Adding MPARK. We are adding MLP Care to our model portfolio with a recently increased TP of TL30.75/share (increased from TL 23.57/share). We label MLP Care as a surprise beneficiary of the re-opening phase of the pandemic thanks to its growth potential of its medical tourism component of revenues and its increased operating efficiency thanks to the cost cutting measures implemented in 2020.
Furthermore, we expect the Company to continue its ongoing deleveraging process with an estimated 2021E Net Debt/EBITDA multiple around 1.5-1.6x. MPARK trades at 2021E EV/EBITDA multiple of 6.5x compared to our peer groups median multiple of 8.8x, yielding a discount of 26%. Further details of our investment thesis on MLP Care can be found on our valuation update published this morning.
Removing TTKOM. Although we think that digitalization would continue, we believe the pace would be slower in 2021, following a strong year thanks to the pandemic. TTKOM stock increased by 13% since its inclusion to the portfolio on November 12, 2020, TTKOM underperformed the index by 7%.
During this period, TTKOM outperformed TCELL, its closest peer, by 6%. Telecoms have a defensive nature, and may be less affected by possible market downturns, and we like TTKOM owing to the management’s efforts to reduce the company’s FX exposure.
However, we think that this year’s post-pandemic era theme may lead to further underperformance of the stock. We have TL10.25 target price with 16% upside potential. TTKOM trades at 7.9x 2021 P/E and 3.3x 2021 EV/EBITDA, implying 38% and 34% respective discount to its peers.
Our Model Portfolio outperformed BIST100 by 1.8% year-to-date.
Source: Y.F. Securities Research