BIM (BIMAS TI, CMP TRY84.70, Buy, TP TRY128.00): The company is likely to continue to benefit from the high food inflation in 1Q22 and general trading down environment. We expect BIM to post strong sales growth of 68% in 1Q22 with its EBITDA margin normalising to 8.7% in 1Q22 (from 10.4% in previous quarter) from rising costs pressure, but still better vs 8.5% in 1Q21. We expect BIM to be the most profitable retailer with c77% yoy growth estimate at net income level.
Erdemir (EREGL TI, CMP TRY35.18, Buy, TP TRY42.50): The company continues to benefit from higher steel prices globally and positive FX translation effects, which leads
to our estimate of c171% sales growth for 1Q22. We estimate a lower EBITDA margin qoq with the cost base starting to reflect higher global raw material prices. We estimate EBITDA/t to reach USD346 in 1Q22, declining by c15% qoq but still strong and higher by c34% yoy. We expect net profit grew by 109% in 1Q22.
Garanti Bank (GARAN TI, CMP TRY14.42, Buy, TP TRY15.70): We expect Garanti to deliver the best sequential performance among private peers by nearly doubling its
earnings QoQ. Rising CPI linker revenues, continued upwards trend in fees and normalising provision expenses from last quarter’s high base likely boosted core income.The solid income contribution from subsidiaries and robust trading income (albeit lower than 4Q) will also support earnings. ROE is likely to reach an all-time high 37%.
Koc Holding (KCHOL TI, CMP TRY41.32, Buy, TP TRY50.40): We expect strong 1Q results from the different major industries that Koc Group operates in, ranging from
autos, white goods and refining to banking. We expect Koc Group to post consolidated profit increases of 211% y-o-y and 14% q-o-q despite the high base from the previous quarter. In achieving this, we believe strong pricing and FX exposure have been among the main supporting factors across the different sectors. We see Koc as a strong value proposition as indicated by its current PE of 4.4x for 2022e vs its ROE of c30%, 32%
NAV discount and the potential catalyst of new projects in automotive.
HSBC Global Research