Petkim (PETKM TI) - Solid results in 3Q20: Maintain Hold
With this report, we incorporate higher polymer pricing but weaker aromatics pricing due to the Covid-19 pandemic. Together with our raised petrochemical pricing and weaker naphtha prices, we also factor in our updated macro forecasts, which new lower risk free rate assumption of 14% and weaker TRY against USD forecasts. As a result, we raise our 12M SOTP-based TP by 15% to TRY4.58. Even though we expect cash generation to remain healthy in the near term, we believe that the upside potential is limited. We lower our EBITDA/NI forecasts for 2020/21 by 29%/40% and 3%/21%, respectively.
Petkim posted net profit of TRY291m in 3Q20, exceeding our estimate of TRY263m and the RT consensus estimate of TRY198m. The beat to our estimate was driven by a lower effective tax rate of 15% vs BNPPe of 22%. Operationally, 3Q20 EBITDA of TRY500m was in line with our estimate of TRY493m but 7% higher than RT consensus of TRY466m. Backed by inventory gains and better q-q petrochemical pricing, the company posted a solid results amid a weaker TRY against the USD.
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.