Buy - Sell

·         SNGYO (NR) >  Bought 45ksqm of land in Atasehir (Istanbul) from SDIF for $90m. Recall appraisal value of land is $111m and SNGYO had offered the highest bid @ $80m with JV partner Maslak Ticaret two weeks ago. Newly acquired land is very close to the Istanbul Finance Centre project and if zoning plans don’t change the co can develop a residential project with c.100k sqm sellable area. This land will raise 2012 year-end NAV ests by c.1%. Based on conservative ests, SNGYO can generate TL500m revs and TL150m NI. We believe this project will be finished in 1H2017.

 

·         EKGYO (NR)> Only one company bid for EKGYO’s Avcilar land tender (revenue sharing model). Co bid TL380m with 12% revenue share agreement to EKGYO (TL46m). Appraisal value is TL78m. We believe EKGYO will cancel this tender. They can re-tender the land or turn it to a public procurement model project where margins are lower than RSM projects.    

 

·         EREGL (HOLD, TP TL2.68) > Will increase paid-in capital by TL410m (13.27%) to TL3.50b through a bonus issue. No date set yet.

 

·         ELECTRICY DISTRIBUTION > Gov’t received initial bids along with pre-qualification applications for 4 electricity distribution assets. ALARK’s Alsim and SAHOL’s Enerjisa both bid for Ayedas (Istanbul) and Toroslar (East Med) electricity distribution assets.

 

·         BIMAS > Will increase paid-in capital in Morocco by ~TL31.5m (60% increase) in three instalments. Neutral

·         TCELL 4Q12 RESULTS TDAY > Cons revs @ TL2.67bn (9%+ y/y), EBITDA @ TL786mn (13%+ y/y; EBITDA margin: 29.4%), NI @ TL465mn (40%+ y/y). Y/y rev growth expectation likely explained by => i) significant incr in both data and Superonline revenues (10% & 7% of total rev in 3Q12 resp’vely), ii) y/y improvement in voice ARPU and iii) still growing subscriber base; however, at a slower pace. Our est of higher y/y growth in EBITDA prob on back of => lower ratio of S&M expenses to sales, as a result of lower sub adds. Absence of 4Q11’s TL95mn translation loss from Belarus should support NI. Seeing signs of price rationalization in Vodafone and Avea results. That said, both Turkcell and Avea believe price rationalization not a trend yet. Sub mkt shr evolution during the quarter should be watched. Vodafone and Avea added respective 215K and 300K subs in 4Q12. Although all of operators share intention for a more rational mkt and value focused subscriber approach, we think they also seem unwilling to risk sub losses.