Is Yatirim Menkul Degerler A Good Investment?
Edison | Feb 18, 2015 05:24AM ET
Is Yatirim Menkul Degerler (IS:ISMEN) reported 2014 consolidated net profits 11% lower than in 2013 with a good performance from its bank debt investment unit (Efes NPL Asset management) partly compensating for the absence of private equity profits, which boosted 2013 results. Corporate finance fees were also strong in Q4 due to the completion of four M&A transactions. We have increased our concerns that the rising political and economic uncertainty affecting Turkey may inhibit client activity and have lowered our 2015 EPS forecast by 4%.
Q414 net attributable profits rose 25% year-on-year thanks to a particularly good performance from the Efes NPL Asset Management business, which makes profits from buying NPLs (non-performing loans) from Turkish banks at a discount to the recoverable amount. There was also a good performance from corporate finance fees, up over 200% y-o-y, with four deals closed in the quarter.
Cautious approach to 2015 profit forecasts/h3
We have lowered our 2015 EPS forecast by 4% to reflect the increased political uncertainty in Turkey, which we fear could stymie deal-making and trading during the year. In addition, there is local political uncertainty arising from the June 2015 general election and a new President whose words seem to be undermining the Turkish Central Bank’s credibility.
Valuation: Implied risk premium persists/h3
ISY is trading on a FY15e P/E of 6.0x (broader European universal bank group: 10.6x) and a dividend yield of 5.3% (broader group: 4.0%) and is on a comparable P/BV multiple for 0.7x for 2015 despite being forecast to generate a higher ROE (12.7% in FY15e versus a consensus for the broader group of 6.7%). The market continues to attach an increased risk premium to Turkish investments consistent with the current geopolitical and local economic and political uncertainties.
To Read the Entire Report Please Click on the pdf File Below
/h2
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.