BGC Partners - Kardemir Karabuk Demir Celik Sanayi ve Ticaret A.S. D (KRDMD) BGC Partners: Kardemir KRDMD TI, KRDMA TI, KRDMB TI reported TL128.6mn net loss in 4Q19, in line (consensus: -TL139mn, BGC: -TL134mn), operationally slightly better

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BGC Partners

Erdem Hafizoglu

EUR 104.36 For Business Accounts Only

BGC Partners: Kardemir <KRDMD TI, KRDMA TI, KRDMB TI> reported TL128.6mn net loss in 4Q19, in line (consensus: -TL139mn, BGC: -TL134mn), operationally slightly better

Similar to Erdemir, Kardemir posted weakest margins of the year in 4Q19 with 5.3% EBITDA margin (vs. 9.5% in 3Q19, 14.9% in 2Q19, and 12.4% in 1Q19) on declining steel prices (spreads) as expected. In the quarter, Kardemir sold 569k tons of steel products (3Q19: 483kt, 2Q19: 564kt, 3Q18: 504kt), above our 525kt estimate; and reported TL1,491mn revenues (down by 8.6%, y/y), better than consensus estimate of TL1,384mn (BGC: TL1,337mn).

04/03/2020 3 EN

Underlying

Kardemir Karabuk Demir Celik Sanayi ve Ticaret A.S. D

Kardemir Karabuk Demir Celik Sanayi ve Ticaret manufactures and sells raw iron and steel products and coke and coke side products. KARABUK Co.'s products include: Steel Products - Blooms, Billets and Beam Blank; Rolling Mill Products - Hot Rolled Round Steel (Bars), Hot Rolled Round Steel (Deformed Bars), Steel Nip Beams, Steel Npu Profiles, Equal Angles, GI Profile, Rails and Billets; Coke Products - Coke Plant Products, Ammonium Sulphate, Pressed Naphthalane, Tar Paint, Carbolic Oil, Grude Benzole, Refine Washed Oil and Crude Tar and Other Products - Pig Irons, Granule Slag, Oxygen, Nitrogen, Argon.

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TRAKRDMR91G7 Istanbul Stock Exchange Turkey

Provider

BGC Partners

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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Analysts

Erdem Hafizoglu

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Ünlü&Co

Kardemir

We are downgrading our rating for Kardemir (D-type shares) to Hold from Buy. We have slightly revised down 12M TP by 3% to TL22.5/s, implying 12M total return potential of 7% and corresponding to a Hold rating. Shares returned 41%/23% in USD over the past 3M/1Y with a 36% outperformance vs. BIST-100 over the past three months. Accordingly, on our estimates, Kardemir is trading FY23E P/E of 5.7x (vs. 5Y median: 6.1x) and EV/EBITDA of 3.3x (vs. 5Y median: 3.6x), thus close to its historic averages. We expect Kardemir’s EBITDA/tonne to improve sequentially in 1H23 from USD67 in 4Q22 led by 1) Pro...

EUR 57.98

March 6, 2023 March 6, 2023 1 EN

Ünlü&Co

Top Picks Portfolio

Excluding Kardemir from our top picks: We are excluding Kardemir from our top picks. Shares have returned 58% in absolute TRY terms and performed in-line (1% outperformance) vs. BIST-100 since its inclusion to our model portfolio since January, 2021. While shares have reached an outperformance in excess of 40% in early March 2022; substantial increase in global recessionary concerns coupled normalization of the initial surge in regional steel prices related to the Russia/Ukraine conflict have led to a tangible decline in product prices and spreads. While we maintain our fundamental positive vi...

EUR 57.98

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Ünlü&Co

Kardemir

Kardemir A (KRDMA, N/R) and B (KRDMB, N/R) shares are trading at c.23% discounts vs D (KRDMD TI, Buy) shares, which is close to their highest discounts over the past three years, following their 10% underperformance vs the BIST-100 in the past three months. From a purely mechanical standpoint, KRDMA and KRDMB should theoretically trade at least at par with KRDMD, given their higher voting rights. Independent of our fundamental view on Kardemir, we believe the divergence is worth flagging from a mechanical point of view, given the proximity of the pairs (A vs. D & B vs. D) to a potential mean r...

EUR 57.98

June 1, 2022 June 1, 2022 1 EN

BGC Partners: TURKEY - Central Government Budget continued to improve in February

Finance Ministry released February Central Government budget figures and the data showed further improvement in budget balances, as already suggested by the Treasury cash budget figures.

EUR 104.36

March 16, 2020 March 16, 2020 1 EN

Cagdas Dogan

Cagdas Dogan

BGC Partners: TURKEY - CBT Expectation Survey: No major change in inflation forecasts and a 50bps rate cut expectation from the CBT next week...

OUR TAKE: We observe no major change in inflation expectations, as the positive surprise in February reading seems to be offset by increased depreciation pressure on TL, while 2020 GDP growth forecast has been cut for the first time since July 2019. Meanwhile, there seems to be a 50bps rate cut expectation from the CBT in next weekâ€™s meeting, 100bps over the next three months, and 175bps over the next twelve months. We currently plug in a 50bps rate cut in our forecasts in next weekâ€™s meeting, followed by a 25bps in the April meeting. (CBT, BGC Partners)

EUR 104.36

March 13, 2020 March 13, 2020 2 EN

Cagdas Dogan

Cagdas Dogan

BGC Partners: TURKEY - Retail sales volume maintained a strong trend in January

According to Turkstat, retail sales volume registered a 9.6% y/y expansion in January 2020 in unadjusted terms; while the calendar-adjusted figure also increased by 9.6% y/y in January, which is a quite strong figure, albeit indicating a mild slow down compared to the 11.9% increase recorded in December 2019.

EUR 104.36

March 13, 2020 March 13, 2020 2 EN

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BGC Partners: Kardemir <KRDMD TI, KRDMA TI, KRDMB TI> reported TL128.6mn net loss in 4Q19, in line (consensus: -TL139mn, BGC: -TL134mn), operationally slightly better

Kardemir

Top Picks Portfolio

Kardemir

BGC Partners: TURKEY - Central Government Budget continued to improve in February

BGC Partners: TURKEY - CBT Expectation Survey: No major change in inflation forecasts and a 50bps rate cut expectation from the CBT next week...

BGC Partners: TURKEY - Retail sales volume maintained a strong trend in January

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