Morning Note /
Turkey

Turkey: Rally in global equities pauses due to weaknesses in Chinese equities

  • Turkish equities may continue decoupling again from global markets and open in green today

  • Daily resistance levels are 3.950-3.980 and 4.000. ARCLK posted weak results on Friday which was guided by the company

  • We expect aviation companies to announce strong financials and please recall TAVHL is one of ATA top picks

ATA Invest
24 October 2022
Published byATA Invest

The rally in global equities paused due to weaknesses in Chinese equities. Turkish equities may continue decoupling again from global markets and open in green today. Daily resistance levels are 3.950-3.980 and 4.000. ARCLK posted weak results on Friday which was guided by the company. This week TAVHL, GARAN; YKBNK, EREGL, TTRAK, TKFEN, TOASO will post their 3Q financials. We expect aviation companies to announce strong financials and please recall TAVHL is one of ATA top picks.Steels on the other hand are likely to announce weak results. In our latest strategy report we removed EREGL from ATA Top picks.

 Macro news:

Consumer Confidence Index* (CCI) increased by 5.3% m/m to 76.2 in Oct’22 (-0.8% y/y).

Financial situation expectation of households* increased by 6.7% m/m to 76.2 in Oct’22. General economic situation expectation* increased by 5.3% m/m to 77.9 Number of people unemployed expectations* increased by 3.6% m/m to 73.0 in Oct’22. Probability of savings* increased by 7.6% m/m to 31.8 in Oct’22.

Company news:

*ARCLK TI> 3Q22 Review: Weak results as expected…Arcelik realised TL336mn net income in 3Q22, slightly lower than our estimate of TL390mn and consensus of TL390mn. Topline was in-line with our estimates but EBITDA margin of 8.7% was 11bps below our estimates. Slightly lower than expected EBITDA and higher than expected financial expenses were the major reasons behind lower than expected net income. Consolidated revenue guidance for 2022 is maintained at “>90%”, driven by “c.70%” growth in Turkey (in TL) and “>20%” growth international revenues (in FX). EBITDA guidance revised down by 50bps to c.9.5%. NWC/Sales guidance of c.25% is maintained and Capex is revised by €40mn to €260mn. We foresee 96.4% topline growth and 9.1% EBITDA margin in 2022E.

*MPARK TI> bought back 134K shares at an average price of TL59.47 on 21 October 2022. Since 25 May 2022, the total number of shares bought back reached 5.2mn at an average price of TL43.66.

*PENTA TI> will raise its capital through 800% bonus issue and the reference price will be TRY 78.72

Weekly Agenda:

Oct, 25: Oct capacity utilisation rate

Oct, 26: TAVHL TI 3Q cons NI TRY 1.371 mn ATA NI TRY 1.295 mn

Oct, 26: AKBNK TI 3Q cons NI TRY 16.606 mn ATA NI TRY 16.542 mn

Oct, 26: TKFEN TI 3Q cons NI TRY 661 mn ATA NI TRY 661 mn

Oct, 26: TOASO TI 3Q cons NI TRY 1.821 mn ATA NI TRY 1.783 mn

Oct, 26: TTRAK TI 3Q cons NI TRY 534 mn ATA NI TRY 526 mn

Oct, 26: EREGL TI 3Q cons NI TRY 1.908mn ATA NI TRY 1.914 mn

Oct, 27: Oct Economic confidence index

Oct, 27: Sep Foreign trade statistics

Oct, 27: BRSA Weekly banking sector data

Oct, 27: GARAN TI 3Q cons NI TRY 17.059 mn ATA NI TRY 17.264 mn