Emlak Konut GYO (EKGYO TI) - Weak 4Q due to revenue sharing: Maintain Hold
Emlak REIT announced 4Q net income of TRY171m (3Q18: TRY32m net loss, –75% y-y), below the RT consensus (TRY492m) and our estimate (TRY507m). Weak deliveries from RSM projects resulted in the lower-than-expected results. While 4Q revenues grew 15% y-y backed by presale contribution from certain projects, EBITDA fell 75% y-y to TRY215m. The company did not purchase any land, yet, net debt worsened y-y (TRY3b vs TRY1.8b). Emlak guided to 2019 sales revenue of TRY7.3b and net earnings of TRY1.25b (flat y-y).
We raise our 2019-20 estimates by c2% each on lower financing costs, and SoTP-based TP by 6% on higher appraisal value of buildings and land bank. We maintain our HOLD rating due to limited upside.
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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