SAHOL TI /Teleconference Highlights and updated NAV table (Oyak Yatırım)

We recently held a teleconference meeting with Sabancı Holding (SAHOL). The highlights of the teleconference are as follows:
• On 24.05.2023, Sabancı Holding announced for the first time that it decided to purchase Exsa shares owned by Çimsa (CIMSA) and other shareholders in Exsa in exchange for SAHOL shares. As a result of the planned merger of Sabancı and Exsa, the amount of capital increase to be realized is TL72.91mn increasing SAHOL’s capital to TL2.11bn from TL2.04bn.
• Apart from recently shared details about the swap ratios for the aforementioned merger, SAHOL’s disclosure also included an independent valuation report of the conglomerate dated 21.06.2023 with revaluations of non-publicly traded companies which are also reflected to our NAV in the document attached. For instance, in these valuations, Enerjisa Üretim A.Ş.'s valuation of TL73.72bn draws attention. Please recall that SAHOL’s 1Q23 presentation had included 1x BV figure of USD771mn (TL17.77bn with end-1Q23 USD/TL) in the conglomerate’s NAV.
• Insurance side continues to be neutral and although financial returns declined. Aksigorta (AKGRT) has strategically downsized on the vehicle insurance side due to the risk arising from rising costs as a result of inflation.
• Brisa (BRISA) has a positive outlook and margins are improving on a quarterly basis.
• Kordsa (KORDS) maintains its weak outlook shared with 1Q23 results. Production lost pace since customer demand weakened due to the global recession, but composite side looks strong.
• Cement segment looks robust. Improvement in margins in 1Q continues in 2Q. Lower petcoke and energy costs are supporting margins. In addition, continued strong demand in the domestic market has paved the way for higher prices. Solid demand in the domestic market enabled cement companies to switch from exports to domestic market.
• Carrefoursa (CRFSA) competes with its rivals in terms of margins, but indebtedness continues to weigh on net income.
• On Teknosa (TKNSA) side, sales increased due to the expectations of weaker TL. The e-commerce arm of the company also continues to do well. The company has no plans to open new stores but they intend to transform their stores into "experience centers".
• In the analyst meeting held by the Holding back in April, SAHOL’s target was to make 75% of their investments in different unregulated sectors and actuals are in line up until now. Focus areas of investments are: Climate Technologies (55%), Advanced Materials Technologies (38%) and Digital Technologies (7%). Details on investments are as follows:
• Investments in energy and climate technologies:
o Enerjisa Uretim’s 1000MW wind plant capacity increase which is planned to be gradually completed in 1Q26.
o Establishment of a 272 MW power plant in the US. The investment is expected to be completed in 1Q24.
• Investments in Advanced Material Technologies:
o CIMSA's USD45mn worth capacity increase investment in Calcium Aluminate Cement (CAC)- strong cement type due to this niche usage area- contributes positively to the financials.
o BRISA acquired 88.89% of Arvento for TL337mn in March 2022. Arvento is one of the top leading fleet telematics companies, offering wide range of technology products and solutions worldwide. It will contribute to the mobility solutions of the tire business.
• Investments in Digital Technologies:
o Acquired cyber security company Radiflow for USD30.5mn in May 2022. The company is growing above its market gaining higher share.
o SEM, a digital marketing company, 100% of which was acquired for USD14.8mn is one of the investments that the Holding attaches high importance to.

In Sabancı Holding’s aforementioned valuation report, fixed assets belonging to Sabancı Holding were valued at TL2.15bn. According to our NAV table which can be seen in the document attached, when the recently shared valuations of unlisted companies and fixed assets are included, the NAV discount increases to 41.5% compared to 31.4% discount at last week’s closing with previous content.



Oyak Yatırım Menkul Değerler A.Ş.
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