3Q12 earnings beat
estimates, operating performance stays strong
Dogus Otomotiv reported 3Q12 net profit of TRY56m (+70% y-y; our forecast TRY50m; CNBC-e consensus TRY51m). Sales of TRY1,212m (+16% y-y) was in line with our estimate (consensus TRY1,254m). EBITDA increased 20% y-y to TRY78m (our estimate TRY75m, consensus TRY79m). Net debt declined from TRY585m in Jun-12 to TRY537m in Sep-12.
We increase our estimates for market share and market demand
In 10M12, Dogus Otomotiv increased its market share in the light vehicle (LV) market by 3.3ppt y-y to 16%. We raise our normalised LV market-share estimate from 12.3% to 13%. We also revise our Turkish market volume growth forecasts to 4.5%/3.5% in 2013/2014 (previous: 1.3%/1.9%) reflecting an increase in our GDP growth forecasts.
BUY maintained, TP increased to TRY7.60
We raise our 12-month TP for Dogus Otomotiv to TRY7.60 (from TRY6.98), reflecting higher valuations for Dogus Holding and participations, and our higher estimates of normalised market share and market demand. Renegotiation of the pricing strategy with VW on less favourable terms and a sharp appreciation of the EUR vs the TRY are key downside risks.
2013E DPS prospect is strong; beneficiary of improving macro
In 3Q12, Dogus Otomotiv was the only Turkish auto company under our coverage to post positive revenue/EPS growth thanks to market-share gains. Income from participations remained strong at TRY11m. We expect strong dividends to continue amid a decline in funding cost. We forecast 2013 DPS of TRY0.49 (Bloomberg consensus: TRY0.36), which corresponds to 7.3% yield. Dogus Otomotiv will likely benefit from the improving macro environment in Turkey, since: 1) as a pure domestic player, it is highly leveraged to GDP growth and easing interest rates; and 2) as an importer, it benefits from the TRY’s strength.
Dogus Otomotiv reported 3Q12 net profit of TRY56m (+70% y-y; our forecast TRY50m; CNBC-e consensus TRY51m). Sales of TRY1,212m (+16% y-y) was in line with our estimate (consensus TRY1,254m). EBITDA increased 20% y-y to TRY78m (our estimate TRY75m, consensus TRY79m). Net debt declined from TRY585m in Jun-12 to TRY537m in Sep-12.
We increase our estimates for market share and market demand
In 10M12, Dogus Otomotiv increased its market share in the light vehicle (LV) market by 3.3ppt y-y to 16%. We raise our normalised LV market-share estimate from 12.3% to 13%. We also revise our Turkish market volume growth forecasts to 4.5%/3.5% in 2013/2014 (previous: 1.3%/1.9%) reflecting an increase in our GDP growth forecasts.
BUY maintained, TP increased to TRY7.60
We raise our 12-month TP for Dogus Otomotiv to TRY7.60 (from TRY6.98), reflecting higher valuations for Dogus Holding and participations, and our higher estimates of normalised market share and market demand. Renegotiation of the pricing strategy with VW on less favourable terms and a sharp appreciation of the EUR vs the TRY are key downside risks.
2013E DPS prospect is strong; beneficiary of improving macro
In 3Q12, Dogus Otomotiv was the only Turkish auto company under our coverage to post positive revenue/EPS growth thanks to market-share gains. Income from participations remained strong at TRY11m. We expect strong dividends to continue amid a decline in funding cost. We forecast 2013 DPS of TRY0.49 (Bloomberg consensus: TRY0.36), which corresponds to 7.3% yield. Dogus Otomotiv will likely benefit from the improving macro environment in Turkey, since: 1) as a pure domestic player, it is highly leveraged to GDP growth and easing interest rates; and 2) as an importer, it benefits from the TRY’s strength.
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