Gursel Tasımacılık (TFG Istanbul Menkul Değerler )

TAKE THE BUS TO EUROPE



The company participates in public and private sector personnel transportation tenders, providing owned vehicles from its assets or finding suitable sub-contractors and organizing personnel and student transportation. GRSEL also rents out cars with drivers. The company has a daily transportation capacity of 200.000 personnel and 40.000 students. The company transports personnel for companies such as LCW, Mercedes, Netflix, P&G, Arcelik, Tupras, Starbucks in Turkey. Contracts with the well known companies proves company’s brand image while providing sustainable turnover Most of the vehicles in the company's fleet consist of contractor vehicles. The amount paid to these contractors is calculated as a fixed amount per trip, while all other expenses are covered by the contractor and the company does not bear any other costs. Only 10% of the vehicles in the fleet are owned by the company. The large sum of GRSEL’s cost base consists of commissions paid to those contractors, while personnel, fuel, maintenance & repair, and insurance are burdens only for self-owned vehicles.
We like the company for its massive growth potential both locally and internationally, efficient business model thanks to the contractor-based operations and optimization software, likely inclusion to BIST sustainability and participation indices that would attract fresh investor demand, sizeable hidden value in land investments, the catalyst of the possible restart of Uber-like taxi services and appealing valuation.

Growth Without the Need for Additional Working Capital and CAPEX

The company deals with personnel and student transportation. 90% of the vehicles in the fleet are owned by contractors. The commission paid to contractors is calculated as a fixed amount per trip. All other expenses are covered by the contractors implying no capex is needed other than increasing the contractor base when there is growth, and it is easy to curb down the fleet when demand is less. Fixed asset investments are only required for growth in its self-owned cars. Moreover, the company operates with low inventory and can finance itself comfortably with upfront payments. The company has no net debt.
Strong year Ahead: Targeting Europe in 2023

We expect the company to record US$130mn of revenues in 2023, which indicates 26% YoY Growth in US$ terms, excl.Hamburg contract. To be conversative we forecasted EBITDA margin of 14% for 2023 indicating 14% YoY EBITDA growth in US$ terms. Moreover, the company signed a non-binding letter of intent for bus transportation service in Hamburg/Germany. The contract includes a 2-year service with 25 buses starting from the second quarter of 2023, with a total contract size of EUR12mn, would roughly lead to a higher revenue growth than our expectation if the deal goes through.

 TFG Istanbul Menkul Değerler A.Ş.
  www.tfgistanbul.com/arastirma-raporlar
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