Investment Rating - The report assigns an "Outperform" rating to Borouge, indicating an expected relative return exceeding the benchmark index by more than 10% over the next 12-18 months [25]. Core Insights - Borouge is positioned as a global leader in the chemical industry, focusing on high-value and sustainable returns, with a strong emphasis on maintaining cost leadership and product differentiation [2][4]. - The establishment of Borouge Group International (BGI) through the merger with Borealis and the acquisition of NOVA Chemicals is expected to enhance operational efficiency and market presence, with a projected EBITDA of over $7 billion throughout the cycle [3][4]. - The company anticipates maintaining a premium pricing strategy for its polyethylene and polypropylene products, with benchmarks set at $200/ton and $140/ton respectively [4]. - Borouge's average EBITDA margin is projected to reach 26% from FY20-24, significantly higher than the industry average of 16% [4]. Company Overview - Borouge, headquartered in Abu Dhabi, is one of the largest petrochemical producers globally, primarily owned by ADNOC and Borealis [2]. - The company operates one of the world's largest integrated polyolefins facilities in Al Ruwais, with a production capacity of 5 million tons per year [2]. - Borouge's product offerings mainly include polyethylene and polypropylene, with a significant sales focus on the Asian market [2]. Strategic Developments - The merger forming BGI is expected to create a total production capacity of 13.6 million tons per year, positioning it as the fourth-largest player globally [3]. - The company is exploring the feasibility of a new specialty polyolefins plant in China, which is seen as a promising market due to its significant sales contribution [7][8]. - Borouge emphasizes the importance of artificial intelligence and digitalization in optimizing operations and maintaining high utilization rates in its facilities [8]. Financial Outlook - BGI plans to offer a minimum annual dividend of 16.2 fils per share, targeting a payout of 90% of free cash flow [6]. - The company expects to maintain its dividend policy, with a projected distribution of $1.3 billion in FY25 prior to the completion of the merger [6].