Turkey - SAHOL - Main Takeaways from Sabanci Holding (SAHOL) Call
We arranged a call with SAHOL to discuss current circumstances and its future prospects, following its virtual Energy Day presentation held in last Thursday. The call was fruitful in terms of presenting Energy segment’s trends and expectations for the future. On top of SAHOL’s major business banking segment, its energy segment has been growing significantly and increasing its contribution to SAHOL’s financials both in terms of operating income as well as free cash flow generation. Banking side keeps its strength on capital and liquidity structures. For industrial segment, the group plans to grow in composite sector by new acquisitions in Europe. SAHOL trades at 47% NAV discount compared to 5yr median of 38%. We consider that discount is unfair considering its bright outlook both in financial and industrial segments. We maintain our Buy recommendation with 12M target price of TL13.08.Hace Omer Sabanci Holding is the holding company of Sabanci Group. Co. is organized under seven strategic business units: Banking, Tire, Tire Reinforcement Materials and Automotive, Retail, Cement, Energy, and Insurance. Co.'s other activities consists of tourism facilities management, information technology and telecommunication services, and tobacco production and distribution. Co. operates in 18 countries and exports products to Europe, the Middle East, Asia, North Africa, North and South America. Co. has partnerships with international companies such as Ageas, Aviva, Bridgestone, Carrefour, Citigroup, Dia, Heidelberg Cement, International Paper, Philip Morris and Verbund.
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