Company Update Report: Galata Wind (GWIND)

Rating:                       Outperform

Price (TL):                       23.72

Target Price (TL):           38.00

Potential Return:               60%


Geographically Dispersed Capacity Expansions

3Q23 Results Overview: Strong seasonality and a higher USD/TRY rate helped capture a top-line increase of 39% (QoQ: +89%) for Galata Wind at TL481mn in 3Q23. No carbon sales were realized in 3Q23 (9M23: TL26mn). COGS was posted as TL120mn indicating a YoY increase of 69%. Bulk of costs came in from production expenses due to higher CPI readings, this brought down gross margin to 75.0% indicating a decline of 438bps YoY. EBITDA increased by 95% QoQ and reached TL360mn, while also up 26% YoY. EBITDA margin increased by 205bps QoQ to 75.0% (3Q22: 82.7%).

Net financial expenses came in at TL64mn in 3Q23 compared to financial expenses of TL47mn in 3Q22 via higher derivative transaction expenses. Deferred tax income came in at TL50mn. Net cash drawdown reverted and increased to TL81mn this quarter (2Q23: TL31mn). Lastly, net income was posted at TL349mn, up 22% YoY (QoQ: +58%).


Key Estimates

EMRA approved the pre-license applications for electricity generation facilities (with storage) of Galata Wind for a total of 350 MW for 7 separate plants. We have incorporated these prospective capacity additions in our forecasts for 2027-2029 with gradual production kick starts, while assuming YEKDEM (Renewable Energy Support Scheme) unit sale prices. We utilized the average of the expected capacity utilization rates (35.39%) of our existing wind power plants in 2027 for the electricity generation calculation for the 6 WPP’s that have received pre-licenses. Similarly, we utilized the same methodology for the only approved SPP.

Storage included energy plants in essence ought to have comparatively higher CUR readings compared to standard plants, ergo our methodology carries upside potential. We incorporated 300 MW of capacity in Europe to be in production by the start of 2027, while assuming unit sale price of USD80/MWh. In Turkiye, WPP capacity increase of 13 MW at Taspinar was assumed operational by 1Q24, while hybrid SPP capacity increases of 17 MW (phase 1) and 25 MW (phase 2) were assumed to be in production by 2024 and 2025. Lastly, WPP capacity increase at Mersin of 39 MW was assumed in production by 3Q24. Altogether, we expect current capacity of 269 MW to reach 1027 MW by 2029.


We are reiterating our Outperform rating for Galata Wind, while raising our fair value estimate to TL38.00/share – upside 60%

We are raising our target price from TL37.73/share after reflecting upon (1) ongoing and prospective capacity expansions, (2) stable margins (3) and lastly an attractive DCF valuation. The stock trades at a FY24E 5.7x EV/EBITDA multiple. Risks associated consists of (1) reinstatement of AUF (maximum settlement price) mechanism and (2) possible delays in project pipelines.

Yunus Emre Yenikalaycı,

Ali K. Akkoyunlu,  Research Director, Gedik Investment


Follow our  English language YouTube videos  @ REAL TURKEY:

And content at Twitter: @AtillaEng

Facebook:  Real Turkey Channel:






Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.