Company Report & Initiation / Ulusoy Elektrik (ULUSE TI) - Profitable growth to continue: Initiating at Buy
Considering the growing energy demand and modernization needs, investments in electricity transmission and distribution infrastructure are expected to increase in the coming years. As the leading electrical equipment manufacturer in Turkey, Ulusoy Elektrik is well positioned to reap the benefits of prospective growth in the electricity infrastructure market. Accordingly, we estimate that the company’s domestic revenues will post a 6% CAGR in 2017-2020.
On top of a strong foothold in the domestic market, Ulusoy Elektrik exports its products to more than 50 countries. The company’s export revenues grew by 53% y-y to TRY65m thanks to diversification of export markets and localization of operations. We forecast that the company’s export revenues will post a 71% CAGR in 2017-2020. All in all, we estimate the company’s total revenue to grow by 21% on average in 2017-2020.
We initiate coverage of Ulusoy Elektrik with a BUY rating and 12 month target price of TRY14.95/share, which offers 30% upside potential. We like the company’s profitable growth story which is also supported by a solid balance sheet.
Ulusoy Elektrik Imalat Taahhut ve Ticaret AS. Ulusoy Elektrik Imalat Taahhut ve Ticaret AS is a Turkey-based company engaged in the manufacture of switchgears. The Company's products are: HMH series metal enclosed modular switchgears, which are medium voltage switchgears designed for use in secondary distribution systems, in compact kiosk type transformer substations, in industrial facilities and indoor spaces; LBSG Series Complete SF6 Gas Insulated medium voltage Modular Switchgears (RMU), which are used in M.V secondary distribution systems; Metal Clad Switchgears, used in Energy Generation and Distribution Facilities, Mines and Iron and Steel Factories, among others, and UBET series monoblock concrete substation kiosks, used in secondary distribution systems for housing purpose of modular Switchgears, distribution transformers , LV distribution boards and other medium voltage switchgear and and distribution equipments, among others.
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