Buy - Sell

·         THYAO TI (BUY, TP TL8.46) > 4Q12 results today. We expect EBITDAR TL726m & NI TL217m (close to cons). We expect strong top line (+27% y-y) and EBITDAR (+30% y-y) on +26% growth in passenger travel unit sales (as measured by RPK) and 4.5ppt y-y improvement in the passenger load factor. We estimate EBITDAR mrgn expansion will slow to less than 1ppt, from 6ppt in first 9 months, given sharp mrgn recovery already realized in 4Q11. Announcing YE12 financials earlier than usual, as it plans to hold annual shareholders meeting end-March to make changes to co’s charter, as required by new commercial code and capital markets rules.

 

·         TR Food retail sector > UCZ discount markets (80% owned by Ciner Group) targets continued aggressive growth => has reached 860 stores since start of operations in Apr’12 & aims to reach 2,000 stores by YE13. The Co has 350 SKUs in its product portfolio (compared to +600 of BIM –BIMAS-). Comment: Need to follow UCZ’s aggressive growth closely with regards to its implications for BIM. BIM had 3,655 stores, as of YE12 and plans to open 350-400 stores in 2013. We believe it is becoming critical for BIM to accelerate store openings. However, the Co does not plan to do so at least in the ST, believing it would compromise its strong execution capability.

 

·         DYHOL (HOLD, TP TL0.83) / HURGZ (HOLD, TP TL0.94) > Advertising spending +8% y/y to TL4.65bn in 2012 (in line with our est), according to the Advertising Assoc. Expects 12% growth in 2013 on domestic economic recovery vs. our expectation of a 7% increase. Better growth in advertising spending would be an upside risk to our ests for DYHOL and HURGZ.      

 

·         ALBRK (BUY, TP TL2.50) > Partnered with Kuveyt Turk to establish a private pension company. Comment:  ASYAB’s private pension company, Asya Emeklilik (operational since mid-2012) has 47,366 outstanding contracts (1.27% mrkt share) and TL38.2m AUM (0.02% market share). We don’t expect the partnership to add to ALBRK’s revenue base soon. Neutral.

 

·         EKGYO (NR) > Will hold tender to select an investment bank for its SPO on March 14 @ 14:30, according to an official filing.

 

·         EREGL (BUY; TP TL2.63) > Erdemir completed its 2-yr TL200m bond issue => maturity @ Mar 11, 2015, bearing int payments every 6-mts @ benchmark + 150 bps. Bid-to-cover 1.33x on demand from 72 qualified domestic and int’l investors. Comment: +VE for diversifying funding sources. But Erdemir does not seem to in immediate need of funding given its YE12 cash position of TL1.8b (gross debt @ TL4.4b). The issue, small in size, will not have an impact on our f/casts or valuation.