Kalekim: a growth story worth paying for (initiation of coverage)
In this report, we initiate our sponsored research coverage of Kalekim, one of Turkey’s leading building chemicals producers. We see the company as a solid growth play with a strongly cash-generative business model and an unlevered balance sheet. Kalekim benefits from organic growth in the domestic market, while also generating around one-third of its revenues from exports, the majority of which are destined for Iraq. We believe also that its solid business model and unlevered balance sheet leave room for acquisition targets in adjacent sectors. We estimate 158% yoy growth in revenues in 2022E, as a result of pricing, a weaker TRY and the acquisition of Lyksor Chemicals; and 168% yoy EBITDA growth. We also project 38% and 32% CAGRs in revenues and EBITDA for 2022-25E. Kalekim trades at a deep discount to its global peers on our 2022-23E EV/EBITDAs and P/Es. We estimate the potential fair valuation range at TRY 29.2-44.9 vs. the current price of TRY 20.4.
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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