TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

Paint it Red Across the Board
" The sell-off yesterday at the BIST was coming, as we observed in the drop in the trading volume the previous day, as investors are becoming wary and cautious that the BIST's recent rally maybe overdone, and that a correction is needed for new/sceptical investors to jump in. As such, the BIST closed 0.78% lower to 7412, with a turnover of TRY 137.8bn, with the Conglos and Transportation stocks weighing down on the benchmark, whereas the Banks managed to diverge positively from their peers, while the Energy and Mining stocks were yesterday's best performers. Today, we expect to see a flat opening at the BIST.
" We also observed the better-than-expected financial results by the CEMENT companies as an excuse to dump their positions-no pun intended.
" The global markets also performed very badly yesterday, each country with its own issues, but never independent of each other. The European markets closed considerably lower yesterday on the back of the surprise tax on banking profits, coupled with the decline in China's exports, and the US markets fell after Moody's downgraded banks, and warned of other possible cuts to others.
" Waking up this morning was not so bright either, besides the much needed cool weather this morning in Istanbul, as China's consumer prices posted their first annual decline in more than 2 years, the CPI declining by 0.3% in July, while the PPI fell by 4.4%, thus triggering deflation risk and heightening concerns of a lag in economic recovery-surely, we will most likely hear new fiscal stimulus plans to shock the economy back to life.
" As of yesterday's close, the TRY is trading flat at 27.02 against the USD, a 29.65 against the Euro, whereas the DXY has relaxed slightly to 102.40. On the Bonds' side, the 2yr rates have risen by 46bps to 16.51%, however, the 10yr yields have fallen by another 16bps to 18.43%.
" On the Commodity front, Brent is trading calm at USD 85.75, while both ounce and gram GOLD prices have soared to USD 1931 and TRY 1678, respectively.
" At yesterday's meeting with investors, VP Cevdet Yilmaz, stated that single figure inflation for 2026 was their main target, adding that access to financing would be solved in 1.5-2 months, concluding that the new MTP would be announced in September.
" Please note yesterday that we downgraded DESA to HOLD and initiated our ISCTR coverage with a HOLD rating.
AGENDA:
" There are no major local or international macro new releases expected today.
CORPORATE NEWS:
" EREGL - POSITIVE - Do not be disappointed with EREGL's TRY4.0bn net loss for 2Q23 versus -TRY2.8bn expectation, it just stems from deferred tax expense. Pre-tax profit is a solid +TRY1.3bn! Revenues are 23% better than expectations, EBITDA is 12% over the consensus. These strong core business realizations indicate that worst could be behind us on the operational side of the business. The quarterly annualized EV/EBITDA stands at 10.5x, which is fair in our view. We recommend investors to be buyers at the dips rather than selling into these numbers.
" THYAO - POSITIVE: Solid 2Q23 results with EBITDA of TRY25.6bn that is 4% better than consensus and the TRY13.8bn net profit that surpassed analyst expectations by 16%. EBITDA margin of 24% is 1pp above the expectations (2Q22:22%). The stock is trading at 6.2x trailing EV/EBITDA and 6.7x P/E, both are not demanding at all. We expect positive market reaction for these numbers.
" AEFES - POSITIVE: Aefes recorded TRY38bn revenue for 2Q23, in line with market expectations with improvment in EBITDA margin from 19.4% in 2Q22 and 16.4% 1Q23 to 21.8%. The Company reported TRY8.3bn EBITDA and net income of TRY2.87bn, respectively 6% and 32% higher than analyst expectations. Besides EBITDA margin improvement, increase in net profit was 603% q-q and 101%y-y thanks to income from investment activities that included gains for Anadolu Etap merger and hard currency appreciations.
" SUWEN - POSITIVE: 2Q23 financials came out positive with net sales and net profit in line with our expectation of TRY457mn and TRY82mn. EBITDA however exceeded our estimate by 20% and stood at TRY159mn for the period. EBITDA margin for the quarter surged to 34.8% which was higher than 20.7% of last quarter and our forecasted 30.4% however it was still lower than 36.5% during the same period last year. Profitability during the quarter improved at the back of lower COGS and Opex expenses relative to robust sales. In all, we deem the results positive for the stock. With TTM EV/EBITDA of 10.78 and P/E of 19.85, earnings growth seems priced in to an extent.
" LOGO - NEUTRAL: The company posted 2Q23 financial in line with market expectation with net sales and EBITDA of TRY572mn and TRY174mn respectively. EBITDA margin came out at 30.4% vs estimated 29.7%. Net profit for the quarter also stood in line with estimated at TRY268mn.
" MPARK - POSITIVE: While Medical Park posted net sales in line with estimated at TRY3.7bn for 2Q23, EBITDA and net profit for the quarter exceeded market consensus by 8.5% and 47.2% respectively. EBITDA margin also surpassed forecasted by 148bps and stood at 24.3%. We deem the results as positive catalyst for the stock.
" AKSA - NEGATIVE: The company posted disappointing financials for 2Q23 with net sales, EBITDA and net profit lagging market expectation by 13%, 5% and 26% respectively. Net sales and EBITDA stood at TRY4bn and TRY839mn while the company posted a net profit of TRY373mn. EBITDA margin for the quarter was realized at 20.9% vs 19.3% expected. EBITDA margin was above 18.2% of last quarter however lower than 23.2% of 2Q22.
" YYLGD - NEGATIVE: Yayla Gıda reported TRY3bn revenue, inline with analyst expectations with deterioration in EBITDA margin from 8% in 1Q23 and 11.3% 2Q22 to 7% for the last quarter. The Company reported net income of TRY547mn 60% higher than analyst expectations thanks to FX gains. Increase in net income realized as up by 94% y-y and 163% q-q.
" GOODY - NEGATIVE: Goodyear's net sales increased 129% y-y. The Company's TRY207mn net profit and TRY528mn EBITDA went up by 68% and 60% respectively y-y. The 15.2% EBITDA margin in 2Q23 is higher than that of 14.2% in the previous quarter, but well below than the Company's EBITDA margin of %21.8 in 2Q22.
" KOZAL: As a result of the metallurgical test studies for approximately 4,758,000 ounces of ore detected within the scope of the Mollakara Gold Mine Project in the Diyadin District of Ağrı Province, 417,222 ounces of gold and 215,368 ounces of silver were converted into reserves. The company also announced that it decided to invest in gold and silver production for the Mollakara Project, and the contract was signed between Fernas İnşaat and The Company for the construction investment.



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