Market Watch (Şeker Yatırım)

Market Watch - Wednesday, August 7, 2024

Outlook:
 
The BIST100 Index started Tuesday on a positive trend, maintaining its positive outlook throughout the day, only to weaken amid rising sales pressure near the closing. The Index closed at 9,881.23, down 0.12%. While the Industrial Index rose 0.65%, the Banking Index diverged negatively, down 1.77% to lead the selling pressure. Despite the reactionary purchases seen in global markets yesterday, the BIST continued its weak and volatile performance. Profit realization continues, especially in banking stocks that have yielded over 80% returns since the start of the year. We think that, in addition to the volatility in global markets and mounting geopolitical risk, the lack of a short-term expectation supporting the BIST also increases selling pressure. We expect the BIST to continue its volatile course with stock-based divergences for some time yet, and recommend that caution be exercised in leveraged and credit transactions until the wavelengths decrease. Following the sharp sales recorded in global markets at the start of the week, reactionary purchases were observed yesterday. This morning, such purchases are observed in U.S. futures, German DAX futures and Asian stock markets. The balancing in global markets will continue if news flows support it. The VIOP30 Index ended the evening session down 0.18%. Locally, we expect the Benchmark Index to start Wednesday with a slightly positive trend and to continue its fluctuating course thereafter. SUPPORT: 9,750 - 9,600 RESISTANCE: 10,000 - 10,250.
Money Market:
The Lira was negative yesterday, weakening 0.70% against the USD to close at 33.6114. The currency also depreciated by 0.53% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were negative. The ten-year benchmark bond was traded within a range of 28.02%-28.57%, ending the day at a high of 28.57%, 35 bps above its previous closing.
Company News:
Isbank (ISCTR.TI; OP) is expected to announce its 2Q24 earnings results today after the market close. Our 2Q24 profit expectation is 10,396 million TL. We model a 26% quarterly, 44% annual earnings decline and a quarterly ROAE of 15.7%. Research Turkey market consensus is at TRY10,588mn (Negative).
According to inflation accounting provisions (IAS-29), Ford Otosan (FROTO.TI; OP) announced a net profit of TRY 5,976mn, down 43 YoY% (2Q23: TRY 10,556mn) in 2Q24. In 2Q24, due to the relatively weak FX rates, lower YoY domestic & export performance, and extended ramp-up period of new Custom & Courier, and the negative impact of inflation accounting on inventories and its subsequent influence on the cost of goods sold were effective in the declining net profit performance. The monetary gain of TRY 5,765mn (2Q23: TRY 3,937mn) and the positive impact of deferred tax income were the factors supporting the net profit in 2Q24.
Ford Otosan's total sales units in 2Q24 declined by 10% YoY and reached 139,159 units (2Q23: 154,753 units). In 2Q24, domestic sales revenues declined by 34% YoY, reaching TRY 25,353mn (2Q23: TRY 38,177mn), due to the decline in domestic LCV and PC sales and the pressure on the pricing environment in the market. Domestic sales volumes decreased by 23% YoY to 25,152 units (2Q23: 32,794 units) due to the increase in the base price for the SCT-exemption applied to disabled individuals, the GSR Regulation creating a competitive pricing environment in the market, the extended ramp-up period in new Courier models and the decline in LCV & HCV sales. The Company's export units decreased by 7% YoY in 2Q24 compared to 2Q23, reaching 114,007 units (2Q23: 121,959 units). Despite the positive effects of the product mix and the supportive effect of the Craiova Factory on foreign sales volumes, the Company's export revenues decreased by 11% in 2Q24, reaching TRY 81,426mn (2Q23: TRY 91,841mn) due to the negative impact of the flat FX rate and shrinking export volumes. In conclusion; the Company achieved sales revenue of TRY 106,779mn in 2Q24, down 18% YoY.
Ford Otosan announced an EBITDA of TRY 7,061mn (2Q23: TRY 13,798mn) in 2Q24, down 49% YoY. In 2Q24, the Company's GP margin printed at 9.7%, down 4.2 p.p. due to the negative impact of inflation accounting on inventories and its subsequent influence on the cost of goods sold, and reduced domestic volumes. The EBITDA margin declined 4.0 p.p. compared to 2Q23, reaching 6.6% in 2Q24 (2Q23: 10.6%).
FY2024 expectations: The company expects an 1,000-1,100k unit (800-900k unit) domestic light vehicle market with Ford Otosan branded-vehicle sales of 100-110k units. The Company has reduced its export volume expectation to 560-610k units (Romania: 210-230k units) (TR: 350-380k units). It forecasts a wholesale volume for 2023 of 660-720k units. The total production forecast is at 650-700k units (Craiova Plant production expectation: 250-270k units, TR: 400-430k units). Ford Otosan's 2023 CapEx target is EUR 900-1,000mn (General Investments: EUR 170-190mn, Product Related Investments: EUR 730-810mn) (Negative).



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                               Yasal Uyarı
 
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