Aselsan (ASELS TI) - Upside potential limited: Maintain Hold
We raise our 12M TP by 35% to TRY18.35, due to TRY depreciation against the USD. This is despite the slower revenue recognition, owing to the disruption in the supply chain from Covid-19 and higher risk free rate assumption of 14% (previously 13%). We expect Aselsan's strong order backlog to have limited impact on its 2020 financials, due to the disruption in the supply chain from Covid-19. While we remain positive on the company’s long-term prospects, we believe that the current risk/reward profile limits near term upside potential. Maintain HOLD.
Aselsan’s reported 3Q20 net profit of TRY1.1b, broadly in-line with our estimate of TRY1.2b, and on par with RT consensus of TRY1.1b. 3Q20 EBITDA of TRY542m is 8% lower than our estimate of TRY589m, but in-line with RT consensus of TRY558m.
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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