Cimsa: sustainable growth, with a global view (BUY - initiation of coverage)
We initiate coverage of Cimsa with a BUY rating and a 12M price target (PT) of TRY 45.3. Since 2020, Cimsa has evolved successfully into a globally diversified building materials company through strategic acquisitions and greenfield investments, with a focus on sustainability remaining at the heart of this transformative journey. The company's unique strength lies in its diversified business model and extensive global reach, which set it apart from other global building material producers, in our view. We believe that management’s ambitions to expand the scope of the international operations, attain operational excellence, and implement a digital transformation will be the key factors that will shape Cimsa in the short term. We expect Cimsa to register stable free cash flows in its core cement operations; however, we also anticipate the full consolidation of Sabanci Building Solutions to act as a growth engine and enable Cimsa to crystallise the value of its new international operations, which are yet to be priced in by investors, in our view. Cimsa is trading at 9.7x 2024E P/E, indicating a 15% discount vs. its global cement peers, on the consensus.Cimsa Cimento Sanayi ve Ticaret is engaged in the cement industry. Co. produces and sells cement and ready-mixed concrete. As of Dec. 31, 2004, Co. maintains 17 ready-mixed concrete plants in 8 provinces.
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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