Enka Insaat (ENKAI TI) - Boosted by MTM gains: Maintain Buy
With this report, we incorporate our updated macro forecasts and our lower segmental estimates, owing to the adverse impact of the Covid-19 pandemic. Despite lowering operational forecasts in USD terms, we raise our 12M TP by 48% to TRY9.87, due to a weaker TRY as we value its operations using USD-based DCF models. We believe Enka offers one of the strongest alpha stories in the Turkish market, as most of its value creation generates hard currency. Net cash position as of 9M20-end is USD3.9b, equal to 78% of its Mcap.
3Q20 net income of TRY826m beat our loss estimate of TRY76m but is in-line with the RT consensus estimate of TRY812m. Strong bottom line came from a higher than expected mark-to-market (MTM) gain from fixed income investments. Boosted by strong contracting segment profitability, EBITDA stood at TRY686m, 7% higher than our estimate of TRY641m (vs RT consensus of TRY667m). In 3Q20, Enka booked income of TRY540m from its financial investments.
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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