The reporting season for 3Q financials is over with Pegasus & Dogus Otomotiv results, with Halkbank the only large cap that has not reported yet. It has been a great season in terms of earnings growth. Earnings growth for BIST-30 companies are up 132% y/y for 9M21( up 39% for banks & 338% for non-financials(excluding banks and holdings).
It will be now again the start of a period focused on macro developments as inflation & monetary policy will dominate the headlines. The market has appreciated quickly hence a breather in the short-term will be normal. There was a lot of overall pessimism with the new monetary policy approach of the CBRT and Lira depreciating by 15% over a month after mid-September, hence there was lot of short-positions opened in the futures market (both index & single stock), however there is official data to track net short-interest in the market. We expect the support at 1590-1605 to work in the coming days.
*BIZIM TI> 3Q21 Review: Broadly in line with our estimates. Bizim Toptan recorded TL15.1mn net income in 3Q21, in line with our estimate of TL15.0mn but higher than consensus of TL11.5mn. EBITDA of TL102.0mn was higher than our estimate of TL92.1mn. Adjusted for net financial expenses related to operations, adj-EBITDA of TL58.4mn was broadly in line with our est. of TL57.7mn. 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 5.0% and (3) net income of TL43mn vs our est. of TL41mn
*SAHOL TI> announced buy-back programme (Positive) The company decided to initiate share buy-back programme in order to support share performance of the company in the equity market, and hence reducing the NAV discount by bringing SAHOL shares closer to its fair value. Sabanci Holding trades at 42.0% discount to its NAV vs. 43.4% historical discount since 2016. The program consists of purchasing maximum number of shares which is nominal 102mn TL (5% of SAHOL’s share capital) number of shares and the maximum amount of funds to be allocated for the share buyback as TL1,750mn. Please note that the company’s free float stands at 49%. We believe announced share buy-back programme will have positive impact on share performance
*DOAS TI> 3Q21 Review: Better than expected results in all fronts... Dogus Otomotiv recorded TL370mn net income which is 39% higher than our estimate of TL266mn and 51% higher than consensus estimate of TL245mn in 3Q21. Despite negative effect of TL10mn higher than expected net financial expenses and TL23mn higher than expected tax expense, TL110mn higher than expected EBIT and TL28mn higher than expected non-operating income led to TL104mn better than expected bottom-line. The company recorded TL576mn EBITDA which was 30% higher than our and consensus estimate of TL444mn in 3Q21. In 3Q21, EBITDA margin was 11.9% which is 230bps higher than our and consensus estimate of 9.6%. Based on our 2022E estimates, DOAS is currently trading at 4.2x EV/EBITDA and 6.4x P/E. In the past 5 years DOAS median EV/EBITDA and P/E multiples were 6.0x and 6.0x respectively.
*PGSUS TI> 3Q21 Review: Better than expected results in all fronts… Pegasus posted EUR56mn net income in 3Q21 which is 14% higher than our and consensus estimate of EUR49mn net income. Despite EUR8mn higher than expected net financial expenses, EUR10mn higher than expected EBIT and EUR5mn lower than expected tax expense led to EUR7mn better than expected bottom-line. The company’s EBITDA was EUR172mn in 3Q21 which was 9% higher than our estimate of EUR158mn and 10% higher than consensus estimate of EUR157mn. After 1Q20 results, PGSUS had withdrawn its 2020 guidance and no guidance is given about financials for 2021E with 3Q21 results due to ongoing uncertainties regarding Covid-19 developments. However, PGSUS plans to reach 85-90% of its 4Q19 ASK in 4Q21E and 75% of its 2019 ASK in 2021E. As of 3Q21, fleet size reached 91 aircrafts with 2 net exits in 3Q21. PGSUS year-end fleet size estimate is 90 aircrafts. In 3Q21 presentation, no capacity outlook shared for 2022E due to ongoing pandemic uncertainties.
*GUBRF TI> 3Q21 Results: Gubretas posted TL50mn net income in 3Q21. (not rated) Net sales increased by 103% y/y to TL2,367mn in 3Q21. Thanks to strong fertilizer prices, domestic revenues increased by 87% y/y to TL1,581mn in 3Q21 whereas Gubretas’ Iranian venture Razi’s revenues increased by 95% y/y to TL786mn during the same period. Gubretas’ EBITDA came at TL335mn in 3Q21, up 31% y/y. Domestic EBITDA increased by 103% to TL148mn while Razi’s EBITDA declined by 2% y/y to TL187mn. Net debt increased to TL837mn in 3Q21 from TL171mn in 2Q21. The company’s net debt / EBITDA ratio increased to 0.66x in 3Q21 from 0.14x in 2Q21.
*ENKAI:Chairman Sinan Tara bought 100k shares within TL 11.19--11.25 band.
10 Nov: September Unemployment rate (12.1%)
11 Nov: September Current Account Balance (Consensus +US$1.4)
12 Nov: November CBRT Macro Expectations Survey
12 Nov: September Industrial Production (Consensus -0.7%)