Coca-Cola Icecek: Compelling defensive growth story (BUY - transfer of coverage)
Due to a change in analyst responsibilities, we transfer coverage of Coca-Cola Icecek (CCI), with a BUY rating and a 12M price target (PT) of TRY 172.3/share. We view CCI as a secular defensive growth play, which operates with high profitability and generates strong free cash flows. We expect investors to focus on the growth trajectory and the Uzbekistan operations in the near term. We expect a step-function type of growth in the EBITDA and net earnings in 2022E, driven by the weaker TRY, the impact of the Uzbekistan acquisition and the continuation of organic growth. We strongly believe that there is a mispricing in the valuation, when the growth, profitability and risk factors are considered, as the stock trades at 4.4x 2022E EV/EBITDA and 6.7x 2022E P/E, on our estimates.Coca-Cola Icecek is a bottler and distributor of alcohol-free beverages in Turkey, Pakistan, Central Asia and the Middle East. Co. focuses on the production, sales and distribution of sparkling and still beverages with The Coca-Cola Company (TCCC) trademarks. Co. has rights to produce, sell and distribute TCCC branded beverages including Coca-Cola, Coca-Cola Zero, Coca-Cola Light, Fanta, Sprite, Cappy, Sen Sun, Powerade and Fuse Tea in TCCC authorized packages throughout Turkey. Co. also has the right to produce, sell and distribute Burn and Gladiator branded energy drinks throughout Turkey, as well as bottling and distribution rights in Turkey for Schweppes branded beverages.
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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