Company Report & Initiation / Kafein Yazılım (KFEIN TI) - A profitable growth story: Initiating at Buy
Kafein completed the acquisition of a 51% stake in software company Smartiks in May this year. We expect the business to start contributing to Kafein’s top and bottom-line growth from 2H18, with synergies between the two companies enlarging Kafein’s product portfolio and marketing power. Consequently, we forecast revenue/EBITDA/net profit CAGRs of 51%/101%/66% over 2017-20.
We value Kafein using a combination of DCF and peer group comparison, giving us a 12M target price of TRY10.47/share. Kafein trades at steep discounts to its local peers. Considering its high ROE, strong balance sheet and robust net profit growth in the last three years, we think this is unwarranted. Initiate coverage at BUY.
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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