Buy - Sell

·        EYE ON CBT LIQUIDITY > Avg repo funding cost increased to 7.43% from 7.13% previous day and 6.52% a week ago. CBT had announced add liquidity tightening would end today, which would lower blended repo cost to 7.0%. However, it might revise this and continue with add tightening (?!?), given the depreciation pressure on the currency. If so, avg repo rate would surge to 7.6%.

·        DOHOL (BUY; TP: TL1.22), TCELL (BUY, TP:TL13.56), NTHOL (N/R) National Lottery > Reportedly, tender process for National Lottery company will start in Sept & bids will be received w/i 3m vs previously. According to previous reports, sale proceeds might be received during 1Q14, which still holds true. Interested parties are DOHOL, TCELL, NTHOL, Bilkent, British Camelot, Greek Intralot, Gtech and Sgames.

·        DOHOL 2Q13 RESULTS > TL12m net loss, lower than cons and our est of TL21m net loss on better-than-expected oper performance and lower than expected FX losses . EBITDA TL144m was better than our and cons est of TL130m and TL125m resp, thanks to better performance of media segment on lower print/personnel costs.

·        DYHOL (HOLD, TP TL0.73) 2Q13 RESULTS > TL2m net loss, higher than cons and our est of TL11m net loss on better oper performance and lower than expected FX losses . EBITDA TL140m was better than our and cons est of TL128m and TL113m thanks to savings on print/personnel costs. Despite recovery in printing segment, broadcasting ops remained under pressure due to higher personnel/advert exp.

·        KRDMD (BUY, TP TL1.38) 2Q13 RESULTS > TL35m net loss ( vs +TL64m in 2Q12, BNPP TL3m net loss, Cons TL17m net loss) on EBITDA of TL42m (-37% y-y, BNPP: TL68m, Cons TL67m) and rev of TL463m (+2% y-y, BNPP TL426m, Cons: TL412m). Top line surprised to some extent on sl higher-than-expected vols and prices but EBITDA remained below our est on costs. We understand both higher labour and raw material costs were the main culprits. Co increased share of high-value added products such as railway tracks in its unit sales to 19% from 13% a year-ago but was not enough to lift margins. Net profit surprised on significantly higher-than-expected financial expenses as co did not capitalise any of its financial exp despite ongoing investments. Despite some improvement in net working capital, net debt rose to TL557m ($298m) as of end-2Q13 from TL454m a quarter ago ($251m) on weaker TRY, ongoing major investment programme and poor margins. We will look into revising our forecasts for KRDMD on back of these poorer-than-expected results (More details to be released today).

·        BIMAS (NR) 2Q13 Results > NI @ TL93m (+34% y-y), higher than CNCB-e cons est @ TL87m => deviation on sl higher EBITDA & FX gains. Rev +20% y-y @ TL2,854m (cons: LY2,763m), while EBITDA +29% y-y to TL133m, sl above cons est of TL131m. 0.4pp improvement in OPEX/sales ratio due to elimination of one-off costs (such as BIMCELL advert exp) & economies of scale => expected. Despite well managed OPEX, sharp incr in employee exp for G&A (+33% y-y to TL30.4m) surprised us. TL3.6 net FX gain => driver of +VE surprise on NI. Comment: Tax financials had highlighted potential +VE surprise @ EBITDA lvl BUT we believe actual surprise is more muted. We exp impact of results to be lmtd on stock. Analyst teleconference tdy => growth plans in Egypt amid the political unrest in the country & colour on competition in TK are among important factors to watch-out.

EARNINGS TODAY

·        THYAO TI (BUY, TP: TL10.35) 3Q12 due tdy > We exp it to continue reporting strong rev growth on >+20% y-y in unit sales, as measured by RPK => we exp EBITDA mrg to improve c.1ppt on rev growth & c.2ppt improvement in passenger load factor. We expect NI growth to u/p EBITDA growth as last yr's NI was flattered substantially by financial income on weaker EUR vs USD.

·        TAVHL (BUY TP TL16.50) 2Q13 RESULTS TODAY > TEB-BNP NI TL41m, EBITDA TL 96m, Rev TL305 vs Consensus => NI TL36m, EBITDA TL98m, Rev TL312m. We foresee double-digit rev growth, driven by 17% y-y terminal passenger growth. But we expect EBITDA margin to remain unchanged given the increase in the combined share of domestic and transfer passengers. We forecast NI will increase in line with the top line, but only because last year's net fin exp was lower than usual due to EUR depreciation.