TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• The BIST managed to continue yesterday’s buying appetite, despite a brief selling pressure, to close the day on a gain of 0.77% at 5237, thus diverging positively from its peers, with a relatively high turnover of TRY 94.4bn, a welcoming sign amid the recent risk-off, and disinterested mood at the market.
• The Banks were little changed, after the previous day’s surge, whereas the Conglomerates and Industrials rose by 1.40% and 0.65%, respectively.
• KRDMD continued its surge, and topped the BIST30 advancers, and was followed by SISE and PGSUS, whereas ISCTR, VESTL and EKGYO were the most sold.
• Today, we expect the positive mood to continue into the new month.
• As of yesterday’s close, the TRY is trading flat against both the USD and the Euro at 18.88 and 20.00, respectively, whereas the DXY is a a tad higher at 104.85. The 2yr bond yields fell by 17bps to 10.49%, whereas the fall in the 10yr yields was more profound, retreating 33bps to 10.16%.
• On the commodity front, Brent is trading slightly higher at USD 83.80, and both ounce and gram GOLD prices are calm this morning at USD 1831 and TRY 1112, respectively.
• According to the Associated Press, inspectors from the United Nations nuclear watchdog found uranium particles enriched up to 83.7% in Iran’s underground Fordo nuclear site.
• The Turkish economy grew by 3.5% in the fourth quarter of 2022 vs the Est. 2.8%, and 5.6% for 2022.
• According to the Official Gazette, a 75% discount rate will be applied for cash brought back to Turkey in capital increases from abroad.
4Q22 FINANCIAL RESULTS:
• AEFES NEGATIVE: Aefes posted a net profit of TRY53mn, surpassing the market's mean estimate by a remarkable 268%. Despite the positive surprise in net profit, EBITDA fell short of expectations by 8.1%, indicating an unexpected result. Moreover, the EBITDA margin was a lacklustre 13.2%, 1.4 pp lower than expectation. Aefes' sales experienced a significant decline of 25% q-q, while EBITDA plummeted by 56%, presenting a considerable setback. Regrettably, Aefes' outlook for 2023 was unsatisfactory, forecasting a contraction of 100-200bps in consolidated EBITDA margin and 300bps in beer group EBITDA margin. AEFES guided that FCF generation will be under pressure in 2023 mainly due to phasing of some payables in international beer operations to following year.
• ALKIM NEGATIVE: The company’s financials for 4Q22 were below market expectations. Net profit stood at TRY119mn which was 23% below anticipation while EBITDA was TRY170mn which was 20% lower than market forecasts. Net sales for 4Q22 was also 16% below market expectation at TRY750mn. EBITRDA margins for 4Q22 stood at 22.7%, 130bps lower than consensus. We deem 4Q22 financial results as negative.
• ASELS POSITIVE: ASELS posted TRY6124mn net profit, TRY5365mn EBITDA and TRY17553mn sales in its 4Q22 financials. The net profit is 49% above the consensus mean, net sales is 12%above the consensus mean, EBITDA is 31% above the consensus mean due to higher than expected EBITDA Margin (Consensus mean: 26.3% realized 30.6%). In 4Q22, new contracts worth USD680mn were signed and total outstanding orders reached USD8.2bn (3Q22: USD7.6bn). Defense and non-defense business accounted for 92% and 8% of total outstanding orders, respectively. Net profit after adjusting for the deferred tax income is 11% above expectations. Cash collections is strong as net debt came down by TRY2.5bn. We expect positive reaction on the stock that trades at 10.6x trailing earnings.
• AKSA: NEGATIVE: AKSA posted TRY649mn net profit, TRY1100mn EBITDA and TRY11908mn sales in its 4Q22 financials. The net profit is 42% below the consensus mean, net sales is in line with the expectations and EBITDA is 31% below the consensus mean due to lower than expected EBITDA Margin (Consensus mean: 12.8% realized 9.2%).
• BNTAS: NEUTRAL: Posted an accounting net profit of TRY8mn in Q422, but this is entirely due to the increase in depreciation-like expenses after the revaluation in this quarter. Quarter-on-quarter sales increased by 21.5% and equity after revaluation increased by 35% quarter-on-quarter to TRY510mn. We deem neutral as the sales are above our expectation but the margins fall q-q.
• DOAS NEGATIVE: DOAS reported a lucrative net income of TRY2.36bn in Q4, which sadly fell short of expectations by 7.8%. Meanwhile, EBITDA was dismally lackluster with a 24.5% shortfall from market expectation. The EBITDA margin was only 13.2%, rather than the anticipated 18.5%. DOAS proffered guidance that their car sales, which amounted to 85.9k in 2022, are expected to increase to 96k in2023, marking an upswing of 11.7%.
• GOODY NEGATIVE: Posted TRY142mn net loss, TRY250mn EBITDA and TRY3402mn sales in its 4Q22 financials. The net sales are in line with our expectations, while EBITDA is below 30% from our expectations due to lower EBITDA Margin (Our expectation: 11%, realized: 7.3%). Net income was TRY142mn loss whereas we were expecting TRY160mn profit mostly due to higher than expected financial expenses and other expenses. Overall, we were expecting EBITDA margins to normalize from their highs in last years to around 9.5% but the margin erosion may be higher than our expectation based on these results. We deem the results negative for the company.
• INDES POSITIVE: INDES posted TRY146mn net profit, TRY440mn EBITDA and TRY8126mn sales in its 4Q22 financials. The net profit is 28% below the consensus mean while net sales is in line with consensus mean, EBITDA is 22% above the consensus mean due to higher than expected EBITDA Margin (Consensus mean: 4.2% realized 5.4%).
• MGROS NEGATIVE: Migros posted a net profit of TRY1.16bn in Q422, exceeding the market's mean estimate by a noteworthy 114%. Nonetheless, upon deducting TRY916mn in deferred tax income, the net profit suffered a substantial decline, falling short of market expectations by 54%. Operationally, EBITDA failed to meet expectations by 14%, reflecting an unexpected setback. Likewise, the EBITDA margin demonstrated an unsatisfactory figure of 6.3%, 1.4pp lower than the market's estimated value. Migros has set lofty guidance for the upcoming financial year, projecting sales growth of 75-80%, an EBITDA margin of 7-7.5%, and an expansion plan of 365 new store openings.
• SUWEN NEGATIVE: Suwen posted net profit of TRY53mn, EBITDA of TRY97mn and net sales of TRY313mn for 4Q22. Sales grew by only 2.9% qoq whereas they were up 158% yoy. EBITDA numbers for 4Q22 were down 10.5% qoq and up 174% yoy, net profit also saw a decline of 29% qoq and an increase of 317% yoy. EBITDA margin saw a contraction of 430bps qoq and stood at 31.1% and net profit margin for the quarter also declined by 750bps qoq to 16.8% in 4Q22. The margin compression was mainly due to dent in gross margin and higher financial expenses during 4Q22. We deem the 4Q22 results negative for the company.
AGENDA:
• On the local front, the PMI figures will be announced, whereas on the international side, the German Retail Sales and PMI figures, as well as the PMI figures from the Eurozone, China and the U.S. will be disclosed, as well as the U.S. Construction and ISM Manufacturing Data.


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