ORGE Enerji Elektrik Taahhut (ORGE TI) - Better cash flow deserves TP upgrade: Maintain Buy
* Target price raised, maintain BUY
We met with Orge’s management to get detailed information on the ongoing and potential projects as well as its 2020 targets. Considering that the improvement in cash collection will continue in the coming quarters too and 3Q results were above our expectations, we revisited our estimates and raised our TP by 35% to TRY5.33. We maintain our BUY rating on the stock.
* New additions expected to the backlog in the coming quarters
The current backlog of the company stands at TRY230m as of end-September. The management expects to receive new orders amounting to c.TRY160m in 2020, driven by potential electrical works of subway, tourism, hospital and petrochemical facilities, in the coming quarters. Half of this figure is foreseen to be generated by subway works as subway constructions have started again after a year-long pause. Orge is also keen on having business from the petrochemical sector.
Orge Enerji Elektrik Taahhut AS is a Turkey-based company engaged in the electrical contracting sector. It undertakes electrical contracts for various projects, such as shopping centers, industrial zones, energy transmission lines, industrial plants, universities, housing projects, hotels, schools, logistics warehouses, and business centers; and renewable energy projects, such as biogas, wind, and sun. The Company's completed projects include Prime Mall Antakya, Pendorya Shopping Center, Cansa Chemistry, Benar Chemistry, Bosal Mimaysan, MecaPlast Automotive, Akse Living Residences, Gala Town, Kadir Has University, Paint Varnish Organized Industrial Zone, Jasmine Hotel-Antalya, Ekrem Elginkan High School, ICA Plaza and Tirsan Logistic among other.
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