Morning Note /
Turkey

Turkey: We could see a digestion of this rally

  • Turkish equities continued their strong run

  • 2Q results have been the main driver of the rally

  • We are at the end of 2Q earnings season with Petkim & KRDMD

ATA Invest
17 August 2021
Published byATA Invest

Turkish equities continued their strong run but its strength looks like it is running out of steam as it gets close to 1465, its high it tested twice in May but could not break (year high is 1589). 2Q results have been the main driver of the rally but overall strong sentiment in global markets and stronger TL with declining CA deficit expectations have also been helpful.

We are at the end of 2Q earnings season with Petkim & KRDMD, both beating consensus estimates like most of the companies in 2Q. We could see a digestion of this rally as news flow slows down both domestically and globally – the most important news flow might come from the Jackson Hole meetings on August 26-28.

Company news:

*BIZIM : 2Q21 Review: Slightly weaker than expected results. Bizim Toptan recorded TL5.8mn net income in 2Q21, slightly lower than our estimate of TL7.1mn but slightly higher than consensus of TL5.0mn. EBITDA of TL75.0mn was lower than our estimate of TL78.1mn. Adjusted for net financial expenses related to operations, adj-EBITDA of TL36.5mn was lower than our est. of TL43.7mn. 2021 Guidance maintained: (1) Topline growth of 23-25% (excl tobacco &sugar) vs our est. of 24.5%, (2) EBITDA margin of 4.8% vs our estimate of 4.9% and (3) net income of TL43mn vs our est. of TL39.5mn 

*PETKM : 2Q21 Review: Stronger than expected results… Petkim posted TL1,336mn net income in 2Q21, higher than our estimate of TL1,157mn and consensus estimate of TL1,226mn. The deviation stemmed from TL207mn higher than expected EBIT in 2Q21. The company posted TL1,896mn EBITDA in 2Q21, higher than our estimate of TL1,645mn and consensus estimate of TL1,679mn. Thanks to strong product margins and CUR, the company’s EBITDA/ton increased to US$323 in 2Q21 (ATA Est: US$319) from US$104 in 2Q20. We believe that the initial reaction to the results will be positive thanks to strong operating performance in 2Q21

*DARDL: Niyazi Onen Holding did not participate in the capital increase and their share declined from 68.6% to 48.68%