TURKISH SOFTWARE - Soft power
Software has become an essential input for operations of virtually all businesses, across industries and sectors along with delving deeper into every aspect of consumers’ life. As the information and communication technology (ICT) sector continues to expand globally, in Turkey too software is one of the fastest growing segments. During 2014-18, Turkey’s software sector grew at 23% CAGR to TRY18.3b - sector exports reached USD773m, growing at 17% CAGR in the mentioned period.
Over and above the growth seen in conventional segments, we believe that the Internet of Things (IoT), the fourth industrial revolution (Industry 4.0), cloud technology, artificial intelligence (AI), block-chain technology and cyber security will be the growth drivers of the software sector in ensuing years. We expect Turkey’s software sector to grow at 25% CAGR over 2019-21.
We initiate coverage on Logo Yazılım and Smartiks Yazılım with BUY ratings and target prices of TRY52.75 and TRY4.49, implying attractive 37.7% and 76.1% upside potential, respectively. We maintain BUY on Kafein Yazılım with target price of TRY12.95, implying upside potential of 70.2% from current levels.
Logo Yazilim Sanayi ve Ticaret AS is a Turkey-based company engaged in the development of computer operation systems, business application software, database structures, multimedia software, as well as in the provision of technical support and service, and training. The Company's products are offered in eight units: Small and Medium Enterprises (SME) products, Enterprise Resource Planning (ERP) products, Java products, Vertical solutions, Integration products, Human Resources (HR) products, Business Intelligence solutions, Mobile solutions and LOGO keys. Its products and services are used in a range of industries, such as distribution, machine and automotive spare parts, marine, packaging, retailing, cement, glass, steel, furniture, telecommunication, information technology (IT), tourism and textile. The Company has business partners in Azerbaijan, Egypt, Georgia, Germany, India, Iran, Iraq, Kazakhstan, Kyrgyzstan, Kosovo, Kuwait, Libya, Russia, Sudan, Syria, Turkmenistan, and the Unit
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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