Market Watch (Şeker Yatırım)

Market Watch - Wednesday, March 27, 2024

Outlook:

The BIST100 Index started Tuesday flat, but followed a trend of profit-taking during the rest of the day. The Benchmark Index closed at 8,807.38, down 2.46%. With stocks of high weight such as SAHOL, TCELL, BIMAS making the highest negative contribution to the Index, the Banking Index lost 2.60% and the Industrial Index fell 2.35%. Despite reactionary purchases in the BIST 100 Index, which completed its 3rd consecutive day of decline, we expect the fluctuating course to continue ahead of the election. Deposit interest rates remain an important alternative in the short term, and rising stock loan interest rates also limit interest in BIST. That being said, we maintain our view that it would be appropriate to view sharp declines as buying opportunities as long as current policies continue in the medium term. In global markets, yesterday European Stock Markets closed with increases, while profit sales continued in the U.S. bourses. This morning Asian stock markets have a mixed outlook while the U.S. futures and German DAX futures are positive. As long as expectations regarding the global loosening process prevail, we think that the rising trend in major stock markets will be maintained amid limited sales. We expect data and statements from Central Banks to continue guiding global markets. The VIOP30 Index completed the evening session down 0.04%. Locally, we expect the Benchmark Index to start Wednesday on a mild selling trend and thereafter seek to return to an incline with future purchases. SUPPORT: 8,700 - 8,600 RESISTANCE: 9,000 - 9,250.
Money Market:
The Lira was negative yesterday, weakening 0.10% compared to the USD to close to 32.1814. In addition, the currency depreciated by 0.11% against the basket composed 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 26.52%-26.93%, ending the day at a high of 26.93%, 39 bps above its previous closing.
Company News:
According to inflation accounting provisions (IAS-29), Aselsan's (ASELS.TI; OP) net profit increased to TRY 7,290mn at YE23 from TRY 1,282mn at YE22 - A net other operating gain of TRY 12,349 million at YE23 (vs. TRY 6,363mn at YE22) due to Fx differences from operations, resulting from the IAS-29 effect supported the bottom-line. The Company recorded net sales revenue of TRY 73,593mn in YE23, up 10.1% YoY on higher project deliveries, factoring in the IAS-29 impact, compared to YE22 (TRY 66.860mn). EBITDA of TRY 16,027mn was up 14.2% YoY due to the increased top-line, including the IAS-29 impact. The gross margin rose 0.6pp YoY to 27.3% in YE23 on lower COGS, while the EBITDA margin climbed 0.8pp to 21.8%. The Company generated TRY 10,145mn from net monetary loss in YE23 (vs. TRY 14,574mn at YE22), while the net financial loss rose to TRY 7,652mn at YE23 from TRY 4,341mn at YE22, including the IAS-29 impact. The net debt position increased to TRY 13,328mn for YE23 from TRY 8,480mn for YE22. Thus, Net debt/EBITDA realized at 0.8x at YE23 (0.6x in YE22). Given the disclosed YE23 financials, we maintain Outperform and have a TP of TRY 62.50/shr, implying 18% upside potential. We note that ASELS stock has increased 18%, also underperforming the BIST-100 index by 0.1%, since the start of 2024.
Backlog increased to USD 10.9bn as of YE23 (USD 8.2bn in YE22 - USD 10.8bn in 9M23) - Concerning publicly-disclosed projects, the company undertook around USD 4,993mn in new projects in YE23 (a total of USD 1,604mn in YE22, vs. USD 2,022mn in YE21). The company received new orders worth USD 601mn from abroad in 2023 (USD 415mn in 2022).The backlog consists of 95% defense and 5% non-defense. As of YE23, 44% of backlog contracts are denominated in USD, 31% Euro, and 25% in TRY.
Aselsan's guidance for 2024 - Aselsan expects net sales revenue growth of >10% in TRY terms, with an EBITDA margin of >22% for YE24, including the IAS-29 impact. The Company budgets TRY 14.0bn capex for 2024, including the IAS-29 impact.
Garanti BBVA (GARAN.TI; OP) has sold TRY1.5bn from its NPL book for TRY525.8mn to Dunya Asset Management, indicating a recovery rate of 45.8%.
Total sales amount account for 5.3% of the bank's NPL book as of 4Q23, and should reduce the NPL ratio by 11bps. For comparison, the recovery rate for the bank's recent NPL sale was 41.3%.
Sisecam (SISE.TI; OP) has announced that a total of 1,000,000 nominal shares (total amount of TRY 46,080,000) were repurchased within a price range of TRY 45.98 - TRY 46.16 per share (average price TRY 46.08) at the BIST on March 26, 2024. Total repurchased shares to date correspond to 1.924% of the company's capital (including the disposal of a portion of the repurchased shares).



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