Aselsan: Is the worst over? (stays BUY)
Post its 9M19 results, we revise our earnings estimates and update our valuation model for defence electronics giant Aselsan. We trim our 12M price target (PT) by 11% to TRY 28.35/share, but reiterate our BUY rating for the stock on valuation grounds. Despite its robust 9M19 operating performance (revenues/EBITDA up 47%/44% yoy in TRY terms and backlog up 14% to USD 9.8bn), the stock price is down 20% ytd, underperforming the BIST100 by 31%. We believe this is attributable mainly to deteriorated working capital dynamics (NWC) hurting the FCF generation, and US sanctions worries surrounding the Turkish defence sector. In our view, at current price levels, both concerns have been overdone and the stock offers an attractive risk/reward profile.
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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