Morning Note /
Global

Turkey: Closed between 2-5 May for holidays

  • The market did what it was supposed to do on Monday and danced to the tune of the selloff

  • After a 2-month breathless rally, we had the first correction on Friday

  • If it was not for the revised buyback price of Garanti, the market would have been in negative territory

Batuhan Ozsahin
ATA Invest
27 April 2022
Published by

The market did what it was supposed to do on Monday and danced to the tune of the selloff. After a 2-month breathless rally, we had the first correction on Friday and if it was not for the revised buyback price of Garanti, the market would have been in negative territory. After a strong start to the day with Turkish Airlines & Kardemir, the weakening momentum quickly turned into a sharp sell-off with circuit breakers flying in the air even for blue chip companies. Eregli, Kardemir, Tupras all got circuit breakers and most mid & small cap names were down more than 5% at the end of the day. Sise & Arcelik stood out with the help of buybacks (1m & 4.4m shares respectively).

We are closed between May 2-5 for holidays, hence local investors will be on the sidelines today without taking much risk with so much going on in global markets.

Aselsan’s & TAV’s 1Q results are Neutral. We expect Akbank’s results. Our estimate is 17% higher than consensus, hence the stocks could give a good reaction if results are in line with our expectations.

Company news:

*ASELS TI> 1Q22 Results: Higher than expected net income and NWC needs still increased Aselsan reported TL1,696mn net income in 1Q22, 9% higher than our estimate of TL1,560mn but 18% higher than consensus estimate of TL1,436mn. Despite the lower than expected net other income, higher than expected tax income and lower than expected financial expenses led to higher than expected net income in 1Q22. The company posted TL1,037mn EBITDA in 1Q22, 4% higher than our estimate of TL1,001mn and consensus estimate of TL1,001mn. The company reported 23.7% EBITDA margin in 1Q22, 42bps lower than our estimate of 24.2% (Ras. Cons:24.3%). Based on our 2022 estimates, Aselsan is trading at 9.6x EV/EBITDA, implying 13% discount compared to its 5yr historic multiple. We maintain our “Marketperform” recommendation for Aselsan with 12M TP of TL33.17, implying 31% upside potential.

*ASELS TI> proposed to pay 0.20 DPS/share from 2021 earnings, implying 0.79% dividend yield. This cash dividend implies TL460mn cash outflow and 6.5% dividend payout ratio ATA Est.: 10% payout & TL0.31 DPS). Board aims to distribute cash dividend on 16 November’22, pending for the approval at the General Assembly meeting.

TAVHL> 1Q22 Results: TAV Holding posted EUR-22.7mn net loss in 1Q22, 8% better than consensus and our expectation of EUR-24.6mn loss. Deviation was mainly due to EUR16mn higher than expected revenue. The company reported positive EUR32.6mn EBITDA, 26% higher than consensus estimate of positive EUR25.8mn and our estimate of positive EUR27.4mn. According to the CEO Sener’s statement, In the first quarter, they placed €375mn of equity in the New Antalya SPV, financed the rest of the upfront rent payment and made the upfront rent payment of EUR1.8125bn to the State Airports Authority of Turkey. The completion of this financing amid significant geopolitical turbulence was a remarkable achievement testifying to the quality of Antalya as an asset and to the level of intellectual capital accumulated at TAV Airports. Also 2022 Turkish traffic so far is very strong for all of their major source markets except for Ukraine and Russia with Antalya preliminary() April international traffic showing -7% vs 2019. They have started to reap the benefits of diversification efforts in Turkish tourism. Although there is a marked decrease in their Russian and Ukranian guests, other source markets have made up for most of the lost traffic so far in April. Germany is 25% above 2019, UK is 67% above 2019, Iran is 41% above 2019 and the remaining source markets are 8% above 2019.

*SISE TI> bought back 4.31mn shares at an average price of TL17.72 on 26 April 2022. Since February, 26 2021, the total number of shares bought back reached 58.5mn at an average price of TL11.37

*ARCLK TI> bought back 1,000K shares at an average price of TL67.01 on 26 April 2022. Since 02 July 2021, the total number of shares bought back reached 60.7mn at an average price of TL41.78.

*SAHOL TI> bought back 470K shares at an average price of TL19.96 on 26 Apr 2022. Since 09 Nov 2021, the total number of shares bought back reached 42.0mn at an average price of TL15.76.

Weekly Agenda:

Apr 27: TTKOM 1Q22 financials cons TL 539 mn ATA TL 538 mn

Apr 27: TOASO 1Q22 financials cons TL1,064 mn ATA 1,001 mn

Apr 27: FROTO 1Q22 financials cons TL 2,672 mn ATA 2,587 mn

Apr 27: AKBNK 1Q22 financials cons TL 7,369 mn ATA 8,579 mn

Apr 28: TKFEN 1Q22 financials cons TL 745 mn ATA TL 616 mn

Apr 28: THYAO 1Q22 financials cons TL 1,200 mn ATA TL 1,509 mn

Apr 28 TCELL 1Q22 financials cons TL 905 mnATA TL 843mn

Apr 28: TTKOM dividend payment TL 1.42/share

Apr 29: March Trade Balance ( Consensus -USD8.2bn, February -USD7.88bn)

Apr 29: YKBNK 1Q22 financials cons TL 6,088 mn ATA TL 6,436 mn

Apr 29: TURSG dividend TL 0.46/share