Brisa: Turkish samurai (BUY - initiation of coverage)
We initiate coverage of Brisa with a price target (PT) of TRY 11.9/share and a BUY recommendation. Regardless of the disruption caused by COVID-19, we believe that Brisa offers an attractive story of export-led growth, mid-term deleveraging and, potentially, an attractive yield story, since resuming dividends after a two-year hiatus. The company has completed the investment in new capacity at its new Aksaray factory and can expand this by another 2m units p.a. for USD 40m in capex, probably stating in 2022/23E. In the meantime, we see Brisa generating an average high-teens FCF yield. Moreover, the company has resumed its dividends, starting this year with a TRY 0.093 DPS from its 2019 earnings, representing a 1.1% yield; while we expect yields to rise to 2.6% and c.4.8% from its 2021E and 2022E earnings, respectively (assuming a 30% payout; the company has significant room to increase payouts).Brisa Bridgestone Sabanci Lastik Sanayi ve Ticaret is engaged in the manufacture and sale of vehicle tires for domestic and foreign brands.
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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