Buy - Sell

·         NOV CPI => TEB-BNPP & Cons @ +0.9% m/m, if in-line annual @ 6.9%. Downside risk to food and clothing prices remain.

 

·         YKBNK (BUY, TP TL5.46) => Sold TL626m NPL portfolio for TL67m (11 cents on the dollar) => 21% of total NPLs => will lower NPL ratio of 3.6% by 75bp to 2.9% while boosting 4Q12 NI by TL53m. Will lower specific coverage ratio to 57.8% from 66.5% and if the bank chooses to restore its previous ratio it will have to set aside TL188m add provisions.

 

·         YKSGR (NR) => Italy’s Generali is interested in Yapi Kredi Sigorta, according to daily Sabah. Positive for Ykbnk as it would up its CAR by 75bps if sold for $1bn.

 

·         TOASO (HOLD, TP TL10.5) => Fiat/Chrysler launched Ducato LCV in the US under the Ram brand (as of 3Q13) and the US launch of Doblo might follow suit, according to daily Milliyet. We recently turned more +ve on the possibility of Doblo exports to the US given Fiat’s recent comments on the strategic importance of an enlarged LCV portfolio in the US. However, we continue to believe Fiat/Tofas might need to seek a lower capex alternative for the project to work.

 

·         TTRAK (HOLD, TP TL39.33) => BoD entitled the management to invest EUR63m in the co’s new Sakarya facility. Broadly in line with our forecast of EUR65m. Recall that the co was also granted an incentive for TRY90m investment. Total investment support from the government will reach up to 30% of TRY90m.

 

·         KRDMD (BUY, TP TL1.55) => Investments to increase effective crude capacity to be delayed to late 2103/early 2014 according to comments by the GM. Sl -ve as delays might make it more difficult to achieve 8% unit sales growth y-y we were pencilling in for 2013. In other news, AKP party chief at Karabuk said the dispute between KRDMD and some local re-rolers was a commercial dispute and the gov’t did not want to get involved. Slightly +ve.

 

·         TCELL (BUY, TP: TL11.11): RU President Putin in TR today. Will meet PM Erdogan. Erdal Saglam (a journalist for HURGZ) says selection of independent board members in TCELL also on the agenda. If the legal dispute b/w Cukurova & Altimo concludes in favour of Cukurova => shareholder structure will not change but might still be a starting point in the process to pay out dividends.

 

·         ARCLK (upg to HOLD, TP upped to TL11 from TL10.36): We incr’d 12-m TP mostly reflecting our lower Rf assumption (from 8.5% to 8.0%). We continue to believe it might miss its EBITDA mrg guidance of 10.5% for 2012 (our est 10.1%) => co also highlighted some d/s risk to guidance. However, u/p XU100 7.1% since its 3Q12 earnings release Nov 1 => fairly valued. Key upside risk => inorganic growth. Key downside risk => lower normalized EBITDA mrg than our assumption @ 11%.

 

·         TATKS Update (HOLD; TP TL2.27) > We cut our TP by 23% given the weak earnings outlook. We also cut our 2013/14 EBITDA est by 24% and 21%. We cut our revenue and NI est by 11% and 51% for 2013 and by 10% and 42% for 2014E <= lower rev from tomato processing and higher mkt exp. Tat cut pace of capacity growth and future production targets in South East Anatolia => we cut our tomato paste prod est by over half to 50k from 110k tonnes by 2016.