Morning Note /
Turkey

Turkey: We expect a green opening

  • Thanks to Chinese technology stocks, losses in global markets following Powel’s comments were recovered.

  • TCELL and MGROS from our coverage posted very strong results please recall both are ATA TOP picks.

  • BIST 100 broke up 4,100 resistance yesterday and likely to open in green today.

ATA Invest
4 November 2022
Published byATA Invest

Thanks to Chinese technology stocks, losses in global markets following Powel’s comments were recovered. TCELL and MGROS from our coverage posted very strong results please recall both are ATA TOP picks. BIST 100 broke up 4,100 resistance yesterday and likely to open in green today. 4,120 and 4,140 are the next resistance levels to be followed. 

Macro news:

*CPI increased by 3.54% m/m to 85.51% y/y in Oct’22. PPI increased by 7.83% m/m to 157.69% y/y in Oct’22. With the highest share in the calculation (%25.32), Food and Non-Alcoholic beverages increased by 5.09% m/m (+99.05% y/y) in Oct’22. Core inflation (excluding alcoholic beverages, tobacco products, energy and gold, B) increased by 77.01% y/y in Oct’22 (Sep’22: 74.63% y/y). With the Inflation Report published in Oct’22, Central Bank of Turkey increased its 2022 inflation target to 65.2% from 60.4%. (ATA Est.: 68.0%).

Company news:

*SAHOL TI> posted TL10.9bn net income, 15% higher than the consensus estimates of TL9.5bn in 3Q22.

*TCELL TI> 3Q22 Earnings Review: Stronger expected bottomline. Turkcell recorded TL2,396mn net income in 3Q22, 9.6% higher than our est. of TL2,187mn and 44.0% above consensus est. of TL1,664mn. Higher than expected EBITDA (+TL49mn), higher than expected income from investments net of fin. expenses (+TL114mn) & lower than expected taxes (+TL46mn) were the reasons behind stronger than expected net income. Revenues were 1.1% above our estimates and EBITDA of TL5,990mn was 0.8% above our estimates. The company guidance for 2022 is revised up: (1) topline growth to “47-48%” from “>40%” and (2) EBITDA to c.TL21bn from c.TL20bn which are in line with our estimates.

*MGROS TI> 3Q22 Review: Another very impressive quarter. Stay tuned... Migros realised TL807mn net income in 3Q22, better than our estimate of TL575mn and consensus estimate of TL567mn. Supported by strong topline growth, significantly higher than expected EBITDA was the major reason behind higher than expected net income. The management revised its 2022E (1) topline growth guidance to “c.100%” from “c.80-85%” versus our estimate of 90.6% (2) new store openings guidance to c.365 from C.350 new stores (3) capex guidance to c.TL2,200mn from c.TL1,600 and (4) its EBITDA margin guidance to “c.8.5%” from “8.0%” versus our estimate of 8.0%. Considering the inflation trends and latest guidance, we see upside risk to our estimates and 12- month target price of TL160/shr for Migros, despite significant rally during the last 3 months. As a separate note, transformation of Migros ecosystem with new subsidiaries (online business, fintech company, logistics start-up, media assets, EV charging services) might be another hidden value.

* MPARK TI> bought back 37K shares at an average price of TL66.32 on 3 November 2022. Since 25 May 2022, the total number of shares bought back reached 6.2mn at an average price of TL47.10.

*SAHOL TI> bought back 500K shares at an average price of TL33.41 on 3 November 2022. Since 09 Nov 2021, the total number of shares bought back reached 71.1mn at an average price of TL18.45.

Weekly Agenda:

Nov, 4 October REER