More Feedstock, More Methanol, More Upside

Research evidence excerpt

More Feedstock, More Methanol, More Upside

Update

June 24, 2026 09:23 PM GMT

Morgan Stanley & Co. International plc+MSahara International Petrochem | Europe Ricardo Rezende, CFA

Equity Analyst

More Feedstock, More Ricardo.Rezende@morganstanley.comSylvia C Richards +44 20 7677-9886

Research Associate

Sylvia.Richards@morganstanley.com +44 20 7677-3354

Methanol, More Upside Giulia Faro

Giulia.Faro@morganstanley.com +44 20 7425-7581

Key Takeaways

Sahara International Petrochem (2310.SE, SIPCHEM AB)

Sipchem announced it has received an allocation for additional feedstock to EEMEA - Chemicals | Saudi Arabia

develop a methanol plant in Jubail with an annual production capacity of 1.8mn Stock Rating Overweight

MT. Industry View No Rating

Price target SAR 18.00

This should increase the company's overall production capacity by 45% once Shr price, close (Jun 24, 2026) SAR 14.03

52-Week Range SAR 21.05- 13.37

operational, though no timeline has been given yet. Mkt cap, curr (mn) SAR 10,289

Net debt (12/26e) (mn)* SAR 2,053

We estimate incremental upside to our DCF of 12-34%, based on capex intensity EV, curr (mn)* SAR 12,308

for similar projects in the region. * = GAAP or approximated based on GAAP

Bottom-line: positive. We've been arguing for a while that increased gas production

in Saudi Arabia should drive higher chemicals capacity in the Kingdom, with different

companies (including Sipchem itself) announcing they've received gas allocation for

new projects in recent past. This time, Sipchem announced a new 1.8mtpa methanol

plant. Why do we see that as positive? First, market fundamentals for methanol

looks more attractive than for polymers ( Exhibit 1 ). Second, we see the project as

value accretive. There's still no indication on capex, timing, etc. But based on similar