the first time in the Iran constitutes another significant part of MCI’s costs with 16%.
Farabourse (IFB). The company’s ticker symbol was Irancell and Rightel are MCI’s two main rivals. Rightel was
transferred to the TSE’s second market in August 2013. It is licensed in 2010 as a monopolistic provider of 3G services
worth noting that the Telecommunication Co. of Iran (TCI) is for five years. However, its poor performance in comparison
the major stock holder of MCI with 90% of shares. to MCI and Irancell who received the 3G license in 2014,
From 1994 to 2003, the MCI has had a monopoly over Iran’s resulted in a stronger performance of MCI and Irancell
mobile communications market. Taliya Mobile reached in terms of market share. Irancell has also succeeded in
the market in 2003 as a telecom contractor for providing earning the license to provide 4G service while MCI’s 4G
license has been held until it resolves its problems and
prepaid SIM cards. Coming forth of Irancell in 2005 as the
improve the quality of its 3G service first.
second operator formed a competition in mobile phone
market. The competition was later intensified as WiMAX Prior to national roaming plan, MCI used to possess a
technology and Rightel (the third operator) made their majority of market share with wider network coverage
debut in 2010. The competition have gone further since across the country in comparison with other operators.
mid-2014 after the first and second operators earned their However, as a result of a new regulatory plan, since June
licenses to provide service using new communication 2014, that required all operators to provide other rivals with
generations. communicative networks including hardware, software,
personnel and all investments based on the price set by
With more than 63,000,000 subscribers, MCI is ranked
Communications Regulatory Authority (CRA), the MCI lost
first among all other Iranian mobile operators nationwide. its significant competitive advantage in favor of other two
MobinNet Telecom Co. and Pardakht-Aval-Kish (PAK) are operators. TIC and CRA are both subsidiaries to the Ministry
subsidiaries to MCI. With around 700,000 subscribers, of I.C.T.
MobinNet accounts for nearly 60% market share of WiMAX
services. The second subsidiary, Pardakht-Aval-Kish,
provides financial value added services in mobile phone
network.
Three main products and services of MCI include SIM cards;
voice, SMS, MMS, GPRS services; and value added services
Fiscal Year Ends 20 Mar 2016
of ring back tone, SMS, and 3G services such as Mobile
IPO Date 19 Dec 2010
Phone Apps and mobile TV.

14 Mofid Securities (en.emofid.com)

Mobile Telecommunication Co. of Iran—CONTINUED

Last Close 26,501 Market Cap (M USD) 3,209 No. of Shares (B) 4.0
Free Float % 9 EPS (TTM) 6,349 EPS (FWD) 6,808
P/E (TTM) 4.17 P/E (FWD) 3.89 Beta —

Chart (Percent) Return %

100 Return 1Yr. 2.69
Return 3Yr. -
3Yr. Avg. -
40

52 Week Range 23,662 - 35,400

-20
Nov 2013 Apr 2014 Aug 2014 Jan 2015 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 14.18 Dividend Payout Ratio (LFY) 85.71
Sales - 3Yr. Growth Rate 17.05 Dividend Payout Ratio 3Yr. Avg. 94.97
EPS (LFY) vs FYE 1Yr. Ago 12.42 Dividend Yield 20.8
EPS - 3Yr. Growth Rate -6.02 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -3.41 P/B 7.51
Dividend - 3Yr. Growth Rate 12.30 P/S 1.27

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

90 30

45 0

2010 2011 2012 2013 2014

0 -30
2010 2011 2012 2013 2014 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 30.50 30.72 63.52 Debt Ratio 0.88 0.74 0.67
GP Margin 36.56 34.90 36.56 Debt to Equity Ratio 7.55 2.81 4.25
OP Margin 32.21 31.02 60.90 LT Debt Ratio 0.35 0.49 0.18
ROA 22.19 22.21 21.58 Interest Coverage Ratio - - 2.76
ROE 202.25 86.45 121.15

Liquidity MRQ 5 Yr. Avg. Industry

Current Ratio 0.57 1.62 0.79
Quick Ratio 0.56 1.60 0.79
Cash Ratio 0.13 0.78 0.15

Iran Top 40 Listed Companies 15

05 Telecommunication Co. of Iran
(TSE:MKBT)
TCI is Iran’s largest telecommunication company which almost holds the
whole market share in landline telephone as well as a great majority of
mobile phone market share across the country.

TCI is Iran’s largest telecommunication company which As the basic telecom services are affected by alternative
almost holds the whole market share in landline telephone internet-based technologies, the new sectors like
as well as a great majority of mobile phone market broadband communications services, data, value added
share across the country. Established in early 1971, the services, and electronic banking would serve as resources
Telecommunication Co. of Iran currently has over 50,000 for growth in revenues.
permanent and contract employees, and owns around 90% TCI has been able to keep sanctions at bay through
of shares of the Mobile Telecommunication Company of Iran receiving services from Chinese companies, and will be
(MCI). able to access more cutting-edge technologies once the
TCI has launched more than 29 million landlines which international sanctions against Iran are lifted. Revenues and
covers 37% of the total population of Iran. The company expenses are mostly in local currency (Iranian Rial) and
also has 63,000,000 mobile phone subscribers which less subject to foreign currency fluctuations. The Iranian
account for 80% of total subscribers in the country. The TCI government and parliament’s role in setting the prices are of
also has the potential of providing service to 96% of the challenges which TCI undergoes.
total population nationwide. Half of the TCI’s shares are owned by Tose’e Etemad Mobin
Company (Ltd), while another 20% are owned by the
The TCI’s operation in field of domestic landline telephone
Iranian government and Justice Share as the next major
network is perfectly monopolistic. However, there is a
shareholders.
serious competition among TCI, and Irancell and Rightel
(as the second and third telecommunication operators) in
terms of increasing market share on mobile phone network
and data transfer. The competition comes as Irancell and
Rightel were privileged with being the first pre-paid SIM
card supplier and the first 3G mobile internet supplier,
respectively. Offering pre-paid SIM cards over the recent
years and providing 3G mobile internet service since 2014
have made TCI the largest mobile phone operator both in
Iran as well as across the Middle East.
Calls make 80% of the combined telecom revenues,
while the remaining 20% goes to data services. Also,
67% of calls revenue consists of mobile phone sector,
while 22% are from landline telephone, and the rest is
earned through subscriptions as well as communication
with other operators. Around half of the expenses are
generated by personnel, asset depreciation and energy-
related consumption. Nearly one fourth of total expenses
goes to Communications Regulatory Authority licensing
purposes. Interconnection with other operators and repair/
maintenance of communication networks account for 10%
Fiscal Year Ends 20 Mar 2016
and 5% of other expenses respectively, while the other 8%
IPO Date 9 Aug 2008
goes to using network and infrastructure communications.

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Telecommunication Co. of Iran—CONTINUED

Last Close 2,180 Market Cap (M USD) 3,028 No. of Shares (B) 45.9
Free Float % 5 EPS (TTM) 460 EPS (FWD) 559
P/E (TTM) 4.74 P/E (FWD) 3.90 Beta 0.59

Chart (Percent) Return %

500 Return 1Yr. -1.13
Return 3Yr. 62.75
3Yr. Avg. 17.63
250

52 Week Range 1,950 - 3,099

-0
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -2.48 Dividend Payout Ratio (LFY) 87.52
Sales - 3Yr. Growth Rate 9.66 Dividend Payout Ratio 3Yr. Avg. 91.58
EPS (LFY) vs FYE 1Yr. Ago -4.39 Dividend Yield 16.16
EPS - 3Yr. Growth Rate 5.43 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -8.05 P/B 1.67
Dividend - 3Yr. Growth Rate -1.61 P/S 4.65

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

24 11

12 0

2011 2012 2013 2014

0 -11
2011 2012 2013 2014 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 98.16 - 63.52 Current Ratio 1.02 - 0.79
OP Margin 90.99 - 60.90 Quick Ratio 1.02 - 0.79
ROA 20.96 - 21.58 Cash Ratio 0.17 - 0.15
ROE 36.07 - 121.15

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.44 - 0.67
Debt to Equity Ratio 0.80 - 4.25
LT Debt Ratio 0.00 - 0.18
Interest Coverage Ratio 2.76 - 2.76

Iran Top 40 Listed Companies 17

06 Parsian Oil & Gas Development Co.
(TSE:PASN)
With 10% market share in global market, POGDC is considered the fourth
largest producer of methanol in the world.

Parsian Oil & Gas Development Co. (POGDC) is the largest POGDC has paid special attention to complete its supply
producer of methanol, urea and ammonia across the chain and production from raw material to sales through
country, and also the most important and largest petro- acquisition of subsidiaries and affiliated companies. By
refinery holding nationwide. It also enjoys a significant having a full management over Niroo Rail Transportation
portfolio with full management of companies such as Company, PODGC, in addition to acquisition of important
Tabriz Petrochemical Company (T.P.C) as well as Tabriz companies within the relevant industry, has completed the
Refinery, Shiraz Petrochemical Company & Refinery, Pardis distribution and transfer chain of petrochemical products
Petrochemical Company, Zagros Petrochemical Company, across the country.
Kermanshah Petrochemical Industries Company, Niroo Rail A number of petrochemical subsidiaries to POGDC suffer
Transportation Company and Petrochemical Commercial from foreign currency debts as a result of using different
Company International. financing methods for construction, and also imported
By having a management role in production of 3.3 Mtpa material and components expenses. On the other hand,
since the products of the subsidiaries are mostly export-
methanol in Zagros and Shiraz petrochemical companies,
oriented, the foreign currency rate fluctuations have
POGDC is considered the fourth largest producer of
a serious effect on the revenues and costs of POGDC.
methanol in the world with 10% market share in methanol
Furthermore, the main feedstock for most of gas and
global market. Moreover, POGDC manages production and
petrochemical complexes and also refineries is crude oil
sales of 2.1 Mtpa ammonia and 3.3 Mtpa urea through Pardis,
of which the government is the sole supplier. Uncertain
Kermanshah, and Shiraz petrochemical companies. POGDC
price outlook for feedstock of the mentioned subsidiary
also manages 10% of crude oil processing capacity in Iran.
companies is believed to be a challenge against POGDC
More than 70% of POGDC’s portfolio is invested in listed and the whole industry as well.
companies and the rest in non-listed ones. Pardis, Zagros, Ghadir Investment and Armed Forces Staff Pension Fund
Marun, and Shiraz petrochemical companies as well as with 63% and 13% ownership are the largest shareholders of
Tabriz and Shiraz refineries comprise over 90% of POGDC’s POGDC respectively.
listed portfolio market value. Pars Petrochemical Company
is the most important non-listed corporation in which
POGDC has invested, and makes up 90% of POGDC’s non-
listed portfolio. The most profitable companies managed
by POGDC over the last three years have been Tabriz Oil
Refining Company, Shiraz Oil Refining Company, and Pardis
Petrochemical Company.
Today, POGDC is the most important and profitable
subsidiary to Ghadir Investment in a way that POGDC’s
Fiscal Year Ends 21 Dec 2015
dividend accounts for roughly 70% of Ghadir investments
IPO Date 15 Feb 2012
income.

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Parsian Oil & Gas Development Co.—CONTINUED

Last Close 3,140 Market Cap (M USD) 2,898 No. of Shares (B) 30.0
Free Float % 18 EPS (TTM) 947 EPS (FWD) 840
P/E (TTM) 3.32 P/E (FWD) 3.74 NAV 3666
Beta 1.17

Chart (Percent) Return %

700 Return 1Yr. -12.55
Return 3Yr. 232.10
3Yr. Avg. 49.20
300

52 Week Range 2,620 - 8,024

-100
Jun 2012 Mar 2013 Dec 2013 Sep 2014 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 19.40 Dividend Payout Ratio (LFY) 93.97
Sales - 3Yr. Growth Rate 36.28 Dividend Payout Ratio 3Yr. Avg. 91.10
EPS (LFY) vs FYE 1Yr. Ago 18.55 Dividend Yield 21.39
EPS - 3Yr. Growth Rate 37.15 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 30.81 P/B 1.82
Dividend - 3Yr. Growth Rate - P/S 3.22
P/NAV 0.86
NAV/B 2.13

Income Statement (Trillion Rials) Portfolio (Percent)

30
75% Chemicals
24% Petroleum Products
1% Other
15

0
2010 2011 2012 2013
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 95.75 - 101.61* Current Ratio 0.77 - 1.10
OP Margin 99.94 - 98.96* Quick Ratio 0.77 - 0.99
ROA 33.26 - 35.96 Cash Ratio 0.02 - 0.15
ROE 61.92 - 104.64

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.35 - 0.55
Debt to Equity Ratio 0.54 - 1.50
LT Debt Ratio 0.00 - 0.04
Interest Coverage Ratio 27.03 - 48.83

* Only petrochemical investment companies are included.

Iran Top 40 Listed Companies 19

07 Bank Mellat (TSE:BMLT)

With the majority of investment deposits among other banks, Bank Mellat
has the 3rd largest banking network across Iran with 1600 branches.

Bank Mellat was established in 1980 as a merger of ten pre- Non-interest income of the bank, significant to the total
revolution private banks including Tehran, Dariush, Bein-al- income, is mostly earned from granting foreign currency
melalie-Iran, Omran, Bimeh Iran, Iran & Arab, Pars, Etebarat loans. Thus, bank service commissions and fees – especially
Taavoni & Tozie, Tejarat Khareji Iran and Farhangian. Listed credit card services - play vital roles in generating income
on TSE for the first time in 2008 as a joint stock company, for the bank. Leading in attracting off-balance sheet
Bank Mellat today is the largest listed bank in terms of items like banking guarantees issuance, makes up another
market value. part of the receiving fees. The quality of non-interest
Bank Mellat accounts for most of investment deposits income of Bank Mellat has been satisfactory and normally
repeatable and sustainable. Having four foreign branches
(about 12%) among the other banks across the country;
is also considered a competitive advantage for the bank in
nonetheless, the interest income (i.e., receiving deposits
international trades.
and granting facilities) comprises only 10% of the bank’s
income. In the bank’s balance sheet, the foreign currency 30% of Bank Mellat’s shares is owned by provincial
denominated assets play a major role as the majority of its investment companies (Justice Share) which is followed by
claims is to the government. Bank Mellat also holds around the Iranian government and Social Security Organization
one fourth of off-balance sheet items of all banks, including as the second and third largest shareholders with 20% and
the bank’s liabilities for opening of letters of credit (L/C) and 10% ownership, respectively. The significant state ownership
issuance of guarantees. Following the Bank Saderat Iran and has undermined the bank’s bargaining power against the
Bank Tejarat, Bank Mallet, with 1600 branches, has the third government as a customer of financing services (foreign
largest banking network across the country. it also owns currency-Rial), causing the government-related claims and
branches in Turkey and South Korea and holds shares in a loans to make up a large part of the bank’s assets.
number of foreign banks. Bank Mellat, after Bank Saderat
Iran, is Iran’s second largest bank in terms of possessing
foreign branches. With nearly 22,000 employees, Bank
Fiscal Year Ends 20 Mar 2016
Mellat ranks second after Bank Saderat Iran in terms of
IPO Date 18 Feb 2009
number of staff.

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Bank Mellat—CONTINUED

Last Close 2,324 Market Cap (M USD) 2,814 No. of Shares (B) 40.0
Free Float % 22 EPS (TTM) 464 EPS (FWD) 475
P/E (TTM) 5.0 P/E (FWD) 4.9 Beta 0.85

Chart (Percent) Return %

700 Return 1Yr. 13.2
Return 3Yr. 358.8
3Yr. Avg. 66.2
300

52 Week Range 1,843 - 2,729

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 0.06 Dividend Payout Ratio (LFY) 0.20
Sales - 3Yr. Growth Rate 0.19 Dividend Payout Ratio 3Yr. Avg. 0.45
EPS (LFY) vs FYE 1Yr. Ago 0.09 Dividend Yield 0.04
EPS - 3Yr. Growth Rate 0.38 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -0.73 P/B 1.22
Dividend - 3Yr. Growth Rate -0.13 P/S 1.32

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 25.9 31.1 120

Net Interest Income After Provison Margin 0.6 3.7

Cost to Income Ratio 65.8 54.3
60
ROA 1.3 1.6
ROE 24.9 17.9
0
Equity to Asset 5.3 8.6 2010 2011 2012 2013 2014
CAR 9.0 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 16.0 16.0

NPL Coverage Ratio 49.9 44.1

Deposit per Employee (M) 41,526 57,249

Net Income per Employee (M) 814 1264

Iran Top 40 Listed Companies 21

08 I.R.Iran Shipping Lines (TSE:KSHJ)

IRISL has a 5 million tons of transport capacity with more than 150 vessels
with an average age of 15. The company’s shipping lines connects the Persian
Gulf to East Asia, South China, South East Asia, India, and East Africa.

Established in 1967, IRISL Group commenced its commercial Port service is another operation that is run by IRISL. Tax
activities by employing four ocean-going vessels as well laws, port tariffs, and rise of fuel prices are among other
as two home-trade ones. IRISL was operating prior to the important risk factors for the company. Supplying fuel
Islamic Revolution by its former name of Arya National and water makes one third of the company’s operational
Shipping Lines Company which was later renamed in expenses while loading/unloading expenses, keelage, and
1979 to its current title and run under supervision of Iran’s the wages of employees make up the other major expenses
Ministry of Industry, Mine and Trade. of IRISL’s.
As a holding with more than 20 subsidiary companies, Three fourth of IRISL’s shares is owned almost equally by
IRISL has assigned its all operating assets – except for the Social Security Investment Company, Civil Servants Pension
containers – to its subsidiaries. IRISL is active in Northern Fund (CSPF), and provincial investment corporations (so-
and Southern ports of the country with over 150 vessels called Justice Share). Governmental Trading Corporation of
with an average age of 15. Iran (G.T.C) holds nearly 20% of IRISL’s shares as well.
Bulk and container carrier vessels comprise half of the IRISL
Group’s fleet while another 25% are multipurpose vessels.
The transport capacity of IRISL is 5 million tons which is
about 0.3% of the world total fleet capacity of 1.5 billion
tons.
IRISL Group has four main container transport shipping lines
that connect Persian Gulf to East Asia, South China, South
East Asia, India, and East Africa. IRISL’s container capacity
is over 100,000 TEU which amounts to 0.5% of the world
total. Each unit of TEU is equivalent to a container with
dimensions of 20 * 8 square feet and a height of 8.5 feet.
Activities in shipping industry are considered as
international business; however, survival of companies
comes up with difficulty when exposed to any international
sanction, e.g. Iran-India Shipping Company (a subsidiary to
IRISL Group) has become almost non-operative due to the
Western-imposed sanctions against Iran. Iran’s oil delivery Fiscal Year Ends 21 Jun 2016
to India has been one of the main operations by the above
IPO Date 18 May 2008
mentioned company.

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I.R.Iran Shipping Lines—CONTINUED

Last Close 5,409 Market Cap (M USD) 2,685 No. of Shares (B) 16.4
Free Float % 5 EPS (TTM) 265 EPS (FWD) 145
P/E (TTM) 20.41 P/E (FWD) 37.30 Beta 0.91

Chart (Percent) Return %

600 Return 1Yr. 104.13
Return 3Yr. 769.68
3Yr. Avg. 105.65
250

52 Week Range 2,695 - 6,350

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 0.12 Dividend Payout Ratio (LFY) 0.64
Sales - 3Yr. Growth Rate -44.11 Dividend Payout Ratio 3Yr. Avg. 0.21
EPS (LFY) vs FYE 1Yr. Ago 2655.95 Dividend Yield 2.68
EPS - 3Yr. Growth Rate 201.40 Valuation
Dividend (LFY) vs FYE 1Yr. Ago - P/B 5.26
Dividend - 3Yr. Growth Rate - P/S 425.72

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

3 8

1.5 0

2010 2011 2012 2013

0 -8
2010 2011 2012 2013 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 1251.16* - 1041.60 Debt Ratio 0.71 - 0.68
GP Margin( 16.90 - 4.00 Debt to Equity Ratio 2.42 - 2.27
OP Margin -147.20 - -118.82 LT Debt Ratio 0.41 - 0.35
ROA 5.19 - 7.44 Interest Coverage Ratio 202.67 - 493.85
ROE 19.79 - 25.00

Liquidity MRQ 5 Yr. Avg. Industry

Current Ratio 0.27 - 0.37
Quick Ratio 0.27 - 0.35
Cash Ratio 0.08 - 0.09

* Due to a non-operating revenue

Iran Top 40 Listed Companies 23

09 Ghadir Investment (TSE:GDIR)

As the largest conglomerate holding company in the TSE, Ghadir

Investment is comprised of eight specialized holdings which are active in
oil, gas and petrochemical, cement, mine & industry, transportation, elec-
tricity and energy among others.

Ghadir Investment is the largest conglomerate holding Since 70% of Ghadir’s investment income comes from
company in the Iranian capital market, active through eight Parsian Oil and Gas Development Co. (POGDC), currency
specialized holdings in oil, gas and petrochemical, cement, fluctuations and any changes in global price of oil,
construction, mine and industry, transportation, electricity petrochemical complexes’ feedstock, methanol, urea and
and energy, finance and commerce, and other independent ammonia as inputs/outputs to POGDC may severely affect
companies. the profitability of Ghadir Investment.
More than 60% of Ghadir Investment’s portfolio has been Establishing gas condensate refinery with production
taken by listed companies, while the remaining goes to capacity of 12 TBD, an aluminum complex with capacity
investing in non-listed companies. The most important and of 1 Mtpa, and implementation of a 950 MW combined
largest subsidiary to Ghadir Investment is Parsian Oil and cycle power plant are of the latest projects run by Ghadir
Gas Development Co. (POGDC). According to the latest Investment.
released reports, POGDC has taken over half of Ghadir With aim of playing a more significant role in Iran’s capital
Investment’s listed portfolio which comprises about 70% of market, Ghadir Investment Company was established in
profits Ghadir makes in investments through its dividend. 1991 by Bank Saderat and was first titled as “Bank Saderat
Also 70% of Ghadir Investment’s non-listed portfolio has Investment Company”. Bank Saderat transferred 51% of
been invested in Pars Petrochemical Company which marks its management shares to Armed Forces Social Security
a total 40% ownership by Ghadir Investment and POGDC in Organization in 2008. The Pension, Disability, and Savings
the mentioned company. Fund of Banks, and Bank Saderat Network are the second
and third largest shareholders of Ghadir Investment with
In addition to above mentioned ownership, Ghadir
15% and 10% ownership respectively.
Investment also holds the management shares of a number
of corporations including Iran Alloy Steel Co., International
Construction Development Co., Motogen Co., Kavir Tire
Co., and considerable shares in Arfa Iron & Steel Co.,
ASP Construction Co., Behshahr Industrial Development
Corporation, Bahman Group and Parsian Electronic
Commerce Co., suggesting an active presence of Ghadir
Investment in various industries. Large-scale investments of
Ghadir holding in diverse industries has made it the largest
Fiscal Year Ends 21 Dec 2015
TSE-listed company in terms of market value among all
IPO Date 25 Mar 2001
industrial conglomerates and investment groups.

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Ghadir Investment—CONTINUED

Last Close 2,400 Market Cap (M USD) 2,616 No. of Shares (B) 36.0
Free Float % 16 EPS (TTM) 1,242 EPS (FWD) 705
P/E (TTM) 1.93 P/E (FWD) 3.40 NAV 3351
Beta 1.18

Chart (Percent) Return %

1000 Return 1Yr. -23.02
Return 3Yr. 198.87
3Yr. Avg. 44.04
400

52 Week Range 2,348-7,000

-200
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 104.61 Dividend Payout Ratio (LFY) 40.25
Sales - 3Yr. Growth Rate 65.28 Dividend Payout Ratio 3Yr. Avg. 48.71
EPS (LFY) vs FYE 1Yr. Ago 105.65 Dividend Yield 16.31
EPS - 3Yr. Growth Rate 67.34 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 58.73 P/B 0.91
Dividend - 3Yr. Growth Rate 43.28 P/S 1.89
P/NAV 0.72
NAV/B 1.27

Income Statement (Trillion Rials) Portfolio (Percent)

50
70% Chemicals
11% Other Non-Metallic Ore
6% Financial Services
25 5% Metallic Ores
3% Basic Metals
5% Other

0
2009 2010 2011 2012 2013
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 97.95 95.97 99.26 Current Ratio 7.10 4.87 4.07
OP Margin 99.79 98.45 99.36 Quick Ratio 7.10 4.54 4.07
ROA 57.06 38.67 41.75 Cash Ratio 0.53 0.28 0.41
ROE 61.35 44.23 49.65

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.06 0.13 0.17
Debt to Equity Ratio 0.06 0.15 0.25
LT Debt Ratio 0.00 0.02 0.01
Interest Coverage Ratio 1.76 49.32 38.93

Iran Top 40 Listed Companies 25

10 MAPNA Group (TSE:MAPN)

MAPNA is the largest company in power plant activities both in Iran and
across the Middle East which owns 11% of total power generated in Iran.
The group has no major rival in the region, giving it the ability to carry
out projects across the Middle East.

MAPNA Group (MAPNA) was established by the Iranian A key factor of development is electricity consumption.
Ministry of Energy in 1993. All pre-MAPNA executive affairs Rising growth in electricity consumption along with annual
regarding Iran’s thermal power plant projects were carried need for a 5000 MW increase in electricity power have
out by foreign companies. MAPNA is the largest company made construction of power plants a potential income for
in power plant activities in Iran as well as the whole Middle MAPNA. Having no serious rival in the Middle East, MAPNA
East. is capable of developing its projects across the region once
The subsidiaries to MAPNA Group fall into five categories; international sanctions against Iran are lifted. The shortage
power-related subsidiaries are active in construction of liquidity is one of the main challenges that MAPNA faces.
of power plants and transmission lines. In production, Failure of the government to pay its outstanding debts on
manufacturer companies produce various types of time has resulted in reduction of MAPNA’s revenue and
electrical equipment for power plants. Investment projects forced the company to resort to bank loans to finance
are concerned with electricity and freshwater power its projects. Receiving bank loans results in a rise in the
plants. Rail transport sector deals mostly with locomotive corporate interest expense on one hand, and a profit
construction as well as design, repair, and maintenance reduction for the company on the other hand.
of rail lines. Reservoir construction, drilling projects, and Almost 48% of MAPNA is owned by Saba Power and Water
field development are of the major activities of oil and gas Industries Investment Corp. (Saba) which is followed by
category. provincial investment companies (Justice Share) as the
MAPNA owns, directly and indirectly, power plants with second largest shareholder with 26% ownership. Almost half
capacity of over 8 thousand MW which comprise 11% of of Saba is owned by Mahab Ghodss Consulting Engineering
total power generation of the country. The first desalination Company and the other half goes to provincial investment
plant of the country was established in Qeshm Island companies. Therefore Justice Share controls almost half of
near the Strait of Hormuz with production capacity of MAPNA directly and indirectly.
18,000 cm/d. About 60% of the company’s profit comes
from project-driven income and the rest is earned from
investments. Most of investments are made in electricity Fiscal Year Ends 20 Mar 2016
sector, and electricity sales account for the majority of
IPO Date 26 Aug 2007
MAPNA’s income.

26 Mofid Securities (en.emofid.com)

MAPNA Group—CONTINUED

Last Close 7,791 Market Cap (M USD) 2,359 No. of Shares (B) 10.0
Free Float % 10 EPS (TTM) 603 EPS (FWD) 622
P/E (TTM) 12.92 P/E (FWD) 12.53 Beta 1.47

Chart (Percent) Return %

500 Return 1Yr. 12.19
Return 3Yr. 407.91
3Yr. Avg. 71.89
200

52 Week Range 5,955 - 8,890

-100
Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 26.76 Dividend Payout Ratio (LFY) 54.36
Sales - 3Yr. Growth Rate 13.30 Dividend Payout Ratio 3Yr. Avg. 38.23
EPS (LFY) vs FYE 1Yr. Ago 6.54 Dividend Yield 3.84
EPS - 3Yr. Growth Rate 1.07 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 6.01 P/B 2.46
Dividend - 3Yr. Growth Rate 0.08 P/S 2.57

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

32 13

16 0

2010 2011 2012 2013 2014

0 -13
2010 2011 2012 2013 2014 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 19.91 23.44 20.70 Debt Ratio 0.78 0.73 0.75
GP Margin(%) 20.39 25.17 21.45 Debt to Equity Ratio 3.49 2.90 3.31
OP Margin 21.89 25.86 22.52 LT Debt Ratio 0.05 0.05 0.05
ROA 4.35 6.22 5.69 Interest Coverage Ratio 1.34 2.50 2.71
ROE 20.02 22.10 21.33

Liquidity MRQ 5 Yr. Avg. Industry

Current Ratio 1.06 1.13 1.10
Quick Ratio 0.99 0.96 1.03
Cash Ratio 0.03 0.05 0.08

Iran Top 40 Listed Companies 27

11 Bandar Abbas Refinery (TSE:PNBA)

Bandar Abbas Refinery carries out 20% of the country’s oil refining
operations and has a daily refining capacity of 330 TBD crude oil and gas
condensate.

Bandar Abbas Refinery Company was established in 1997 Bandar Abbas Refinery’s access to open waters has made
by collaboration of Italy and Japan. This refinery with a daily exporting of the domestic consumption surplus possible,
refining capacity of 330 TBD crude oil and gas condensate and over the recent years, the refinery has exported the
carries out 20% of the Iranian oil refining operations, and fuel oil surplus to domestic needs through the Persian Gulf.
produces 50 million liters of petroleum products including Using sea water for cooling the equipment, and providing
gas oil, gasoline and fuel oil. The operating units of the fresh water are counted as other advantages of the refinery.
company are located near the city of Bandar Abbas. Shares of Bandar Abbas Refinery, as the largest refinery
The refinery feedstock including light crude oil is provided listed on the Tehran Stock Exchange (TSE) in terms of
by Hengam Island, and heavy crude oil, and extracted gas market value, were offered to public in TSE for the first time
condensate are supplied by gas resources of Sarkhun and in 2012 by National Iranian Oil Refining and Distribution
Assaluyeh. The cost of crude oil feedstock on the Persian Company (a subsidiary to the Iranian Ministry of Petroleum).
Gulf FOB price in recent years has been calculated by 40% of the company’s shares is owned by Provincial
applying a 5% discount. Investment Companies (Justice Share) and nearly 30% is
The activity of the Iranian refineries is considered a ceded to Social Security Organization. Due to strategic
commissioning work. Taking crude oil and gas condensate nature of oil products and high reliance of refineries upon
from the Ministry of Petroleum, refineries deliver the main the government, the macro policies of these corporations
products such as LPG, gasoline, kerosene, gas oil, fuel oil, are still set in line with strategies of the Ministry of
and jet fuel to the National Iranian Oil Distribution Company Petroleum.
so that the latter sells the produced energy products
vicariously.
Products prices for refineries are determined based on
Persian Gulf FOB prices for oil products. Sales prices for
domestic consumers are set factoring in government
subsidies; however, the payment for the differences
between subsidized sales rates and real rates is paid by the
government to the refineries.
Since the current domestic gasoline and gas oil quality
is lower than international standards, the Iranian Ministry
of Petroleum has required the refineries to meet Euro-4
standards by the end of 2019. Bandar Abbas Refinery Fiscal Year Ends 20 Mar 2016
launched a relevant initiative project in 2006 of which 90%
IPO Date 24 Jun 2012
was completed by March 2015.

28 Mofid Securities (en.emofid.com)

Bandar Abbas Refinery—CONTINUED

Last Close 5,527 Market Cap (M USD) 2,309 No. of Shares (B) 13.8
Free Float % 15 EPS (TTM) 406 EPS (FWD) 500
P/E (TTM) 13.61 P/E (FWD) 11.05 Beta —

Chart (Percent) Return %

1800 Return 1Yr. -37.41
Return 3Yr. 433.59
3Yr. Avg. 74.74
800

52 Week Range 4,282 - 7,280

-200
Oct 2012 Jun 2013 Feb 2013 Oct 2014 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -33.90 Dividend Payout Ratio (LFY) 100.00
Sales - 3Yr. Growth Rate 28.09 Dividend Payout Ratio 3Yr. Avg. 33.86
EPS (LFY) vs FYE 1Yr. Ago -77.76 Dividend Yield 9.05
EPS - 3Yr. Growth Rate - Valuation
Dividend (LFY) vs FYE 1Yr. Ago -72.22 P/B 2.57
Dividend - 3Yr. Growth Rate - P/S 0.29

Income Statement (Trillion Rials) Sales (Thousand m3)

450 7,000

225 3,500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Gas Oil Fuel Oil Motor Gasoline Kerosene Naphtha Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 2.60 2.47 8.44 Debt Ratio 0.63 0.52 0.57
GP Margin 3.99 4.22 10.10 Debt to Equity Ratio 1.68 1.20 1.76
OP Margin 3.00 3.37 9.93 LT Debt Ratio 0.03 0.05 0.05
ROA 4.25 5.60 16.62 Interest Coverage Ratio - - 21.81
ROE 8.93 11.51 45.55

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 5.50 8.46 14.43 Current Ratio 0.54 1.05 1.43
Receivable Turnover 43.48 26.34 24.00 Quick Ratio 0.06 0.37 0.88
Asset Turnover 1.63 2.32 3.92 Cash Ratio 0.03 0.03 0.20

Iran Top 40 Listed Companies 29

12 Bank Pasargad (TSE:BPAS)

Bank Pasargad is the 2nd largest bank in the TSE in terms of market value
and has the highest amount of net profit margin among the TSE-listed
banks. Pasargad’s NPL ratio is less than half of the average rate of 14%.

Going operational in 2005, Bank Pasargad was listed in the Bank Pasargad’s ownership, however, has a somehow
Tehran Stock Exchange (TSE) in 2011. Around 60% of the complicated structure in a way that the largest shareholder
initial capital of the bank was funded by the founders while (with nearly 11% ownership) of Pars Aryan Investment Co. is
the remaining 40% was provided by public underwriting. Arzesh Afarinan Pasargad Company of which 98% is owned
Following Bank Mellat, Bank Pasargad is considered as the by Bank Pasargad.
second largest bank in TSE in terms of market value.
Some 70% of Bank Pasargad’s income is earned from
interest activities i.e. receiving deposits and granting loans.
Loans hold 60% of the bank’s assets out of which 85% goes
to participation contracts. Bank Pasargad’s net profit margin
is up to 75% which is considered highest among those
of TSE-listed banks. Bank Pasargad possesses over 320
branches and more than 3500 staff.
Among the largest banks in TSE, Pasargad has the most
received deposits and generated income per employee.
Bank service commissions and fees – esp. L/C opening -
make up about two third of the bank’s non-interest income.
However, given the international sanctions against Iran,
the number of L/C accounts opened in 2013 indicates a
considerable decrease compared to previous years. The
Bank’s investment-driven income is earned mostly from
mining industries. It is worthy of note here as an example
that Bank Pasargad owns nearly 50% shares of TSE-listed
Middle East Mines Industries Development Holding
Company (MIDHCO) directly and indirectly (through
subsidiaries), and this ownership comprises more than 40%
of the bank’s investment profit. Capital adequacy ratio of
19% and less than average non-performing loans (NPLs)
Fiscal Year Ends 20 Mar 2016
ratio (6% against 14% average of large banks) are of other
IPO Date 16 Aug 2011
privileges of Bank Pasargad.

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Bank Pasargad—CONTINUED

Last Close 1,847 Market Cap (M USD) 2,298 No. of Shares (B) 42.0
Free Float % 52 EPS (TTM) 260 EPS (FWD) 342
P/E (TTM) 7.1 P/E (FWD) 5.4 Beta —

Chart (Percent) Return %

300 Return 1Yr. -8.1
Return 3Yr. 103.4
3Yr. Avg. 26.7
100

52 Week Range 1,503 - 2,146

-100
Jan 2012 Nov 2012 Sep 2013 Jul 2014 May 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 2.4 Dividend Payout Ratio (LFY) 66.4
Sales - 3Yr. Growth Rate 19.9 Dividend Payout Ratio 3Yr. Avg. 39.3
EPS (LFY) vs FYE 1Yr. Ago -19.3 Dividend Yield 11.1
EPS - 3Yr. Growth Rate 8.7 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -12.5 P/B 1.15
Dividend - 3Yr. Growth Rate 10.2 P/S 3.39

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 55.2 31.1 80

Net Interest Income After Provison Margin 18.9 3.7

Cost to Income Ratio 26.3 54.3
40
ROA 3.1 1.6
ROE 21.1 17.9
0
Equity to Asset 15.2 8.6 2010 2011 2012 2013 2014
CAR 19.8 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 5.5 16.0

NPL Coverage Ratio 68.0 44.1

Deposit per Employee (M) 94,620 57,249

Net Income per Employee (M) 3,431 1,264

Iran Top 40 Listed Companies 31

13 Iran National Copper Industries Co.
(TSE:MSMI)
As the second largest company in sector of basic metals in TSE, the INCI is
considered the largest producer of copper in the Middle East. It produces
cathode with 99.999% purity. INCI’s export makes over 5% of country’s non-
oil exports.

Iran National Copper Industries Co. (INCI) is the largest prices to deviate from the global trends.
copper producer in the Middle East with production INCI considers numerous development projects which
capacity of 0.2 Mtpa refined copper and 50 ttpa slabs and require a considerable amount of fund, according to initial
wire rods. About half the products are used for domestic estimates, to go operational. Developing smelting unit
consumption and the rest goes for export which alone and refining capacity in Khatounabad are of the most
makes up over 5% of country’s non-oil exports. important in-progress plans. Condensing development
INCI has three copper complexes of Sungun (located in plan for Sungun and Sarcheshmeh copper complexes with
East Azerbaijan Province), Sarcheshmeh, and Shahrbabak concentrate production capacity of 0.15 Mtpa for each has
(located in Kerman Province) out of which Sarcheshmeh been underway since 2009. The plan for Sungun complex
(with a longer history) went under the first copper was initiated in January 2015.
extraction in Iran in 1949. With nationalization of mines in Justice Shares Investment Companies Association with 37%
June 1972, Sarcheshmeh Copper Mines Joint Stock Co of ownership is the largest shareholder of INCI, and is followed
Kerman was established and renamed later in 1976 to Iran by Iranian Mines and Mining Industries Development and
National Copper Industries Co. With more than 10,000 Renovation Organization (IMIDRO) with 12% ownership.
permanent and contract employees which now is the
second largest company in basic metals in Tehran Stock
Exchange (TSE) after Mobarakeh Steel Co. of Esfahan
(MSC).
INCI has a perfect monopoly over all activities covering
extraction to exploitation of mines, refined copper
production and export. Refined copper import has been
faced with a tremendous amount of restrictions and
practically drawn to a halt. Therefore, manufacturers of
copper products such as Kashan Copper World Company
are fed for the refined copper solely by INCI. INCI is licensed
under its name for a 25-year course of exploitation which
is valid up to late 2025 which is also extendable. INCI
conducts turning a full-blown soil extracted from copper
mines into concentrate in condensing plants. In smelting
and refining plant or in leaching, the refined copper from
the concentrate turns into a cathode with 99.999% purity. A
part of refined copper turns into slabs, billets, and wire rods
in casting plant. After meeting domestic needs, the rest
of the products (surplus) are exported. Pricing of copper
products is regulated in Iran Mercantile Exchange based
Fiscal Year Ends 20 Mar 2016
on the global copper price and USD free market exchange
IPO Date 4 Feb 2007
rate, given the premium. This premium may cause domestic

32 Mofid Securities (en.emofid.com)

Iran National Copper Industries Co.—CONTINUED

Last Close 3,318 Market Cap (M USD) 2,232 No. of Shares (B) 43.4
Free Float % 23 EPS (TTM) 233 EPS (FWD) 271
P/E (TTM) 14.22 P/E (FWD) 12.24 Beta 1.20

Chart (Percent) Return %

500 Return 1Yr. -28.72
Return 3Yr. 20.16
3Yr. Avg. 6.31
200

52 Week Range 1,621 - 3,059

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 10.25 Dividend Payout Ratio (LFY) 0.00
Sales - 3Yr. Growth Rate 11.32 Dividend Payout Ratio 3Yr. Avg. 58.39
EPS (LFY) vs FYE 1Yr. Ago -19.14 Dividend Yield 0.00
EPS - 3Yr. Growth Rate -9.64 Valuation
Dividend (LFY) vs FYE 1Yr. Ago - P/B 1.08
Dividend - 3Yr. Growth Rate - P/S 1.57

Income Statement (Trillion Rials) Sales (Thousand Tone)

60 1,000

30 500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Cupper Concentrate Cupper Cathode Rod, Billet, Slab Molybdenum

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 21.53 39.74 32.74 Debt Ratio 0.39 0.33 0.48
GP Margin 36.15 49.07 26.70 Debt to Equity Ratio 0.64 0.50 1.05
OP Margin 26.98 41.82 35.79 LT Debt Ratio 0.04 0.04 0.06
ROA 9.47 28.43 10.86 Interest Coverage Ratio 2.65 32.69 8.62
ROE 15.25 41.23 21.85

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 1.24 2.53 1.81 Current Ratio 1.15 1.95 1.04
Receivable Turnover 5.63 4.80 7.33 Quick Ratio 0.48 1.22 0.53
Asset Turnover 0.44 0.68 0.55 Cash Ratio 0.10 0.19 0.08

Iran Top 40 Listed Companies 33

14 Jam Petrochemicals (IFB:PJMZ)

Jam Petrochemicals is Iran’s largest olefin unit and the 4th largest ethyl-
ene producer in the world. The company is capable of producing 26 differ-
ent grades of high density polyethylene and 54 different grades of linear
low density polyethylene.

Jam Petrochemicals Co. went on stream in 2007 in Pars Raw material purchase accounts for roughly 70% of Jam’s
Special Economic Energy Zone (Assaluyeh) as Iran’s largest total expenses. Jam Petrochemicals has the ability to use
olefin unit as well as the fourth largest ethylene producer in different raw materials such as ethane (gas), light end
the world. (liquid), and pentane (liquid). Jam purchases ethane gas
Jam’s olefin unit produces ethylene, propylene, C4 from Pars Petrochemical Co. and South Pars complexes at
compound, and pyrolysis gasoline using double furnace and the state-set price, and light end and pentane from Nouri
by receiving various feedstocks of gas (ethane) and liquid Petrochemical Company on 95% of the Persian Gulf FOB at
(LPG, light end, raffinate, and pentane). Jam Petrochemicals the official exchange rate. The utility of Jam is supplied by
has the capacity to produce 1.32 Mtpa ethylene, 305 ttpa Mobin Petrochemical Company.
propylene, 0.3 Mtpa linear high/low density polyethylene, Jam petrochemicals is capable to produce 26 different
0.3 Mtpa high density polyethylene, 216 ttpa pyrolysis grades of high density polyethylene and 54 different grades
gasoline, 115 ttpa butadiene, 0.1 Mtpa butene-1, and 0.17 Mtpa of linear low density polyethylene. The Jam’s ABS project –
fuel oil. Jam also has the capacity to produce 245 ttpa C4 with 0.2 Mtpa production capacity aiming at using 54 ttpa
cuts (as an intermediate product) for manufacturing of 0.13 of Jam’s produced butadiene by March 2015- so far has had
Mtpa of abovementioned raffinate and butadiene. a 13% physical progress and is slated to go operational in
Jam Petrochemicals holds 49% of Jam Propylene Co’s 2017.
shares and supplies its feedstock. With a production Given the plans on increasing gas production capacity
capacity of 0.3 Mtpa polypropylene, Jam Propylene Co. in South Pars Gas Field, Jam Petrochemicals, capable of
normally produces and sells 0.2 Mtpa of this product. using its full nominal capacity of ethylene production via
High and linear low density polyethylene (HDPE & LLDPE), receiving sufficient ethane, is considering long-term projects
ethylene, and propylene comprise more than 50%, 20%, to use and turn the surplus ethylene in production line into
and 10% of Jam Petrochemicals total sales respectively. polyethylene.
Most of the produced polyethylene is exported while Civil Servants Pension Fund and Tamin Petroleum &
the ethylene and propylene are sold in domestic market. Petrochemical Investment Co. (TAPPICO) own 42% and 23%
Jam Petrochemicals has used over 90% of its full nominal of Jam Petrochemicals’ shares respectively.
capacity by producing 0.56 Mtpa polyethylene, although
the olefin reactors are run using just 70% of its full nominal
capacity.
Exports make 50% of Jam Petrochemicals’ sales. Most
of the produced polyethylene are issued with CFR arte,
and the foreign currency income revenue is converted at
free market rate. However, ethylene and propylene are
sold within an inter-complex process to other regional Fiscal Year Ends 20 Mar 2016
companies based on 95% of the Persian Gulf FOB price at
IPO Date 17 Sep 2013
the official exchange rate.

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Jam Petrochemical—CONTINUED

Last Close 7,452 Market Cap (M USD) 2,166 No. of Shares (B) 9.6
Free Float* % — EPS (TTM) 1,599 EPS (FWD) 1,527
P/E (TTM) 4.66 P/E (FWD) 4.88 Beta 0.67

Chart (Percent) Return %

60 Return 1Yr. 0.30
Return 3Yr. -
3Yr. Avg. -
25

52 Week Range 6,870 - 9,954

-10
Nov 2013 Apr 2014 Sep 2014 Jan 2015 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -8.87 Dividend Payout Ratio (LFY) 93.81
Sales - 3Yr. Growth Rate 30.53 Dividend Payout Ratio 3Yr. Avg. 94.84
EPS (LFY) vs FYE 1Yr. Ago 2.82 Dividend Yield 16.92
EPS - 3Yr. Growth Rate 62.38 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -3.23 P/B 2.62
Dividend - 3Yr. Growth Rate 64.82 P/S 1.54

Income Statement (Trillion Rials) Sales (Thousand Tone)

60 1,400

30 700

0 0
2011 2012 2013 2014 2011 2012 2013 2014
Sale Cost of Sale Net Profit Olefins HDPE LLDPE Butadiene

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 32.96 - 48.54 Debt Ratio 0.35 - 0.55
GP Margin 37.08 - 46.87 Debt to Equity Ratio 0.54 - 1.50
OP Margin 31.69 - 44.15 LT Debt Ratio 0.01 - 0.04
ROA 34.23 - 35.96 Interest Coverage Ratio 14.02 - 48.83
ROE 62.12 - 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 8.12 - 5.86 Current Ratio 1.65 - 1.10
Receivable Turnover 2.34 - 6.58 Quick Ratio 1.37 - 0.99
Asset Turnover 1.04 - 0.62 Cash Ratio 0.07 - 0.15

* IFB does not publish free float of listed companies

Iran Top 40 Listed Companies 35

15 Mobarakeh Steel Co. of Esfahan
(TSE:FOLD)
As the largest manufacturer of various steel sheets in Middle East, MSC
accounts for 1/3rd of domestic steel production.

Mobarakeh Steel Co. of Esfahan (MSC) is the largest MSC development plans often focus on increasing molten
manufacturer of various steel sheets in the Middle East steel production capacity in steel producing units as well
and the largest industrial complex in Iran as well. Located as improving the performance. Saba steel company, one of
75 kilometers southwest of the historical city of Isfahan the steel making units of Mobarakeh complex, manufactures
and adjacent to the city of Mobarakeh, the complex is thin slabs with a thickness of 50 mm as one of its main
made up of pelletizing, smelting, casting and rolling units. productions. Automakers, profile makers, and household
With producing 5.8 Mtpa, MSC accounts for one third of appliance manufacturers comprise major customers of
domestic steel production. MSC, with more than 15,000 MSC, and their business boom may affect the profitability of
permanent and contract staff, is the largest company in MSC directly.
basic metals industry listed in TSE. Design and construction Iranian Mines and Mining Industries Development and
of MSC began in 1981 and the company came on stream in Renovation Organization (IMIDRO) is the major owner of
1992. MSC’s shares with 17.2%, and is followed by Mehr Eqtesad
MSC uses direct reduction technology for producing the Iranian Investment Company and Social Security Investment
crude steel which is more cost effective due to low gas Company with 13.1% and 10% respectively as the second and
price than blast furnace. It produces various kinds of steel third main shareholders.
sheets and coils in hot, cold, and coated categories. Hot
products comprise two third of the whole production, and
the rest is made up of cold and coated ones, respectively.
The main consuming material in MSC is iron ore concentrate
which is followed by pellet and scrap. The concentrate and
iron scrap are all supplied by domestic mines while most
of the required pellet is provided from abroad. Sales prices
and raw material supply depends upon market supply and
demand. Domestic production, usually, fails to meet the Fiscal Year Ends 20 Mar 2016
steel sheets demand; however, the government supports
IPO Date 11 Mar 2007
the domestic steel producers through import tariffs.

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Mobarakeh Steel Co. of Esfahan—CONTINUED

Last Close 1,406 Market Cap (M USD) 2,129 No. of Shares (B) 50.0
Free Float % 22 EPS (TTM) 475 EPS (FWD) 453
P/E (TTM) 2.96 P/E (FWD) 3.10 Beta 1.25

Chart (Percent) Return %

600 Return 1Yr. -0.30
Return 3Yr. 102.22
3Yr. Avg. 26.46
300

52 Week Range 1,814 - 2,759

0
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 4.85 Dividend Payout Ratio (LFY) 76.92
Sales - 3Yr. Growth Rate 30.71 Dividend Payout Ratio 3Yr. Avg. 80.28
EPS (LFY) vs FYE 1Yr. Ago -23.07 Dividend Yield 16.62
EPS - 3Yr. Growth Rate 35.05 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 41.68 P/B 0.84
Dividend - 3Yr. Growth Rate 45.33 P/S 0.69

Income Statement (Trillion Rials) Sales (Thousand Tone)

120 4,500

60 2,250

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Hot products Cold products Coated products

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 23.30 28.30 32.74 Debt Ratio 0.53 0.52 0.48
GP Margin 31.67 37.06 26.70 Debt to Equity Ratio 1.14 1.07 1.05
OP Margin 26.65 32.59 35.79 LT Debt Ratio 0.04 0.04 0.06
ROA 14.45 18.06 10.86 Interest Coverage Ratio 3.44 7.08 8.62
ROE 30.50 37.01 21.85

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 1.74 2.00 1.81 Current Ratio 1.01 1.14 1.04
Receivable Turnover 6.72 6.17 7.33 Quick Ratio 0.49 0.58 0.53
Asset Turnover 0.62 0.63 0.55 Cash Ratio 0.07 0.11 0.08

Iran Top 40 Listed Companies 37

16 Middle East Mines Industries
Development Holding Co. (IFB:KHMZ)
With 15 subsidiary companies and nearly 8,000 employees, MIDHCO was
established in 2007 to invest and develop the country’s mines and mining
industries.

MIDHCO, possessing 15 subsidiary companies today, was The majority of MIDHCO’s shares are owned by Bank
established in 2007 with aim of investing and developing Pasargad and its subsidiaries such as Middle East Mabna
Iran’s mines and mining industries. MIDHCO’s projects are Company. Middle East Mabna Co. is the largest shareholder
run mostly in the southeastern Kerman province, although of MIDHCO with 22% ownership, while Bank Pasargad itself
the company’s headquarter is located in Tehran. MIDHCO holds nearly 20% of shares.
has nearly 8,000 employees factoring in outsourcing and
contract staff.
Given low investment in listed companies, almost all
MIDHCO’s income comes from investing in non-listed
corporations of which almost total shares are owned by
MIDHCO. Sirjan Iranian Steel Company comprises about
half of MIDHCO’s income, followed by Zarand Iranian
Steel Company. Copper industry is also an area of interest
for MIDHCO for investment. In this regard, MIDHCO has
invested in Iranian Babak Copper Company (IBCCO) which
is slated to go operational next year to produce copper
cathode. MIDHCO does not have a tangible investment in
non-listed companies.
MIDHCO has many projects in progress, mostly focused
on setting up pelletizing and steel making units. Zarand
Iranian Steel Co., slated to be launched in 2017, accounts
for the majority (almost half) of investment costs for the
above projects. Producing 4.5 Mtpa crude steel, 7.5 Mtpa
pellets, and 50,000 tons copper cathodes are of the most
important plans of the company to realize in the next five
years. Since MIDHCO’s main focus is on steel industry, this
sector is of high importance. Higher domestic demand Fiscal Year Ends 20 Mar 2016
against the steel production and the government’s support
IPO Date 1 Oct 2011
for this industry are considered the privileges of MIDHCO.

38 Mofid Securities (en.emofid.com)

Middle East Mines Industries Development Holding Co.—CONTINUED

Last Close 2,998 Market Cap (M USD) 2,029 No. of Shares (B) 22.0
Free Float* % — EPS (TTM) 145 EPS (FWD) 205
P/E (TTM) 20.66 P/E (FWD) 14.66 NAV —
Beta 0.91

Chart (Percent) Return %

700 Return 1Yr. -18.87
Return 3Yr. 3.32
3Yr. Avg. 0.63
300

52 Week Range 2,800 - 4,699

-100
Mar 2012 Jan 2013 Nov 2013 Sep 2014 Jul 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 120.68 Dividend Payout Ratio (LFY) 94.18
Sales - 3Yr. Growth Rate 213.92 Dividend Payout Ratio 3Yr. Avg. 83.67
EPS (LFY) vs FYE 1Yr. Ago 60.09 Dividend Yield 4.45
EPS - 3Yr. Growth Rate 90.52 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 92.00 P/B 3.06
Dividend - 3Yr. Growth Rate 174.39 P/S 19.89
P/NAV -
NAV/B -

Income Statement (Trillion Rials) Portfolio (Percent)

3.6
98% Basic Metals
2% Other

1.8

0
2011 2012 2013 2014
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 96.26 - 96.18** Current Ratio 0.79 - 1.04
OP Margin 94.56 - 94.44** Quick Ratio 0.79 - 0.53
ROA 10.16 - 10.86 Cash Ratio 0.08 - 0.08
ROE 18.27 - 21.85

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.39 - 0.48
Debt to Equity Ratio 0.63 - 1.05
LT Debt Ratio 0.13 - 0.06
Interest Coverage Ratio 26.12 - 8.62

* IFB does not publish free float of listed companies

** Only basic metal investment companies are included.

Iran Top 40 Listed Companies 39

17 Pardis Petrochemical Co. (TSE:PRDZ)

Pardis Petrochemical Co. is the largest urea and ammonia producer in the
Middle East, and one of the largest in the world which is located at the
Pars Special Economic Energy Zone.

With a nearly 2 Mtpa urea production, Pardis Petrochemical Urea is sold in export markets based on global prices.
Co. is the largest urea and ammonia producer in the Pardis Petrochemical has various customers across the
Middle East, and one of the largest ones in the world. world such as India, China, Africa, and even in South
Pardis Petrochemical is located at Pars Special Economic America. Mobin Petrochemical Company (a subsidiary to
Energy Zone (Assaluyeh) in southern coast of Iran. The Persian Gulf Petrochemical Industry Group) supplies Pardis
company made its ammonia and urea production debuts Petrochemical with utilities services as well as the required
in 2009 under licenses of Kellogg (UK) and Stami Carbon gas feed from South Pars gas field.
(Netherlands), respectively. With similar capacity to the 1st and 2nd phases, the
The first and second units of Pardis complex operate with development project of the 3rd phase of Pardis complex
the nominal capacity of 2.15 Mtpa urea fertilizer and 1.36 had a 77% progress by March 20, 2015. This phase is
Mtpa ammonia. This complex requires 1340 million cubic projected to go operational in late 2015.
meters per year of natural gas feedstock. Being located Parsian Oil and Gas Development Co. (POGDC) owns
adjacent to resources of South Pars gas field and also almost 67% of shares of Pardis Petrochemical, and
Assaluyeh port, and possessing storage facilities and Malek Petrochemical Commercial Co. is the next largest
dedicated loading dock to export urea products are of the shareholder with 12% ownership. Ghadir Investment
privileges and merits Pardis Petrochemical enjoys. Urea Company, an affiliate to the Iranian Armed Forces, owns
makes up 90% of complex’s sales, and about 150 thousand 68% of POGDC.
tons of ammonia surplus to urea production lines is sold
through export.
The urea production capacity in Iran is approximately 4.4
Mtpa out of which 1 to 2 Mtpa is consumed domestically
given the rainfall and cultivation levels. The Iranian
companies, considering their production capacities, are
accountable for supplying part of domestic consumption
for urea at a price and shares declared by the government. Fiscal Year Ends 22 Sep 2015
Pardis Petrochemical Co. sells roughly 30% of its
IPO Date 18 Apr 2011
productions inside the country.

40 Mofid Securities (en.emofid.com)

Pardis Petrochemical Co.—CONTINUED

Last Close 9,498 Market Cap (M USD) 1,725 No. of Shares (B) 3.0
Free Float % 14 EPS (TTM) 3,575 EPS (FWD) 2,346
P/E (TTM) 2.66 P/E (FWD) 4.05 Beta 0.55

Chart (Percent) Return %

500 Return 1Yr. 30.66
Return 3Yr. 176.19
3Yr. Avg. 40.30
200

52 Week Range 9,291 - 19,860

-100
Apr 2012 Jan 2013 Oct 2013 Jun 2015 Mar 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 0.57 Dividend Payout Ratio (LFY) 95.69
Sales - 3Yr. Growth Rate 57.07 Dividend Payout Ratio 3Yr. Avg. 88.65
EPS (LFY) vs FYE 1Yr. Ago -63.20 Dividend Yield 95.72
EPS - 3Yr. Growth Rate -5.92 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -62.12 P/B 6.03
Dividend - 3Yr. Growth Rate -4.81 P/S 2.98

Income Statement (Trillion Rials) Sales (Thousand Tone)

18 2,500

9 1,500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Urea Ammonia

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 54.29 - 48.54 Debt Ratio 0.49 - 0.55
GP Margin 59.20 - 46.87 Debt to Equity Ratio 0.97 - 1.50
OP Margin 55.97 - 44.15 LT Debt Ratio 0.00 - 0.04
ROA 48.60 - 35.96 Interest Coverage Ratio 22.93 - 48.83
ROE 102.37 - 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 10.30 - 5.86 Current Ratio 0.58 - 1.10
Receivable Turnover 6.25 - 6.58 Quick Ratio 0.41 - 0.99
Asset Turnover 0.87 - 0.62 Cash Ratio 0.07 - 0.15

Iran Top 40 Listed Companies 41

18 Omid Investment Management (TSE:OIMC)

OIMC is the largest TSE-listed mining holding with investments in mining,

steel, cement, construction, financial services, trade, oil, gas and energy
industries.

Omid Investment Management Corporation (OIMC) is the The considerable level of OIMC’s ownership in Gol-e-Gohar
largest TSE-listed mining holding and is active mostly in and Chadormalu companies suggests a high interrelation
establishing and launching companies and investing in between shares of OIMC and the two latter. Foreign
mining, steel, cement, construction, financial services, trade, currency rate fluctuations, paying royalties by extractors,
oil, gas, and energy industries. Following Ghadir Investment, and impacts of the government policies upon sales rate of
OIMC is the second largest company in conglomerates, and these companies are among the key factors influencing the
is also ranked second in terms of profit making. profitability of the above companies as well as OIMC.
More than 80% of OIMC’s portfolio is investing in listed Bank Sepah, a state-run and the first Iranian bank, is the
companies and the rest in non-listed ones. OIMC has major shareholder of OIMC with 70% ownership. Banks
invested mostly in iron ore industry, especially in Gol-e- Employees Pension Fund, and Bank Sepah Staff Welfare
Gohar Iron Ore Company and Chadormalu Mining and Institute with 17% and 4% are the next largest shareholders
Industrial Company (the largest domestic suppliers of of OIMC.
pellet and iron ore concentrate) with 38% ownership in
shares of each company. This makes up approximately
60% of OIMC’s total portfolio value. Moreover, OIMC also
holds management shares of Hormozgan, Ilam, Bojnourd,
Kurdistan, and Khash cement companies, National
Investment Company of Iran (NICI), Sepah Investment Co.,
Marjan Kar Co., Omid Leasing Co., and Kavir Tire Co.
OIMC’s investment income comes mostly from dividends
of Gol-e-Gohar Iron Ore, Chadormalu Mining and Industrial,
and Sepah Investment companies respectively (as the
first three in portfolio). OIMC’s non-listed portfolio include
shares of Omid Taban Hour Energy Management Co.,
Sepah Construction Investment Co., Petro Omid Asia Co.,
Goharzamin Iron Ore Co. The non-listed companies of Omid
Leasing Co., Goharanomid Development Management Co.,
and Omid Taban Hour Energy Management Co. have been
Fiscal Year Ends 20 Jan 2016
accepted in Iran Farabourse (IFB) and are set for their initial
IPO Date 6 Jan 2008
public offering.

42 Mofid Securities (en.emofid.com)

Omid Investment Management—CONTINUED

Last Close 1,850 Market Cap (M USD) 1,680 No. of Shares (B) 30.0
Free Float % 6 EPS (TTM) 599 EPS (FWD) 541
P/E (TTM) 3.09 P/E (FWD) 3.42 NAV 2,926
Beta 0.86

Chart (Percent) Return %

700 Return 1Yr. -19.50
Return 3Yr. 95.37
3Yr. Avg. 25.01
300

52 Week Range 1,765 - 4,000

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 20.07 Dividend Payout Ratio (LFY) 88.84
Sales - 3Yr. Growth Rate 45.34 Dividend Payout Ratio 3Yr. Avg. 86.62
EPS (LFY) vs FYE 1Yr. Ago 18.13 Dividend Yield 21.75
EPS - 3Yr. Growth Rate 44.56 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 23.92 P/B 1.01
Dividend - 3Yr. Growth Rate 40.57 P/S 3.07
P/NAV 0.63
NAV/B 1.59

Income Statement (Trillion Rials) Portfolio (Percent)

20
46% Metallic Ores
14% Financial Services
9% Other Non-Metallic Ore
10 7% Chemicals
6% Engineering
5% Other Minerals
5% Construction
0 3% Petroleum Products
2010 2011 2012 2013 21014 2% Tire
Income Operational Expense Net Profit 3% Other

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 99.50 101.95 99.26 Current Ratio 2.55 2.17 4.07
OP Margin 99.41 101.33 99.36 Quick Ratio 2.55 2.55 4.07
ROA 31.39 29.81 41.75 Cash Ratio 0.36 0.47 0.41
ROE 37.74 39.98 49.65

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.15 0.25 0.17
Debt to Equity Ratio 0.18 0.35 0.25
LT Debt Ratio 0.02 0.02 0.01
Interest Coverage Ratio - - 38.93

Iran Top 40 Listed Companies 43

19 Isfahan Refinery (TSE:PNES)

As the 2nd largest refinery in Iran, the Isfahan Refinery has a capacity to
refine 375 TBD of crude oil which makes about 1/5th of country’s oil refin-
ing operations.

Isfahan Refinery was established in 1979, and now, with Energy Exchange.
crude oil refining capacity of 375 TBD, holds more than Refineries across the country are old and relatively aged. In
20% of Iran’s oil refining operations. This refinery provides line with improving oil products in accordance with global
the market with 60 million liters of various oil products on standards, the Iranian Ministry of Petroleum has required the
daily basis which are used as fuel and primary feedstock refineries to meet Euro-4 standards by the end of 2019.
for downstream companies. The operational units of this
Isfahan Refinery’s shares were offered for the first time
company – as the second largest refinery in Iran- are located
in Tehran Stock Exchange (TSE) in 2008 of which 30%
near Isfahan.
is owned by Provincial Investment Companies (Justice
The required crude oil of the refinery is supplied through a Shares) and the rest is held by other shareholders. However,
pipeline from Marun oil field, which is located 70 km away due to strategic nature of oil products and high reliance of
from the southwestern city of Ahvaz. Over the recent years, refineries upon the government, the macro policies of these
the final cost of crude oil feedstock has been calculated corporations are still set in line with strategies of the Ministry
based on the Persian Gulf FOB price with a 5% discount of Petroleum.
included.
The activity of the Iranian refineries is a kind of
commissioning work. Taking crude oil and gas condensate
from the Ministry of Petroleum, refineries deliver the main
products such as LPG, gasoline, kerosene, gas oil, fuel oil,
and jet fuel to the National Iranian Oil Distribution Company
so that the latter sells the produced energy products on
their behalf.
Products prices for refineries are determined based on
the Persian Gulf FOB prices for oil products. Sales prices
for domestic consumers are set factoring in government
subsidies; however, the payment for the difference
between subsidized sales rates and real rates is paid by the
government to the refineries.
In addition to gasoline, diesel, and fuel oil which comprise
75% of the refinery’s production, some especial products
for delivery to wholesale buyers and downstream small-
scale industries are of high importance in the company’s
production basket. Sepahan Oil Co., one of the largest
lube cut refining units of the country, Jey Oil Co., leading
in bitumen industry in Iran, and Iranian Chemical Industries
Investment Co., as detergent raw material producer, are of Fiscal Year Ends 20 Mar 2016
the most important buyers of Isfahan Refinery’s especial
IPO Date 29 Jun 2008
products. The refinery also offers diverse solvents in Iran

44 Mofid Securities (en.emofid.com)

Isfahan Refinery—CONTINUED

Last Close 2,681 Market Cap (M USD) 1,624 No. of Shares (B) 10.0
Free Float % 11 EPS (TTM) 687 EPS (FWD) 871
P/E (TTM) 3.90 P/E (FWD) 3.08 Beta 1.47

Chart (Percent) Return %

1200 Return 1Yr. -39.00
Return 3Yr. 266.68
3Yr. Avg. 54.20
500

52 Week Range 3,165 - 6,499

-200
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -17.92 Dividend Payout Ratio (LFY) 84.40
Sales - 3Yr. Growth Rate 19.50 Dividend Payout Ratio 3Yr. Avg. 79.72
EPS (LFY) vs FYE 1Yr. Ago -65.18 Dividend Yield 9.71
EPS - 3Yr. Growth Rate -6.87 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -61.33 P/B 1.80
Dividend - 3Yr. Growth Rate 32.43 P/S 0.18

Income Statement (Trillion Rials) Sales (Thousand m3)

400 10,000

200 5,000

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Gas Oil Fuel Oil Gasoline Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 2.29 3.87 8.44 Debt Ratio 0.40 0.49 0.57
GP Margin 1.42 3.66 10.10 Debt to Equity Ratio 0.66 1.02 1.76
OP Margin 1.22 3.45 9.93 LT Debt Ratio 0.02 0.01 0.05
ROA 12.86 19.15 16.62 Interest Coverage Ratio 21.81
ROE 20.27 39.63 45.55

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 24.97 32.15 14.43 Current Ratio 1.79 1.51 1.43
Receivable Turnover 29.76 22.29 24.00 Quick Ratio 1.17 1.15 0.88
Asset Turnover 5.63 4.90 3.92 Cash Ratio 0.58 0.63 0.20

Iran Top 40 Listed Companies 45

20 Bank Saderat (TSE:BSDR)

As the oldest non-governmental bank, Bank Saderat is considered the 3rd

largest TSE-listed bank in terms of market value with 21 foreign branches.
The bank has 2700 branches and 32,000 employees.

Bank Saderat, the oldest Iranian non-governmental bank, Given the combination of non-interest part, the majority of
came on stream in 1952 with initial name of “Bank Saderat income generation here is not repeatable and sustainable,
and Ma’aden” from which the word “Ma’aden” was dropped especially over the recent years in which foreign branches-
a decade later. The bank was listed in Tehran Stock driven income has been cut remarkably as a result of
Exchange (TSE) in 2009 and is considered as the third Western imposed sanctions against Iran. Nonetheless, the
largest TSE-listed bank in terms of market value. number of foreign branches as well as holding shares in
Bank Saderat has the most foreign branches (21 Bs.) some foreign banks are competitive advantages for Bank
among all Iranian non-governmental banks. The first Saderat with potential to generate a considerable income.
foreign branch of the bank was established in Hamburg in The expenses for high number of staff and branches has
1961 which proceeded later with similar branches in Paris, greatly affected the bank’s profit and has reduced its net
London, and Beirut. In addition to become a shareholder profit margin to less than 20% (lowest among the large
in two banks in Bahrain and Afghanistan, Bank Saderat TSE-listed banks). The inefficiency in attracting deposits
has established two banks in London and Tashkent as well. and creating income is also true if evaluated in terms of the
Possessing 2700 branches as well as 32,000 employees number of each employee. The significant state ownership,
has made Bank Saderat the first ranked among the Iranian on the other hand, has undermined the bank’s bargaining
non-governmental banks in terms of number of branches power. It can be noted as an example that Mizan Finance
and staff. and Credit Institute underwent a crisis-push merger with
The interest activities of Bank Saderat have been very Bank Saderat in 2015 H1 on account of avoiding refusal of
weak in general, even Loss-making in 2014. Rise in non- obligations.
performing loans (NPLs) and claims to the government 40% of Bank Saderat’s shares is owned by provincial
has led to a severe liquidity shortage making deposit- investment companies (Justice Share), followed by the
driven income generation problematical. Following Bank Iranian government and Falahatian brothers (as individual
Mellat, Bank Saderat is the second largest among non- owners) by 22% and 6% respectively as the next largest
governmental banks in attracting investment deposits with shareholders.
10%. Thus, non-interest part has played a key role historically
in the bank’s income and profit. The mentioned income is
earned mostly from arrears penalty for facilities instalments
(governmental/non-governmental), foreign branches’ profit,
or selling assets.
Since a part of the government’s debts to Bank Saderat
is settled through corporation assignment, the bank’s
investment goes beyond the proclaimed permitted ratio
of Central Bank of I.R. of Iran (the maximum investment
volume is set as 40% of the capital base - T2). Bank Saderat Fiscal Year Ends 20 Mar 2016
enjoys rather diverse investments, however, investing in
IPO Date 9 Jun 2009
power plant industry outweighs in between.

46 Mofid Securities (en.emofid.com)

Bank Saderat—CONTINUED

Last Close 927 Market Cap (M USD) 1,622 No. of Shares (B) 57.8
Free Float % — EPS (TTM) 128 EPS (FWD) 145
P/E (TTM) 7.24 P/E (FWD) 6.39 Beta 0.69

Chart (Percent) Return %

500 Return 1Yr. 13.45
Return 3Yr. 171.87
3Yr. Avg. 39.57
250

52 Week Range 674 - 1,075

0
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 21.7 Dividend Payout Ratio (LFY) 35.3
Sales - 3Yr. Growth Rate 16.0 Dividend Payout Ratio 3Yr. Avg. 49.7
EPS (LFY) vs FYE 1Yr. Ago 6.3 Dividend Yield 4.7
EPS - 3Yr. Growth Rate 14.3 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -50.0 P/B 0.56
Dividend - 3Yr. Growth Rate 31.4 P/S 0.95

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 13.1 31.1 100

Net Interest Income After Provison Margin -11.1 3.7

Cost to Income Ratio 73.2 54.3
50
ROA 0.8 1.6
ROE 8.7 17.9
0
Equity to Asset 8.7 8.6 2010 2011 2012 2013 2014
CAR 10.34 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 23.5 16.0

NPL Coverage Ratio 24.7 44.1

Deposit per Employee (M) 25,485 57,249

Net Income per Employee (M) 230 1,264

Iran Top 40 Listed Companies 47

21 Gol-E-Gohar Mining & Industrial Co.
(TSE:GOLG)
Gol-e-Golahr Mining & Industrial Co. is the largest producer of pellet in
Iran and the 2nd largest iron ore producer after Chadormalu Mining &
Industries Company.

Gol-E-Gohar Mining & Industrial Co. is the second largest Gol-E-Gohar pays annual royalties to the state-run Iranian
iron ore producer in Iran after Chadormalu Mining & Mines and Mining Industries Development and Renovation
Industrial Company. Gol-E-Gohar accounts for one fourth Organization (IMIDRO) which is determined as a percentage
of domestic iron ore market, and with holding about of sales (30% for 2014 as an example). Royalties payment is
half of pellet production in the country, Gol-E-Gohar is a big challenge between Gol-E-Gohar and the government
the largest producer of pellet in Iran. Gol-E-Gohar mines in a way that the differences on payment amount have been
include six mineral masses located near the city of Sirjan, referred to Iran’s Supreme Audit Court over the years back.
in southeastern Iran. Although the first iron ore extraction Meanwhile, Iran’s crude steel production is on the annual
operation in the mentioned area dates back to 1969, the upswing according to statistics released by the World Steel
concentrate and pellet production lines went operational Association. Iran has projected a 55 Mtpa steel production
in 1994 and 2010, respectively. Gol-E-Gohar was licensed by 2025 which indicates a growth more than doubling the
for the first time in August 1993 for a 10-year exploitation current capacity. This suggests a high growth potential
course that was extended later for another 25 years. With target for steel raw material producers such as Gol-E-Gohar.
producing 3 Mtpa concentrate and more than 5 Mtpa In line with production capacity expansion policies, Gol-E-
of pellets, Gol-E-Gohar has roughly 1000 permanent Gohar plans to develope the second pelletizing unit as well
employees. as three new concentrate production lines by 2016.
The iron ore extracted from open-pit mines is sent to Over one third of Gol-E-Gohar’s shares is held by Omid
processing plant in which it turns into sized iron ore and Investment Group Corporation which is followed by Mines
concentrate. It is then turned into pellet in the pelletizing and Metals Development Investment Co. (MMDIC) with 22%
unit. As one of the main materials in steel production ownership. It is worth noting that 70% of Omid Investment
chain, pellet makes up the majority of Gol-E-Gohar’s sales. is owned by fully state-run Bank Sepah.
Increasing in domestic steel production has brought about
a rise in demands for pellet; the export of this product,
thus, has been banned by the government since 2013. The
government, however, has not been faced such a restriction
in terms of sized iron ore. Pricing for products of Gol-E-
Gohar in domestic markets does not depend upon global
prices and is set based on a percent of Khuzestan steel billet
price. Concentrate and pellet sales prices for delivery to
Mobarakeh Steel Co. of Esfahan (MSC) in 2015 are approved Fiscal Year Ends 20 Mar 2016
as 13.6% and 23% of the abovementioned billet average
IPO Date 29 Aug 2004
price, respectively.

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Gol-E-Gohar Mining & Industrial Co.—CONTINUED

Last Close 2,155 Market Cap (M USD) 1,608 No. of Shares (B) 18.0
Free Float % 17 EPS (TTM) 474 EPS (FWD) 434
P/E (TTM) 4.55 P/E (FWD) 4.97 Beta 1.27

Chart (Percent) Return %

800 Return 1Yr. -44.47
Return 3Yr. 79.81
3Yr. Avg. 21.60
350

52 Week Range 2,155 - 5,879

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -7.15 Dividend Payout Ratio (LFY) 105.52
Sales - 3Yr. Growth Rate 37.25 Dividend Payout Ratio 3Yr. Avg. 96.65
EPS (LFY) vs FYE 1Yr. Ago -37.17 Dividend Yield 16.44
EPS - 3Yr. Growth Rate 13.57 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -33.33 P/B 1.81
Dividend - 3Yr. Growth Rate 15.24 P/S 2.31

Income Statement (Trillion Rials) Sales (Thousand Tone)

30 7,000

15 3,500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Iron Ore Concentrate Lump and Fine ores Iron Ore Pellet

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 37.07 56.40 56.46 Debt Ratio 0.49 0.34 0.40
GP Margin 35.28 57.23 40.84 Debt to Equity Ratio 0.96 0.56 0.71
OP Margin 34.79 56.64 53.66 LT Debt Ratio 0.05 0.02 0.03
ROA 16.90 39.69 20.58 Interest Coverage Ratio 10.94 191.00 48 K
ROE 30.69 61.02 33.86

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 3.00 2.54 2.68 Current Ratio 0.99 1.72 0.98
Receivable Turnover 2.84 7.27 65.75 Quick Ratio 0.77 1.14 0.77
Asset Turnover 0.46 0.68 0.41 Cash Ratio 0.04 0.31 0.04

Iran Top 40 Listed Companies 49

22 Mobin Petrochemical Co. (TSE:MOBN)

As one of the largest integrated utility complex in the world, Mobin

Petrochemical Co. is assigned with supplying utilities services like steam,
fresh water, service air and nitrogen for petrochemical complexes in the
1st phase of Assaluyeh.

Mobin Petrochemical Co. is the largest integrated utility The price of Mobin’s products is set in the Petrochemical
complex in Iran and one of the largests in the world. Industries Association (APIC) in presence of all companies
Located in Pars Special Economic Energy Zone (Assaluyeh), based on the mutual consent of the parties to transactions.
Mobin Petrochemical is assigned with supplying utilities Mobin Petrochemical’s gas feedstock is supplied by the
services for petrochemical complexes located in the first general gas network, with National Iranian Gas Company
phase of Assaluyeh. (NIGC) as the counterparty.
Producing and distributing of electricity, steam, nitrogen, Mobin Petrochemical has currently free capacities in such
service air, instrumentation air, fresh water, mineral water, a way that the company was faced in 2014 with 40%,
service water, fire water, cooling water, reception and 50%, and 20% free nominal capacity in producing oxygen,
treatment of industrial and sanitary wastewater of the electricity, and cooling water respectively. Demand for
petrochemical companies of the region, liquid and solid services of the company may increase once new projects
waste incineration in incinerator furnaces, receiving gas are developed in the region.
from the National network and its pressure reduction and Having access to required feedstock due to being adjacent
distribution among the petrochemical complexes are of to resources of South Pars Gas Field on one hand, and the
Mobin’s activities. Nouri, Pars, Jam, Zagros, and Pardis rising demand for petrochemical products on the other are
Petrochemicals as well as Arya Sasol Polymer Co. are considered as advantages of which Mobin Petrochemical
counted as the main customers of Mobin Petrochemical Co. enjoys. Receiving gas from the general pipeline has
Mobin Petrochemical has an annual production capacity of minimized the risk of raw material supply for Mobin
8.6 million MW electricity, 25 million tons of steam, 4 billion Petrochemical, and it is not easy also for Mobin’s customers
cubic meters of cooling water, 68 million cubic meters of to meet their needs from other suppliers. A 3 Mtpa rise in
waters including fresh water, mineral water, boiler feedwater steam production has been set as one of the future plans of
& service water, 267 million cubic meters of compressed air, Mobin Petrochemical.
841 million cubic meters of nitrogen, 1.9 billion cubic meters Persian Gulf Petrochemical Industry Group is the sole major
of oxygen, and 8.8 billion cubic meters of gas transmission. shareholder of Mobin Petrochemical with more than 90%
Mobin Petrochemical’s income comes mostly from oxygen ownership.
sales, i.e. 40% of its gross profit. Electricity, cooling water,
and steam with 25%, 23%, and 10% shares respectively make
up the next main income sources for the company.
The price rate for products of Mobin Petrochemical is set by Fiscal Year Ends 20 Mar 2016
National Petrochemical Company (NPC) and all transactions
IPO Date 28 Apr 2015
of the company are made as dollar-denominated trades.

50 Mofid Securities (en.emofid.com)

Mobin Petrochemical Co.—CONTINUED

Last Close 3,280 Market Cap (M USD) 1,438 No. of Shares (B) 14.3
Free Float % 7 EPS (TTM) 551 EPS (FWD) 671
P/E (TTM) 5.96 P/E (FWD) 4.89 Beta —

Chart (Percent) Return %

40 Return 1Yr. -
Return 3Yr. -
3Yr. Avg. -
15

52 Week Range 2,810 - 3,525

-10
May 2015 May 2015 Jun 2015 Jul 2015 Jul 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 109.7 Dividend Payout Ratio (LFY) 70.08
Sales - 3Yr. Growth Rate 56.7 Dividend Payout Ratio 3Yr. Avg. -
EPS (LFY) vs FYE 1Yr. Ago 12 Dividend Yield 11.21
EPS - 3Yr. Growth Rate 5.1 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 28.26 P/B 2.11
Dividend - 3Yr. Growth Rate - P/S 1.37

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

36 8

18 0

2010 2011 2012 2013 2014

0 -8
2010 2011 2012 2013 2014 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 23.07 15.92 24.54 Debt Ratio 0.36 0.58 0.36
GP Margin 27.92 33.90 33.36 Debt to Equity Ratio 0.56 5.12 0.56
OP Margin 26.98 36.20 32.56 LT Debt Ratio 0.02 0.04 0.02
ROA 25.26 10.20 25.26 Interest Coverage Ratio 244.85 88.52 209.05
ROE 38.23 18.74 38.23

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 10.30 7.78 10.30 Debt to Equity Ratio 1.51 0.78 1.51
Receivable Turnover 5.28 3.80 5.28 LT Debt Ratio 1.27 0.64 1.27
Asset Turnover 1.10 0.61 1.01 Interest Coverage Ratio 0.22 0.07 0.22

Note: MOBN is 83% of utility industry’s market cap

Iran Top 40 Listed Companies 51

23 Chadormalu Mining & Industrial Co.
(TSE:CHML)
Established in 1992, today Chadormalu Mining and Industrial Co. is the larg-
est iron ore concentrate producer and second produce of pellets in Iran.

With production volume of over 9 Mtpa, Chadormalu Mining way that the differences on payment amount have been
& Industrial Co. is the largest iron ore concentrate producer referred to Iran’s Supreme Audit Court over the years back.
in Iran which holds almost half of domestic concentrate Iran has projected a 55 Mtpa steel production by 2025
market. Chadormalu ranks second across the country, after which indicates a growth more than doubling the current
Gol-E-Gohar Mining & Industrial Co., in producing pellets capacity, implying a potential target for iron ore producers
with 3.4 Mtpa. Chadormalu mine is located near the city as well. In line with production capacity expansion policies,
of Yazd in central Iran. Chadormalu was established as a Chadormalu has planned a production capacity increase in
corporation in Yazd in 1992, although minerals of the region pelletizing unit as well as another pelletizing project with 2.5
had been explored in 1940. This company has more than Mtpa capacity.
4,000 employees, mostly as contract staff. Chadormalu was established for the first time as initial
The main products of Chadormalu are concentrate, investment by Bank Sepah and National Iranian Steel
pellet, and sized iron ore. To obtain a higher added value, Company (NISCO). More than one third of Chadormalu’s
Chadormalu has planned, for the first time, to produce shares is owned by Omid Investment Management Co.
0.2 Mtpa crude steel in 2015. Following extraction from which is a subsidiary to the state-run Bank Sepah. 20% of
the mine, iron ore is processed into sized iron ore and shares of Chadormalu is held by Justice Shares which is
concentrate which turns later to pellet. Concentrate followed by Mines and Metals Development Investment Co.
comprises almost half of company’s sales, followed by (MMDIC) and Mobarakeh Steel Co. of Esfahan (MSC) with
pellet as the next effective factor. Almost all sales go for respectively 16% and 10% as the next largest shareholders.
the domestic market. Increasing domestic steel production
capacity entails a rise in demand for steel raw material,
the issue that resulted in government push for non-export
ban since 2013. Pricing of Chadormalu products does not
depend directly upon global prices and is set based on a
percent of Khuzestan steel billet price. Concentrate and
pellet sales prices for delivery to Mobarakeh Steel Co. of
Esfahan (MSC) in 2015 are approved as 16% and 23% of the
abovementioned billet average price, respectively.
The exploitation license for Chadormalu region has been
issued in the name of Iranian Mines and Mining Industries
Development and Renovation Organization (IMIDRO)
(a state-run organization), and Chadormalu pays annual
royalties which is determined as a percent of sales (30% Fiscal Year Ends 20 Mar 2016
for 2014 as an example). Royalty fees payment is a big
IPO Date 19 Oct 2003
challenge between Chadormalu and the government in a

52 Mofid Securities (en.emofid.com)

Chadormalu Mining & Industrial Co.—CONTINUED

Last Close 2,091 Market Cap (M USD) 1,415 No. of Shares (B) 17.1
Free Float % 11 EPS (TTM) 822 EPS (FWD) 651
P/E (TTM) 2.54 P/E (FWD) 3.21 Beta 1.34

Chart (Percent) Return %

800 Return 1Yr. -47.30
Return 3Yr. 75.55
3Yr. Avg. 20.63
350

52 Week Range 3,650 - 6,232

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -15.90 Dividend Payout Ratio (LFY) 79.08
Sales - 3Yr. Growth Rate 36.92 Dividend Payout Ratio 3Yr. Avg. 81.33
EPS (LFY) vs FYE 1Yr. Ago -10.82 Dividend Yield 23.99
EPS - 3Yr. Growth Rate 44.18 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -11.79 P/B 1.50
Dividend - 3Yr. Growth Rate 22.82 P/S 1.88

Income Statement (Trillion Rials) Sales (Thousand Tone)

32 7,000

16 3,500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Iron Ore Concentrate Lump and Fine ores Iron Ore Pellet

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 56.66 57.78 56.46 Debt Ratio 0.42 0.27 0.40
GP Margin 50.31 58.23 40.84 Debt to Equity Ratio 0.73 0.42 0.71
OP Margin 49.63 57.64 53.66 LT Debt Ratio 0.03 0.03 0.03
ROA 29.25 42.80 20.58 Interest Coverage Ratio 14 K 32 K 48 K
ROE 50.46 58.25 33.86

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 2.07 2.30 2.68 Current Ratio 0.86 3.02 0.98
Receivable Turnover 3.32 4.27 65.75 Quick Ratio 0.56 2.32 0.77
Asset Turnover 0.52 0.74 0.41 Cash Ratio 0.03 0.64 0.04

Iran Top 40 Listed Companies 53

24 Tejarat Bank (TSE:BTEJ)

Established in 1979 after a merger between several banks, Tejarat Bank

makes over 90% of its income through non-interest activities. The bank has
over 1800 branches nationwide and two active branches in France and
Tajikistan.

Tejarat Bank was established in 1979 following the merger of Given the limited income generation of Tejarat Bank using
Iran-England Bank, Iran-Japan International Bank, Iran- available resources, the interest activities play insignificant
Russia Bank, Iran-Netherland Commercial Bank, Iran-Middle role in creating the bank’s income. Approximately 60% of
East Bank, and some other credit institutes. Tejarat Bank’s the bank’s non-interest income is from recognizance, i.e.
shares were offered in Tehran Stock Exchange (TSE) for the arrears penalty for claims (L/C mostly) which is normally
first time in 2009. unstable. Bank services, however, hold 25% of non-interest
income, compensating for the other parts.
More than 90% of the bank’s income is earned from
non-interest activities making up low profit margin due Tejarat Bank’s shares are mostly under the ownership of the
to relatively high operating costs. Since a part of the government or state-run corporations. 40% of Tejarat Bank’s
government’s debts to Tejarat Bank is settled through shares is owned by provincial investment corporations
corporation assignment– like Bank Saderat, the bank’s (Justice Share), followed by the Iranian government and
Saba Tamin Investment Company (an affiliate to Social
investment goes beyond the proclaimed permitted ratio of
Security Investment Company) with 20% and 10% as the
Central Bank of Iran (the maximum investment volume is set
next largest shareholders.
as 40% of the capital base-T2). Over 35% of Tejarat Bank’s
investments is done through stock market, mostly in basic
metals, chemicals, and petroleum products industries. The
bank’s other investments are diverse, however, investing in
power plant industry outweighs in between. Following Bank
Saderat, Tejarat with more than 1800 branches is the second
among TSE-listed banks in terms of number of branches.
Tejarat Bank also has two foreign branches active in France
Fiscal Year Ends 20 Mar 2016
and Tajikistan which is considered the highest after Mellat
IPO Date 18 May 2009
and Saderat banks.

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Tejarat Bank—CONTINUED

Last Close 996 Market Cap (M USD) 1,378 No. of Shares (B) 45.7
Free Float % 23 EPS (TTM) 106 EPS (FWD) 194
P/E (TTM) 9.40 P/E (FWD) 5.13 Beta 1.03

Chart (Percent) Return %

500 Return 1Yr. 0.3
Return 3Yr. 140.3
3Yr. Avg. 33.9
200

52 Week Range 761 - 1,197

-100
Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -12.1 Dividend Payout Ratio (LFY) -9.3
Sales -3Yr. Growth Rate 10.9 Dividend Payout Ratio 3Yr. Avg. 80.8
EPS (LFY) vs FYE 1Yr. Ago 19.1 Dividend Yield 0.9
EPS - 3Yr. Growth Rate -5.3 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -94.1 P/B 0.74
Dividend - 3Yr. Growth Rate -36.1 P/S 1.49

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 16.1 31.1 100

Net Interest Income After Provison Margin -9.3 3.7

Cost to Income Ratio 77.3 54.3
50
ROA 0.5 1.6
ROE 7.8 17.9
0
Equity to Asset 6.5 8.6 2010 2011 2012 2013 2014
CAR 6.7 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 19.8 16.0

NPL Coverage Ratio 34.7 44.1

Deposit per Employee (M) 36,804 57,249

Net Income per Employee (M) 256 1,264

Iran Top 40 Listed Companies 55

25 Civil Servants Pension Fund Investment
Co. (TSE:SAND)
A great majority of CPFIC’s investments are in petrochemical and refiner-
ies. The company also has management shares in a number of companies
including the Isfahan Refinery, Iranol Oil Co. and Pasargad Oil Co.

Civil Servants Pension Fund Investment Co. (CPFIC) was More than half of Jam’ sales is from exported products
established in July 1988, and was listed in Tehran Stock which indicates high sensitivity of the company’s
Exchange (TSE) in August 2000. The activities of CPFIC are profitability to foreign currency rate fluctuations. CPFIC,
set out to invest in various companies, projects, and units. currently, has no foreign currency debt; however, the
The aim of these investments are optimized management of company’s profitability may be affected by foreign currency
some of Civil Servants Pension Fund’s (CSPF) assets. rate fluctuations due to increased imported equipment cost
Approximately 80% of CPFIC’s portfolio is invested in listed owing to advancing new projects.
companies, with more than 70% of the shares basket in The newer projects of CPFIC include Persian Gulf Saba
petrochemicals and refineries. CPFIC owns 17% of Jam Steel Co. for 9 Mtpa production of iron and steel billet,
Petrochemical Co. which marks 15% of the CPFIC’s total Bakhtar Petrochemical Co., focusing on activities of the
portfolio value. petrochemical companies of Kavian, Lorestan, Kermanshah,
CPFIC also holds the management shares of a number etc., Ilam Petrochemical for 1.2 Mtpa production of ethylene
of companies such as Isfahan Refinery, Iranol Oil Co., and propylene, and the 2nd phase of Jam Petrochemical
with production capacity of over 0.7 Mtpa Butane,
Behshahr Industrial Development Corporation, Fanavaran
Butadiene Styrene, a-Olefin.
Petrochemical Co., Pasargad Oil Co., Mellat Insurance Co.,
Abadan Petrochemical Co., Persian Gulf Saba Steel Co., More than 86% of CPFIC is owned by Civil Servants Pension
etc. In recent years, the CPFIC’s profits have come from Fund (CSPF), followed by Saba Tamin Investment Co. and
dividends of Jam and Fanavaran Petrochemicals as well as Mehr Ayandegan Financial Development Group Co. as the
Iranol and Pasargad Oil Companies. next largest shareholders.
Ilam Petrochemical Co., Ahvaz Pipe Mills Co., as the main
domestic producer of steel pipes of 6-56 inches diameter,
and Iran Dairy Industries Commercial Co., as the largest
domestic dairy producer, are among the non-listed
corporations in which CPFIC holds 17%, 40%, and 15%
ownership shares, respectively.
CPFIC’s most profitable company is Jam Petrochemical
Co. which is the largest olefin producing complex
worldwide. In addition to the CPFIC’s 17% ownership in Jam
Petrochemical, Civil Servants Pension Fund (CSPF) owns Fiscal Year Ends 22 Sep 2015
19% of Jam as well which suggests Jam’s financial and
IPO Date 9 Apr 2001
operational policies are highly affected by CSPF.

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Civil Servants Pension Fund Investment Co.—CONTINUED

Last Close 2,849 Market Cap (M USD) 1,242 No. of Shares (B) 14.4
Free Float % 12 EPS (TTM) 757 EPS (FWD) 703
P/E (TTM) 3.76 P/E (FWD) 4.05 NAV 4079
Beta 1.39

Chart (Percent) Return %

800 Return 1Yr. -6.08
Return 3Yr. 429.47
3Yr. Avg. 62.55
350

52 Week Range 2,153 - 4,134

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 20.07 Dividend Payout Ratio (LFY) -93.86
Sales - 3Yr. Growth Rate 45.34 Dividend Payout Ratio 3Yr. Avg. -85.82
EPS (LFY) vs FYE 1Yr. Ago 29.33 Dividend Yield -21.75
EPS - 3Yr. Growth Rate 72.56 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 33.33 P/B 0.74
Dividend - 3Yr. Growth Rate 83.25 P/S 2.27
P/NAV 0.70
NAV/B 1.07

Income Statement (Trillion Rials) Portfolio (Percent)

14
33% Chemicals
15% Petroleum Products
10% Fixed Income Securities
7 7% Metallic Ores
7% Metallic Products
7% Industrial Machinery
6% Financial Services
0 5% Food and Beverage
2009 2010 2011 2012 2013 10% Other
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 99.50 101.95 99.26 Current Ratio 2.55 2.17 4.07
OP Margin 99.41 101.33 99.36 Quick Ratio 2.55 2.55 4.07
ROA 31.39 29.81 41.75 Cash Ratio 0.36 0.47 0.41
ROE 37.74 39.98 49.65

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.15 0.25 0.17
Debt to Equity Ratio 0.18 0.35 0.25
LT Debt Ratio 0.02 0.02 0.01
Interest Coverage Ratio - - 38.93

Iran Top 40 Listed Companies 57

26 Tehran Refinery (IFB:PTRZ)

With a production capacity of 250 TBD, Tehran Refinery offers 35 million

liters of various oil products on daily basis. Tehran Refinery covers 25% of
domestic kerosene production and nearly 50% of offered lube cut in Iran
Mercantile Exchange.

With two separate refining units, Tehran Refinery is located To improve the quality of produced gasoline and diesel, the
in south Tehran. The first refining unit of the company Iranian ministry of petroleum has required the refineries
was established with the initial production capacity of 85 to meet Euro-4 standards by the end of 2019. The lower
TBD in 1968, while the second was built with the refining amount of sulfur are among the key quality factors of
capacity of 100 TBD in 1973. Following capacity expansion the final products. The product quality improvement
plans, both units now have a capacity of 250 TBD which plan for Tehran Refinery went on stream in 2012 of which
compromises for 15% of the total oil refining operations desulfurization of diesel and kerosene were the most
of the country. Tehran Refinery offers 35 million liters of significant parts of the project. Tehran Refinery covers one
different oil products to the market on daily basis. fourth of domestic kerosene production.
The company’s feedstock is supplied by Ahvaz and Marun Nearly half of offered lube cut in Iran Mercantile Exchange
oil resources. In recent years, the price of feedstock have is supplied by Tehran Refinery. As a result of closed
been calculated based on the Persian Gulf FOB price with proximity to some production complexes, which cuts the
5% discount included. The activity of the Iranian refineries transportation expenses, companies like Behran Oil Co. as
is considered a commissioning work. Taking the feedstock well as Iranol Oil Co. supplied most of their required raw
from the Ministry of Petroleum, refineries deliver the main materials from the Tehran Refinery.
products such as LPG, gasoline, kerosene, diesel, fuel oil, The shares of Tehran Refinery were offered in Iran
and jet fuel to the National Iranian Oil Distribution Company Farabourse (IFB) for the first time in 2012. The Provincial
so that the latter vicariously sells the produced energy Investment Companies (Justice Shares) is the largest
products. shareholder of the above refinery with roughly 90%
Price of products for refineries are determined based on ownership. Due to strategic nature of oil products and
Persian Gulf FOB prices for oil products. Sales prices for high reliance of refineries upon the government, the macro
domestic consumers are set factoring in government policies of these corporations are still set in line with
subsidies; however, the payment for the gap between strategies of the Ministry of Petroleum.
subsidized sales rates and actual market rates is paid by the
government to the refineries.
Gasoline, jet fuel, and diesel comprise the products with
higher quality, while fuel oil and vacuum baton (the raw
material in producing bitumen) – placed in lower parts of
Fiscal Year Ends 20 Mar 2016
the distillation tower- with lower quality are less valuable
IPO Date 10 Oct 2012
than crude oil.

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Tehran Refinery—CONTINUED

Last Close 4,880 Market Cap (M USD) 1,182 No. of Shares (B) 8.0
Free Float* % — EPS (TTM) 414 EPS (FWD) 288
P/E (TTM) 11.79 P/E (FWD) 16.95 Beta —

Chart (Percent) Return %

1800 Return 1Yr. -14.40
Return 3Yr. -
3Yr. Avg. -
800

52 Week Range 4,130 - 11,581

-200
Jan 2013 Sep 2013 Apr 2014 Nov 2014 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -14.96 Dividend Payout Ratio (LFY) 50.03
Sales - 3Yr. Growth Rate 22.15 Dividend Payout Ratio 3Yr. Avg. 51.45
EPS (LFY) vs FYE 1Yr. Ago -32.03 Dividend Yield 8.40
EPS - 3Yr. Growth Rate 36.01 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -63.93 P/B 2.62
Dividend - 3Yr. Growth Rate 50.10 P/S 0.19

Income Statement (Trillion Rials) Sales (Thousand m3)

250 6,000

125 3,000

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Gas Oil Fuel Oil Gasoline Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 1.64 1.98 8.44 Debt Ratio 0.54 0.81 0.57
GP Margin 1.93 3.80 10.10 Debt to Equity Ratio 1.18 20.87 1.76
OP Margin 1.27 2.12 9.93 LT Debt Ratio 0.04 0.07 0.05
ROA 9.91 10.63 16.62 Interest Coverage Ratio 9.10 - 21.81
ROE 24.34 132.58 45.55

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 15.27 21.98 14.43 Current Ratio 1.27 0.89 1.43
Receivable Turnover 46.26 22.52 24.00 Quick Ratio 0.56 0.52 0.88
Asset Turnover 6.02 4.86 3.92 Cash Ratio 0.21 0.13 0.20

* IFB does not publish free float of listed companies

Iran Top 40 Listed Companies 59

27 Informatics Services Corporation
(TSE:INFO)
As the 1st and largest domestic company in providing e-banking services,
the ISC also provides foreign currency wire transfer systems and have
developed national payment systems like SHETAB and SHAPARAK among
others.

Informatics Services Corporation (ISC) is the first and Given the expenses and activity type of the company, ISC
largest domestic company in design, implementation, and is less sensitive to fluctuations of foreign currency rates or
development of e-banking services. The Central Bank of energy products, which is considered an advantage for the
Iran along with Bank Melli Iran, Bank Saderat, and Bank of firm. Convenient relationships with Central Bank of Iran and
Industry and Mine via National Informatics Corporation are National Informatics Corporation (NIC) have resulted in a
the main owners of ISC. Informatics Services Corporation monopolistic market for ISC. Reaching some outstanding
was established in 1993 as a private joint stock company. achievements by the company has made the country less
After going public in 2002, ISC was listed in Tehran Stock dependent on foreign suppliers. The achievements have
Exchange (TSE) the same year. been so great that ISC has changed its strategy from
ISC is active in comprehensive e-banking systems such as product assembling to production.
web-based services for banks, customization of mobile Rapid change of technology is a serious challenge to
bank software, and foreign currency wire transfer systems informatics industries. The exclusive offering of services to
for commodity imports; the national payment systems like a limited number of clients, and banks’ failure in making the
SHETAB, SHAPARAK, SATNA, and PAYA; network services due payments are among the challenges the company is
and communication solutions; and Pouyan Business faced with.
Intelligence System. National Informatics Corporation (NIC) is the major
ISC also provides services of maintaining, managing, shareholder of ISC with 95% ownership. On the other hand,
and review of all operational and governing systems almost half of NIC’s shares is held by Central Bank of Iran,
of the banking network and the customers across the while Bank Melli Iran and Bank Saderat each with roughly
country, support management of customer services, risk 21% and Bank of Industry and Mine with less than 5%
management and information safety through design, ownership are the next largest shareholders of NIC.
implementation, and evaluation of information safety
management systems. Personnel and maintenance costs
make up the most significant expenses of the company.
ISC possesses four subsidiaries of Kish Informatics Services
Co. (KISC), which provides required information and
communication infrastructure to offer uninterrupted, stable,
secure and guaranteed services in e-banking to ISC and
other customers (banks); Faradis Alborz Informatics Co.,
as the most extensive supporter of banking IT systems
with the most ATMs machines nationwide; Faradis Gostar
Kish Informatics Services Co. that offers mobile services
Fiscal Year Ends 20 Mar 2016
on phone card and cell phone; and Novin Kish Informatics
IPO Date 19 Apr 2003
Services Co.

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Informatics Services Corporation—CONTINUED

Last Close 13,900 Market Cap (M USD) 1,178 No. of Shares (B) 2.8
Free Float % 5 EPS (TTM) 1,927 EPS (FWD) 1,799
P/E (TTM) 7.21 P/E (FWD) 7.73 Beta 0.3

Chart (Percent) Return %

1400 Return 1Yr. 139.86
Return 3Yr. 360.51
3Yr. Avg. 66.37
700

52 Week Range 9,700 - 14,300

0
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 40.57 Dividend Payout Ratio (LFY) 70.09
Sales - 3Yr. Growth Rate 73.49 Dividend Payout Ratio 3Yr. Avg. 68.89
EPS (LFY) vs FYE 1Yr. Ago 0.22 Dividend Yield 9.23
EPS - 3Yr. Growth Rate 0.36 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 26.79 P/B 5.59
Dividend - 3Yr. Growth Rate 37.24 P/S 5.54

Income Statement (Trillion Rials) Cash Flow Statement (Trillion Rials)

7 5

3.5 0

2010 2011 2012 2013 2014

0 -5
2010 2011 2012 2013 2014 Operating Activities Investing activities Financing Activities
Sale Cost of Sale Net Profit investment Return and Financing Expense Tax

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 76.85 119.34 61.06 Debt Ratio 0.55 0.51 0.54
GP Margin 49.67 21.61 44.38 Debt to Equity Ratio 1.24 1.07 1.24
OP Margin 41.23 3.91 35.63 LT Debt Ratio 0.02 0.01 0.03
ROA 39.51 31.99 32.27 Interest Coverage Ratio - - 34.67
ROE 92.18 66.17 74.65

Liquidity MRQ 5 Yr. Avg. Industry

Current Ratio 0.84 1.31 0.95
Quick Ratio 0.79 1.14 0.89
Cash Ratio 0.07 0.25 0.17

Iran Top 40 Listed Companies 61

28 Iranian Investment Petrochemicals
Group (IFB:IPTZ)
Some 40% of IIPG’s investment are in listed companies. The company has sev-
eral new petrochemical projects which are scheduled to go operational
by 2017-2018. Main sources of the company’s income are from urea units of
Shiraz, Kermanshah, and Pardis petrochemical companies.

Iranian Investment Petrochemicals Group (IIPG) was Given IIPG’s portfolio, the gas price (as the petrochemical
established in 2010. This company was offered in the Iran feedstock) which is set annually by the government highly
Farabourse (IFB) base market with the symbol of IPTZ in affects the IIPG’s profitability. The other important factors
January 2012, and was transferred later in September 2014 here are the fluctuation rate of products’ global sales price
to IFB’s main market. as well as the foreign currency rate fluctuations. In terms of
Almost all investment of IIPG goes to chemical producing global sales price rate, IIPG is affected mostly by urea and
companies and projects. 40% of IIPG’s investment has been methanol price rates. Considering petrochemical projects
at hand, however, olefins and polyolefins outweigh in the
made in listed companies, including Pardis, Kermanshah,
diverse products basket of the company.
Zagros, and Jam petrochemical companies. The IIPG’s
investment in non-listed companies is made mostly in The major owner of IIPG’s shares (almost 50%) is the
petrochemical companies of Ilam, Gachsaaraan, Mamasani, Persian Gulf Petrochemical Industry Group which is the
Dehdasht, Boroujen, Kazeroon, Lordegan, and Modaberan largest listed company in Iran. More than one third of IIPG is
Eghtesad Co. Modaberan owns one third of Shiraz held by Petrochemical Commercial Company (PCC) out of
Petrochemical Company. which 45% is owned by Persian Gulf Petrochemical.

Main sources of IIPG’s income are the urea units of Shiraz,

Kermanshah, and Pardis petrochemical companies, followed
by Jam and Zagros petrochemicals. In addition to urea,
Shiraz Petrochemical Co. produces methanol as well.
Except for Lordegan petrochemical project with urea
production capacity of 1 Mtpa, the other petrochemical
projects of IIPG are in progress for olefin production.
Gachsaaraan petrochemical would deal with ethylene
production, while Mamasani, Boroujen, Dehdasht, and
Kazeroon petrochemicals would be ethylene consumers
and polyethylene producers at the same time. Lordegan
and Gachsaaraan petrochemicals are projected to go
operational in 2017, and Mamasani, Boroujen, Dehdasht, and
Kazeroon petrochemicals are set to come on stream in 2018.
Sadaf Petrochemical is also another project, set to produce
Fiscal Year Ends 22 Sep 2015
Butadiene rubber which is used in rubber products such as
IPO Date 9 Jan 2012
car tires.

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Iranian Investment Petrochemicals Group—CONTINUED

Last Close 1,711 Market Cap (M USD) 1,036 No. of Shares (B) 20.0
Free Float* % — EPS (TTM) 244 EPS (FWD) 253
P/E (TTM) 7.00 P/E (FWD) 6.78 NAV 1562
Beta —

Chart (Percent) Return %

40 Return 1Yr. -
Return 3Yr. -
3Yr. Avg. -
5

52 Week Range 1,370 - 2,753

-30
Oct 2014 Dec 2014 Feb 2015 Apr 2015 Jul 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 84.34 Dividend Payout Ratio (LFY) 69.13
Sales - 3Yr. Growth Rate - Dividend Payout Ratio 3Yr. Avg. 81.37
EPS (LFY) vs FYE 1Yr. Ago 96.60 Dividend Yield 1137.00
EPS - 3Yr. Growth Rate - Valuation
Dividend (LFY) vs FYE 1Yr. Ago 60.00 P/B 1.30
Dividend - 3Yr. Growth Rate - P/S 7.01
P/NAV 1.10
NAV/B 1.19

Income Statement (Trillion Rials) Portfolio (Percent)

7
92% Chemicals
8% Financial Services

3.5

0
2010 2011 2012 2013
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 100.14 - 101.67** Current Ratio 2.59 - 1.10
OP Margin 99.52 - 98.96** Quick Ratio 2.59 - 0.99
ROA 17.80 - 35.96 Cash Ratio 0.23 - 0.15
ROE 24.23 - 104.64

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.18 - 0.55
Debt to Equity Ratio 0.21 - 1.50
LT Debt Ratio 0.00 - 0.04
Interest Coverage Ratio 0.88 - 48.83

* IFB does not publish free float of listed companies

** Only petrochemical investment companies are included.

Iran Top 40 Listed Companies 63

29 Zagros Petrochemical Co. (IFB:PZGZ)

As the largest methanol producer in Iran and one of the largest in the
globe, Zagros Petrochemical Co. currently has a 2.8 Mtpa production
capacity. Some 95% of the total produced methanol in the company is ex-
ported. The company is fully exempted from stated income tax until March
2017.

Zagros Petrochemical Co. is the largest methanol producer In spite of the total 98 Mtpa methanol production capacity
in Iran and one of the largests in the world. The first unit in the world, the global production for methanol marked 60
of this company and the second one, under the license of Mtpa in 2013. On the other hand, there have been projects in
Lurgi GmbH Co., went operational in March 2007 and July Iran running with 30 Mtpa capacity which will increase the
2009 respectively in Assaluyeh, southern coast of Iran. global free capacity of methanol remarkably, suggesting a
The total methanol production capacity in Iran is 5 Mtpa, risk to the global prices.
and the full capacity of methanol production of Zagros The conversion rate of methanol to olefin and propylene
Petrochemical is 3.3 Mtpa. The current production capacity was less than 2% of its total consumption in 2013. The
of Zagros Petrochemical is 2.8 Mtpa which is supplied by 2.5 officials of the Iranian Ministry of Petroleum have made
billion cubic meters methane through South Pars gas field. promises on converting Iran’s produced methanol into olefin
The primary usage of methanol is to be used as the and propylene; however, failure in fulfilling the promises may
raw material of some other chemical products such as cause methanol global prices to drop sharply.
Formaldehyde, Dimethyl Ether (DME), Acetic Acid, and Parsian Oil and Gas Development Co. (POGDC) is the
MTBE (a fuel additive) or as the fuel. In new applications, largest shareholder of Zagros Petrochemical with 36%
methanol turns into olefin (MTO) and propylene (MTP) ownership which is followed by Taban Farda Petrochemical
as well. Methanol comprises 10% of total export dollar- Co., Morvarid Industrial Investment Co., and Poushineh
denominated value of Iran’s petrochemical products, Industrial Group with 21%, 18%, and 18% ownership
according to customs statistics for the last Iranian calendar respectively as the next largest shareholders. POGDC is a
year (begins March 21). subsidiary to Armed Forces Social Security Organization,
Methanol sales makes up almost all Zagros’ income. 95% and Taban Farda Petrochemical is a subsidiary to Oil
of the produced methanol in Zagros is exported based Industry Staff Welfare, Saving, and Pension Fund.
on global price rates, and the export sales-driven income
is converted with foreign currency market exchange rate
in the financial statements. Approximately 80% of the
produced methanol is domestically sold through Iran
Energy Exchange. Zagros Petrochemical is fully exempted
from stated income tax due to mineral and manufacturing
activities during March 15, 2007 to March 13, 2017.
The required utility and oxygen for Zagros Petrochemical
are supplied by Mobin Petrochemical Co. (a subsidiary
to Persian Gulf Petrochemical Industry Group) as the
counterparty for Zagros gas feedstock. The gas price is
set by the government and is different from the global
prices in such a way that the price of gas feedstock for
petrochemical companies was 13 cents in 2014 with 5
cents for their consuming fuel, while the price of the Iran’s
Fiscal Year Ends 20 Mar 2016
exporting gas to Turkey has been 48 cents per cubic meter,
IPO Date 11 Jul 2011
according to media reports.

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Zagros Petrochemical Co.—CONTINUED

Last Close 14,085 Market Cap (M USD) 1,027 No. of Shares (B) 2.4
Free Float* % — EPS (TTM) 3,299 EPS (FWD) 2,578
P/E (TTM) 4.27 P/E (FWD) 5.46 Beta 1.21

Chart (Percent) Return %

350 Return 1Yr. -17.90
Return 3Yr. 175.03
3Yr. Avg. 40.11
150

52 Week Range 11,500 - 23,400

-50
Dec 2011 Oct 2012 Aug 2013 Jun 2014 Apr 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 21.03 Dividend Payout Ratio (LFY) 100.01
Sales - 3Yr. Growth Rate 26.40 Dividend Payout Ratio 3Yr. Avg. 96.82
EPS (LFY) vs FYE 1Yr. Ago -24.17 Dividend Yield 22.37
EPS - 3Yr. Growth Rate 7.96 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -16.59 P/B 5.3
Dividend - 3Yr. Growth Rate 13.65 P/S 1.21

Income Statement (Trillion Rials) Sales (Thousand Tone)

32 3,000

16 1,500

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Methanol Steam

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 44.44 - 48.54 Debt Ratio 0.73 - 0.55
GP Margin 28.28 - 46.87 Debt to Equity Ratio 2.72 - 1.50
OP Margin 24.14 - 44.15 LT Debt Ratio 0.01 - 0.04
ROA 32.22 - 35.96 Interest Coverage Ratio 250.65 - 48.83
ROE 115.72 - 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 11.84 - 5.86 Current Ratio 1.10 - 1.10
Receivable Turnover 3.40 - 6.58 Quick Ratio 1.02 - 0.99
Asset Turnover 1.14 - 0.62 Cash Ratio 0.02 - 0.15

* IFB does not publish free float of listed companies

Iran Top 40 Listed Companies 65

30 Iran Khodro Industrial Group Co.
(TSE:IKCO)
As the 1st Iranian automaker and the largest one in the Middle East, Iran
Khodro Industrial Group Co. produces a different kind of sedans, hatch-
backs, SUVs and pickups. IKCO has a production record of 714,000 cars in 2011
before the company was hit with Western sanctions against the country.

Iran Khodro Industrial Group Co. (IKCO) is the first Iranian Car import tariffs and barriers are supportive factors for
automaker and the largest one in the Middle East. The the domestic producers, while it leaves adverse impact on
company was established in 1962, with LP buses as the the production quality and competition within the industry.
initial products of which the parts were imported from The absence of a serious rival in the Middle East further
Germany and assembled domestically. Manufacturing the paves the way for the domestic manufacturers. The vehicles
first sedan in Iran dates back to a partnership agreement per capita rate in most of countries in the Middle East is
between IKCO and British Rootes Group in 1966 on lower than the global average. Making more diversity and
producing Paykan. The partnership agreement with higher quality in production gives IKCO a higher chances
Peugeot Company as the most important partner of IKCO for exports. The foreign currency price fluctuations and
was made in 1989. IKCO and Mercedes-Benz also started high interest rates of the banks make up the important
their partnership in 1967 to produce Mercedes Benz 309 challenges the company suffers from. The excess of staff
Minibus and Mercedes Benz 302 Passenger Bus. The first due to some state-recommended employments, and
local engine in Iran – named EF7 - was produced by IKCO disagreement of the government with layoffs have resulted
which was installed first on Samand, the so-called national in a lower efficiency in the industry.
car. As a semi-governmental company, IKCO is run by a
With a record production of 714,000 cars prior to western- manager assigned by the government. 15% of IKCO’s shares
imposed sanctions (2011), IKCO made up 1% of the total is held by Tadbir Sarmayeh Arad Co., followed by Industrial
Development and Renovation Organization of Iran (IDRO),
car manufactured worldwide. Following exposure of
Samand Investment Co. (an affiliate to IKCO), and Sepehr
automotive industry in Iran to western imposed sanctions,
Kish Iranian Commercial Co. with 15%, 14%, 10%, and 10%,,
the IKCO’s production dropped to less than 400,000.
respectively as the next largest shareholders.
IKCO’s productions include sedans, hatchbacks, SUVs, and
pickups. The company’s strategy focuses more on securing
the market share, gradual termination of Peugeot 405
production and replacing them with products with greater
amount of diversity and quality. In order to diversify the
products, IKCO has embarked on new cooperation with
Groupe Renault and Peugeot. More than half of IKCO’s
products are different models of Peugeot.
Peugeot, Groupe Renault, and Suzuki Motor companies are
the international partners to IKCO. Due to the monopolistic
auto industry in Iran, the prices are set by the Competition
Committee and are determined given the factors of
inflation rate, dollar rate, efficiency, and the products quality
index. The more price gap between the company and free
Fiscal Year Ends 20 Mar 2016
market, the higher bargaining power IKCO makes in the
IPO Date 25 Mar 2001
Competition Committee.

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Iran Khodro Industrial Group Co.—CONTINUED

Last Close 2,833 Market Cap (M USD) 1,025 No. of Shares (B) 12.0
Free Float % 37 EPS (TTM) 502 EPS (FWD) 221
P/E (TTM) 5.64 P/E (FWD) 12.82 Beta 1.27

Chart (Percent) Return %

500 Return 1Yr. 5.51
Return 3Yr. 172.63
3Yr. Avg. 39.70
200

52 Week Range 2,254-3,286

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 97.65 Dividend Payout Ratio (LFY) 3.19
Sales - 3Yr. Growth Rate 15.95 Dividend Payout Ratio 3Yr. Avg. -
EPS (LFY) vs FYE 1Yr. Ago - Dividend Yield 0.52
EPS - 3Yr. Growth Rate 8.97 Valuation
Dividend (LFY) vs FYE 1Yr. Ago - P/B 2.29
Dividend - 3Yr. Growth Rate - P/S 0.20

Income Statement (Trillion Rials) Sales (Thousands)

180 500

90 250

0 0
2010 2011 2012 2013 21014 2010 2011 2012 2013 21014
Sale Cost of Sale Net Profit Peugeot Group Samand Group Peykan Group Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 3.60 0.84 -3.84 Debt Ratio 0.85 0.89 0.75
GP Margin 14.90 12.81 13.86 Debt to Equity Ratio 5.47 9.52 20.83
OP Margin 9.38 9.34 6.84 LT Debt Ratio 0.09 0.07 0.10
ROA 6.31 1.97 2.08 Interest Coverage Ratio 1.37 1.15 2.5 K
ROE 56.77 14.91 -27.88

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 10.33 7.06 12.08 Current Ratio 0.91 0.82 1.05
Receivable Turnover 16.19 6.87 117.61 Quick Ratio 0.75 0.65 0.86
Asset Turnover 1.76 1.11 1.08 Cash Ratio 0.08 0.05 0.09

Iran Top 40 Listed Companies 67

31 Khorasan Steel Complex Co. (TSE:FKAS)

As the largest steel maker in Eastern Iran, and the fifth largest steel mak-
er in the country, Khorasan Steel Complex Co. producers 5% of the total
domestic crude steel. More than 75% of KSC’s income comes from rebar.

Khorasan Steel Complex Co. (KSC) is the largest steel The developmental projects of KSC are planned in line with
maker in Eastern Iran and ranks fifth among the largest steel completing raw material production and supply chain which
makers across the country. The design and establishment entails cut in consuming materials expenses. In this regard,
of KSC was carried out in 1989 in partnership with the establishment of pelletizing unit with production capacity
Japanese steel manufacturer Kobe Steel, Ltd. Located near of 2.5 Mtpa was commenced in 2011 and is projected
the city of Neyshabur, the complex is made up of direct to go operational by 2015Q4. The technical studies on
reduction, steel and roll making units. KSC produces sponge construction of iron ore condensing unit to supply the
iron, billet, and some diverse light construction products required concentrate is also in progress. Due to the role of
with 1, 0.7, and 0.6 Mtpa respectively. KSC has nearly 1,000 rebar as the final product of the company, fluctuations of
permanent employees. construction market has a direct effect on the company’s
KSC produces 5% of the total domestic crude steel. The income. The construction of the second steel producing
company uses direct reduction technology for producing unit with production capacity of 720 Mtpa is also projected
the crude steel which is more cost effective due to low gas for 2015. Since a significant amount of water is required in
price. Pellet and scrap iron make up the great majority of producing steel, the water shortage in Neyshabur and the
raw materials for the company which are supplied through surrounding regions could be a challenge for the company.
domestic sources. Just a small portion of the produced steel Villagers, Farmers, and Nomads Social Insurance Fund holds
billet is sold in domestic market as most of it is transformed more than 50% of KSC, and Mines and Metals Development
into light construction products in the rolling unit. The Investment Co. (MMDIC) and Steel Industry Staff Support
final product is rebar while an insignificant amount turns and Pension Fund are the next largest shareholders of KSC
to by-products such as steel channels and angles. Rebar with 30% and 17% ownership, respectively.
comprises more than three fourth of the company’s income.
The selling price of the products depends upon the market
supply and demand, and the company may export the
products surplus to domestic needs. In addition to granting Fiscal Year Ends 20 Mar 2016
export permit, the government supports the domestic steel
IPO Date 30 Oct 2007
makers through increased tariffs on imports.

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Khorasan Steel Complex Co.—CONTINUED

Last Close 5,434 Market Cap (M USD) 921 No. of Shares (B) 5.6
Free Float % 2 EPS (TTM) 329 EPS (FWD) 312
P/E (TTM) 16.49 P/E (FWD) 17.42 Beta 0.65

Chart (Percent) Return %

700 Return 1Yr. -16.88
Return 3Yr. 124.25
3Yr. Avg. 30.89
300

52 Week Range 5,434 - 7,592

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 11.77 Dividend Payout Ratio (LFY) 54.63
Sales - 3Yr. Growth Rate 27.63 Dividend Payout Ratio 3Yr. Avg. 62.16
EPS (LFY) vs FYE 1Yr. Ago -20.95 Dividend Yield 3.01
EPS - 3Yr. Growth Rate 4.95 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -14.29 P/B 3.25
Dividend - 3Yr. Growth Rate 0.27 P/S 2.33

Income Statement (Trillion Rials) Sales (Thousand Tone)

14 800

7 200

0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
Sale Cost of Sale Net Profit Bar Construction Products Sponge Iron

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 14.12 23.99 32.74 Debt Ratio 0.44 0.36 0.48
GP Margin 19.41 29.18 26.70 Debt to Equity Ratio 0.78 0.58 1.05
OP Margin 17.37 27.70 35.79 LT Debt Ratio 0.01 0.03 0.06
ROA 11.97 24.18 10.86 Interest Coverage Ratio 13.81 76.69 8.62
ROE 21.72 37.12 21.85

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 2.13 2.55 1.81 Current Ratio 1.05 1.77 1.04
Receivable Turnover 13.08 - 7.33 Quick Ratio 0.36 0.63 0.53
Asset Turnover 0.85 0.98 0.55 Cash Ratio 0.05 0.36 0.08

Iran Top 40 Listed Companies 69

32 Parsian Bank (TSE:BPAR)

Parsian Bank which has a private ownership has the highest NPL ratio (38%)
among the listed Iranian banks. Non-interest income of the bank is mainly
made from foreign exchange transactions and bank service fees.

Parsian Bank made its debut in 2001 with private (IKCO) as the major shareholder of Parsian Bank has been
ownerships, and was listed later in TSE in 2007. raised since 2009 although it has not been realized yet. The
The interest income of Parsian Bank which makes up about above issue has undermined the bank’s bargaining power
half of the bank’s total income, has been reduced due to the against IKCO. Given the current conditions of automotive
shortage of liquidity; to the extend that it become loss- industry in Iran, debts in financial structure of IKCO, and
making in 2014. The non-performing loans (NPLs) ratio of financing costs are significant and meaningful in this regard.
Parsian Bank amounts to 38% which is the highest among IKCO holds almost one third of Parsian Bank indirectly
the listed banks. The investments of Parsian Bank goes a through the affiliates such as Iran Khodro Investment
little beyond the allowed level declared by the Central Bank Development (IKIDO) and Samand Investment Co., followed
of Iran. Tose’e Etemad Novin Co. (the major shareholder by Tadbir Investment Group with 10% ownership in shares of
of Telecommunication Company of Iran-TCI) makes up Parsian Bank.
the most of investments of Parsian Bank. Non-interest
income of the bank comes mostly from foreign exchange
transactions and bank service fees which is normally
repeatable and sustainable. Parsian Bank has around 300
branches and 4500 employees with a branch in Baghdad as
the sole active foreign branch.
Over the recent years, the high non-performing loans
(NPLs) of the bank, increase in bank interest rates in 2014,
and the economic recession has resulted in bank’s income
failure to cover the deposit expenses. Thus, the interest
Fiscal Year Ends 20 Mar 2016
income of the bank has turned loss-making. Selling the
IPO Date 30 Nov 2004
management shares of Iran Khodro Industrial Group Co.

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Parsian Bank—CONTINUED

Last Close 1,777 Market Cap (M USD) 852 No. of Shares (B) 15.8
Free Float % — EPS (TTM) 62 EPS (FWD) 306
P/E (TTM) 28.7 P/E (FWD) 5.8 Beta —

Chart (Percent) Return %

500 Return 1Yr. -39.9
Return 3Yr. 33.2
3Yr. Avg. 10.0
200

52 Week Range 1,608 - 3,050

-100
Sep 2013 Mar 2014 Aug 2014 Jan 2015 Jun 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -42.3 Dividend Payout Ratio (LFY) 97.5
Sales - 3Yr. Growth Rate -9.6 Dividend Payout Ratio 3Yr. Avg. 75.1
EPS (LFY) vs FYE 1Yr. Ago -81.1 Dividend Yield 3.3
EPS - 3Yr. Growth Rate -47.9 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -71.2 P/B 1.01
Dividend - 3Yr. Growth Rate -42.6 P/S 2.94

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 10.2 31.1 70

Net Interest Income After provison Margin -16.1 3.7

Cost to Income Ratio 59.5 54.3
35
ROA 0.2 1.6
ROE 3.4 17.9
0
Equity to Asset 5.0 8.6 2010 2011 2012 2013 2014
CAR 7.1 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 42.3 16.0

NPL Coverage Ratio 14.4 44.1

Deposit per Employee (M) 97,524 57,249

Net Income per Employee (M) 230 1,264

Iran Top 40 Listed Companies 71

33 Tosee Melli Group Investment Co.
(TSE:tmel)
TMGIC is the fourth largest conglomerate company in the TSE in terms of
market value. The company also has management shares in many listed and
non-listed companies like Iran Transfo and National Mining & Industrial
Developement Co (NIMIDCO).

Tosee Melli Group Investment Co. (TMGIC) was established In addition to the high profit made from the subsidiaries
in 1991 and listed four years later in Tehran Stock Exchange ‘dividends (over 90% of the company’s profit is made
(TSE). Following Ghadir Investment, Omid Investment from investments), TMGIC possesses management shares
Management, and Civil Servants Pension Fund Investment in the mentioned companies and is key to their macro
Co. (CPFIC) in conglomerates, TMGIC is the fourth largest policy makings. The listed companies in which TMGIC
in terms of market value; its value, however, exceeds all has management shares include Behshahr Industry
companies included in investment group. Development Corp., Iran Transfo, Dashte Morghab Co.,
Doodeh Sanati Pars Co. (Pars Carbon Black Co.), and Iran
Approximately 20 industries and more than 100 companies
Carton Co.. TMGIC also possesses management shares
are included in the shares basket of TMGIC. Listed
among the non-listed companies such as National Mining
companies comprise over 85% of the basket of which the & Industrial Developement Co (NIMIDCO), International
rest goes to non-listed ones. The most important listed Construction Development Co., National Industry Co., and
companies of the above basket are Shazand Petrochemical Shafa Darou Investment Co.
Co. (Arak) and Cement Investment & Development Co.
Bank Melli Iran is the largest shareholder of TMGIC with 75%
(CIDCO). Shazand Petrochemical, of which half of shares is
ownership, and National Mining & Industrial Development
owned by TMGIC, has the production capacity of more than
Co., and Hamyari Kowsar Institute are the next largest
1.8 Mtpa intermediate and final chemical products and is the shareholders with 4.2% and 3.2% respectively.
most profit-making subsidiary to TMGIC with 40% share of
the company’s total profit.
TMGIC established CIDCO in 2003, and today is the largest
holder of it with 93% ownership. The CIDCO’s shares
were offered in Tehran Stock Exchange in 2014. CIDCO,
whose dividends accounted for 13% of TMGIC’s profits in
2013, makes up roughly 12% of domestic total production
capacity of cement and clinker. Tosee Melli Investment Co.,
Fiscal Year Ends 20 Mar 2016
Barez Tires, and Kharg Petrochemical Co. are other profit-
IPO Date 25 Mar 2001
making companies for TMGIC.

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Tosee Melli Group Investment Co.—CONTINUED

Last Close 4,311 Market Cap (M USD) 848 No. of Shares (B) 6.5
Free Float % 16 EPS (TTM) 505 EPS (FWD) 580
P/E (TTM) 8.54 P/E (FWD) 7.43 NAV 5841
Beta 1.25

Chart (Percent) Return %

900 Return 1Yr. 20.88
Return 3Yr. 387.67
3Yr. Avg. 69.58
400

52 Week Range 4,011 - 6,150

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 37.12 Dividend Payout Ratio (LFY) 94.85
Sales - 3Yr. Growth Rate 58.31 Dividend Payout Ratio 3Yr. Avg. 61.91
EPS (LFY) vs FYE 1Yr. Ago 31.39 Dividend Yield 16.82
EPS - 3Yr. Growth Rate 22.49 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 63.00 P/B 0.95
Dividend - 3Yr. Growth Rate 220.44 P/S 2.51
P/NAV 0.74
NAV/B 1.29

Income Statement (Trillion Rials) Portfolio (Percent)

12
37% Chemicals
15% Financial Services
15% Other Non-Metallic Ore
6 15% Food and Beverage
6% Electrical Machines
5% Construction
1% Tire
0 6% Other
2010 2011 2012 2013 2014
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 95.71 95.42 99.26 Current Ratio 2.18 6.89 4.07
OP Margin 97.84 97.62 99.36 Quick Ratio 2.18 7.03 4.07
ROA 31.13 22.40 41.75 Cash Ratio 0.19 1.96 0.41
ROE 39.20 28.02 49.65

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.24 0.20 0.17
Debt to Equity Ratio 0.32 0.26 0.25
LT Debt Ratio 0.07 0.13 0.01
Interest Coverage Ratio 47.09 - 38.93

Iran Top 40 Listed Companies 73

34 Khouzestan Steel Co. (TSE:FKHZ)

Khouzestan Steel Co. is the largest producer of steel billet and slabs in
Iran with 3.5 Mtpa production. It is the first domestic company to use direct
reduction technology. It also produces nearly 2Mtpa blooms and 1.5 Mtpa
of slabs.

With 3.5 Mtpa production, Khouzestan Steel Co. is the in partnership with Iranian Mines and Mining Industries
largest producer of steel billet and slabs in Iran. The Development and Renovation Organization (IMIDRO) in
complex, located near the southwestern city of Ahvaz, is 2014. The direct reduction and steel making units of the
made up of pelletizing, direct reduction, steel making, and project are slated to launch in 2015 and 2017, respectively.
rolling units. Khouzestan Steel was established in 1989 The manufacturers of construction equipment such as
and is the first domestic steel making company using Esfahan Steel Co. and Azarbayjan Steel Co. are of the
direct reduction technology. Holding almost one fourth of important wholesale buyers of Khouzestan’s produced steel
domestic crude steel production, Khouzestan Steel Co. is billets. The steel roll making companies produce beams
the second largest crude steel producer across the country and rebars using Khouzestan’s produced steel billets.
following Mobarakeh Steel Co. of Esfahan (MSC), and has The housing sector boom, thus, may boost indirectly the
more than 7,000 contract and permanent employees. company’s income. Steel slab is used in producing sheet
Khouzestan Steel Co. uses direct reduction technology for and other flat products.
producing the crude steel which is more cost effective due Payandegan Economic Development Group (a subsidiary to
to low gas price than blast furnace. The company produces Oil Industry Staff Welfare, Saving, and Pension Fund), which
roughly 2 Mtpa blooms as well as 1.5 Mtpa slabs. The main owns more than half of shares, is the main shareholder
feedstock of the company is iron ore concentrate and also of Khouzestan Steel Co., and is followed by Provincial
scrap and sponge iron which are supplied all by domestic Investment Companies (Justice Shares) as the next largest
sources. Iron ore makes up over two third of consuming shareholder.
material needed in the production process and is supplied
by Chadormalu Mining & Industrial Company. The selling
price of the products and also meeting the raw material
requirements all depend upon the market supply and
demand. Khouzestan Steel Co. holds almost half of the slab
and billet domestic market of which the surplus to domestic
needs could be exported. In addition to granting export
permit, the government supports the domestic steel makers
through increased tariffs on imports.
Khouzestan Steel Co. development plans often focus on
optimizing and increasing molten steel production capacity
in the relevant units. Controlling pollution and improving
the environmental conditions due to adverse circumstances
of the plant are high priorities in Khouzestan Steel Co. Fiscal Year Ends 20 Mar 2016
development plans. Khouzestan Steel Co. embarked on
IPO Date 7 Aug 2007
a 65% investment plan in Shadegan Steel Making Project

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Khouzestan steel Co.—CONTINUED

Last Close 3,318 Market Cap (M USD) 831 No. of Shares (B) 8.0
Free Float % 19 EPS (TTM) 1,152 EPS (FWD) 801
P/E (TTM) 2.88 P/E (FWD) 4.14 Beta 0.67

Chart (Percent) Return %

1200 Return 1Yr. -38.78
Return 3Yr. 54.04
3Yr. Avg. 15.49
500

52 Week Range 3,265 - 7,297

-200
Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -12.92 Dividend Payout Ratio (LFY) 99.80
Sales - 3Yr. Growth Rate 25.71 Dividend Payout Ratio 3Yr. Avg. 85.95
EPS (LFY) vs FYE 1Yr. Ago -42.77 Dividend Yield 25.75
EPS - 3Yr. Growth Rate 32.40 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -30.30 P/B 1.31
Dividend - 3Yr. Growth Rate 56.26 P/S 0.57

Income Statement (Trillion Rials) Sales (Thousand Tone)

60 2,500

30 1,250

0 0
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
Sale Cost of Sale Net Profit Slab Bloom & Billet Pellet

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 19.14 22.65 32.74 Debt Ratio 0.62 0.55 0.48
GP Margin 27.75 34.95 26.70 Debt to Equity Ratio 1.66 1.33 1.05
OP Margin 22.68 28.48 35.79 LT Debt Ratio 0.03 0.05 0.06
ROA 18.23 29.28 10.86 Interest Coverage Ratio 5.64 38.70 8.62
ROE 40.19 64.96 21.85

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 2.04 2.92 1.81 Current Ratio 0.93 1.35 1.04
Receivable Turnover 6.03 16.93 7.33 Quick Ratio 0.34 0.61 0.53
Asset Turnover 0.95 1.25 0.55 Cash Ratio 0.07 0.19 0.08

Iran Top 40 Listed Companies 75

35 Kharg Petrochemical Co. (TSE:PKHA)

Established in 1969 with equal partnership of NPC and the American com-
pany of Amoco Corporation, KPC is considered the 3rd largest methanol
producer of Iran and a major exporter of propane and LPG. KPC has two
exclusively owned docks to export its products.

As the third largest domestic methanol producer, Kharg According to reports, there are 38 million tons free capacity
Petrochemical Co. (KPC) is an exporter with the major in methanol production worldwide while there are ongoing
products of propane and butane (LPG) and is located in projects in Iran for production of 30 million tons methanol.
Kharg Island in the Persian Gulf. KPC has the full nominal Officials at Iran’s Ministry of Petroleum have made promises
production capacity of 0.66 Mtpa methanol, 0.115 Mtpa on turning domestically produced methanol to propylene
propane, 0.12 Mtpa butane, 70 ttpa pentane (light naphtha), and olefin. The amount of worldwide methanol conversion
and 0.17 Mtpa sulfur. to propylene and olefin in 2013 has been less than 2% of its
KPC was established in mid-1969 with equal partnership total consumption. Failure in fulfilling the promises may lead
of National Petrochemical Industries Co. (NPC) and the to a sharp slump of methanol global prices.
American company of Amoco Corporation. The complex Tamin Petroleum & Petrochemical Investment Co.
was initially run with the aim of separating components of (TAPPICO) which is a subsidiary to the Social Security
rich gases of oil wells – such as propane, butane, pentane Organization holds more than 20% ownership of KPC.
and sulfur- in Iran’s oil fields. Licensed by the German Lurgi Taban Farad Petrochemical Group (affiliated with Oil
GmbH Co., the methanol unit was added to the complex Industry Staff Welfare, Saving, and Pension Fund),
in 1999 setting out to save the produced methane from Civil Servants Pension Fund (CSPF), and Oil Pension
burning and conversion into methanol. Fund Investment Company (OPIC) are the next largest
shareholders of KPC with 17.8%, 17%, and 12.4% ownership,
Methanol comprises an average of 50% of the company’s
respectively.
sales, and LPG makes up 35-40% of sales. All KPC’s
products are exported and the foreign currency earned via
export is exchanged based on the market rate. The complex
produces approximately 135 ttpa LPG and 0.62 Mtpa
methanol. KPC which uses 1400 million cubic meters of
gas every year, pays the the consuming gas to the National
Iranian Oil Co. The required utility is produced within the
complex as well.
KPC possesses two solely owned docks to export its
products. It also has a storage capacity (with average of
45 to 60 days) for it’s produced LPG which reinforces the
company’s bargaining power for timely sales.
The construction plan for the 2nd methanol unit was started
in 2005. The unit consumes 3.5 million cubic meters of
methane to produce 1.4 Mtpa methanol. However, due to
western-imposed sanctions, progress has been very slow.
A pause in running NGL unit of KPC by Iranian Offshore Oil
Fiscal Year Ends 20 Mar 2016
Company (IOOC) has also caused KPC to suffer reversals
IPO Date 7 Apr 2001
on meeting the required feedstock for this unit.

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Kharg Petrochemical Co.—CONTINUED

Last Close 13,590 Market Cap (M USD) 804 No. of Shares (B) 2.0
Free Float % 11 EPS (TTM) 3,433 EPS (FWD) 2,902
P/E (TTM) 3.96 P/E (FWD) 4.68 Beta 1.23

Chart (Percent) Return %

1000 Return 1Yr. -11.40
Return 3Yr. 316.99
3Yr. Avg. 60.96
400

52 Week Range 13,192 - 20,361

-200
Feb 2011 Feb 2012 Feb 2013 Feb 2014 Feb 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -7.20 Dividend Payout Ratio (LFY) 101.95
Sales - 3Yr. Growth Rate 20.40 Dividend Payout Ratio 3Yr. Avg. 95.65
EPS (LFY) vs FYE 1Yr. Ago -24.92 Dividend Yield 20.03
EPS - 3Yr. Growth Rate 5.10 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -10.26 P/B 2.75
Dividend - 3Yr. Growth Rate 10.42 P/S 2.05

Income Statement (Trillion Rials) Sales (Thousand Tone)

16 700

8 350

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Methanol Propane Butane Pentane Sulphur

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 51.74 64.56 48.54 Debt Ratio 0.36 0.33 0.55
GP Margin 59.04 65.98 46.87 Debt to Equity Ratio 0.57 0.49 1.50
OP Margin 45.01 58.59 44.15 LT Debt Ratio 0.05 0.05 0.04
ROA 45.38 56.30 35.96 Interest Coverage Ratio - - 48.83
ROE 69.63 81.64 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 2.54 2.23 5.86 Current Ratio 2.37 3.03 1.10
Receivable Turnover 2.67 3.63 6.58 Quick Ratio 1.91 2.23 0.99
Asset Turnover 0.88 0.87 0.62 Cash Ratio 0.65 1.07 0.15

Iran Top 40 Listed Companies 77

36 Amir Kabir Petrochemical Co. (IFB:PKBP)

Amir Kabir Petrochemical Co. is the largest polyethylene producer in Iran.

AKPC is also among the largest polyolefin complexes in Iran located in
Mahshahr Petrochemical Special Economic Zone.

Amir Kabir Petrochemical Co. (AKPC), as one of the AKPC receives its feedstock from different petrochemical
largest polyolefin complexes and the largest polyethylene companies across the country. Domestic trades between
producer in Iran, is located in Mahshahr Petrochemical complexes are made with mutual consent of the parties,
Special Economic Zone. The high density polyethylene unit, usually given the global prices and the official foreign
ethylene and linear low density polyethylene units, and low currency exchange rate declared by Central Bank of Iran.
density polyethylene unit of AKPC went on stream in 2002, Due to insufficient feedstock supply, the company is far
2005, and 2010, respectively. away from its full nominal and even practical capacity.
However, the company is capable of increasing its
AKPC has a production capacity of 0.52 Mtpa ethylene,
production once the above reversal is cut through.
0.7 Mtpa various polyethylene types (including 0.3 Mtpa
low density polyethylene, 0.26 Mtpa linear low density AKPC holds 44% of shares of Farabi Petrochemical Co.
polyethylene, 0.14 Mtpa high density polyethylene) and which is capable of producing 55 ttpa Dioctyl phthalate
(DOP) as the raw material in plastic, paint and resin
by-products such as 154 ttpa propylene, 134 ttpa pyrolysis
industries.
gasoline, 51 ttpa butadiene and 52 ttpa C4 raffinate.
Bank Refah Kargaran owns 52% of shares of AKPC, followed
Olefin unit of AKPC receives diverse feedstocks such as
by Navid Zar Chimi Industrial Company, Civil Servants
raffinate, ethane, LPG, and light end to produce ethylene.
Pension Fund Investment Co. (CPFIC) and Saderfar
AKPC, meanwhile, uses Mahshahr ethylene supply, and
Investment Co. with 20%, 11%, and 10% respectively.
utility services from Fajr Petrochemical Company.
AKPC’s income comes mostly from selling polyethylene.
AKPC sells linear high/low density polyethylene
domestically often through Iran Mercantile Exchange while
it exports most of the produced low density polyethylene
Fiscal Year Ends 20 Mar 2016
based on global prices. All the company’s exports are
IPO Date 7 JUN 2011
conducted using dollar at market exchange rate.

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Amir Kabir Petrochemical co.—CONTINUED

Last Close 6,816 Market Cap (M USD) 743 No. of Shares (B) 3.6
Free Float* % — EPS (TTM) 783 EPS (FWD) —
P/E (TTM) 8.70 P/E (FWD) — Beta 0.65

Chart (Percent) Return %

500 Return 1Yr. 43.51
Return 3Yr. 204.91
3Yr. Avg. 45.01
200

52 Week Range 4,817 - 11,849

-100
Nov 2011 Sep 2012 Jul 2013 May 2014 Mar 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 13.83 Dividend Payout Ratio (LFY) 77.11
Sales - 3Yr. Growth Rate 31.95 Dividend Payout Ratio 3Yr. Avg. 126.39
EPS (LFY) vs FYE 1Yr. Ago 251.71 Dividend Yield 10.19
EPS - 3Yr. Growth Rate 30.97 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -35.83 P/B 3.47
Dividend - 3Yr. Growth Rate 56.73 P/S 0.97

Income Statement (Trillion Rials) Sales (Thousand Tone)

30 300

15 150

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Olefins HDPE LDPE LLDPE Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 13.17 12.54 48.54 Debt Ratio 0.55 0.59 0.55
GP Margin 16.15 18.85 46.87 Debt to Equity Ratio 1.23 1.55 1.50
OP Margin 11.73 13.59 44.15 LT Debt Ratio 0.11 0.17 0.04
ROA 21.62 15.45 35.96 Interest Coverage Ratio 297.01 68.42 48.83
ROE 46.30 38.75 104.64

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 8.17 8.42 5.86 Current Ratio 1.17 1.00 1.10
Receivable Turnover 9.63 14.03 6.58 Quick Ratio 0.68 0.62 0.99
Asset Turnover 1.64 1.20 0.62 Cash Ratio 0.10 0.14 0.15

* IFB does not publish free float of listed companies

Iran Top 40 Listed Companies 79

37 SAIPA Group (TSE:SIPA)

SAIPA Group is the second largest automaker in Iran after IKCO. The compa-
ny has a production record of over 600,000 cars/annum before 2011 which
equals 0.08% of all cars produced globally. SAIPA’s production includes
sedans, hatchbacks and SUVs.

Following Iran Khodro Industrial Group Co. (IKCO), SAIPA Car import tariffs and barriers are supportive factors for
Group is the second largest automaker across the country. the domestic producers, while it leaves adverse impact on
SAIPA was established for the first time in 1967 as the the production quality and competition within the industry.
“Iranian Citroën producer” which went operational in 1968, Absence of serious rivals in the Middle East is another
and was renamed to SAIPA a decade later. factor paving the way for automakers who, like SAIPA,
SAIPA commenced its production first with manufacturing manufacture inexpensive products. The Vehicles per capita
of AKA Pickup and Dyan models (Citroën 2CV or deux rate in the majority of the Middle Eastern countries is lower
chevaux) with full manual methods and without using than the global average. Diversifying the products along
modern equipment and facilities. Pride, a relatively with improving the quality offers the company a chance of
inexpensive and small-scale sedan, was the most important more exports. Foreign currency fluctuations and high bank
product of SAIPA for a decade at least, and has the highest interest rates are of serious challenges for SAIPA. The excess
number of production in domestic market today. SAIPA of staff due to some state-recommended employments,
plans to halt production of Pride by 2016. and disagreement of the government with layoffs have
resulted in a lower efficiency in the industry.
The production of SAIPA was over 600,000 cars per annum
prior to 2011 which marks 0.8% of total car production in the As a semi-governmental company, SAIPA is run by
world. The products of SAIPA include sedans, hatchbacks, a manager assigned by the government. Industrial
and SUVs. Pride and TIBA, the two of the company’s Development and Renovation Organization of Iran (IDRO)
products, are still the cheapest domestic cars. SAIPA’s owns 17% of shares of SAIPA. Rena Industrial Group
strategy on preserving the market share in domestic Investment Co. holds almost 18% of SAIPA while the latter
inexpensive cars is a gradual removal of Pride from its owns indirectly 15% of Rena as well. The other major
production line and its replacement by higher quality shareholder of SAIPA Group is Steel Industry Staff Pension
products. and Support Fund with 17.5% ownership.

The automaker companies of Kia Motors, Peugeot,

Citroën, Nissan Motor, and Renault have been pre-sanction
international partners of SAIPA to which the Chinese
companies of Changan Automobile and Brilliance Auto
Group are added as well. For monopolistic market of
automotive industry in Iran, pricing of products is set by
the Competition Committee which is determined based
on factors of inflation rate, dollar exchange rate, efficiency,
and products quality index. The more price gap between
the company’s products and the free market, the more Fiscal Year Ends 20 Mar 2016
bargaining power SAIPA gains against the Competition
IPO Date 6 May 2001
Committee.

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SAIPA Group—CONTINUED

Last Close 1,357 Market Cap (M USD) 717 No. of Shares (B) 17.4
Free Float % 24 EPS (TTM) 13 EPS (FWD) 5
P/E (TTM) 104.38 P/E (FWD) 271.40 Beta 0.76

Chart (Percent) Return %

500 Return 1Yr. -0.59
Return 3Yr. 112.36
3Yr. Avg. 28.54
200

52 Week Range 1,100 - 1,670

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 88.35 Dividend Payout Ratio (LFY) -
Sales - 3Yr. Growth Rate 8.48 Dividend Payout Ratio 3Yr. Avg. -
EPS (LFY) vs FYE 1Yr. Ago - Dividend Yield 0.00
EPS - 3Yr. Growth Rate -70.41 Valuation
Dividend (LFY) vs FYE 1Yr. Ago - P/B 2.28
Dividend - 3Yr. Growth Rate - P/S 0.34

Income Statement (Trillion Rials) Sales (Thousands)

80 700

40 350

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Pride Tiba Other

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP margin 0.33 -4.05 -3.84 Debt Ratio 0.86 0.79 0.75
GP Margin 16.79 8.27 13.86 Debt to Equity Ratio 6.05 4.74 20.83
OP Margin 10.94 2.43 6.84 LT Debt Ratio 0.06 0.05 0.10
ROA 0.31 -0.21 2.08 Interest Coverage Ratio 0.93 0.50 2.5 K
ROE 2.19 -11.21 -27.88

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 10.06 10.18 12.08 Current Ratio 0.49 0.60 1.05
Receivable Turnover 12.33 8.59 117.61 Quick Ratio 0.39 0.46 0.86
Asset Turnover 0.94 0.76 1.08 Cash Ratio 0.02 0.07 0.09

Iran Top 40 Listed Companies 81

38 Mines and Metals Development
Investment Co. (TSE:MADN)
As one of the largest mining & metal holdings in Iran, MMDIC operates mainly
in iron ore, copper & steel sectors. The company is a shareholder in major
companies like Gol-E-Gohar Mining & Industrial Co. and Chadormalu Mining &
Industrial Co.

Mines and Metals Development Investment Co. (MMDIC), Of the most significant activities of MMDIC over the recent
as one of the largest mining and metal holdings across years are rising partnership with Industrial Development
the country, was established in 1995, operating mostly in and Renovation Organization of Iran (IDRO) in establishing
iron ore, copper, and steel sectors. Although non-listed a catalyst production plant, increasing investment in
companies outweigh listed ones in MMDIC’s portfolio, the Sadid Mahan Steel Co., and investing in establishment of
listed corporations make up 90% of the basket’s value. Abarkooh Rolling Mill Co., with the production capacity of
The main listed companies in MMDIC’s portfolio are 0.6 Mtpa.
Gol-E-Gohar Mining & Industrial Co. (with 22% ownership As to MMDIC’s portfolio combination, the key factor in
for MMDIC) as the largest domestic pellet producer, MMDIC’s value fluctuations is price volatilities of metals,
Chadormalu Mining & Industrial Co. (with 16% ownership foreign currency rate, and follow-up profit margin changes
for MMDIC) as the largest domestic iron ore concentrate of the subsidiary companies.
producer, Iran National Copper Industries Co. (INCI), Mobarakeh Steel Co. of Esfahan (MSC), with 19% ownership,
(with 5% ownership for MMDIC) as the sole domestic is the largest shareholder of MMDIC, and Villagers, Farmers,
copper producer, Khorasan Steel Complex Co., as the and Nomads Social Insurance Fund, and Pasargad Bank
third largest domestic steel producer, Shahid Ghandi with 11% and 5% ownership are the next largest shareholders
Corporation Complex (with 78% ownership for MMDIC) as respectively.
a manufacturer of telecommunication cables and the sole
domestic producer of solar panels, and Arfa Iron & steel
Co. (with 19% ownership for MMDIC). The MMDIC’s profit in
the past years have been earned mostly from Gol-E-Gohar,
Chadormalu, and INCI, respectively.
Some non-listed companies of which MMDIC possesses
management shares include Goharzamin Iron Ore Co. with
estimated 640 million tons reserves, Sarmad Iron and Steel
Co., Tabas Coke Co., Iranian Catalyst Development Co., etc.
Given the fact that listed investment companies are banned
from commercial activities, MMDIC has invested in two
commercial companies of Seavolex Brokerage Co., and
Saba International Trade and Development Co., in order to
Fiscal Year Ends 20 Mar 2016
meet the needs of its affiliated companies and make high
IPO Date 13 May 2001
profits as well.

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Mines and Metals Development Investment Co.—CONTINUED

Last Close 1,071 Market Cap (M USD) 711 No. of Shares (B) 21.9
Free Float % 23 EPS (TTM) 233 EPS (FWD) 237
P/E (TTM) 4.59 P/E (FWD) 4.51 NAV 1554
Beta 1.66

Chart (Percent) Return %

900 Return 1Yr. -49.03
Return 3Yr. 53.45
3Yr. Avg. 15.34
400

52 Week Range 1,274 - 3,149

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -40.67 Dividend Payout Ratio (LFY) 138.41
Sales - 3Yr. Growth Rate 8.04 Dividend Payout Ratio 3Yr. Avg. 96.01
EPS (LFY) vs FYE 1Yr. Ago -42.07 Dividend Yield 32.16
EPS - 3Yr. Growth Rate 7.38 Valuation
Dividend (LFY) vs FYE 1Yr. Ago 21.62 P/B 0.91
Dividend - 3Yr. Growth Rate 64.25 P/S 4.29
P/NAV 0.69
NAV/B 1.32

Income Statement (Trillion Rials) Portfolio (Percent)

10
50% Metallic Ores
36% Basic Metals
5% Electrical Machines
5 4% Financial Services
5% Other

0
2010 2011 2012 2013 2014
Income Operational Expense Net Profit

Profitability % TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
NP Margin 93.45 94.59 93.93* Current Ratio 0.90 1.87 0.98
OP Margin 98.60 99.26 98.17* Quick Ratio 0.90 1.73 0.77
ROA 16.79 32.80 20.58 Cash Ratio 0.04 0.12 0.04
ROE 19.54 40.47 33.86

Leverage MRQ 5 Yr. Avg. Industry

Debt Ratio 0.21 0.18 0.40
Debt to Equity Ratio 0.26 0.23 0.71
LT Debt Ratio 0.00 0.02 0.03
Interest Coverage Ratio 0.24 28.22 48 K

* Only metallic ores investment companies are included.

Iran Top 40 Listed Companies 83

39 Karafarin Bank (TSE:KRAF)

Karafarin Bank has the highest profit spread coming from deposit rate and
loans among the Iranian listed banks. The bank’s approximate 12% NPLs ratio
is less than average of the listed banks and despite having fewer branch-
es, deposit attraction per capita for each staff is higher than average.

Karafarin Bank came on stream in 1999 initially as Saba Tamin Investment Company (an affiliate to Social
Karafarinan Credit Institute. It was later renamed to Security Investment Company) with 9% ownership is the
Karafarin Bank in 2001. The bank was listed in March 2004 largest shareholder of Karafarin Bank among the others.
in the Iranian stock exchange market. Social Security Investment Co. also owns shares in Mellat,
Karafarin Bank’s income comes mostly from interest income. Tejarat, and Refah Banks. The IFB-listed Karafarin Insurance
The bank has relatively low general administrative expenses Co. holds 8% of shares of the bank, while 20% of shares
and as a result, high profit margin due to having the least of itself is owned by Karafarin Bank and the rest goes to
number of branches and staff - 100 branches and 1800 individual shareholders. The shareholders of Karafarin Bank
employees - among the large listed banks. with more than 1% ownership witness a number of individual
shareholders of which the total shares amount to 23%.
The non-interest income – as an insignificant part of the
total income - of Karafarin Bank comes mostly from bank
service fees which is normally repeatable and sustainable.
The investment size of the bank is relatively less than that
of the large listed banks. Shares of the listed companies
make up most of the bank’s investment portfolio in which
chemical producers and banks outweigh.
Karafarin Bank’s high income from assets has led the
bank to enjoy the highest profit spread coming from
deposit rate and loans among the Iranian listed banks.
The bank’s approximate 12% non-performing loans (NPLs)
ratio is less than average of the listed banks. Irrespective
of low branches, deposit attraction per capita for each
staff is higher than average. Considering the mentioned
characteristics, and in the event the bank increases the
number of branches and invests in attracting deposits, Fiscal Year Ends 20 Mar 2016
Karafarin bank is able to increase its bank deposit market
IPO Date 5 Jul 2003
share, and develop the interest income.

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Karafarin Bank—CONTINUED

Last Close 2,765 Market Cap (M USD) 710 No. of Shares (B) 8.5
Free Float % 33 EPS (TTM) 406 EPS (FWD) 511
P/E (TTM) 6.81 P/E (FWD) 5.41 Beta 0.58

Chart (Percent) Return %

500 Return 1Yr. 20.0
Return 3Yr. 207.3
3Yr. Avg. 45.4
200

52 Week Range 1,949 - 3,392

-100
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago 14.4 Dividend Payout Ratio (LFY) 48.2
Sales - 3Yr. Growth Rate 18.4 Dividend Payout Ratio 3Yr. Avg. 69.1
EPS (LFY) vs FYE 1Yr. Ago 9.5 Dividend Yield 6.7
EPS - 3Yr. Growth Rate 18.3 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -30.0 P/B 1.58
Dividend - 3Yr. Growth Rate 38.3 P/S 3.64

Key Ratios % LFY Industry Income Statement (Trillion Rials)

NP Margin 57.3 31.1 24

Net Interest Income After Provison Margin 24.2 3.7

Cost to Income Ratio 25.0 54.3
12
ROA 3.5 1.6
ROE 25.9 17.9
0
Equity to Asset 13.3 8.6 2010 2011 2012 2013 2014
CAR 17.1 11.6 Net Interest Income Non-interest Income Expenses Net Profit

NPL 11.9 16.0

NPL Coverage Ratio 30.4 44.1

Deposit per Employee (M) 50,361 57,249

Net Income per Employee (M) 2,257 1,264

Iran Top 40 Listed Companies 85

40 Behran Oil Co. (TSE:NBEH)

As the largest producer of engine oils and industrial lubricants in Iran,

Behran Oil Co. which has been licensed by EXXON has a production capacity
of over 450,000 cubic meters of different lubricant and waxes.

Behran Oil Company (BOC) is the largest domestic occasions when prices were increased as a result of weak
producer of engine oils as well as industrial lubricants. demand and low market capacity. The consuming growth
Licensed by the American company of EXXON, BOC of engine oil goes to show a direct correlation with the
came on stream under ESSO trademark in 1962, and was economic growth and increase in number of automobile
authorized later in 1968 to produce 30 ttpa of engine oil. sales.
Renamed in 1991 from its initial name (Oil Production and The shares of BOC were listed in Tehran Stock Exchange
Refining Co.) to Behran Oil Co., BOC has increased its (TSE) for the first time in 1990. Islamic Revolution
production capacity to more than 450,000 cubic meters of Mostazafan Foundation (IRMF), Sina Energy Development
various lubricants and waxes. Co. (SEDCO), and Oil Pension Fund Investment Company
The needed additives for engine and industrial oils are (OPIC) are the major shareholders of BOC. Given the fact
supplied through foreign providers. that SEDCO is an affiliate to IRMF, the latter holds a half of
BOC totally.
BOC along with Iranol, Sepahan, and Pars Oil Companies
make up almost 90% of the domestic market share
out of which BOC as the largest producer, sells most of
its products domestically. Engine oil and industrial oils
comprise 60% of BOC’s products. The middle products of
oil refinery account for other products of the company.
Selling engine oil in the domestic market is nearly done
in a monopolized market; oil producers, however, are
required to obtain the relevant permit for any rise in prices
from Consumers and Producers Supporting Organization.
Fiscal Year Ends 20 Mar 2016
Nonetheless, the industry has secured a safe gross profit
IPO Date 16 Apr 2001
margin. In the past, the market has witnessed a number of

86 Mofid Securities (en.emofid.com)

Behran Oil Co.—CONTINUED

Last Close 11,359 Market Cap (M USD) 688 No. of Shares (B) 2.0
Free Float % 32 EPS (TTM) 2,192 EPS (FWD) 2,266
P/E (TTM) 5.18 P/E (FWD) 5.01 Beta 1.04

Chart (Percent) Return %

1000 Return 1Yr. 20.25
Return 3Yr. 689.11
3Yr. Avg. 99.09
500

52 Week Range 9,701 - 12,200

0
Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015
Stock Index

Growth Rates % Dividend %

Sales (LFY) vs FYE 1Yr. Ago -2.09 Dividend Payout Ratio (LFY) 99.67
Sales - 3Yr. Growth Rate 34.45 Dividend Payout Ratio 3Yr. Avg. 89.01
EPS (LFY) vs FYE 1Yr. Ago -8.98 Dividend Yield 22.22
EPS - 3Yr. Growth Rate 61.99 Valuation
Dividend (LFY) vs FYE 1Yr. Ago -20.83 P/B 3.50
Dividend - 3Yr. Growth Rate 69.52 P/S 1.33

Income Statement (Trillion Rials) Sales (Thousand m3)

20 450

10 225

0 0
2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
Sale Cost of Sale Net Profit Lubricants Paraffin Wax Engine Coolant & Anti Freeze

Profitability % TTM 5 Yr. Avg. Industry Leverage MRQ 5 Yr. Avg. Industry
NP Margin 25.69 21.78 8.44 Debt Ratio 0.72 0.69 0.57
GP Margin 36.69 32.19 10.10 Debt to Equity Ratio 2.54 2.31 1.76
OP Margin 36.07 29.63 9.93 LT Debt Ratio 0.15 0.17 0.05
ROA 20.99 25.90 16.62 Interest Coverage Ratio 3.55 6.06 21.81
ROE 70.97 78.90 45.55

Efficiency TTM 5 Yr. Avg. Industry Liquidity MRQ 5 Yr. Avg. Industry
Inv. Turnover 1.73 2.62 14.43 Current Ratio 1.09 1.49 1.43
Receivable Turnover 4.90 7.93 24.00 Quick Ratio 0.53 0.63 0.88
Asset Turnover 0.82 1.20 3.92 Cash Ratio 0.03 0.06 0.20

Iran Top 40 Listed Companies 87

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