Cimsa (CIMSA TI) - No signs of a near term recovery: Maintain Hold
Cimsa posted net profit of TRY8m for 3Q19 that stood lower than both our (TRY26m) and RT consensus (TRY30m) estimates. On top of the lower than expected operational figures, higher than expected financial costs caused the difference in our bottom-line forecast. Note that the company recorded TRY14.2m asset sale income from Afyon factory land sale in 3Q19.
The stock has gained 25% and outperformed the benchmark index by 24% in the last three months, despite the lack of any recovery signs in the Turkish cement sector. After such outperformance, the stock now trades at 11.6x 2020E P/E, which corresponds to a 22% premium to its peers. After revisions to our estimates, we have cut our TP by c7% to TRY8.10, which offers only 2.5% upside potential. Accordingly, we maintain our HOLD recommendation on Cimsa.
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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