Aselsan: growth prism – new angles, brighter future (stays BUY)
Following Aselsan’s 110% rally in USD terms over the past 12M, we are revisiting our investment case, as the company’s growth engines multiply and gear up. As expected, following a period of muted growth in 2020-22, Turkish defence spending and defence procurement activity gained momentum in 2023-24 and, as Türkiye’s largest defence contractor and defence electronics powerhouse, Aselsan secured new contracts of an unprecedented size (USD 5-6.5bn in 2023/24). The company’s (mainly domestic contracts driven) backlog growth was also supplemented by its accelerated exports momentum, as Aselsan expanded its international branch network, while also benefitting from the rising penetration of Turkish defence platform exports (built by TAI, Roketsan, Baykar, and the naval shipyards). As the new geopolitical reality (the Ukraine/Gaza wars, and the recent clashes between India-Pakistan and Israel-Iran) triggers a long-term growth trend in global defence spending, we anticipate Aselsan’s expanding international JV and foreign branch network (in the APAC/MENA/LATAM regions) and its recent inclusion in major EU/NATO air defence programmes as important tailwinds for the company’s exports execution and a strong manifestation of the technological maturity it has reached. We reiterate our BUY on the stock, with a new price target (PT) of TRY 204.4.
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.
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