TFG Istanbul Morning Report (TFG Istanbul Menkul Değerler )

• The BIST pared Friday’s fluke sell-offs yesterday, closing 3.77% higher at TRY 167.6bn, with most Banks, with the exception of GARAN due to its higher-than peers’ FX-Protected Deposits, recovered their losses from a near loss of 4-5%, to also close positively. As for the brokers, Friday’s biggest sellers were yesterday’s biggest buyers. The Industrials were the locomotive behind the gains, thanks to the buying appetite in the heavy-weight TUPRS and EREGL shares, however the Telco’s were yesterday’s biggest upward movers.
• As such, TUPRS and TCELL closed limit up, and were joined at the top by EREGL and BIMAS-a crowd favourite in inflationary terms, especially amid Friday’s expected survey of around a 60% inflation rate. At the bottom-end of the table, GARAN closed 1.80% and AKBNK 1.20% lower, followed by GUBRF-thus just 3 blue chip stocks closed in the red zone yesterday. Amid speculations of a low-interest home loan rate campaign, EKGYO closed yesterday 5.61% higher.
• Today, we expect the positive mood to continue.
• The TRY is currently trading weaker at 27.20 against the USD, and at 29.70 against the Euro, while the DXY has fallen to 103.19. Both the 2yr and 10yr Bond yields rose by 84bps and 47bps respectively to 18.07% and 19.12%, respectively.
• On the commodity front, Brent has fallen slightly to below the USD 84 ticker to USD 83.96, whereas ounce GOLD is trading flat ahead of Thursday’s Jackson Hole Meeting, gram GOLD has risen slightly to TRY 1658.
• S&P Global Ratings downgraded five regional US banks by one notch and signaled a negative outlook for several others yesterday, noting that the current “tough” lending environment caused it to downgrade the five banks, which include KeyCorp, Comerica Inc., Valley National Bancorp, UMB Financial Corp. and Associated Banc-Corp. The US 10yr Treasury Bonds hit their highest level since November 2007 at 4.34%,
• On the European continent meanwhile, the German producer prices fell for the first time since 2020, as easing energy price pressures added to hopes that inflation in Europe's largest economy could abate further. July producer prices were down 6.0% compared with the same month last year.
AGENDA:
• There are no major local macro releases expected today, whereas the US will be disclosing the July existing home sales figures.
2Q23 FINANCIAL RESULTS:
• BIOEN: SLIGHTLY POSITIVE: Net sales for 2Q23 stood at TRY391mn, 12.6% above estimated while EBITDA came out in line with forecasted at TRY84.7mn. EBITDA was up 13.1% qoq and down 3.4% yoy. EBITDA margin of 21.65% lagged consensus by 362bps due to elevated top line. Net profit exceeded market expectation by 70.9% and stood at TRY114.8mn thanks to strong financial income as well as lower effective tax rate in its 2Q23 financials. We expect neutral to slightly positive market reaction.
• DOAS: NEUTRAL: Totally in line with expectations Dogus Oto posted TRY5.75bn EBITDA and TRY5.13bn net profit in its 2Q23 financials. We expect no market reaction to these numbers. The theme for importers will be downbeat particularly for consumer discretionary stocks for the rest of the year due to higher interest rates and softer financing alternatives.
• FRIGO: NEUTRAL: The company posted 2Q23 net sales of TRY160mn, up 20% qoq and 62% yoy. EBITDA came out at TRY38mn up 112% qoq and 14% yoy. EBITDA was in line with our estimate however net sales lagged our estimate by 14% hence EBITDA margin evolved at 24% vs our forecasted 20.6%. Despite improved operational profitability the company posted a net loss of TRY0.4mn vs net profit of TRY8mn last quarter and TRY9.3mn net profit for 2Q22. Bottom-line was under pressure due to higher net financial expenses. Debt levels surged during the quarter but it should be noted that Frigo closed its FX loans completely this quarter. We deem results as neutral and expect improvement in top-line and profitability in second half of the year.
• OZKGY: POSITIVE: The company posted EBITDA of TRY246mn exceeding expectation by 81%. EBITDA was up 36.5% qoq and down 50.2% yoy. Net sales and net profit stood in line with consensus at TRY340.8mn and TRY7.9bn. EBITDA margin for the quarter evolved to 72.2% vs 37.9% estimated. Bottom-line was supported by revaluation of investment property income of TRY6.9bn during the quarter. We deem the results positive for the stock.
• PENGD: NEGATIVE: 2Q23 financials came out disappointing with net sales of TRY91mn (down 43% qoq and up 5% yoy) and EBITDA of TRY10.3mn (down 59% qoq and down 56% yoy). The company also posted a net loss of TRY22mn. EBITDA margin stood at 11.3% for the quarter vs 15.9% of 1Q23 and 26.1% of 2Q22. Profitability was affected by higher operating expenses as opex to sales stood at 25.2% which is the highest ever opex to sales ratio for the company, it was driven up due to higher personnel expense, production costs and other overhead costs. Expansion in net financial expenses which was double of 2Q22 at TRY30m further pressured bottom line. Share of overseas sales in gross revenue was 54% while of domestic sales was 46% during 2Q23. We deem results as negative for the stock.
• YATAS: POSITIVE: 2Q23 net sales came out in line with estimated at TRY2.6bn however EBITDA stood at TRY369.5mn which exceeded expectations by 5.8%. EBITDA margin evolved to 14.3%, 88bps higher than forecasted. Net profit of TRY207mn also exceeded market consensus by 29.3%. We deem results as positive for the stock.
CORPORATE NEWS:
• According to media reports, price hikes have been made on sugar again, accordingly, we may continue to see the uptrend continue on the related commodity-linked stocks such as KAYSE and KTSKR shares.
 
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