Advanced Petrochemical Company (Advanced) [2330.SE] has announced the admission of Petrochemical Industries Company (PIC) (100%-owned subsidiary of Kuwait Petroleum Company) as an additional investor in its propane dehydrogenation (PDH) plant in South Korea, in which Advanced’s 95%-owned subsidiary, Advanced Global Investment Company (AGIC), owns a 35% stake. PIC will acquire a 25% equity stake in the project with 5% to be sold by AGIC and the remaining 20% to be sold by SK Gas, the third joint venture partner. Accordingly, the new shareholder structure of the project will be as follows: SK Gas will own 45%, AGIC will own 30% (Advanced’s effective ownership will be 28.5%) and PIC will own 25%. The gain from the sale of AGIC’s 5% stake will amount to SAR16 million and is expected to be reflected on 1Q2016 results. We estimate the sale implies a P/B of 1.2x and we view the deal positively, especially in light of the current weak prices for propylene that are likely to pressure margins at the project in 2016, but we expect that the overall impact of the deal on Advanced’s valuation would be minimal. We note that the company mentioned in the release that the strategic partnership with KPC through PIC will improve the competitiveness and stability of the project, given that KPC will supply a significant portion of the feedstock for the project.  (Tadawul, Yousef Husseini)   Advanced: SAR34.17 as of 18 January 2016, Rating: Buy, FV: SAR60.00 per share, MCap: USD1,494 million, APPC AB / 2330.SE