Teb Yatirim - Kardemir Karabuk Demir Celik Sanayi ve Ticaret A.S. D (KRDMD) Earnings Review / Kardemir (KRDMD TI) - Outstanding profitability in 2Q18: Maintain Buy

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Teb Yatirim

Erdem Kaylı

Earnings Review / Kardemir (KRDMD TI) - Outstanding profitability in 2Q18: Maintain Buy

Kardemir reported net income of TRY163m in 2Q18, surpassing our estimate of TRY124m and the Research Turkey consensus estimate of TRY137m. The deviation at the bottom-line came from much better than expected operating profitability.

In 2Q18, Kardemir posted its historically best operational performance in TRY terms, backed by promising steel making margins and higher contribution of value added products.

We reiterate our BUY call on Kardemir as it offers exposure to a promising re-rating story on better cash generation capability via better product mix and volume growth. We expect a 5% dividend yield from 2018 earnings.

07/08/2018 9 EN

Underlying

Kardemir Karabuk Demir Celik Sanayi ve Ticaret A.S. D

Kardemir Karabuk Demir Celik Sanayi ve Ticaret manufactures and sells raw iron and steel products and coke and coke side products. KARABUK Co.'s products include: Steel Products - Blooms, Billets and Beam Blank; Rolling Mill Products - Hot Rolled Round Steel (Bars), Hot Rolled Round Steel (Deformed Bars), Steel Nip Beams, Steel Npu Profiles, Equal Angles, GI Profile, Rails and Billets; Coke Products - Coke Plant Products, Ammonium Sulphate, Pressed Naphthalane, Tar Paint, Carbolic Oil, Grude Benzole, Refine Washed Oil and Crude Tar and Other Products - Pig Irons, Granule Slag, Oxygen, Nitrogen, Argon.

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TRAKRDMR91G7 Istanbul Stock Exchange Turkey

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Teb Yatirim

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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Analysts

Erdem Kaylı

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Earnings Review / Kardemir (KRDMD TI) - Outstanding profitability in 2Q18: Maintain Buy

Kardemir - Upgrade to Buy. Domestic tailwinds, cautious on the global backdrop.

Kardemir

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Turkcell (TCELL TI) - Investments on the rise: Maintain Hold

Ulker Biskuvi Sanayi (ULKER TI) - Proven resilience: Maintain Buy

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