Market Watch (Şeker Yatırım)

Market Watch - Wednesday, February 14, 2024
Outlook:
The BIST100 Index started Tuesday on a positive trend and peaked at a record high of 9,217.45. Yet trading was weak throughout the day and the Index closed at 8,994.00, down 1.97%. While stocks with high index weights such as ASELS, GUBRF, HEKTS, and SASA pulled the index up, THYAO, BIMAS, TCELL, and SAHOL, which have led the index rise since the start of January, made the strongest negative contribution. The Banking Index lost 0.96% and the Industrial Index shed 1.57%. Since there is limited upside potential for many stocks at the BIST, we continue to expect profit sales. Our target for the BIST100 Index, which is at 11,700, offers less than 30% upside potential. However, from a medium-term perspective, interest in the BIST will be maintained as long as confidence in rational policies, the decline in country risk premium, and foreign investor interest continue. Thus, sharp withdrawals will present buying opportunities. On the global front, markets followed U.S. CPI inflation data yesterday. The data printed at 3.1%, above the expectation of 2.9%. Subsequently, the perception that the Fed should not be hasty in reducing interest rates strengthened and risk appetite weakened. The U.S. and European Stock Markets closed Tuesday with declines of up to 1.3%. This morning, the U.S. futures are mixed, German DAX futures are sellers, and Asian Stock Markets are buyers (New Year's holiday continues in China). In general, we expect economic data to guide risk appetite. Euro Zone 4th Quarter growth data will be followed today. The VIOP30 Index closed the evening session flat. Locally, we expect the Benchmark Index to start Wednesday with a negative trend, and despite potential reactionary purchases during the day, those will merely fuel profit-taking in the short term. SUPPORT: 8,900 - 8,750 RESISTANCE: 9,150 - 9,300.
Money Market:
The Lira was negative yesterday, weakening 0.06% compared to the USD to close to 30.7250. In addition, the currency appreciated by 0.14% against the basket composed of $0.50 and €0.50. Meanwhile, the local fixed income markets were relatively flat. The ten-year benchmark bond was traded within a range of 26.44%-26.61%, ending at the 26.57%, 4 bps above its previous closing.
Company News:
HalkBank (HALKB.TI; MP) is expected to announce its 4Q23 earnings results today after the market close. Our 4Q23 net income estimate is TRY2,036mn (-34% QoQ, -65% YoY) with a rather weak quarterly ROAE of 6.7%. The Research Turkey market consensus is TRY2,202mn.
Isbank (ISCTR.TI; OP) posted TRY20,219mn net income (-2% QoQ) in its 4Q23 bank-only financial statements. This strongly beats our TRY16,103mn call and the TRY17,526mn RT consensus estimate by 26% and 15%, respectively. 12M profit of TRY72,265mn jumped 17% YoY. 12M ROAE fell to 33.3% in 2023 from 58.2% in 2022, above the budgeted ~30%. The main drivers of deviation from the estimated figures are: negative surprise in core banking revenues and other income, and positive surprise in ECL.
TRY3bn tax revenue boosted profitability. Contrary to the trend seen in other private banks, the bank posted TRY1.1bn trading loss. Additionally, a free provision of TRY3.5bn has been set aside for possible risks. (Total: TRY10bn).
For FY24, the bank is targeting >35% ROAE (Seker: 30.1%) on the back of;
1) ~50% TRY loan growth (Seker: 40%),
2) Swap adj. NIM: ~4.0% (Seker: +100bps),
3) Fee growth: >100% (Seker: 65%),
4) OPEX: Average CPI (Seker: 48%),
5) Total CoR (net, exc. currency impact) of ~150bps, vs. 96bps in YE23. (Seker: 150bps).
The bank's growth expectation of ~50% in TRY loans and >100% in fee income for 2024 is optimistic compared to other banks, and its budget of >35% ROAE is compatible with our expectations. For 2024 we model 25% earnings growth for the bank.
There should be a positive market reaction to the results. We maintain our TP at TRY38.95 offering 48% upside. We also maintain our "Outperform" recommendation. The bank is trading at a 2024E P/E of 3.0x (1% discount to domestic peers) and P/BV of 0.82x with a ROAE of 30.1% (Positive).
Pegasus (PGSUS.TI; OP) has released its monthly traffic figures for January 2024. The carrier's total PAX rose by 24% YoY for the month, and the load factor was up 0.7 pp YoY to 85.2%. Domestic PAX rose by 20% YoY to 1.07mn. International PAX improved by 27% YoY to 1.59mn for the month. The domestic load factor rose by 2.5 pp YoY to 88.9%, while the international load factor slightly declined 0.3 pp YoY to 82.8% (Positive).
TAV Airports Holding (TAVHL.TI; OP) announced a net profit of €73mn in 4Q23, above the market average expectation and our forecast (4Q22: €-6.8mn). Thanks to the positive impact of increasing deferred tax gains with inflation accounting regulations and strong operational profitability, TAV achieved net profit growth in 4Q23, reaching a net profit of €73 million. The Group's total sales revenues increased by 10% YoY in 4Q23, reaching €327.7mn (4Q22: €298.9mn). TAV Airports was able to achieve €63.4mn EBITDA (4Q22: €55.2mn), with an increase of 14.9% YoY in this period.
The Company's 2024 & 2025 Expectations: The Company has announced its guidance for 2024 & 2025. It expects sales revenue of around €1,500-1,570mn for 2024. It anticipates total PAX at 100-110mn for 2024 (Int' PAX: 67-73mn). The Company also expects EBITDA of around €430-490mn, and €230-270mn CapEx for 2024. The net debt/EBITDA target is expected at 3.5-4.5x for 2024. The Company foresees net sales revenue of around 14-18% CAGR (2022-2025) & total passenger traffic of around 10-14% CAGR (2022-2025) in 2025 (including the New Ankara (2025+) Esenboga concession). The Company has an EBITDA margin expectation in 2025 above that achieved in 2022. It expects a Net Debt/EBITDA ratio of around 2.5-3.0 by the end of 2025. TAV's EBITDA expectation for 2025 is around 14-20% CAGR (2022-2025) (Positive).
According to its financials with inflation accounting provisions, Tofas (TOASO.TI; OP) closed the 2023 with a net profit of TRY 15,083mn, rose by 60.9% YoY (2022: TRY 9,37mn). In terms of sales revenues, the Company achieved a net sales revenue of TRY 127,601mn, rose by 2.9% YoY in 2023 (2022: TRY 124,019mn). The EBITDA figure increased by 8.6% YoY and reached TRY 19,623mn (2022: TRY 18,064mn). EBITDA margin rose by 0.8 p.p. YoY, rose from 14.6% in 2022 to 15.4% in 2023.
Tofas has announced its 2024 guidance. The Company expects a 800-1,000k domestic light vehicle market with Tofas-branded vehicle sales of 160-180k units. It anticipates export shipments of 60-70k units. Its CapEx target is at EUR 200mn. The Company expects the total production volume of between 180-210k units. It expects to achieve a PBT margin of over 10% for 2024.
Zorlu Energy (ZOREN.TI; MP) has decided to sell all of the 895,150,000 shares with a nominal value of TL 1 each representing the capital of its 100% subsidiary Zorlu Enerji Dağıtım, together with all its rights and debts, to Palmet Energy (PALMT.TI; N/C). In this regard, the "Share Purchase Agreement" was signed between the parties. It was stated that the sales amount would be determined on the completion date of the transaction, upon obtaining the necessary legal permissions.



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