Buy - Sell

·         BRSA > Jan banking data expected today after 1st session close. We expect strong core banking performance to be sustained with milder volume expansion. If provisioning expenses normalize in Jan then might see an even stronger start to year. Our earnings ests stands @ TL2.01bn (+8.1% m/m +9.0% y/y), resulting in 13.2% annualized monthly RoE.

 

·         AYGAZ (BUY, TP TL11.68) 4Q12 Review > domestic distribution unit sales down 3% y-y @ 256k tonnes <= unexpected contraction in TR LPG mkt vs. our est of flat y-y for the quarter. EBITDA @ TL49m slightly below our est of TL52m (cons: TL64m) <= higher than exp’d opex. NI @ TL61m vs. our exp of TL45m (cons: TL56m) <= higher equity earnings from Enerji Yatirimlari, which owns 51% of Tupras. Mgmt decided to propose doubling the divi for 2013 (vs 2012 payout) to TL300m (9.7% yield), c.200% more than our exp. Mgt also decided to use upcoming 2-yr TL150m bond issue for this. Although we like to see Aygaz’s B/S getting leveraged, we are surprised given the M&A prospects and think this level of divi is unsustainable.

 

·         DOAS (BUY; TP TL11.40) 4Q12 review > NI @ TL47m (+41% y-y) => in-line with cons, but abv our TL40m est. Rev @ TL1.54bn (+15% y-y) => in-line with our, but slightly below cons est of TL1.46bn. EBITDA up 34% y-y to TL74m (our est: TL69m, cons: TL74m). 2013 DPS very strong => announced TL1.0/shr divi (86% payout, 9.8% yield), significantly beating our est @ TL0.57/shr. Net debt as of Dec-12 @ TL555m. The Co will hold an analyst meeting tdy to discuss 2012 results and 2013 expectations. More to follow.

 

·        TAVHL (BUY, TP TL15.61) > Chairman of Akfen, one of the controlling shareholders at TAVHL, said that they would decide in April on whether to bid for the new Istanbul airport tender. Says others were unlikely to bid unless TAVHL did. Added that a team from TAV Construction was working on the project and surveying the site. Comment: Given that TAVHL is the most likely winner of the tender this is somewhat an odd remark. We believe the chairman meant the gov’t may have to change terms of the tender to attract enough number/high quality bids. Any significant postponement of the tender would increase chances of capacity expansion at Istanbul Ataturk airport, benefiting TAVHL given its concession until 2021.

 

·         ALBRK (BUY, TP TL2.50)> Mandated international banks for up to $200m sub-debt issue. Slightly +VE. Will support capital base, as ALBRK is growing. +VE impact on share price should be limited since widely expected.

 

·         KRDMD (BUY, TP TL1.67) > Gov’t has reportedly brought railways privatisation bill to parliament => will allow pvt companies to operate existing railways or build new ones. TCDD, state-owned railways co, will be restructured to adapt to new rules. Comment: +VE for KRDMD, as it is likely to speed up demand for rails and components. KRDMD only domestic rails producer with c60%-70% mkt share. Expanding capacities in order to produce various railway components such as railway freight cars, steel tires for railway cars. Started JV in 2010 (Vademsas) with TCDD and Austrian steel co Voestalpine to produce (high speed) train switches.