BGC PARTNERS - PETKIM DOWNGRADED (HOLD)
• Downgraded to HOLD… We revised down our ex-dividend TP from TL8.60 to TL5.73/share on the back of: i) weaker than expected 1Q18 earnings with an unplanned shut down and weaker margins, ii) plugging 18% stake in STAR Refinery in our valuation, iii) using a higher risk free rate– 13% vs. 11% before, iv) higher FX rate assumptions and v) higher crude oil price assumptions – US$73/bl current vs. US$60 before. We are downgrading Petkim, since we believe that downside risks to our estimates are higher parallel to higher crude oil prices and FX volatility coupled with increasing leverage for the acquisition of STAR refinery stake. Potential weakness in demand amid several capacity expansions in the sector and uncertainty in the election period are the other reasons for the downgrade. We do not expect Petkim shares to outperform the market until we see some concrete contribution from STAR Refinery on Petkim’s earnings and EBITDA, - which might be realized in 2H19.Turkiye Petrol Rafinerileri is an energy and refining company based in Turkey. Co. is engaged in providing and refining crude oil, the importing and exporting of oil products, and establishing and operating refineries in Turkey and foreign countries. Also, Co. is establishing and operating factories and facilities in the petrochemical industry. Co. is engaged in purchasing, selling, importing, exporting, storing, marketing and distributing (wholesale, retail, foreign and domestic) all kinds of petroleum products, LPG and natural gas. Co. runs its business through the refineries in Izmit, Izmir, Kirikkale and Batman.
BGC has been one of the major market players in Turkish OTC debt, FX and swaps markets since 1998.
We started offering corporate finance and investment banking services to our clients in 2013. We offer a complete range of financial services to help our clients achieve their goals. Our main areas of activity within investment banking are as follows:
- Mergers & Acquisitions
- Equity Capital Markets
- Debt Finance & Advisory
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