TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• The gains accelerated at the second half of the day, after a rather dull and sideways opening, as the BIST closed 1.63% higher at 5323, with a turnover of TRY 85.1bn, led by the gains in the Conglomerates and Energy stocks, whereas the Banks closed below the benchmark. The BIST diverged positively from its peers yesterday, as the European and U.S markets closed lower as the higher-than expected PMI figures from China, spoked fresh inflation concerns across the globe, followed by hawkish Fed-speak thereafter. Consequently, the US 10yr bond yields have jumped over the 4% ticker.
• On the BIST30 front yesterday, FROTO, TKFEN and VESTL led the gains, whereas KOZAL, KOZAA and PGSUS were the most sold.
• Today, we expect a flat/down opening at the BIST, parallel to the mood in the global markets.
• As of yesterday’s close, the TRY is trading flat at 18.89 against the USD, but slightly stronger against the Euro at 20.11, and the DXY has risen slightly to 104.60. The 2yr bond yields were unchanged at 10.49%, whereas the 10yr yields rose by 46bps to 10.62%.
• On the commodity front, Brent has risen to USD 84.27, encouraged by the growth figures from China, whereas ounce and gram GOLD are trading flat at USD 1834 and TRY 1113, respectively.
• Minneapolis Fed President Neel Kashkari, a voting member, said he was inclined "to push up my policy path" after a recent government report showed the Fed's preferred inflation index accelerated in January to a 5.4% annual rate, more than double the Fed's 2% target and slightly faster than the month before. He added that while he was still on the fence on the target federal funds rate, "at this point...I lean towards continuing to raise further," beyond the 5.4% level that he previously thought would be adequate to lower inflation. Meanwhile, his Atlanta counterpart, Raphael Bostic stated that “He still feels a federal funds rate set in a range of from 5% to 5.25% would be adequate, an outlook he has maintained despite last week's high inflation reading and an unexpectedly strong January jobs report. However he said the policy rate would need to be kept at that level "until well into 2024," with the Fed committed to not "reversing course" until it is clear inflation is subsiding.
4Q22 FINANCIAL RESULTS:
• KOZAL: NEGATIVE - Koza Altın’ released disappointing figures for 4Q22. The EBITDA is 57% below the consensus mean and came in at TRY455mn that is almost half the lowest forecast in the market. The EBITDA margin is 12pp below the expectations at 42%, which is the lowest ever margin for the company. Both y-y sales and EBITDA growth figures remained below the inflation at around 40% levels as it gold production plunged down by 20% in 2022 down to 195k ounces. The company trades at 22x EV/EBITDA and 19x P/E, which are stretched in our view.
• PETKM: NEGATIVE - Petkim posted operational loss for 4Q22. Out of 13 analyst estimates, no one has overseen a TRY149mn EBITDA loss from Petkim (Consensus: TRY434mn, lowest TRY174mn). While the net profit looks 48% above the expectations, it actually points to a loss if we are to isolate deferred tax income. The management claims that margins bottomed out due to weaker demand with ample supply and customer destocking in the sector. Petkim’s ethylene capacity utilization for the final quarter was just 48%, down from 66% a quarter earlier and 98% in the final quarter of 2021.
• SAHOL POSITIVE-SAHOL posted TRY16613mn net profit in its 4Q22 financials. The net profit is 53% above the consensus mean.
• THYAO POSITIVE- Revealed a staggering net profit of TRY8.93 billion in the fourth quarter, a whopping 246% increase from pre-pandemic 2019 levels, despite the dismaying -67% quarter-on-quarter downturn. The net profit outshone market forecasts by a remarkable 39.7%, while EBITDA and revenues met expectations. Unfortunately, passenger numbers saw a dismal decline, registering a meager 72k, a -3.3% drop compared to 2019 figures. The EBITDA margin clocked in at 23.4, a hair's breadth below market expectations by 30bps
NEWS FLOW:
• TOASO: Disclosed that Tofas will acquire the entire share capital of Stellantis Otomotiv Pazarlama A.S., the Stellantis Türkiye distribution company for €400mn. As a result, all Stellantis brands available for distribution in Turkey - Alfa Romeo, Fiat, Citroën, DS Automobiles, Jeep, Maserati, Opel and Peugeot - will be distributed by Tofas. Stellantis will allocate the production of the “K0” model to Tofas, in both mid-size light commercial vehicle and passenger car versions, planned for five brands with a target production launch from the beginning of 2025. The current Doblo production is planned to continue until the start of work on the production lines of the “K0” model in July 2023. Current Fiat Egea/Tipo project is extended until end of 2025. The transaction, which will be subject to requisite regulatory approvals, including the approval of the relevant competition authorities, is expected to close in the second half of 2023.
• Suwen: Disclosed that it has opened its first store in Azerbaijan in February, and that 8 of its stores were damaged and inoperable as of February 28 due to the earthquake, pending a damage control report, with a current store count of 163.
• HALKB/VAKBN NEUTRAL: Disclosed that the 16% acquisition of Birlesim Varlik Yonetim A.S shares, belonging to the Savings Deposit Insurance Fund, for TRY 119.284.800, has been completed.
AGENDA:
• On the local front today, Minutes from last week’s MPC Meeting, and the Weekly Foreigners’ Net Stock/Bond holdings will be released, whereas the Eurozone will be following the CPI and U.S. will announce the Weekly Jobless Claims numbers.
 
 TFG Istanbul Menkul Değerler A.Ş.
  www.tfgistanbul.com/arastirma-raporlar
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