Kardemir (KRDMD TI) - Eye-catching performance prevails: Maintain Buy
We raise our 12M TP by 37% to TRY5.67 for Kardemir (D) reflecting better long steel pricing and higher sales volume in the longer term. We expect Kardemir to benefit from continued favourable global steel making margins in the near future, and from higher production volume capability given its ongoing investments.
We raise our 2018 EBITDA/net income forecasts by 34%/37% on better steel making margins. We forecast a unit EBITDA of USD140/t in 2018 declining to USD106/t in 2019 as long steel prices normalize. We raise our 2019 EBITDA/net income forecasts by 18%/30% on higher production capability after completion of current investments.
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.
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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