Morning Note /
Turkey

Turkey: Eyes will be on July inflation

  • After almost testing the historical high of 2,684, BIST 100 closed slightly below Monday closing

  • Markets have been selling the tension expectation and today may be buying the realisation

  • So a positive opening is likely in the market

ATA Invest
3 August 2022
Published byATA Invest

After almost testing the historical high of 2,684, BIST 100 closed slightly below Monday closing. As expected US-China tension over Taiwan was the main reason for daily volatility in the market. Markets have been selling the tension expectation and today may be buying the realisation. So a positive opening is likely in the market. SISE –which is one of ATA top picks posted very strong results and we expect a strong opening at SISE shares today. Eyes will be on July inflation which will be announced at 10:00 AM local time where consensus expects 3% and ATA expects 3.4%

Company news:

*SISE TI> 2Q22 Review: Better than expected operating results and bottom-line... Sisecam reported TL 5,379mn net income in 2Q22 which was 37% above our estimate of TL 3,935mn and 35% above consensus estimate of TL3,977mn. Higher than expected operating profit, higher financial income and lower taxes were the main reasons behind stronger than expected net income. The company’s EBITDA surged by 204% y/y to TL5,637mn in 2Q22, which was 8% higher than our estimate of TL5,201mn and 5% higher than consensus estimate of TL3,977mn. The company generated 24.2% EBITDA margin in 2Q22, 159bps higher than our estimate of 22.6% (Rasyonet Consensus: 23.1%). Based on 22E estimates, the company currently trades at 4.3x EV/EBITDA and 4.6x P/E multiple, implying 18% and 30% discount to historical averages.

*MPARK TI> bought back 19K shares at an average price of TL40.51 on 02 August 2022. Since 25 May 2022, the total number of shares bought back reached 1.9mn at an average price of TL35.33.

*ARCLK TI> bought back 150K shares at an average price of TL65.50 on 02 August 2022. Since 02 July 2021, the total number of shares bought back reached 68.4mn at an average price of TL44.80.

* TURKISH AUTOS - July 2022 Domestic Sales: LV sales increased by 9.1% y/y to 52.2K in July 2022, lower than our estimate of 58.2K Turkish Light Vehicle (LV) sales increased by 9.1% y/y to 52.2K units in July’22, 10% lower than our estimate of 58.2K units at the beginning of the month. On a segmental basis, P. Car sales increased by 13.0% y/y to 41.0K units whereas LCV sales declined by 3.1% y/y to 11.2K units in July 2022. Our estimate for 2022E LV sales is 754K, implying 2% y/y increase.

Weekly Agenda:

Aug 3: July CPI cons: 3% ATA 3.4%

Aug 3: June BRSA Monthly sector data

Aug 3: ISCTR 2Q22 NI cons TL 14,222 mn ATA 14,289 mn

Aug 4: July REER

Aug 4: BRSA Weekly Banking sector data

Aug 8: TTKOM 2Q cons NI: TL 713 mn ATA TL 831 mn

Aug 8: VAKBN 2Q cons NI: TL 6.550 mn ATA TL 6.878 mn