汇丰-全球化工：化肥可负担性临近临界点-Global Chemicals：Fertiliser affordability nears tipping point-20260428

4ZHseBCGbbalnvestmentResearch28April2026

Equities

Chemicals

GlobalChemicals

Fertiliseraffordabilitynearstippingpoint

uFertiliserpriceshaveralliedsharplyonsupplydisruption,pushingaffordabilitytoatippingpoint

uWeareonthecuspofdemanddestruction,limitingadditionalfertiliserpriceupsideasfarmerP&Lsaresqueezed

uWeseesignificantvalueinSAFCOfromgrowthprojects–retainBuyandraiseTPtoSAR165fromSAR148

Affordabilitynearsatippingpoint

Fertiliserpriceshaveralliedsharply(>70%yoy)onsupplydisruptiondrivenbythe

closureoftheStraitofHormuz.Cropprices,ontheotherhand,have,sofar,been

broadlyflat(~4%yoy).Theinputcostshockhasmeantthatfarmersarestrugglingtocovertheirtotalcostofproduction.Ourfertiliseraffordabilityindexhasreached

troughlevelsandsuggeststhatwemightbeatatippingpointondemanddestructionandpotentiallylowerapplication.

Demanddestructioncouldcappricingupside

Ouranalysisof:a)USvsBrazilfarmmarginstresstests;andb)shareofnutrientcostinrevenueacrossgeographiessuggestsspotfertiliserpriceshavereachedthecuspofdemanddestruction.USfarmereconomicsscreenasthemoststretched,with

marginsturningnegativeatspotfertiliserprices,whileBrazilappearsmarginally

moreresilient,butstillfacesdecliningprofitabilityamidhighfertiliserimport

dependence,highinterestratesandinputcostpressure.Pricingvolatilityhas

resultedinconsumersrunningdowninventoriesandloweringprocurementlevels.Atanutrientlevel,nitrogendemandisthemostinelastic,butthereissomediscretionintheapplicationofbothphosphatesandpotash.Webelievethelikelihoodofdemanddestructionwilllimitanyincrementalupsidetofertiliserprices,fromcurrentlevels.

SAFCOourpreferredfertiliserexposure:Inthenearterm,weseelimitedspot

pricingupside,andwecouldseesubstantialdownsidetoelevatedspotpricesiftheStraitreopensandsupplynormalises.Thatsaid,wearestilloftheviewthatfertiliserpricesand,inparticular,nitrogenwillresettoahigherbaselevelthanbeforethe

crisisoncetheconflictisresolved,giventhepersistenceofthesupplyshock(see

Asignificant,persistentsupplyshock

,24March2026).SAFCOisourpreferredroutetogainexposuretohigherureaprices.Thecompanyalsohassignificantgrowth

potentialwithSAFCO6and7projectsaddingc3.8mtons(1.2mtonsofblue

ammoniaand2.6mtonsofurea)tothecurrentcapacitybaseof4.8mtonsinthemediumterm.OurDCF-basedtargetpricerisestoSAR165fromSAR148aswefactorinthegrowthpotential;weretainourBuyratingonthestock.

SriharshaPappu*

GlobalHeadofEnergy&Materials

HSBCBankplc

sriharsha.pappu@

+442079919243

SwatiSoni*

Associate

Bangalore

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

Disclosures&Disclaimer

ThisreportmustbereadwiththedisclosuresandtheanalystcertificationsintheDisclosureappendix,andwiththeDisclaimer,whichformspartofit.

Issuerofreport:HSBCBankplc

ViewHSBCGlobalInvestmentResearchat:

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Atippingpoint

uFertiliserpriceshaveralliedsharplyonsupplydisruption,pushingaffordabilitytoatippingpoint

uWeareonthecuspofdemanddestruction,limitingadditionalfertiliserpriceupsideasfarmerP&Lsgetsqueezed

uWeseesignificantvalueinSAFCOfromgrowthprojects,retainBuyandraiseTPtoSAR165fromSAR148

Affordabilitynearsatippingpoint

Fertiliserpriceshaverisensharply(up>70%yoy),drivenbysupplyconstraintsonthebackof

theMiddleEasternconflict.Cropprices,incontrast,havebeenbroadlyflat(+4%yoy),weigheddownbyampleinventoriesandexpectationsofimprovedUSsoybeanacreagein2026.With

pricesofotheragriculturalinputs–fuelsandcropprotectionchemicals–alsorisingsharply,ourcropaffordabilityindex,whichmeasurescroppricesvsagnutrients,isheadingtothelowslastseenin2008.

Thecorequestioniswhetherthishittoaffordabilityisnowlargeenoughtoimpactapplication.Inthisnote,welooktoanswerthedemanddestructionquestionbyconsidering:a)scenario-basedfarmmarginstresstestsfortheUSandBrazil;andb)comparingnutrientcostsasa

shareofrevenue.Ouranalysisindicatesthatmarginsareunderseverepressureatcurrent

fertiliserpricesandcoulddeterioratefurtherasbroadercostinflationislayeredin.Onnutrientcostmargins,thecushiontomaintainhistoricalapplicationrateslooksverylimited.

Wethinkspotfertiliserpricesaretestingtheboundaryofaffordability,raisingtheprobabilityofdemanddestructionand,inturn,cappingupsidetofertiliserprices.Pricevolatilityisalso

changingpurchasingpatterns,withfarmersrunningdowninventoriesandrestrictingpurchases.Weseenitrogendemandasrelativelymoreinelasticgivenitsyieldcriticality;phosphatesand

potash,however,onthemarginaremorediscretionaryandcouldseeabiggerdemandhit.

CroppricetoNPKpriceratio–Affordabilityindex

1.901.701.501.301.100.900.70

0.50

May-06May-08May-10May-12May-14May-16May-18May-20May-22May-24CroppricetoNPKpriceratioHistoricalaverage

Source:Bloomberg,HSBCestimates

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3

Fertiliserprices(USD/t)

1000

900

800

700

600

500

400

300

200

Jan-26Feb-26Mar-26Apr-26

MEUreaGranularUSGulfNOLAUrea

USGulfNOLADAPUSGulfNOLAPotash

Source:Bloomberg

Cropprices(USD/t)

1270

1070

870

670

470

270

70

Apr-25Jun-25Aug-25Oct-25Dec-25Feb-26CornSoybeanWheat

Source:Bloomberg

Demanddestructionstresstests

USandBrazil–farmereconomics

70%ofrespondentssaid

fertiliserissoexpensivethattheywillnotbeabletobuyalltheyneed(AmericanFarm

BureauFederationsurveyofmorethan5,700farmers:3-11April2026)

Inthissection,welookatfarmereconomicsintheUSandBrazilforcornandsoybean.Thegoalistoassessifcurrentcommoditypricesallowfarmerstopaythecurrenthighpricesforfertiliserandstillmakeareturn.

Giventhesignificantdropinmarginsovertheyears(zerotonegativeinsomecases),wethinkthatanyfurtherincreaseinfertiliserpriceswouldraiseseriousaffordabilityconcernsandcouldresultindemanddestruction.

Wealsocalculatepotentialcommoditypricebreakevenpoints.FortheUS,atspotfertiliser

pricesandhistoricalcosts,weestimateamarginof-10%,andsobothcornandsoypricesneedtoincreasebyover10%togettobreakevenonourestimates–ie,USD4.9/buandUSD12.9/buforcornandsoy,respectively.However,governmentinterventionthroughnewfederal

assistanceprogramsandenhancedcropinsurancecouldhelp.

Onourestimates,Brazilfarmersappeartobeinarelativelybetterposition,withestimatedmarginsof15-20%forcornandsoy.

Corn–costcomposition

Soybean–costcomposition

100%

80%

60%

40%

20%

0%

US

NutrientsSeeds

Land

BrazilChemicals

OthervariablecostsOtherfixedcosts

100%

80%

60%

40%

20%

0%

US

NutrientsSeeds

Land

BrazilChemicals

OthervariablecostsOtherfixedcosts

Source:USDA,Purdue,Iowa,BrasilAgro,HSBCestimates

Source:USDA,Purdue,Iowa,BrasilAgro,HSBCestimates

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28April2026

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Thereisonekeydifference,though,inthecompositionofcostsbetweenthetwocountriesthat’simportanttoflag.

IntheUS,thecostbaseismoreheavilyskewedtofixeditemssuchasland(c22–28%oftotalcostsvsc11–13%inBrazil).InBrazil,variableinputs–particularlynutrientsandchemicals–accountforalargershareoftotalcosts(c27–39%vsc16–24%intheUS).Thisdrivesabig

differenceinoperatingleverage.

WhileBrazilappearstohavethebiggermargincushionthantheUS,profitabilityinBrazilis

moresensitivetofertiliserpricing.Brazilimports85%ofitstotalfertiliserrequirements,

representingc20%ofglobalfertilisertrade,soanyaffordability-drivenpullbackinBrazilwouldhaveamoremeaningfulread-throughforglobaldemand.

SomeregionsinBrazilarealreadyseeingshrinkingprofits–MatoGrossoprofitperacreisexpectedtoreachUSD10/acrein2025-26fromthehighsofUSD350-450/acrein2020-22(FarmdocDaily,16March2026).

Methodology

Ourcalculationsinthissectionarebasedonstandardisedassumptionsforcropproductivity

(quantityproducedperunitofarea)andnutrientintake(amountoffertiliserrequiredpertonneofcroporperunitofarea).SourcesforthisdataaretheUnitedStatesDepartmentof

Agriculture(USDA)andtheUnitedNationsFoodandAgriculturalOrganization(FAO).

Wethinkit’simportanttounderscorethreecaveatsinthisdata:

uThedatausedforbothcropoutputandrequiredfertiliserinputarebasedonillustrative

informationandserveasabenchmarkfortheindicatedregion.Largedifferencescanexistbetweenregions,evenwithinacountry(especiallyconsideringthesizeofIndia,BrazilandtheUS).

uAlargerangeoffertilisersexist.Weusethreecommononesasproxiesfortheunderlyingnutrients:ureafornitrogen,DAPforphosphate,andpotashforpotassium.Therecanbesubstitutionbetweenvariousmediawithineachnutrientfamily(DAP,MAP,TSAPfor

phosphate;urea,ammoniafornitrogen).Wedonottakeintoaccountpossiblefarmer

substitutionwithineachnutrientfamilywhenanalysingcostsandeconomics.Also,thereareoverlappingnitrogenandphosphatecontentsinDAP,forexample:oneunitofDAPcontains46%phosphateand18%nitrogen,andweassumeinmostcasesthatfarmersusingDAPcountonthisdualcharacteristicwhenplanningoverallfertiliserspreading.

uFinally,therelationshipbetweenfertilisers,inputsandoutputsisnon-linearandtoanextent

circular.Theuseofadditionalfertilisermaycauseyieldestimatestoincrease,andthevalue(orperceivedfuturevalue)ofoutputsmaycausefarmerstotakeonadditionalcostsinthepresent.

Affordabilityissuespointtodemanddestruction

Tocalculatefarmerbreakevens,webuildarepresentativefarmP&L,capturingrevenues,

fertiliserandnon-fertilisercosts,andresultingprofitability.Weputtogetherincomestatements

forUScornandsoyfarmersusingUSDAdata,IowaStateUniversitydataandHSBCestimates.WeusedatafromUSDA,Purdue,BrasilAgro(AGRO3BZ,NR,BRL19.85),andHSBC

estimatestocompileasimilarrepresentativeP&LforBraziliancornandsoybeangrowers.FarmersinBrazilandtheUSaredeeplyconnectedtotheglobaleconomy.

Inthe2025-26cropseason,USandBrazilianfarmersproduced33%and10%ofworldcornvolumes,respectively,and27%and42%ofworldsoybeanvolumes,respectively.

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Ouranalysissuggeststhatweareattroughprofitability.Pricesofcornandsoyarearound

USD4.5/buandUSD11.7/bu,fromthehighsofUSD6.9/buandUSD15.5/buin2022,

respectively.USmarginshaveturnednegative,whilemarginsinBrazilremainpositivebutarecompressingrapidly.

Weestimatethata10%increaseincornandsoypricestoUSD4.9/buandUSD12.9/buarethebreakevenpricelevelsforUScornandsoybeanfarmers,respectively.Brazilenjoysacushionof15-20%forcornandsoybeangrowers,respectively,beforehittingbreakevenlevels,onourestimates.

FarmerP/L

Metric

US

Brazil

Corn

Soybean

Corn

Soybean

Bushel/acre

Bushel/acre

Bushel/hectare

Bushel/hectare

Yield

187

53

275

145

Busheltotonne

39.37

36.74

39.37

36.74

Cropprice(USD/bu)

4.49

11.74

4.49

11.74

Revenue

USD/acre

USD/acre

BRL/hectare

BRL/hectare

838

622

6171

8507

Nutrientrequirements(kgoffertiliser/tonofcrop)

-Nitrogen

38

15

26

6

-Phosphate

16

42

23

51

-Potash

11

33

16

37

Applicationrates

-Nitrogen

136

16

148

20

-Phosphate

57

45

130

161

-Potash

38

36

94

116

Fertiliserpricingassumptions(USD/ton)

-Urea

783

783

760

760

-DAP

824

824

824

824

-Potash

364

364

405

405

Nutrientcosts(USD)

Perton

Perton

Perhectare

Perhectare

167

63

258

195

Nutrientcosts(BRL)

1286

972

Variablecosts

USD/acre

USD/acre

BRL/hectare

BRL/hectare

Seeds

113

63

772

577

Chemicals

49

49

736

840

Fuel,lube,andelectricity

25

16

365

500

Repairs

49

45

444

1364

Others

46

18

0

1000

Total

283

192

2318

4281

Fixedcosts

USD/acre

USD/acre

BRL/hectare

BRL/hectare

Overhead

48

33

0

0

Labour

37

26

326

472

Land

202

194

691

735

Machineandequipment

180

176

171

0

Others

459

350

Totalfixedcosts

468

429

1647

1557

Totalcosts

918

684

5251

6810

Margin(USD/acre)

-80

-62

75

138

Margin(%)

-9.6%

-9.9%

14.9%

19.9%

Margin(BRL/hectare)

920

1697

Source:USDA,PurdueUniversity,FarmdocDaily,IowaStateUniversity,BrasilAgro,HSBCestimates

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28April2026

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UScorn–stress-testingmarginsatcurrentcropprices

8%

4%

0%

-4%

-8%

-12%

-16%

-20%

Scenario1Scenario2Scenario3

FertilizerpricechangeMarginsOthercostchange

Source:HSBCestimates

USsoybean–stress-testingmarginsatcurrentcropprices

8%

4%

0%

-4%

-8%

-12%

-16%

-20%

Scenario1Scenario2Scenario3

FertilizerpricechangeMarginsOthercostchange

Source:HSBCestimates

Stress-testingmargins

Werunathree-scenariostresstestatcurrentcroppricestogaugehowsensitivefarmereconomicsaretofertiliserandbroaderinputinflation.

uScenario1applies“normalised”fertiliserprices(c20%belowspot–HSBC2026e)tohistoricalcoststructures,toreflectsomeeasingfrompeaknutrientpricing.

uScenario2keepsthesamehistoricalnon-fertilisercostsbutusesspotfertiliserprices,capturingthefullpass-throughoftoday’snutrientmarket.

uScenario3istheharshercase:spotfertiliserpricesplusa5%upliftinnon-fertiliser

costs(fuel,labour,logisticsandotheroperatingitems),recognisingthatthecostshockisn’tlimitedtonutrients.

IntheUS,marginsremainunderpressureeveninthe“normalised”fertilisercase,implying

limitedbufferatcurrentcornandsoypricesandaneedforcroppriceupsidetoreturnto

breakeven.UnderScenario3,thebreakevenhurdlerisesmeaningfully,reinforcingtheriskofapplicationcuts,downtradinganddelayedpurchasesifcroppricesdonotimprove.

Brazilscreensbetter,butthecushionislimitedgivenc85%fertiliserimportdependence.

Moreover,BrazilisslightlymoresensitivetofertiliserpricesvstheUS—atbreakevenprices(otherthingsbeingconstant),a20%increaseinnutrientcostsleadstoa4ppt/2pptdropin

Brazilmarginsforcorn/soyvs3ppt/1.5pptfortheUS.

Brazilcorn–stress-testingmarginsatcurrentcropprices

30%

20%

10%

0%

-10%

-20%

Scenario1Scenario2Scenario3FertilizerpricechangeMarginsOthercostchange

Source:HSBCestimates

Brazilsoybean–stress-testingmarginsatcurrentcropprices

30%

20%

10%

0%

-10%

-20%

Scenario1Scenario2Scenario3FertilizerpricechangeMarginsOthercostchange

Source:HSBCestimates

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Shareofrevenuetakenupbynutrientsinvariousregionsforcorn…

25.3%

18.6%

40.0%

30.0%

20.0%

26.6%23.5%

10.0%

0.0%

Brazil

India

NorthAmerica

US

UreauDAPPotashoTotalnutrientcostmarginSource:Brazil,India,NorthAmerica;USdatafromUSDA;fertiliserpricesfordeliveryinrespectivegeographiesonly,HSBC

…andsoybean

20.0%

10.0%

0.0%

11.4%

14.4%

15.0%

13.4%

Brazil

India

NorthAmerica

US

uUreaaDAPnPotash口Totalnutrientcostmargin

Source:Brazil,India,NorthAmerica,USdatafromUSDA;fertiliserpricesfordeliveryinrespectivegeographiesonly,HSBC

Benchmarkingmargins

Tobenchmarkfertiliseraffordability,wecomparetheshareofrevenuetakenupbynutrientsforcornandsoybeansacrossBrazil,India,andNorthAmerica/US.Thesefiguresisolatetheshareofcroprevenueabsorbedbynutrients(excludingotherfarmcosts),sothey’rebestreadasa

directionalstresstest.

Thechartaboveshowsfertiliserstakingameaningfulsliceofcroprevenue,withwide

dispersionbygeographydrivenbyagronomyandpolicy.Brazilremainsstructurallyadvantagedinsoybeansduetolowureaintensity.Overall,withfertiliserandotherinputsup,butcroppriceupsidelimited,thecushiontomaintainhistoricalapplicationrateslooksthinner.

WealsoassessBrazil’sone-yearlaggedfertiliserdemandsensitivitytoprices.Wedon’tsee

outrightdemanddestruction,buttheinverserelationshipisclear,pointingtoshort-cycledemanddeferral.Brazil’sapplicationintensityis>2.5xtheglobalaverageand,whileotherfactorsmaybeatplay,the2007–22datashowthat,inrisingpriceperiods,fertiliserpricesincreasedc40%on

average,whileconsumptionfellc5%thefollowingyear;conversely,infallingpriceperiods,pricesdeclinedc20%,whileconsumptionrosec15%onaveragethefollowingyear.

Brazilfertiliserconsumptionvsfertiliserpricechange

450

400

350

300

250

200

150

100

50

0

20062007200820092010201120122013201420152016201720182019202020212022Brazil*(Fertilizerconsumptionkg/hectare)Averageureaandphosphatesprice(rebasedto100)

350

300

250

200

150

100

50

0

Source:Bloomberg,WorldBank;HSBC;*datalaggedbyoneyear

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SABICAgri-Nutrients(SAFCOAB,Buy,TPuptoSAR165fromSAR148)

Inthenearterm,weseelimitedspotpricingupside,andwecouldseesubstantialdownsidetoelevatedspotpricesiftheStraitreopensandsupplynormalises.Thatsaid,wearestillofthe

viewthatfertiliserpricesand,inparticular,nitrogenwillresettoahigherbaselevelthanbeforethecrisisoncetheconflictisresolved,giventhepersistenceofthesupplyshock(see

Asignificant,persistentsupplyshock

,24March2026).SAFCOisourpreferredroutetogainexposuretotighterureaprices.

SAFCO6and7:On26March2026,SAFCOannouncedthatithadobtainedfeedstock

allocationfortheSAFCO7project,withacapacitytoproduce2.6mtonsoftraditionalurea.ItalsoclarifiedthattheSAFCO6projectwouldnowfocusontheproductionof1.2mtonnesof

low-carbonammonia(asagainsttheJuly2024announcementof1.2mtonnesoflow-carbon

ammoniaand1.1mtonnesofurea).Theseprojectstogethershouldincreasesaleablecapacityto8.6mtonnes,versusthecurrent4.8mtonnes,anincreaseofc80%.

Therewerenodetailsontheexpectedtimelines,FIDstatus,andcapexmarkedforthetwo

projects.However,weestimatethat,onourlonger-termnormalisedpriceforecasts,thesetwoprojectscombinedcouldcontributeSAR3.0bntoEBITDAonacumulativebasis,whichisover60%of2025EBITDA.

Q1’26results:Amixedsetofresultsasprofitbeat,butrevenuelaggedstreetexpectations.

Q1’26netincomerose24%q-o-qtoSAR1.3bn,whilerevenuefellby10%q-o-qtoSAR2.9bn.Highproductprices(urea/ammoniaup28%/19%q-o-q)couldn’tflowthroughtoearningsfullyasvolumeswerehitduetotheMiddleEastconflict.Weestimateavolumeimpactofaround

75%inMarch.However,profitabilityimprovedonlowerCOGS–down21%q-o-q–possiblyduetolowergasconsumptionfromlowerproductionvolumes.TheQ2outlookdependsonnormalisationoftheMiddleEastconflictandtheresumptionofvesseltraffic.SAFCOalso

highlightedapotentialdemandimpactduetoadeclineinfarmers’purchasingpower.

Changeinestimates:WeupdateourestimatesposttheQ1’26results.Wecutour2026revenueestimateby3%,whichleadstominorprofitrevisions,butkeepotherestimatesunchanged.

Valuationandrisks

WevalueSAFCOonaDCFmethodology,assumingarisk-freerateof4.25%,anequityrisk

premiumof5.00%andabetaof1.0,resultingina9.25%costofequity.Weassumeacostofdebtof6.0%andalong-termdebt-to-equityratioof10:90toarriveataWACCof8.9%,

assumingaterminalgrowthrateof2.5%(allunchanged).DuetoalackofcertaintyonSAFCO6and7timelines,weaccountforthehigherfuturevolumesandsalesfromtheprojectsinthelastyearofprojectedfinancials.Factoringinthemedium-termgrowthpotential,wearriveatanewTPofSAR165(fromSAR148),whichimplies21.5%upside.WethereforeretainourBuyrating.WethinkSAFCOhasnear-termgrowthoptionalitythatisnotdiscountedinthecurrentstockprice.

Downsiderisks:

1)lower-than-expectedfertiliserpricesandoperatingrates;2)dividendcut;and3)increaseinfeedstockprices.

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Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Profit&losssummary(SARm)

13,077

14,765

12,983

11,576

4,909

7,144

5,341

4,516

Depreciation&amortisation

-887

-887

-887

-887

4,022

6,258

4,454

3,629

554

554

554

554

4,863

7,156

5,253

4,383

4,863

7,156

5,253

4,383

-396

-582

-427

-356

4,322

6,278

4,609

3,845

4,322

6,278

4,609

3,845

Cashflowsummary(SARm)

5,013

7,006

5,475

4,622

-781

-620

-620

-620

-781

-620

-620

-620

-3,094

-3,570

-3,917

-3,268

-1,383

-3,132

-1,310

-1,131

4,201

6,386

4,855

4,002

Balancesheetsummary(SARm)

42

42

42

42

8,314

8,047

7,780

7,514

15,548

19,030

20,008

20,876

12,929

16,061

17,370

18,501

27,003

30,219

30,930

31,531

3,181

3,393

3,195

3,039

380

380

380

380

-12,549

-15,681

-16,991

-18,122

21,203

23,911

24,603

25,179

7,794

7,666

7,265

6,892

Financials&valuation:SABICAgri-NutrientsBuy

Financialstatements

Revenue

EBITDA

Operatingprofit/EBIT

Netinterest

PBT

HSBCPBT

Taxation

Netprofit

HSBCnetprofit

12/2024a

12/2025a

1,580.0

No.ofboardmembers

8

6,981.4

Averageboardtenure(years)

NA

Yes

Femaleboardmembers(%)

0

12/2024a

Boardmembersindependence(%)

37.5

Employeecostsas%ofrevenues

NA

Yes

Cashflowfromoperations

Capex

Cashflowfrominvestment

Dividends

Changeinnetdebt

FCFequity

Intangiblefixedassets

Tangiblefixedassets

Currentassets

Cash&others

Totalassets

Operatingliabilities

Grossdebt

Netdebt

Shareholders'funds

Investedcapital

Ratio,growthandpershareanalysis

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

Y-o-y%change

Revenue

18.2

12.9

-12.1

-10.8

EBITDA

23.2

45.5

-25.2

-15.5

Operatingprofit

31.9

55.6

-28.8

-18.5

PBT

29.8

47.1

-26.6

-16.6

HSBCEPS

29.9

45.3

-26.6

-16.6

Ratios(%)

Revenue/IC(x)

1.8

1.9

1.7

1.6

ROIC

51.6

74.4

54.8

47.1

ROE

21.8

27.8

19.0

15.4

ROA

17.3

23.2

16.0

13.1

EBITDAmargin

37.5

48.4

41.1

39.0

Operatingprofitmargin

30.8

42.4

34.3

31.4

EBITDA/netinterest(x)

Netdebt/equity

-56.2

-61.9

-64.8

-67.2

Netdebt/EBITDA(x)

-2.6

-2.2

-3.2

-4.0

CFfromoperations/netdebt

Persharedata(SAR)

EPSRep(diluted)

9.08

13.19

9.68

8.08

HSBCEPS(diluted)

9.08

13.19

9.68

8.08

DPS

7.00

7.50

8.23

6.87

Bookvalue

44.54

50.23

51.68

52.89

Valuationdata

Yearto

12/2025a

12/2026e

12/2027e

12/2028e

EV/sales

3.8

3.1

3.5

3.8

EV/EBITDA

10.1

6.5

8.4

9.7

EV/IC

6.3

6.0

6.2

6.4

PE*

15.0

10.3

14.0

16.8

PB

3.0

2.7

2.6

2.6

FCFyield(%)

6.5

9.9

7.5

6.2

Dividendyield(%)

5.2

5.5

6.1

5.1

*BasedonHSBCEPS(diluted)

ESGmetrics

EnvironmentalIndicators

GovernanceIndicators

GHGemissionintensity*

Energyintensity*

CO2reductionpolicy

SocialIndicators

8.7

Employeeturnover(%)

Diversitypolicy

Source:Companydata,HSBC

*GHGintensityandenergyintensityaremeasuredinkgandkWhrespectivelyagainstrevenueinUSDí000s

Issuerinformation

Shareprice(SAR)

135.80

Freefloat

0%

Targetprice(SAR)

165.00

Sector

Chemicals

RIC(Equity)

2020.SE

Country/Region

SaudiArabia

Bloomberg(Equity)

SAFCOAB

Analyst

SriharshaPappu

Marketcap(USDm)

17,235

Contact

+442079919243

Pricerelative

166.00146.00

126.00106.00

86.00

202420252026

SABICAgri-NutrientsReltoTADAWULALLSHAREINDEX

166.00146.00126.00106.00

86.00

Source:HSBC

Note:Pricedatcloseof26Apr2026

Equities●Chemicals

https://www

HSBC

28April2026

10

Disclosureappendix

AnalystCertification

Thefollowinganalyst(s),economist(s),orstrategist(s)whois(are)primarilyresponsibleforthisreport,includinganyanalyst(s)whosename(s)appear(s)asauthorofanindividualsectionorsectionsofthereportandanyanalyst(s)namedasthecoveringanalyst(s)ofasubsidiarycompanyinasum-of-the-partsvaluationcertifies(y)thattheopinion(s)onthesubjectsecurity(ies)orissuer(s),anyviewsorforecastsexpressedinthesection(s)ofwhichsuchindividual(s)is(are)namedasauthor(s),andanyotherviewsorforecastsexpressedherein,includinganyviewsexpressedonthebackpageoftheresearchreport,accuratelyreflecttheirpersonalview(s)andthatnopartoftheircompensationwas,isorwillbedirectlyorindirectlyrelatedtothespecificrecommendation(s)orviewscontainedinthisresearchreport:SriharshaPappu.

Importantdisclosures

Equities:Stockratingsandbasisforfinancialanalysis

HSBCanditsaffiliates,includingtheissuerofthisreport(“HSBC”)believesaninvestor'sdecisiontobuyorsellastockshoulddependonindividualcircumstancessuchastheinvestor'sexistingholdings,risktoleranceandotherconsiderationsandthatinvestorsutilisevariousdisciplinesandinvestmenthorizonswhenmakinginvestmentdecisions.Ratingsshouldnotbeusedorreliedoninisolationasinvestmentadvice.Differentsecuritiesfirmsuseavarietyofratingstermsaswellasdifferentratingsystemstodescribetheirrecommendationsandthereforeinvestorsshouldcarefullyreadthedefinitionsoftheratingsusedineachresearchreport.Further,investorsshouldcarefullyreadtheentireresearchreportandnotinferitscontentsfromtheratingbecauseresearchreportscontainmorecompleteinformationconcerningtheanalysts'viewsandthebasisfortherating.

From23rdMarch2015HSBChasassignedratingsonthefollowingbasis:

Thetargetprice