Turkey - YATAS - Growth continues at attractive valuation
We revisited our estimates and fair value for YATAS and revised up our 12M TP to TL26.00 and upgraded our recommendation to BUY with 50% upside potential. We believe that YATAS’ solid growth story continues both in Turkey and international markets which will lead to higher EBITDA and free cash flow in our valuation period. We expect furniture demand to remain high, powered by the need for living space enhancement, an adaptation of modernization in furnishing, delayed marriages, and to a lesser extent, acceleration in relocating. As a main recipient of the furniture demand, we expect 2021 to be another strong year for YATAS as the company will get the most out of its brand recognition and augmented market positioning with Divanev. Additionally, we believe Divanev operations to gain pace and reach 121 stores by the end of the year. We also expect international sales to pick up with re-openings due to increased vaccinations, especially in Europe, and the USA.Yatas Yatak ve Yorgan Sanayi Ticaret AS is a Turkey-based company engaged in the manufacture and marketing furniture and other related home furnishing products. The Company's products include bedroom, living room, children's room and dining room furniture, bedspreads, bedding sets, pillows, pillow covers, sleeping bags, towels and bathrobes, mattresses, quilts and blankets. Yatas Yatak ve Yorgan Sanayi Ticaret As operates three manufacturing plants in Kayseri and Ankara, and has over 400 sale points, as well as a regional office in Ankara. The Company exports its products to over 45 countries, including the United States, the United Kingdom, the Netherlands, Germany, Hungary, Bulgaria, Kenya, Russia, Romania and North Cyprus. As of December 31, 2010, the Company had two affiliates: Kay-Ser AS and Valya Mobilya Uretim AS.
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