SOK: Leading the modern trade charge (BUY - initiation of coverage)
We initiate coverage of SOK Marketler Ticaret (SOK) with a BUY recommendation and a price target (PT) of TRY 13.0/share. We find SOK similar to Dino Polska in terms of its high growth profile, but at much cheaper multiples. It is fourth-largest player in the Turkish food retail market, yet with sufficient scale, an immature store base and a store format differentiated from the market leaders, to better meet customer needs. The strategy of SOK’s management calls for doubling the store count and tripling sales between 2017 and 2022E. With a consensus 2017-20E EBITDA CAGR of 49%, SOK is at the top of the industry. On our numbers, it should expand at 2018-23E sales and EBITDA CAGRs of 25% and 27%, the highest rate within our consumer universe. At the same time, it is trading a notch below the IPO price of TRY 10.5 at our 2019E adj. EV/EBITDA of 10.5x, 3% below BIM and 32% below Dino. Given the superior growth profile, we find such a discount valuation to be an attractive entry point.Sok Marketler Ticaret AS. Sok Marketler Ticaret AS, located in Istanbul, Turkey, owns and operates grocery stores. It sells Amigo, Crown, Deren, Evin, Karmen, Lio, Peki, Piyale and Tempo brands. The Company was founded in 1995.
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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