Enerjisa Enerji: Illuminating! (BUY - initiation of coverage)
We initiate coverage of Enerjisa Enerji with a BUY recommendation and a 12M price target (PT) of TRY 7.44/share, implying 53% upside. Enerjisa is Turkey’s leading player in power distribution and retail, a growing market, where potential is unlocked through the expansion and modernisation of the underdeveloped and ageing grid. Its operating rights cover many of the country’s largest and most industrial cities, including the Asian side of Istanbul, the capital Ankara and Adana. Enerjisa’s business model is effectively inflation neutral, with limited FX exposure – thereby insulating it from the worst of Turkey’s macroeconomic ills – and it is a generous dividend payer. We believe Enerjisa represents an attractive investment, with two more years of highly foreseeable earnings, driven mainly by the ongoing RAB growth and efficiency gains. For the next regulatory period, 2021-25E, we expect the regulator to keep supporting investments and, therefore, operational growth, and the ongoing liberalisation of the retail segment to result in a further strong performance in the future.Enerjisa Enerji AS is a Turkey-based company engaged in the utilities sector. The Company, together with its subsidiaries, is primarily engaged in making investments in energy companies, and deals with the generation, sale, and distribution of electricity, as well as the trade of natural gas. The Company reports its business activities into two main segments: Electricity Distribution and Retail. The Electricity distribution segment includes the transmission of electricity over lines users through distribution networks and provides infrastructure investments in conformity with the energy market regulation authority (EMRA). The Retail segment conducts mainly retail sales of electricity to customers. Enerjisa Enerji AS operates through a number of subsidiaries, such as Baskent Edas, Ayedas and Toroslar Edas, among others.
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.
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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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