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 Initiate with Buy at SoTP-based TP of KWD fils 1,155 ~ 33% upside.  Petchem player Equate, Boubyan’s primary investment (74% of SoTP), contributes 53% of the group’s recurring FY 18-21e EPS CAGR on higher petchem prices and new MEG capacity (+30% in FY 19e) in the US.  Boubyan’s diversification strategy into education and healthcare (19% of SoTP), provides attractive long-term returns, in our view, and caters for 27% of the group’s FY 18-21e EPS CAGR.  Further potential impairments cloud earnings visibility (KWD 51m impaired in FY 16-18 – c.11% of market cap), although recurring earnings growth has been steady (FY 15-18A EPS CAGR of 5%).

• BPCC reported Q3 22A net income of KWD 2.5m (+10% y/y, -11% q/q), 16% below our expectations (ACe: KWD 3m) • The y/y profit increase was driven by improved operating performance from subsidiaries (mainly AlKout), while q/q, lower investment income led to profit decline. • BPCC is expected to report strong FY 22e EPS growth (+104% y/y) supported by a rebound in Equate’s net income (+210% y/y) on higher petchem prices this year. The stock is up 12% YtD, capturing most of the upside, in our view. Equate’s dividend income will be reflected in the fourth quarter of BPCC. • M&A activity is likely to slow down in the MT, in our view, given minimum KWD 60 fils DPS guidance till FY 24e or 6.4% DY. Maintain Hold.

• BPCC FY22 net income more than doubled y/y to KWD 38.8m on strong dividend income from Equate (KWD 30.2m vs. 9.7m last year) and a 13% y/y increase in core investment income. • BPCC recently sold a GBK stake for KWD 51.2m and we expect this will lead to a 35% y/y reduction in net debt to KWD 117m (adding 120 fils/share to equity value) in FY 23e. BPCC has also early settled KWD 70m of loans. • Core investments (ex-Equate) continue to improve, supported by reopening. But, Equate’s profit is under pressure from lower MEG prices. • We upgrade to Buy at KWD 1.2/share (revised by +26%). The stock trades at 14x FY 23e P/E and provides a minimum DY of 5.8% FY22-24e.

• BPC reported Q3 22/23A net income of KWD 4m (+58% y/y, -39% q/q), in-line with our estimates. • The q/q net income decline was driven by lower dividends from Equate (-71% q/q). Y/y profit increase was supported by a 700bps improvement in gross margin, despite flat revenues. • BPC’s FY 22/23e net income is expected to decline by 28% y/y on a 45% y/y decline in dividends from Equate (Equate FY 22 net income at USD 611m, -45% y/y). • The stock trades at 12x FY 24e P/E and provides a minimum DY of 7.7% till FY 24e. Maintain Buy at SotP based TP of KWD 1/share.

• BPCC reported Q2 22/23 net income of KWD 6.6m (2.3x y/y, -35% q/q), 22% below our estimates (ACe: KWD 8.4m). • The q/q net income decline was driven by sequential decline in operating profits from subsidiaries (Al Kout and EDU). Y/y profit increase was supported by KWD 5.6m interim dividend by Equate. • Equate is expected to witness significant pressure in H2e earning given -25% h/h MEG prices (USD 460/t) and this will impact dividends and earnings for BPCC in the next two quarters. • The stock trades at 15.4x FY 23e P/E and provides a minimum DY of 7.3% till FY 24e. Maintain Buy as our SotP based TP of KWD 1/share provides 22% upside despite a 17% cut, as we reduce Equate’s FVe by 15% on MEG price downtick.

• BPCC reported Q1 22/23 net income of KWD 10.1m (3.6x y/y, -67% q/q), 15% above our estimates (ACe: KWD 8.8m). • The y/y net income increase by driven by higher operating profits from subsidiaries (mainly Al Kout) and KWD 6.3m interim dividend by Equate. Q/q profit decline was a function of seasonality (BPCC recorded full dividend from Equate in Q4 last year). • Core investments (ex-Equate) continue to improve for BPCC as Al Kout delivered strong results in the quarter (NI: +165% y/y and +75% q/q) and EDU net income increased by 7% y/y and 20% q/q. • The stock trades at 12.7x FY 23e P/E and provides a minimum DY of 6.4% till FY24e. Maintain Buy but highlight near term pressure on Equate’s earnings on MEG price downtick.

Operating profit surged by 169% y/y in Q4 22, taking the FY growth to 43%, aided by strong B/S activity, NIM expansion, despite OpEx growth in Q4. • FY 22 EPS missed by 4% on CoR (100bps), as it bolsters provision buffers, with stage 1 coverage doubling to 1.2%, stage 2 at 7.5%, and stage 3 at 49%. • We raise our TP by 5% to JOD 4.1 as we lift our NIM projections by 7bps, partly negated by higher OpEx and slightly higher CoR. The stock remains compelling at 1x BV and P/E 24e of 5.2x, while offering an EPS CAGR (FY 23e-27e) of 19.5% and RoE of 15.8% in FY23e and 18.8% in FY24e.

• We increase our EPS estimates by 1-4% following the stronger operating profit in Q1 (+68% y/y in Q1). B/S activity remains robust, JAWs remain highly positive, while NIM compressed slightly due to a negative net ALM gap (c7% of assets < 12 months), with CoR ahead of expectations and guidance. • The bank is well insulated against lower policy rates as of FY24/25e, with a neutral ALM position (< 12 months). We expect an EPS CAGR FY22-27e of 17%. • The stock remains compelling at 0.9x BV and P/E 24e of 4.4x, while offering a RoE of 16.7% in FY23e and 18.4% in FY24e (vs. a RoE target of > 14%)