Enerjisa Enerji: Hungry cash cow (stays BUY)
We reiterate our BUY recommendation on Enerjisa Enerji, with a new 12M price target (PT) of TRY 10.0/share, which implies 54% upside. In this year’s volatile environment, we see Enerjisa as one of the best defensive names in Turkey, which also offers significant growth potential, regardless of financing costs volatility. Most of the company’s earnings are fully regulated and the government/regulator has only limited options in intervening in Enerjisa’s business, which would hurt cash flow income, should the current crisis escalate further. Despite the likely headwinds ahead, we see Enerjisa delivering another good year through RAB growth, positive FCF generation and higher underlying net income. Financing has been locked in for this year already, and the current net debt/operational earnings of 1.9x and significant cash inflows for overspending coming in 2021E should secure a generous dividend payout next year and operational earnings growth ahead, on our estimates.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.
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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