Report
Erdem Kaylı
EUR 10.00 For Business Accounts Only

Tupras (TUPRS TI) - Better than expected profitability: Maintain Hold

As we incorporate our current refinery outlook and updated macro, we lower our 12M TP by 3% to TRY84.34 and maintain HOLD rating. We expect mediocre cash generation to prevail in 3Q20 due to narrowed crude differentials and muted crack margins. Despite expecting solid recovery by 2021, we find the upside potential to be unattractive, as the stock trades at 18.6x and 6.8x 2020/21E EV/EBITDA, implying 135/63% premium to its European peers.

Tupras posted net loss of TRY185m in 2Q20, better than BNPPe but weaker than RT consensus. Despite lesser than expected deferred tax gain of TRY169m, the deviation came from better than expected operational profitability. 2Q20 EBITDA of TRY559m came better than BNPPe and RT consensus. It booked TRY8m inventory losses in 2Q20 in (vs BNPPe: TRY136m inventory gain). CCS EBITDA (adjusted for FX items and inventory gain) of TRY484m came much higher than our estimate, aided by from cheaper than expected crude slate.

Underlying
Turkiye Petrol Rafinerileri A.S.

Turkiye Petrol Rafinerileri is an energy and refining company based in Turkey. Co. is engaged in providing and refining crude oil, the importing and exporting of oil products, and establishing and operating refineries in Turkey and foreign countries. Also, Co. is establishing and operating factories and facilities in the petrochemical industry. Co. is engaged in purchasing, selling, importing, exporting, storing, marketing and distributing (wholesale, retail, foreign and domestic) all kinds of petroleum products, LPG and natural gas. Co. runs its business through the refineries in Izmit, Izmir, Kirikkale and Batman.

Provider
Teb Yatirim
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.

Analysts
Erdem Kaylı

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