Market Watch – (Şeker Yatırım)

Market Watch - Wednesday, August 6, 2025

Outlook:

The BIST 100 Index started Tuesday on a positive trend, but upon profit-taking closed at 10,849.96 on a modest decline of 0.03%. The Industrial Index rose 0.51%, while the Banking Index fell 0.16%. Stronger interest rate cut expectations following better-than-expected inflation data had supported the BIST, yet the demise of short-term expectations led to profit-taking. We expect the BIST to focus on the emerging 2Q financial statements. Global markets, which started the week positively with expectations of a Fed interest rate cut, closed with limited losses due to discussions on tariffs and Russia, while European stock markets were mixed. Futures and Asian markets revealed a limited positive trend this morning. The VIOP-30 Index closed the evening session up 0.25%. Locally, we expect the Benchmark Index to start Wednesday on a positive trend and seek to maintain it if intraday profit-taking is met. SUPPORT: 10,750 - 10,650 RESISTANCE: 10,900 - 11,000.

Money Market:

The Lira was positive yesterday, gaining 0.03% against the USD to close at 40.6626. The currency also depreciated by 0.03% against a basket of $0.50 and €0.50. Meanwhile, the local fixed income markets were relatively flat. The ten-year benchmark bond was traded within a tight range of 31.21%-31.30%, ending the day at a high of 31.30%, 1 bps above its previous closing.

Company News:

Akcansa (AKCNS.TI; OP) is to announce its 2Q25 financial results after the Turkish Markets close today. We expect the company to print sales revenue of TRY 5,357mn in 2Q, while the median expectation in the market is for TRY 5,270mn. We expect an EBITDA of TRY 710mn (median market forecast of TRY 717mn) and net income of TRY 229mn (median market forecast of TRY 229mn) in 2Q25. According to inflation-adjusted data, we estimate that Akcansa's sales revenues may have declined by around 15% YoY in the second quarter. However, we anticipate a notable contraction in EBITDA margin.

Aselsan (ASELS.TI; OP) has reported a net profit of TRY 3,993mn in 2Q 2025. This figure was 32% higher than the market median expectation of TRY 3,019mn (2Q 2024: TRY 3,075mn). The increase in net sales revenues in 2Q22025, coupled with the increase in operating profit resulting from successful operational management and deferred tax revenue, supported the net profit figure. However, the rise in net financial expenses due to increased exchange rate losses, coupled with the rising net monetary position loss, were factors pressuring profitability.

In 2Q 2025, Aselsan's net sales revenues, including the impact of TAS-29, exceeded the market median expectation of TRY 29,550mn (Expectation: TRY 28,645mn), achieving a net sales revenue of TRY 29,550mn, a 13.3% increase year-over-year. Deliveries for Air Defense, Electronic Warfare, Electro-Optics, Radar, Avionics, Security, and Weapon Systems contributed to the increased sales revenue.

EBITDA, including the impact of TMS-29, exceeded the market's median expectation of TRY 8,016mn (expected: TRY 6,999mn). In 2Q 2025, the company continued to strengthen, driven by increased operational profitability and revenue growth thanks to cost control. The gross profit margin was 33.7%, the EBITDA margin was 27.1%, and the net profit margin was 13.5%. (2Q 2024: 34.5%, 26.0%, and 11.8%, respectively).

ASELSAN's total order volume reached a record high USD16 bn in the first half of the year (USD12.3bn). The company received a total of USD2.8 billion in new orders in 1H 2025 (1H2024: USD2.6bn). The company, resolutely pursuing its export-focused growth strategy, secured USD1.3 million of its USD2.8 billion order volume in 1H25 from abroad (1H24: USD365 million). As of 1H25, defense accounts for 97% of the company's total order backlog, while non-defense accounts for 3%. As of 1H25, 56% of long-term orders were in dollars, 33% in euros, and 11% in TL.

The company's net debt position decreased from TRY21,321mn at the end of 1Q25 to TRY 21,041mn. The net debt/EBITDA ratio, however, fell to 0.57 in 1H25 due to strong EBITDA. Thus, the company maintained its position below the industry average.

Dividend - The company decided to distribute a gross dividend of TRY 0.2346491 and a net dividend of TRY 0.1994517 per share on November 25th. This represents a gross dividend yield of 0.13% based on the last closing price.

The company maintained its 2025 expectations - Aselsan has maintained its 2025 expectations. Accordingly, the company anticipates net sales revenue growth exceeding 10% in Turkish Lira terms in 2025, including TAS 29. The company targets an EBITDA margin of 23% in 2025, including TAS 29. Aselsan also plans for a minimum capital expenditure of TRY20 billion in 2025, including TAS 29.

Cimsa (CIMSA.TI; UR) Cimsa has announced a net profit of TRY 717mn for 2Q25. The figure was below our net profit estimate of TRY 883mn and the median market expectation of TRY 781mn. The company had posted a net profit of TRY 1,725mn in 2Q24. Thanks to organic growth in sales volumes and Mannok's contribution, sales revenues increased by 40.0% YoY in 2Q25, reaching TRY 10,895mn. (2Q24: TRY 7,782mn) (Seker Yatirim sales expectation: TRY 9,985mn, median market sales expectation TRY 10,496mn). The company generated a quarterly EBITDA of TRY 2,029mn in 2Q25, (2Q24: TRY 1,927mn). The quarterly EBITDA margin narrowed by 6.2pp YoY to 18.6%, due to last year's high base effect and the impact of price increases on cost items (2Q24 EBITDA margin: 24.8%). Our EBITDA estimate for this quarter was TRY 2,075mn, while the median market expectation was TRY 2,060mn.

Eregli Demir Celik (EREGL.TI; OP) is to announce its 2Q25 results after the close of the TR markets. For 2Q25, we expect net sales of TRY 47,154 mn (Market median expectation: TRY 49,630 mn). On the EBITDA side, the median market expectation is TRY 4,316 mn, while our expectation is TRY 4,517 mn. As a result, we expect the Company to report a net profit of TRY 502 mn (market median expectation: TRY 781 mn).

Isbank (ISCTR.TI; OP) posted TRY 17,372mn of net income (+40% QoQ) in its 2Q25 bank-only financial statements, exceeding expectations, primarily supported by a 21.5% QoQ increase in net fee & commission income. The announced figure came in 30% above the market consensus of TRY 13,369mn. Despite a 12.3% QoQ decline in swap funding costs, NII contracted by 16% QoQ, while personnel expenses increased by 23.4% QoQ, leading to an 18.8% QoQ quarterly decline in operating profit. Additionally, the TRY 1,220mn in tax provisions put mild pressure on the bottom line. The bank’s ROAE rose from 15.4% in 1Q25 to 17.8% in 2Q25. For FY25, the bank has revised downward its >30% ROAE budget to ~25%. Also, NIM guidance has been reduced to a 350 bps increase from a 450 bps increase (Positive).

Migros (MGROS.TI; OP) has announced that 26 new stores (17 Migros, 2 Migros Jet, 5 Macrocenter, 1 Mion personal care store and 1 Petimo pet food and accessories store) and 1 distribution center were opened in July 2025. The total number of stores is 3,702 as of 31 July 2025 (Slightly Positive).

Pegasus (PGSUS.TI; OP) has announced the Board of Directors resolution regarding the establishment of Pegasus Airlines Ventures Limited Partnership in the USA where the Company will be the sole limited partner. Duly, the aim is to seize investment opportunities in Artificial Intelligence focused technology ventures in which the Company collaborates through its subsidiary, Innovation Lab. Pegasus Airlines Ventures LP will be positioned as a corporate venture capital fund to evaluate investment opportunities in identified ventures.

Petkim (PETKM.TI; OP) is to announce its 2Q25 financials today after the market close. The median market expectation is for a net loss of TRY -1,300mn, while net sales revenues and EBITDA are expected to come in at TRY 19,319mn and TRY -689mn, respectively.

Turkish Airlines (THYAO.TI; OP) reported a net profit of USD 694mn in 2Q25 (2Q24: USD 943mn), slightly above the market expectations (Seker: USD 658mn, Market Consensus: USD 658mn). Thanks to a 5.4% YoY increase in PAX, and a 7.4% YoY growth in passenger revenues, the company was able to generate a positive net profit in the second quarter, mainly supported by a 19.5% YoY rise in operating profit due to easing cost pressures and lower OpEx, as well as income from investment activities. On the other hand, tax expenses and the accounting effect of the weakening USD were headwinds for the bottom line this quarter.

Turkish Airlines carried 23.3mn passengers in 2Q25, marking a 5.4% YoY increase compared to 2Q24. Parallel to strong passenger demand driven by seasonality, passenger revenues grew by 7.4% YoY, supported also by technical revenues, leading to a 5.6% YoY increase in total sales revenues, which reached USD 5,980mn in 2Q25 (Seker: USD 6,043mn; Market Consensus: USD 5,979mn). However, cargo revenues declined by 9.4% YoY due to the slowdown in global freight demand. EBITDA increased by 12.9% YoY in USD terms to USD 1,357mn, driven by improved operational profitability and revenue growth amid lower cost pressure (Seker: USD 1,326mn; Market Consensus: USD 1,263mn). The company’s operational results came in slightly above expectations.

The EBITDAR margin rose by 1.2pp YoY to 25.4%. in 2Q25. The total passenger count for 2Q25 rose 5.4% on an annual basis, with passenger LF at 82.2%, up 1.1 pp in 2Q25. PAX yields slightly declined by 0.6% YoY to US$¢8.85 in 2Q25. Cargo volume rose by 5.5% YoY, while cargo revenue declined by 9.4% YoY to US$ 802mn. RASK2 narrowed 0.7% YoY to US$¢7.67 in 2Q25 (2Q24: US$¢7.73). Passenger RASK showed a 0.7% YoY improvement, reaching US$¢7.27 in 2Q25. Total CASK declined by 2.3% YoY to US$¢7.91 thanks to lower jet fuel prices (fuel CASK: 2Q24: US¢2.49, 2Q25: US¢2.11, -15.2% YoY) despite a 14.3% YoY rise in personnel unit costs (2Q24: US¢1.71, 2Q25: US¢1.96) driven by wage increases and GTF engine-related issues. EBITDAR rose by 10.9% YoY in USD terms to USD 1,522mn in 2Q25, and the EBITDAR margin increased by 1.2pp YoY to 25.4%.

Turkish Airlines has slightly revised upward its 2025 financial and operational outlook, forecasting 7%-8% (Previous: 6%-8%) YoY growth in passenger capacity, with total passengers exceeding 91 million. The company expects total revenue to rise by 6-8% YoY, with an EBITDAR margin in the range of 22-24%. Ex-fuel unit cost is projected to increase in the mid-to-single-digit range, while the fleet is expected to expand to 520-525 aircraft (Previous: 515-525 aircraft) by the end of 2025. We evaluate the financial 2Q25 results as 'slightly positive' for the Company's shares in the short term.

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