Datagate Bilgisayar (DGATE TI) - Weak 1Q sales hit profit: Maintain Hold
Datagate posted net income of TRY4.1m in 1Q18, below our TRY6.4m estimate. There is no consensus available. The weak earnings were largely due to a 25% y-y decline in revenue.
Datagate management has expressed its desire to extend distributorship agreement with Turk Telekom into new regions. If Turk Telekom agrees, this would be a major positive for Datagate. However, there is still no announcement on this front.
After the 1Q results, we significantly pull down our revenue, EBITDA and net profit forecasts. Also, we raise our RFR by 1ppt and roll over our valuation base a year to 2018. As a result, we cut our DCF-based TP by 49% to TRY7.54. With just 7% upside to our TP, we maintain our HOLD rating.
Datagate Bilgisayar Malzemeleri Ticaret AS. Datagate Bilgisayar Malzemeleri Ticaret AS is a Turkey-based computer and computer peripherals distributor. The Company distributes, markets and offers logistics and after-sale services for more than 1,000 computers and computer accessories of international brands, such as Seagate, Intel, Acer, Fujitsu, Belkin, Sapphire, Vestel, genius, Samsung and Transcend, among others. The Company's product portfolio includes microprocessors, hard discs, memory units, optical units, motherboards, tapes, video accelerator cards, monitors and various types of hardware supporting software. The Company distributes its products to wholesale companies and retailers. As of December 31, 2011, its main shareholder was Indeks Bilg. A.S. (59.24%).
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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