GSD Holding (GSDHO TI) - Backed by investment gains: Maintain Buy
1Q net income of TRY61m (+69% q-q, +104% y-y) beat our estimate (TRY30m) supported by dividends from Silopi Electric (TRY14m), a GSD bank property sale gain (TRY27m) and FX gains (TRY22m). Investment income rose to TRY66m vs TRY22m in 1Q17. Overall EBITDA fell 41% y-y to TRY15m on the back of a weak banking contribution. By segment, EBITDA fell 78% y-y to TRY4m for banking, rose 16% y-y to TRY14m for maritime and rose 47% y-y to TRY4m for factoring.
GSD Holding trades at a 2018E EV/EBITDA of 6.2x and P/B of 0.4x. It had net cash of USD28m at end-1Q (TRY0.26/share) and trades at a 66% discount to our 2018E NAV. We update estimates to reflect the results, FX gains in 2018 and a weak margin outlook. We raise our 2018E EPS to TRY105m (from TRY69m) but cut our 2019E EPS to TRY83m (from TRY86m). We maintain our SOTP-based 12M TP of TRY1.25. With 42% upside to our TP, we maintain our BUY rating for the stock.
GSD Holding AS is a Turkey-based holding company operating in shipping, financial services and energy sectors. The Company invests in these sectors through its subsidiaries, forming the GSD Group. The primary subsidiaries include GSD Yatirim Bankasi AS, which runs its corporate banking activities; GSD Factoring AS, which is active in the domestic factoring business, and GSD Shipping BV and GSD Denizcilik Gayrimenkul Insaat Sanayi ve Ticaret AS, which carry out dry bulk shipping business. The Group owns a fleet of approximately six vessels in handy and ultramax segments with a total deadweight of approximately 300,000 tones. GSD Holding AS also holds a minority stake in Silopi Elektrik Uretim AS, a thermal power station with approximately 405 megawatts (MW) installed capacity and asphaltite reserves of nearly 40 million tones.
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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