Turkish White Goods: Quality never goes out of style (initiating on Arcelik with a BUY, and Vestel Beyaz with a HOLD)
We initiate coverage of the Turkish white goods (WG) industry, with a BUY on Arçelik (price target (PT) TRY 23.0) and a HOLD on Vestel Beyaz (VESBE; PT TRY 17.2). Combined, the two companies account for c.80% of Turkish WG exports, which reached a new peak of 22.1m units in 2018. This, coupled with the unprecedented volatility in the TRY over 2H18 and a favourable raw materials environment, resulted in margin accretion and a strong 2018 overall.Arcelik is engaged in the commercial and industrial activities in respect of the production, sales and marketing, customer services after sales, exportation and importation of consumer durable goods and consumer electronics. Co. has two segments: white goods reportable segment, which comprises washing machines, dryers, dish washers, refrigerators, ovens, cookers and the services provided for these products; and the consumer goods reportable segment, which comprises televisions primarily with flat screens, computers, cash registers, other electronic devices and the services provided to consumers for these products.
Vestel Beyaz Esya Sanayi ve Ticaret AS (Vestel Beyaz Esya) is a Turkey-based manufacturer of home appliances, including no-frost, double door, and single door, refrigerators; washing machines with different capacities; air conditioners; ovens with different functions, and dishwashers. The Company operates production facilities in Manisa and Turkey. The Company's marketing and sales activities are carried out by two other group companies, Vestel Dayanikli Tuketim Mallari Pazarlama AS and Vestel Dis Ticaret AS. Vestel Beyaz Esya is a subsidiary of Vestel Group. In January 2014, Vestel Elektronik Sanayi ve Ticaret AS, increased its stake in the Company to 92.6%.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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