Logo Yazılım: Post 1Q21 model update, reiterate BUY
Following the 1Q21 earnings beat when the results were posted in early-May, we have revised our valuation model for Logo Yazılım (Logo) to reflect the significantly better operating performance than expected in 1Q21, but also the deteriorated CPI, exchange rate outlook and higher RFRs in Turkey. As reminder, we adjusted our 12M price target (PT) for the recent 300% bonus share issue on 23 June (when the market price was adjusted to account for the higher number of shares). Following our earnings revisions, the changes to our 2021-22E group revenue forecasts are limited to 1-2%, while we expect 10-7% higher consolidated EBITDA and 10-4% higher net income in the 2021-22E period. Together with our revised macro and TRY WACC assumptions, our 50/50% DCF/target multiples-driven blended valuation now suggests a 2% higher PT of TRY 47.8, offering 44% upside potential. We maintain our BUY rating for Logo and the stock remains among our high-conviction picks in the BIST space, as an attractively-valued proxy for the enterprise digital transformation theme in the EAS and ERP markets, as well as the e-government services segment, in Turkey and Romania.Logo Yazilim Sanayi ve Ticaret AS is a Turkey-based company engaged in the development of computer operation systems, business application software, database structures, multimedia software, as well as in the provision of technical support and service, and training. The Company's products are offered in eight units: Small and Medium Enterprises (SME) products, Enterprise Resource Planning (ERP) products, Java products, Vertical solutions, Integration products, Human Resources (HR) products, Business Intelligence solutions, Mobile solutions and LOGO keys. Its products and services are used in a range of industries, such as distribution, machine and automotive spare parts, marine, packaging, retailing, cement, glass, steel, furniture, telecommunication, information technology (IT), tourism and textile. The Company has business partners in Azerbaijan, Egypt, Georgia, Germany, India, Iran, Iraq, Kazakhstan, Kyrgyzstan, Kosovo, Kuwait, Libya, Russia, Sudan, Syria, Turkmenistan, and the Unit
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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