Kalekim: compelling growth story yet to be priced in (BUY - reinitiation of coverage)
We reinitiate coverage of Kalekim with a BUY rating and a 12M price target (PT) of TRY 48.60. We view Kalekim as a solid growth play with a cash-generative business model and unlevered financials. By leveraging its strong market position, we expect Kalekim to benefit significantly from domestic construction activity, as the ongoing housing demand and the rise in urban regeneration projects are set to drive robust multi-year demand for its products. Meanwhile, we anticipate a higher share of international revenues within total revenues, due mainly to the opening of the Northern Iraq plant in 1H25E. We expect 11% yoy revenue growth in real TRY terms (51% yoy on a non-inflation-adjusted basis) and an improvement in the adjusted EBITDA margin of 28bp to 21% in 2025E. On valuation grounds, we believe that investors are not fully pricing in the strong prospects, as Kalekim trades at an average discount of 60% to its global peers on our 2024-25E EV/EBITDA.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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