汇丰-全球化工：化肥行业面临显著持续的供应冲击-Fertilisers：A significant,persistent,supply shock-20260324

HSBCGicbalinvestmentResearch24March2026

Equities

Chemicals

GlobalChemicals

Fertilisers:Asignificant,persistent,supplyshock

Global

uUreaimpactsettopersistwithQatargascutscascadingtoQatariandoverseasproductionaswellascostcurve

uDAPpricesfirmerondisruptionandcostcurvesteepens,butspreadsloweronhighsulphurprices

uRetainBuysonSAFCO,FertiglobeandOCI;HoldsonCF,MosaicandMaaden;DowngradeIQCDtoHold(fromBuy);adjustseveraltargetprices

Impactonurea,significant,persistent:ThecurrentMiddleEasternconflicthasledtoaseveresupplyshockacrossbothnitrogenandphosphatefertilisersviaexport

disruptionsandproductionshut-ins.Theregionispivotaltoglobalnitrogentradeatc36%offlows.HighergaspricesasaresultofLNGshutdownsalsoresultina

steepercostcurveforammoniaand,consequently,urea.Beyondtheimmediate

disruptionofmarketaccessviatheStraitofHormuz,however,theattacksonQatariLNGinfrastructureon18March2026,whichhave,accordingtoQatarGas,likelycutLNGoutputbyc17%foraperiodof3to5years,representalonger-termconstraint.ThishasadirectpotentialimpactonQatariureaproduction(c6mtonsofcapacity),elevatingtheureacostcurve,andcouldresultinsupplycutsfromproducers

dependentonQatariLNGfortheirgassupply.Weexpecttoseepersistentlyhigherureaprices,eveniftheconflictweretoreachaquickresolution.

Phosphatecostcurvesteepensfurther:TheMiddleEastaccountsforc23%of

globalphosphateexports,dominatedbySaudiArabia(Maaden).Theregionisalsoacriticalsulphurexporter(c47%ofglobalexports),andtightersulphuravailability

compoundsDAP/MAPcostinflation(see

GlobalChemicals:Sulphurinflationtokeep

DAPpriceshigher

,18Nov2025).WealsoexpectDAPpricestoremainelevatedin

thenearterm,butwithlikelylowerpersistenceiftheconflictweretoberesolved.

Fertiliserpriceassumptions:Weraiseour2026,2027andlong-term(LT)urea

priceassumptionsby47%/6%/6%toUSD553/t,USD384/tandUSD349/t,

respectively.OurDAPestimatesfor2026and2027areup16%and9%toUSD679/tandUSD602/t,respectively,whileLTestimatesaredown7%toUSD520/t.

Stockviews:WereiterateBuyratingsonSAFCOandFertiglobeasbeneficiariesofpersistentlyhigherureaprices.BothfaceconstraintsongettingvolumesoutofSaudiArabiaandUAE,buthaveleveragetohigherureaprices.WedowngradeIQCDto

Hold(fromBuy)givenuncertaintyongasavailability,plantrunratesandimpactongrowthprojects.WeremainHoldonCFaswethinktheimpactofhigherureapricesisreflectedinthestockprice;HoldonMaadenonfullvaluations.WealsoreiterateourHoldratingonMosaic,withexposuretohigherphosphatepricespartlyoffsetbyhighersulphurcosts.WereiterateourBuyonOCIasthepossibilityofacashofferallowsforpotentialupsidefromcurrentlevels.DetailedchangestoratingsandTPslistedinthetableonthenextpage.

SriharshaPappu*

GlobalHeadofEnergy&Materials

HSBCBankplc

sriharsha.pappu@

+442079919243

SameerJahagirdar*Associate

Bangalore

*Employedbyanon-USaffiliateofHSBCSecurities(USA)Inc,andisnotregistered/qualifiedpursuanttoFINRAregulations

HSBCGlobalInvestmentSummit

14to16April2026

Findoutmore

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:HSBCBankplc

ViewHSBCGlobalInvestmentResearchat:

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24March2026

2

Keychangestoratingsandtargetprices

Company

Ticker

Currency

Currentprice

T

P

____________

Rating

Upside/downside

Marketcap(USDm)

EV/EBITDA2026

PE2026

Old

New

Old

New

CFIndustries

CFUS

USD

124.90

91.00

130.00

Hold

Hold

4.1%

19,187

5.1

8.1

Fertiglobe

FERTIGLBUH

AED

2.82

3.30

3.30

Buy

Buy

17.0%

6,373

6.7

13.6

IQCD

IQCDQD

QAR

11.14

18.00

12.00

Buy

Hold

7.7%

18,440

8.3

10.9

Maaden

MAADENAB

SAR

69.55

76.00

76.00

Hold

Hold

9.3%

72,031

17.4

27.6

SABICAN

SAFCOAB

SAR

135.50

140.00

148.00

Buy

Buy

9.2%

17,179

6.4

10.2

TheMosaicCo.

MOSUS

USD

23.59

26.00

26.00

Hold

Hold

10.2%

7,490

3.9

11.2

OCINV

OCINA

EUR

3.09

3.50

3.75

Buy

Buy

21.4%

756

13.2

nm

Source:HSBCestimates;Pricedasofcloseat20March2026

Equities●Chemicals

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24March2026

3

Apersistentsupplyshock

uUreaimpactsettopersistwithQatargascutscascadingtoQatariandoverseasproductionaswellascostcurve

uDAPpricesfirmerondisruptionandcostcurvesteepens,butspreadsloweronhighsulphurprices

uRetainBuysonSAFCO,FertiglobeandOCI;HoldsonCF,MosaicandMaaden;DowngradeIQCDtoHold(fromBuy);adjustseveraltargetprices

Fertiliserstofacecascadingimpactofupstreamcuts

Impactonurea,significant,persistent

ThecurrentMiddleEasternconflictrepresentsaseveresupplyshockacrossbothnitrogenandphosphatefertilisersviaexportdisruptionsandproductionshut-ins.Theregionispivotalto

globalnitrogentradeatc36%offlows.HighergaspricesasaresultofLNGshutdownsalsoresultinasteepercostcurveforammoniaand,consequently,urea.

BeyondtheimmediatedisruptionofmarketaccessviatheStraitofHormuz,however,the

attacksonQatariLNGinfrastructureon18March2026,whichhave,accordingtoQatarGas(unlisted),likelycutLNGoutputbyc17%foraperiodof3to5years,couldhavebroader

implicationsongassupplyandcostcurvesforurea.Wedonotyetknowhowthisgas

productioncutinQatarwillcascadeontodomesticgassupplyvsexportgasavailability.

However,attheveryleast,thiscouldhaveadirectpotentialimpactonQatariureaproduction(c6mtonsofcapacity),whichwouldlikelyelevatetheureacostcurveandresultinpotential

supplycutsfromproducersdependentonQatariLNGfortheirgassupply.

Weexpecttoseepersistentlyhigherureaprices,eveniftheconflictweretoreachaquickresolution.

Exhibit1:MiddleEastshare(%ofglobal)

50%

40%

30%

20%

10%

0%

PhosphateUreaAmmoniaPotashSulphurMiddleEastProductionMiddleEastExports

Source:S&PGlobalCommodityInsights,HSBC

Exhibit2:2024topureaexporters(ktpa)

7,000

6,000

5,000

4,000

3,000

2,000

1,000

-

RussiaQatarEgyptIranSaudi

Source:S&PGlobalCommodityInsights,HSBC

Equities●Chemicals

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HSBC

24March2026

4

Exhibit3:DAPprices(USD/t)

900

800

700

600

500

400

Jan-24Jun-24Nov-24Apr-25Sep-25Feb-26

USNolaMiddleEast

IndiaChina

Source:Bloomberg

Exhibit4:Urea,Ammoniaprices(USD/t)

700

23.00

600

50018.00

400

13.00300

2008.00Jan-25Apr-25Jul-25Oct-25Jan-26

Ammonia

Urea

TTFNaturalgas(USD/mmbtu)-RHS

Source:Bloomberg

Phosphatecostcurvesteepensfurther

TheMiddleEastaccountsforc23%ofglobalphosphateexports,dominatedbySaudiArabia

(Maaden).Theregionisalsoacriticalsulphurexporter(c47%ofglobalexports),andtighter

sulphuravailabilitycompoundsDAP/MAPcostinflation.(see

GlobalChemicals:Sulphur

inflationtokeepDAPpriceshigher

,18November2025).WealsoexpectDAPpricestoremainelevatedinthenearterm,butwithlikelylowerpersistenceiftheconflictweretoberesolved.

Fertiliserpriceassumptions:WeraiseourfertiliserpriceassumptionsforureatoUSD553/t

fromUSD376/tfor2026andUSD384/tfromUSD363/tfor2027.Wealsoincreaseourlong-termureaestimatesby6%toUSD349/t.OurDAPestimatesfor2026and2027areupatUSD679/tandUSD602/tfromUSD585/tandUSD550/t,respectively.Ourlong-termDAPestimatesare

down7%toUSD520/tduetohigherlong-termsulphurpriceestimates.

TheoutbreakofconflictintheMiddleEasthascreatedconditionsforacatastrophicsupply

shocktothenitrogenandphosphatefertilisermarkets.Belowwediscussthecascadingimpactoftheconflictandoilandgassupplyshockonthefertilisercompaniesunderourcoverage.

Investmentcases

CFIndustries(CFUS,USD124.90,Hold,TPupatUSD130.00fromUSD91.00)

CFIndustriesisaclearbeneficiaryoftheureaandgassupplydisruptionintheMiddleEast.ItsintegratedoperationsandexposuretoUSgaspricesallowCFtoenjoysuper-normalprofits

fromhigherureaprices,atleastinthenearterm.Weexpectthecompanytodeliver

2026EBITDAofUSD4.4bn,significantlyabovethecompany’s2030mid-cycleEBITDAtargetofUSD3.0bn,helpedbythecurrentextraordinarycircumstances.Forreference,duringthe2022

ureapricingpeak,CFreportedEBITDAofUSD5.5bn.However,webelievethemarketispricinginthisstrongexpectedperformanceinthestockprice.Thecompany’ssharepricehasrisen

by25%sincetheoutbreakoftheconflict(vs5%declineforS&P500).ThismeansCFistradingatac72%premiumtoits5-yearaveragetrailingP/E.ThemarketisbuildinginanEPSofaboveUSD15.5for2026e(vsUSD9in2025),broadlyinlinewithourestimates.Giventhelackof

valuationheadroom,wemaintainourHoldrating.

Weincreaseour2026and2027revenueestimatesby27%and8%,respectively,onhigherproductprices,primarilyAmmonia,UANandAN.Drivenbyoperatingleverage,netincomeestimatesareupby125%/52%for2026/2027,respectively.Weintroduce2028estimatesinthisnote.

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24March2026

5

Companyguidance:Ammoniaproductionisexpectedtobeatc9.5mtin2026(vs10.1mtin

2025)duetotheongoingoutageattheYazooCityComplex.Managementdoesnotexpect

productiontoresumebeforeQ4’26.2026capexisexpectedatUSD950m,includingCF’sshareintheBluePointJVofUSD390m.Itmaintainedits2030mid-cycletargetofUSD3bnEBITDA

(vsUSD2.9bnin2025onanadjustedbasis)andUSD2bnFCF.

FertiglobePlc(FERTIGLBUH,AED2.82,Buy,TPunchangedatAED3.30)

Asmentionedinourlastnote(see

Disruptionplaybook

,10March2026),Fertigloberemains

oneofthetwopreferredpickstoridethehigherfertiliserprices.AlthoughthecompanyisfacingconstraintsaroundgettingvolumesoutoftheUAE,ithasarelativelylowerGulffootprint,givenitsassetsinEgyptandAlgeria,whichwouldbenefitfromhigherproductprices.

WemaintainourBuyratingonthestockwithunchangedestimatesandanunchangedTPofAED3.30.

Outlook:Near-termnitrogenmarketfundamentalsremainrobust,drivenbyhealthydemandfrommajorimportmarketsamidtightsupplyconditions,supportingpricesintoQ12026.The

medium-termoutlookforureaisunderpinnedbyconsistentdemandgrowthandlimitedsupplyadditions,whileglobalammoniacapacitygrowthisexpectedtograduallyrebalancemarket

conditions.

IndustriesQatar(IQCDQD,QAR11.14,downgradetoHoldfromBuy,TPdownto

QAR12.00fromQAR18.00)

TheattacksonQatariLNGinfrastructureon18March2026havemateriallyalteredIQCD’s

investmentcase,inourview.AccordingtoQatarGas,theattackshavelikelycutLNGoutputbyc17%foraperiodof3to5years.ThishasadirectpotentialimpactonIQCD’sureaproduction(c6mtonsofcapacity)aswellasothersegments,duetopossiblecutsingassupply.

Welowerouroperatingrateestimatesover2026-30,reflectingthelikelycutingassupply.Thesituationcouldalsopotentiallyhaveanimpactonthegroup’sgrowthprojects.Weincreaseour2026revenueandnetincomeestimatesby4%and13%,respectively,onstrongerfertiliser

pricesmorethanoffsettinglowervolumes.Butwecutour2027revenueandnetincome

estimatesby14%and19%,respectively,onlowervolumes.Weintroduce2028estimatesinthisnote.

LowerestimatesdriveourTPdowntoQAR12.00(fromQAR18.00),implyingupsideofc8%.WedowngradeIQCDtoHoldfromBuygivenlimitedvisibilityongasavailabilityandplantrunrates.

Companyguidance:IQCDhasguidedforcapexofQAR10.5bnoverthenextfiveyears(2026-30).Accordingtomanagement,theBlueAmmoniaprojectissettobecommissionedinQ2’26,whiletheconstructionofthenewPVCprojectiscompleteandintheperformance-testingstage.

MAADEN(MAADENAB,SAR69.55,Hold,TPunchangedatSAR76.00)

WithitsprimaryoperatingportatRasAl-KhairontheeastcoastofSaudiArabia,Maadenisdirectlyaffectedbytheongoingconflict,thereforeitisunlikelytobenefitfromhigherproduct

prices(DAP,aluminiumandgold).Moreover,ashighlightedinourpreviousnote(see

Maaden:

DowngradetoHold-Momentumcontinues,butvaluationfull

,27January2026),strong

earningsmomentumandsharepriceappreciation(+52%overthepast12monthsvs-6%fortheTadawul)meanthatwethinkthecompanyisfullyvaluedandleavesnoroomfornegativesurprises,especiallyiftheconflictisprolonged.WethusmaintainourHoldrating.

Weincreaseour2026netincomeby2%,supportedbyhigherDAPprices,partlyoffsetbylowervolumeassumptionsacrosssegments.Welowerour2027netincomeestimateby5%onlowervolumes.Weintroduce2028estimates.

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24March2026

6

Companyguidance:MaadenexpectsDAPoutputof6.5m-7.1mtonsin2026(vs6.7min2025),ammoniaat3.0-3.2mtons(vs3.0min2025),aluminaat1.80-1.90mtons(vs1.90min2025),

aluminiumat0.95-1.02mtons(vs1min2025),andgoldat470-515koz(vs478kozin2025).

SABICAgriNutrients(SAFCOAB,SAR135.50,Buy,TPincreasedtoSAR148.00from

SAR140.00)

SimilartoFertiglobe,weexpectSAFCOtobenefitfromhigherfertiliserpricesoncetheMiddleEastsituationnormalises.ThecompanyisfacingconstraintsgettingvolumesoutoftheportinJubailontheeastcoastofSaudiArabia.However,SAFCOisamongthelowest-costproducersoffertiliserintheGulf,benefitingfromalow-costmethaneallocationfromSaudiAramco

(ARAMCOAB,SAR27.06,Hold).Thus,oncetheconflictends,itshouldbenefitfromleveragetohigherureaandammoniapricesgivenitslowcostbase.

Weincreaseour2026and2027revenue/netincomeestimatesby27%/57%and11%/18%,respectively,onstrongproductpriceincreases.Weintroduce2028estimates.

TheincreaseinestimatesfromhigherproductpricesdrivesourTPuptoSAR148(from

SAR140),givingupsideof9%fromthecurrentstockprice.WereiterateourBuyratingaswe

believeSAFCOhasnear-termgrowthoptionalitythatisnotdiscountedinthecurrentstockprice.

Companyguidance:SAFCOstatedthattheammoniamarketremainstightduetosupply

outagesintheMiddleEastandTrinidad,butexpectsthesupplytoimprovetowardstheendofQ1.UreasupplyreboundedinQ4withsuppliersbuildingupinventories,recoveringfromthe

mid-yearshutdowns.However,thesupply-demandimbalanceinureaisexpectedtocontinueinQ1astheimpactofwintergasrationingandlowersupplyfromRussiawouldmorethanoffset

newcapacitiescomingonline.ThecompanymaintainsanoptimisticoutlookinQ1onthebackoftightsupplyandstrongseasonaldemand.

Mosaic(MOSUS,USD23.59,Hold,TPunchangedatUSD26.00)

WemaintainourHoldratingonMosaicasnear-termearningsupsidelookscappedby

phosphatemarginheadwinds.AsharpriseinsulphurpriceswouldcompressMosaic’s

phosphatemargins,asmanagementexpectsacUSD250mQ1’26EBITDAheadwindversuslastyearandthefullimpactofhighersulphurpricesfromQ2’26onwards.Sustainedpressurefromhighersulphurpricesincreasesexecutionriskaroundthepaceofmarginrecovery.

Thepotashmarket,incontrast,appearstobebalanced.Managementemphasisedtangiblecostandefficiencygainsandistargetinghigherphosphateoutputin2026.However,wepreferto

remaincautiousuntilweseeclearevidenceofsustainedhigherutilisationandimprovedstrippingmarginsasinputcostsnormalise.WethereforeretainourHoldratingwithanunchangedtargetpriceofUSD26.

Companyguidance:For2026,thecompanyexpectsphosphateproductionvolumesofatleast7.0mtons(Q1'26salesvolume:1.7-1.9mtons);potashproductionofc9.0mtons(Q1’26sales

volume:2.0m-2.2mtons).FY26capexisexpectedtobecUSD1.5bnandtheeffectivetaxrateinthelow-to-mid-30srange.

Outlook:Weincreaseour2026revenueestimateby21%duetohigherproductprices.

However,wecutournetincomeestimatefortheyearby22%duetorawmaterialcostinflationdrivenbyhighersulphur,ureaandammoniaprices.Similarly,our2027netincomeestimateisbroadlyunchangeddespitehigherrevenue(+15%).Weintroduce2028estimates.

OCINV(OCINA,EUR3.09,Buy,TPincreasedtoEUR3.75fromEUR3.50)

OCIisnearingprojectcompletionattheBeaumontammoniaprojectandexpectstoreceiveUSD470mofdeferredconsiderationatthatpoint,aheadofformalhandovertoWoodside.OCIhas

agreedtosell100%ofOCIAmmoniaHoldingtoAGROFERTforEUR290m,withclosingexpectedinH12026,andcontinuestopursueastrategicsaleoftheremainingOCINitrogenbusiness.

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24March2026

7

OCIN.V.offersanattractivevalue-realisationsetup,afterthesaleofmostoperatingassets,

leavingabusinessthatisincreasinglyatransparent,liquid-asset-backedvehicle.TheproposedmergerwithOrascomConstruction(ORASUH,AED31.84,notrated)hasbeenhaltedbythe

AmsterdamEnterpriseChamberduetoconcernsoverminorityrights(see

Mergerratiosombre

newsforminorities

,10December2025).TheChamberhasalsoappointedtwoindependent

minoritydirectorstotheOCIBoardtoexaminethetransaction.WethinkthisputstheoptionofacashofferforminoritiesbackonthetableandgobacktousinganSOTPmethodtovalueOCI.

OurSOTPvaluationsupportsatargetpriceofEUR3.75,implyingc21%upside,thereforewemaintainabuyonthestock.OurnewestimatesareaffectedbythesaleofOCIAmmonia

Holding,whichwasearlierpartofcontinuingoperations.Thismakesourcurrentestimatesincomparabletopreviousestimates.

OCISOTPvaluation

ParticularsUSDm

SaleofOCIAHtoAGROFERT340

ContingentcashTexasBlue470

Fertiglobeescrow,value

0

CapextobespentonTexasBlue-228

Methanexsharessold173

Netadditionalproceeds755

Currentcash(netdebt),asofDec2025-44

Cashafteradditionalproceeds711

Methanexshares(m)7

Methanexshareprice(USD)56

Methanexsharesvalue373

Totalliquidassets1,084

Cashheldforreinvestment1,084

Haircut35%

Valueofcasheffectively705

Valueofcasheffectivelypershare(EUR)-A(EUR)2.75

RemainCoEBITDA,midcycle40

RemainComultiple(Yara)6

RemainCovalue240

RemainCovalue,pershare-B(EUR)1.0

OCIvaluepershare(EUR)-A+B3.75

Source:Companyreports,HSBCestimates

Equities●Chemicals

https://www

HSBC

24March2026

8

Changestoestimates

Newestimates

RevenuesEBITDA

2026e2027e2028e2026e2027e2028e

N

etIncome

2026e

2027e

2028e

CFIndustries(USDm)

8,359

6,704

6,480

4,387

2,686

2,612

2,306

1,197

1,121

Fertiglobe(USDm)

2,952

2,776

3,023

1,287

1,156

1,266

469

465

556

IndustriesQatar(QARm)

16,749

14,613

13,514

6,854

5,394

4,967

6,207

4,756

4,405

Maaden(SARm)

36,025

36,585

37,808

16,190

15,460

15,019

9,659

9,669

9,328

SABICAN(SARm)

15,192

12,983

11,576

7,166

5,341

4,515

6,298

4,609

3,845

Mosaicco.(USDm)

14,936

13,680

13,189

2,250

2,361

2,304

672

761

695

OCINV(USDm)

1,167

1,033

958

51

49

39

(45)

(42)

(51)

OldestimatesRevenueEBITDANetIncome

2026e2027e2028e2026e2027e2028e2026e2027e2028e

CFIndustries(USDm)6,5816,211-2,5612,268-1,027786-

Fertiglobe(USDm)

2,952

2,776

3,023

1,287

1,156

1,266

469

465

556

IndustriesQatar(QARm)

16,150

16,903

-

5,773

5,870

-

5,503

5,872

-

Maaden(SARm)

37,850

40,082

-

15,495

16,123

-

9,430

10,160

-

SABICAN(SARm)

11,951

11,666

-

4,658

4,544

-

4,005

3,898

-

Mosaicco.(USDm)

12,393

11,862

-

2,533

2,420

-

861

764

-

OCINV(USDm)

1,098

1,098

-

4

91

-

(75)

(3)

-

Changestoestimates

2026e

RevenueEBITDA

N

etIncome

2026e

2027e

2028e

2027e

2028e

2026e

2027e

2028e

CFIndustries(USDm)

27%

8%

-

71%

18%

-

125%

52%

-

Fertiglobe(USDm)

0%

0%

0%

0%

0%

0%

0%

0%

0%

IndustriesQatar(QARm)

4%

-14%

-

19%

-8%

-

13%

-19%

-

Maaden(SARm)

-5%

-9%

-

4%

-4%

-

2%

-5%

-

SABICAN(SARm)

27%

11%

-

54%

18%

-

57%

18%

-

Mosaicco.(USDm)

21%

15%

-

-11%

-2%

-

-22%

0%

-

OCINV(USDm)

6%

-6%

-

nm

-46%

-

nm

nm

-

Source:HSBCestimates

Equities●Chemicals

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HSBC

24March2026

9

Valuationandrisks

ValuationRisks

CFIndustries

CFUS

Currentprice:

USD124.90

Targetprice:

USD130.00

Up/downside:

4.1%

WevalueCFIndustriesusingDCFmethodology.Weassumea

WACCof9.1%basedonaUSrisk-freerateof4.25%,blended

equityriskpremiumof5.0%,betaof1.03,andaftertax-costof

debtof4.2%.Wecontinuewithadditionalriskpremiumof0.5%

becauseofrisksassociatedwithblueammoniaproject.We

assumeaterminalgrowthof2.5%(allunchanged).Weupdate

estimatespostQ425updateandmateriallyincreaseourforecastearningsonstrongproductprices,resultinginournewTPof

USD130.0fromUSD91.0,whichimpliesaupsideofc4%,thereforewemaintainourHoldrating.Webelievethepositiveimpactof

higherproductpricesisalreadyreflectedintheshareprice.

Upsiderisks:1)higher-than-expectedprices;2)afasterthanexpecteddemandrecovery;3)accretiveM&A

opportunities.

Downsiderisks:1)lower-than-expectednutrientprices

impactingprofitabilityandcashflows;2)higher-than

expectedincreaseinUSgaspricesreducingthecompany’scompetitiveadvantages;and3)productiondisruptionduetogasshortagesorhigher-than-expectedplantturnaround

times.

Hold

SriharshaPappu*|

sriharsha.pappu@|

+442079919243

Fertiglobe

FERTIGLBUH

Currentprice:

AED2.82

Targetprice:

AED3.30

Up/downside:

17.0%

WevalueFertiglobeusingaDCFmethodology,assumingarisk-

freerateof4.25%,equityriskpremiumof6.00%(ablended

averageofEgypt,Algeria,andtheUAE),andbetaof1.1,givingusacostofequityof10.9%.Weassumeaftertaxcostofdebtof6.1%andalong-termdebt-to-equityratioof20:80toarriveataWACCof9.9%.Weassumeaterminalgrowthrateof2.5%(all

unchanged).Wedonotm