Morning Note /

Turkey: IST 100 can test 1,440 support level

  • Delta variant concerns bring worries on future growth

  • we keep our short term positive expectations for the index

  • BIST 100 can test 1,440 support level in case of profit taking sales

ATA Invest
16 August 2021
Published byATA Invest

Delta variant concerns bring worries on future growth and likely to negatively affect BIST 100 today as well. Although we keep our short term positive expectations for the index, BIST 100 can test 1,440 support level in case of profit taking sales.

Company news:

*MGROS: 2Q21 Results: 2Q21 Review: No surprise in operating performance. Migros realised TL2mn net income in 2Q21, weaker than our estimate of TL44mn net income and consensus estimate of TL29mn net income. Slightly higher than expected depreciation and interest expense on term purchases led to weaker than expect net income. Thanks to 0.6% higher than expected net sales, EBITDA of TL670mn in 2Q21 was 0.3% above our estimates.The management revised up its 2021 (1) topline growth guidance to “18-20%” from “15-18%” (2) new store openings guidance to +300 new stores from c.170 and (3) capex guidance to c.TL800mn from c.TL600mn while (4) maintaining its EBITDA guidance at 8-8.5%.

*ENKAI: Enka posted TL2,046bn net income in 2Q21, significantly higher than the consensus estimate of TL1,212mn. (positive) (not rated) Enka’s revenues increased by 73% y/y to TL4.67bn in 2Q21, 12% above the consensus estimate of TL4.18bn. Contracting revenues increased by 36% y/y to TL2.91bn and Enka’s construction backlog increased by 8% q/q to US$3.58bn in 2Q21. The real estate revenue increased by 43% y/y to TL632mn. Trade revenues increased by 341% y/y to TL745mn in 2Q21. Please note that, Enka halted electricity generation in its combined power plants in Izmir, Gebze and Adapazarı following expiration of its take or pay agreement with State-run electricity generation company EUAS in 2019. Energy revenue reached to TL492mn in 2Q21 thanks to the resumption of electricity generation in Adapazarı (in May’21) and Gebze plants (in June’21). Enka’s EBITDA came at TL1,332mn, 36% higher than consensus estimate of TL981mn in 2Q21. Contracting EBITDA increased to TL732mn in 2Q21 from TL217mn in 2Q20 while real estate EBITDA increased 40% y/y to TL421mn. Energy EBITDA increased to TL42mn thanks to higher CUR in 2Q21. The company generated 28.5% EBITDA margin compared to consensus estimate of 23.5%. Enka’s net cash improved by 11% q/q to TL29.1bn, implying 7.05x net cash/ EBITDA.

 *ARCLK: bought back 450k shares at an average price of TL33.07 on 13 Aug 2021. Since 02 July 2021, the total number of shares bought back reached 9.0mn at an average price of TL32.65

 *PGSUS: Total PAX was up by 139% y/y to 2.5mn in July... On a segmental basis, domestic PAX was up by 79% y/y in July 2021 while international PAX was up by 352% y/y during the same period. International share in total ASK was up to 69% in July 2021 from 48% a year ago. Total load factor (LF) was up by 413bps y/y to 80.6% in July 2021 due to 560bps and 890bps increase in domestic and international load factor, respectively. Although load factor in July 2021 is 80.6%, when we adjust this KPI for aircrafts on the ground by dividing PAX in July 2021 to seats of July 2019, we find a load factor of %77.8. We believe there is a m/m improvement in load factors in July 2021. Currently, we expect 2021E ASK to be 32.3bn compared to 22,3bn in 2020 and 2021E load factor to be %80.4 compared to %80.2 in 2020. We also expect total PAX to increase to 20.2mn in 2021E from 14.7mn in 2020. Recall that total PAX of 14.7mn in 2020 was 52.2% below total PAX of 30.8mn back in 2019. We believe it might take several years to catch 2019 PAX figures depending on the pace of easing in Covid-19 restrictions. We might receive more clear signals starting by this spring regarding the travel trends.


Weekly Agenda:

Aug 16: 2 Year Fixed Coupon Bond Auction

Aug, 16: BIZIM 2Q21 cons: TL 5 mn ATA: TL 7 mn

Aug 17: 5 Year Fixed Coupon Bond Auction

Aug 17: 9 Year Fixed Coupon Bond Auction

Aug 17: PGSUS 2Q21 cons: TL -737 mn ATA: TL -985 mn

Aug 17: PETKM 2Q21 cons: TL 1,226 mn ATA: TL 1,157 mn