Emlak Konut GYO (EKGYO TI) - Strong 1Q from revenue sharing: Maintain Hold
EKGYO’s 1Q18 net income beat the RT consensus and our estimates. This was supported by strong revenues boosted by RSM projects.
EBITDA grew 120% y-y and EBITDA margin was up 15ppt aided by deliveries from six RSM projects, where RSM revenues climbed 2.1 times y-y, backed especially by the Istmarine project. Turn-key project revenues, on the other hand, dropped 62% y-y.
Net debt excluding TOKI’s and contractors’ cash went down 19% q-q to TRY1.5b. There were no land purchases in 1Q.
Emlak guided to flat y-y net earnings of TRY1.8b in 2018. It achieved 48% of this target in 1Q. We expect a slowdown in project deliveries and earnings generation over the coming quarters. We keep 2018E earnings unchanged but reduce 2019-20E earnings by toning down our EBITDA estimates. Retain HOLD with a 5% lower TP.
Emlak Konut Gayrimenkul Yatirim Ortakligi AS (Emlak Konut) is a Turkey-based real estate investment trust. It is engaged in coordinating and executing real estate property projects mostly housing, besides, commercial units, educational units, social facilities, and all related aspects, controlling and building audit services of the ongoing projects, marketing and selling the finished housing. The ultimate parent and ultimate controlling party of the Company is T.C. Basbakanlik Toplu Konut Idaresi Baskanligi (the Housing Development Administration of Turkey, TOKI). The Company's projects include Agaoglu My Towerland, Alemdag Emlak Konutlari, Varyap Meridian, Mavisehir Modern, Spradon Quartz and Gebze Emlak Konutlari.
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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