We add four more companies to our GCC Petrochemicals Sector coverage, bringing the total to 9. Covered in this report are: Saudi Basic Industries Corp. (SABIC), Sahara International Petrochemical Co. (SIPCHEM), National Industrialization Co. (TASNEE) and Rabigh Refining and Petrochemical (PETRO RABIGH). Our valuations are based on a mix of DCF, DDM, EV/EBITDA, and P/E multiple. Since last week of February 2022, petrochemical end-product prices as well as feedstock prices are being influenced by Russia Ukraine war. Russia’s low share of global petrochemicals (~2%) means petrochemical supply chains would not be impacted, but oil price volatility may influence prices in the near term and would be a key concern. Selectively, integrated petrochemical producers (producing both feedstock and end products) may benefit more than those dependent on only end products. • Russia-Ukraine conflict increases oil price volatility but no threat to petrochemicals global supply chains. The war between Russia and Ukraine (starting in the last week of February 2022) resulted in severe economic and financial sanctions being imposed by US and Europe on Russia, which put Russia’s oil and gas supply at risk. Being a major player in oil market (~10mbpd or ~10% of global supply), initially oil prices spiked over 30% past USD 130/barrel, only to fall back equally fast to below USD 100/barrel. While feedstock prices (Naphtha, Saudi Propane) saw price volatility, basic petrochemical prices (Ethylene, Propylene) have been less volatile, implying global petrochemical supply chains would not be impacted as much as oil market. • Saudi Petrochemicals resilient amid Covid-19 and rode economic recovery wave in 2021. The year 2021 witnessed global economic recovery after the lows of 2020 impacted by COVID-19. Even before Russia Ukraine war, petrochemical prices were up 25-35% in 2021 over 2020 due to global economic recovery, which benefited Saudi petrochemicals industry positively. • Demand expected to continue from both the East (India, China) and the West (US, EU). The demand is coming from both developing economies like India but also those like US and China who had seen peak growth some time back. The widespread application of petrochemicals across industries is likely to result in continued demand for the near to medium term. • Saudi Petrochemical companies demonstrate strategic advantage as the world’s lowest-cost producers. Middle East-based Petrochemical companies and more specifically Saudi petrochemical companies are among the low-cost producers on the cost curve, due to the lowest cost of oil extraction further flowing down the value chain. We have assumed demand, prices, and spreads to sustain till 2024 despite Russia Ukraine war, as the initial spikes in oil prices have subsided and long-term impact looks limited. However, risks to our valuations arise from escalation of Russia Ukraine conflict (to the extent it increases oil market volatility), and another wave of COVID-19 infections (to the extent it reintroduces restrictions on economic activities).