Net profit: OMR0.18mn, -58% Y-o-Y, +77% Q-o-Q, +172% EFGe 
Revenues: OMR5.0mn, -5% Y-o-Y, +11% Q-o-Q, +7% EFGe
 
Al Anwar Ceramics (AACT) reported stronger-than-expected 4Q18 results, with net profit of OMR0.18mn (-58% Y-o-Y, +77% Q-o-Q), which came in ahead of our estimate of OMR0.07mn (+172%), supported by strong revenue, which was 7% above our estimate of OMR5.0mn (-5% Y-o-Y, +11% Q-o-Q). The earnings beat came after a few misses over the past 4 years due to competition pressure in its key markets of Oman and Saudi Arabia. The company’s detailed operational figures will only be available once the full financials are released. 
 
Our view: We view the results positively; however, we still expect the challenges to persist over the short term. Having said that we maintain our positive view on AACT, in the wake of the ongoing anti-dumping investigation across the GCC, which in our view should be a positive trigger for the ceramic industry which has been in turmoil over the past four years due to the severe competition pressure from imported tiles. Moreover, despite the expected short-term operational weakness, the share is trading at an undemanding valuation (2019e EV/EBITDA of 6.4x), and the company maintains a cash-rich balance sheet (cash/investments make up 48% of market cap), which would help it to ride out any prolonged operational weakness, in our view. 
 
Al-Anwar Ceramics: OMR0.077 as of 10 Jan. 2019, Rating: Buy, TP: OMR0.131/share, MCap: USD60mn, AACT OM/AACT.OM