Y.F. Top Picks: Adding AKBN & VAKBN, Removing GARAN


We add AKBNK and VAKBN to our model portfolio, while removing GARAN. Following the recent announcement of CBRT related to loan growth and interest rates on commercial loans, we believe core spreads might be pressured. Yet, negative impact of the said regulation on profitability might be offset by strong CPI-linker income. Hence, we believe AKBNK (with TL85bn CPI-linker portfolio as of 2Q22) and VAKBN (with TL97bn CPI-linker portfolio as of 2Q22) would sustain their strong profitability in the coming quarters as well. On the other hand, considering relatively low CPI-linker portfolio of TL63bn, we think GARAN’s margins might remain under pressure due to the limit on commercial loan rates. Since 2021 year end, AKBNK and VAKBN underperformed XBANK by 14% and 28%, respectively, while GARAN outperformed by 5% thanks to strong performance in last week. According to our estimates, AKBNK trades at 2022E 1.1x P/E and 0.41x P/BV, while VAKBN trades at 2022E 1.5x P/E and 0.36x P/BV.

Adding THYAO

We add THYAO to our model portfolio. We underline decrease in net debt, delay in normalization of cargo yields and recovery in passenger revenues for THY. Despite inflationary pressure in global, ex-fuel cask estimate 5% lower than 2019, with USc4.42. On the bottom line, our estimates stands at all time high level thanks to robust operational performance and favoruble parity. We used 5.5x target multiple for valuation, accordingly new TP stands at TL112.0, which implies 64% upside potential. Similar to PGSUS, stocks still attractively trades at 3.8x EV/EBITDA in 2023E.

Our Model Portfolio is up 78.5% YTD, outperforming BIST100 by 9.8% year-to-date and cycling 64% return (30% relative) in 2021.



Y. F. Securities Research