Earnings Review / Petkim (PETKM TI) - Strong profitability in 3Q18: Maintain Hold
Petkim posted net income of TRY413m in 3Q18, broadly in-line with our estimate of TRY451m but much higher than RT concensus estimate of TRY376m. Despite higher-than-expected effective tax rate (28% in 3Q18 vs. our estimate of 22%) and worse-than-expected financial expenses, the bottom-line was boosted by strong operating profitability. Accordingly, 3Q18 EBITDA of TRY744m came 26% higher than our estimate of TRY590m and 38% above RT consensus of TRY539m, backed by stronger-than-expected aromatics pricing, inventory gains and TRY depreciation.
We reiterate our HOLD call for Petkim but revise up our 12M TP by 14% to TRY5.75/share on better than expected profitability in 3Q18 and updated macro forecasts. Even though we like its appealing transformation story with visible cash generation outlook in the long term, we believe that current prices suggest a limited returns.
Petkim Petrokimya Holdings is engaged in the production of petrochemical products. The product portfolio of Co. comprises goods such as thermoplastics, fibers, and raw material for paints, products which constitute primary inputs for a number of industries. These products are also used for the plastic, chemical, packaging, piping, paint, construction, agriculture, automotive, electricity, electronics, and textiles industries, as well as the pharmaceutical, detergent, and cosmetics sectors. Co. sells its products in the domestic market and in international markets.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.