Vestel Beyaz: Fair valuation, premium dividend (stays HOLD)
Following the c.64% rerating since our initiation in May 2019 and the release of its 2019 results, we have rolled over our model and revisited Vestel Beyaz’s (VESBE) investment case. We maintain our HOLD rating, with a new price target (PT) of TRY 26.6/share. The company’s export unit growth in 2019 remained well above the European MDA market, and we expect the outperformance to continue in the near term. However, we see the increasing presence of Chinese manufacturers, fighting for market share in Europe, as a risk for pricing. This, coupled with the recovering domestic market and its increasing share in total revenues (an inferior margin for VESBE), implies a margin contraction on the gross/EBITDA lines of 110bps/120bps in our model. All-in-all, we see the 2020E EV/EBITDA multiple of 5.7x as justified. We believe the upside risk from a prolonged coronavirus impact on Chinese white goods (WG) manufacturing capacity and VESBE’s 2019 dividend yield of 15%, from its 2019 earnings, justify the same multiple on its 2020E EV/EBITDA vs. Arcelik (based on the Bloomberg consensus).Vestel Beyaz Esya Sanayi ve Ticaret AS (Vestel Beyaz Esya) is a Turkey-based manufacturer of home appliances, including no-frost, double door, and single door, refrigerators; washing machines with different capacities; air conditioners; ovens with different functions, and dishwashers. The Company operates production facilities in Manisa and Turkey. The Company's marketing and sales activities are carried out by two other group companies, Vestel Dayanikli Tuketim Mallari Pazarlama AS and Vestel Dis Ticaret AS. Vestel Beyaz Esya is a subsidiary of Vestel Group. In January 2014, Vestel Elektronik Sanayi ve Ticaret AS, increased its stake in the Company to 92.6%.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.