Genel / Public

Macroeconomic & Equity Market Outlook January 13, 2021

Valuations reach close to fair

Turkish economy seeking sustainable growth in 2021. We estimate GDP growth was 1.6% in 2020, thanks to the strong loan growth. The recovery -30% trend continues despite tighter financial conditions. We expect a 4.2% of -35% economic growth in 2021 under the assumption of a gradual recovery trend on domestic demand starting in 2H21, potentially better contribution from net -40% -45% exports and the strong base effect in 2Q21. Current trends indicate upside -50% risks and the YoY CPI figure could reach a peak around 16% in March-April. We expect the YoY CPI could decrease to around 11.6% at the end of the -55% year, if the required level of tight monetary policy stance is sustained. We -60%

could see a limited hike on the policy rate probably in January (or till April).

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Aug.19 May.20 On the other hand, we expect measurable cuts in the policy rate could start Aug.20 in June, parallel to the expected disinflation process and the policy rate could Discount to EM Average 2 Std. Dev.(+) 2 Std. Dev.(-) decline to 13.5% at the end of the year. ’s three-year average economic growth performance is estimated to be around 1.8% during 2018- 2020 period, in the aftermath of robust 2017 performance taking a toll on 12 exchange rate dynamics later on. Hence, we believe the sustainability of the 11 economic growth rather than the numerical level would be much more 10 important, when we take into consideration the current difficulties on the 9 employment, inflation, and current account outlook (Details on Page 3-5). 8 7 Our revised estimates and valuations point to BIST-100 target of 1,750 6 (previously 1,510); indicating 13% upside potential remaining. If this past 5

year has taught us anything, the path to economic recovery is hardly a

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Jan.18 Jan.19 smooth ride with no setbacks. Flush with liquidity and low interest rates, Jan.20 equity market has rallied strongly on assumptions for a blue sky scenario this MSCI TR P/E Average P/E year. We would like to underline the risk of macro prudential measures being implemented create risks around earnings recovery, while carrying a certain level of uncertainty whether key objectives of lower inflation, C/A deficit and high GDP growth can be reached. Given this background, we recommend following a strictly bottom-up, valuation based approach while investing at BIST at the current levels. 2021E P/E is 8.5x on our estimates and 7.5x, according to consensus, while the discount to EM average has narrowed down to its historical average.

We rate all banks under our coverage as Market Perform at this point. Sector’s current valuation multiples look very attractive from a historical standpoint, but we see significant earnings pressures until 2H21, due to a combination of higher rates and elevated cost of risk. Our Top Picks is GARAN on strength of capital, profitability and ample free provision buffers (Pages 10-11) .

Non-bank valuations indicate 12% overall upside potential. We estimate aggregate revenues of non-financials would grow 30% in 2021E, following a modest increase of 3% in 2020. Rebound in commodity-related sectors, weak base due to lockdowns in 2020 and higher FX rates on average would be drivers of top-line growth in 2021. We estimate aggregate earnings to drop 31% with FX losses pressuring bottom-lines in 2020E, while seeing a strong recovery of 102% in earnings growth for 2021E thanks to the favorable base effects. Our Top-Picks among non-financial names are TUPRS, KRDMD, TKFEN, ARCLK, MPARK, AEFES, PGSUS, TAVHL, ALARK, MGROS and MAVI (replaces EKGYO, Details on Page 2).

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Genel / Public Adding MAVI. The Company would be one of the beneficiaries of the re-opening of the economy, and the base affect should support growth throughout 2021. Coupled with the healthy balance sheet, we expect MAVI to rapidly increase its bottom line in 2021. We have a Market Outperform rating for the stock with TL71/shr TP and 31% upside. The stock trades at 14x 2021E P/E and 4.4x 2021 EV/EBITDA, which imply respective discounts of 60% and 44% to its international peers.

Ticker MAVI Multiples 2020E 2021E 2022E P/E 45.5 14.4 10.8 Rating Outperform EV/EBITDA 7.9 4.7 3.8

Target Price (new) 71.00 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 68.50 Revenues 2,491 3,117 3,831 Current Price 54.20 EBITDA 405 674 833

Upside Potential 31% Net Income 59 187 249

Removing EKGYO. We are taking profits at this point and remove EKGYO from our model portfolio. We believe possible further increase in mortgage rates and ongoing Covid-19 restrictions pose a risk on unit sales. Potential increase in receivables via sales financed by the Company itself in this increasing rate environment remains as a risk factor on cash flow generation. Hence, we downgrade the stock to Market Perform on limited upside potential with a TP of TL2.9. The stock appreciated by 28% since our inclusion on November 17, while outperforming BIST-100 by 4%

YF Research Model Portfolio Yatırım Finansman - Model Portfolio Performance Stocks Price (TL) Market Cap. (million) Inclusion Return since Inclusion Company Ticker Last Target Upside TL US$ Date Relative Absolute Tekfen Holding TKFEN 18.60 24.00 29% 6,882 922 24-Nov-20 3% 21% Tupras TUPRS 109.40 142.00 30% 27,396 3,672 22-Dec-20 -5% 4% Pegasus Hava Tasimaciligi PGSUS 73.25 92.20 26% 7,493 1,004 04-Dec-20 -1% 15% Tav Havalimanlari TAVHL 21.94 28.60 30% 7,970 1,068 10-Nov-20 3% 29% ALARK 9.48 12.25 29% 4,124 553 21-May-20 27% 91% MGROS 44.16 58.40 32% 7,995 1,072 09-Jun-20 -8% 31% Arcelik ARCLK 33.34 37.00 11% 22,529 3,020 27-Jul-20 15% 49% Emlak G.M.Y.O. EKGYO 2.45 2.90 18% 9,310 1,248 17-Nov-20 4% 28% (D) KRDMD 6.41 7.80 22% 5,001 670 17-Nov-20 21% 49% Anadolu Efes Biracilik AEFES 26.50 32.90 24% 15,691 2,103 23-Oct-20 -11% 16% Medical Park Saglik Hizmetleri MPARK 22.52 30.75 37% 4,685 628 11-Jan-21 0% 1%

Model Portfolio Performance - Equally Weighted Model Portfolio return since the last rebalance* 1.1% BIST100 return since last rebalance* 0.6% Model Portfolio Relative return since the last rebalance* 0.6% Model Portfolio Return Year-to-date 7.5% BIST100 Return Year-to-Date 4.9% Model Portfolio Relative Performance Year-to-date 2.4% *Since the last re-balance on January 11th 2021

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Genel / Public

2021 Macroeconomic Outlook: Still misty, but familiar now

Global recovery seems on track in 2021, after the sharp contraction in 2020. Uncertainties related with the pandemic, which was the worst global crisis since WWII, could prevail to a certain extent in 2021 as well. According to the IMF forecasts, global economy recorded a contraction of 4.4% in 2020 but would grow by 5.2% in 2021. Base effect, progress in controlling the pandemic and expansionary measures taken in monetary and fiscal policy fronts could be seen the key drivers of the recovery expectation. The projections of the developed country central banks indicate that the global financial environment would continue to support the global risk appetite, at least for a while.

Stabilization need for Turkey. The Central Bank of the Republic of Turkey (CBRT) had started make front- loaded cuts in the policy rate in 3Q19 after 3-quarter long contraction from 4Q18 to 2Q19 and disinflation process. Pandemic has occurred at the initial period of the recovery trend because of the front-loaded cuts. The CBRT continued to deliver policy rate cuts during March-May of 2020, which had started in July 2019, in order to limit the negative impacts of the pandemic. In addition, the Bank implemented a comprehensive set of measures within the framework of liquidity management (temporarily increase the bond portfolio, targeted liquidity facilities to banks, etc.). Meanwhile, the Banking Regulation and Supervision Agency (BRSA) introduced an Asset Ratio rule (terminated as of Dec. 31, 2020), effective from the beginning of May, with a view to encouraging banks to extend loans to residents and purchase securities. Especially the strong loan growth trend has made a positive economic growth performance possible for Turkey in 2020. However, this situation leaded to significant side-effects on the price and financial stability and caused need for stabilization.

Sustainability of the economic growth would be followed. We estimate that the economic growth was 1.6% in 2020 thanks to the strong loan growth. The recovery trend continues despite tighter financial conditions and momentum losses. We expect a 4.2% of economic growth in 2021 under the assumption of a gradual recovery trend on domestic demand starting in 2H21, potentially better contribution from net exports and the strong base effect in 2Q21. Turkey’s 3-year average economic growth performance is estimated to be around 1.8% during 2018-2020 due to the aftermath of 7.5% economic growth in 2017. Hence, we believe the sustainability of the economic growth rather than the numerical level would be much more important, when we take into consideration the current difficulties on the employment, inflation, and current account outlook.

Monetary policy stance and inflation outlook would be the compass of this year. Current trends indicate upside risks and the YoY CPI figure could reach a peak around 16% in March-April. We expect the YoY CPI could decrease around 11.6% at the end of the year, if the required level of tight monetary policy stance is sustained. We could see a limited hike on the policy rate probably in January (or till April). On the other hand, we expect measurable cuts in the policy rate could start in June, parallel to the expected disinflation process and the policy rate could decline to 13.5% at the end of the year.

Our average USDTRY currency assumption is 7.79 while our year-end currency estimate is 8.15. We expect a more stable TL performance throughout the year. A possible reserve accumulation action of the CBRT seems unrealistic in 1H20. TL could continue to get strengthen in 1H20 thanks to the supportive global financial environment, tight monetary policy stance and renewed interest on TL assets. On the other hand, we believe the downside potential of the USDTRY would be limited in 2H20 due to the expected cuts in the policy rate and possible actions for reserve accumulation.

Our CAD to GDP ratio forecasts are 5.5% for 2020 and 3.3% for 2021. The outlook of the balance of payments deteriorated remarkably because of the sharp drop in tourism revenues, which is one of the most important driver of the FX inflow, due to the pandemic and the jump in imports thanks to the strong loan growth. The jump of the gold imports due to the dollarization trend was higher than the gains from the net energy imports due to weak performance of the energy prices. Official reserves were the key financing item of the current account deficit due to the weakness in FDI, portfolio outflows and deleveraging trend in the real sector. Rational policy approach and expected stabilization process have crucial importance in bolstering reserves.

Fiscal discipline would be followed closely. The maneuvering area in budget has been utilized due to the negative shocks in recent years and the pandemic. Despite the extraordinary conditions that make this outlook acceptable in the short run, restoring the maneuvering area again would be important when the incentives would have to be rolled back, starting 2022. On the other hand, we should note that the incentive needs in the economy prevails simultaneously with the tight monetary policy necessities. This condition could 3

Genel / Public continue to put a negative pressure on the budget outlook in 2021. We should also note that the increasing share of the FX and gold in internal borrowings recently could be seen as another difficulty on the budget outlook. Our budget to GDP ratio estimate is at -3.7% for 2020 and -4.5% for 2021.

Sustainable recovery in the employment market would not be easy. The pandemic has occurred when the unemployment ratio was above the historical averages due to the weak growth performances in the recent years. Despite the employment protective measures, turning back to the pre-pandemic levels would not be easy. Service sector, which gets the hardest hit from the pandemic, has the highest share (56%) in the employment market. More importantly, there are 4.3 million people who are not seeking a job, but available to be employed (not included in labor force), as of October 2020 (2019: 2.5mn) in addition to 4 million of unemployed (2019: 4.4mn). Possible inclusion of discouraged workers to the labor force during the expected recovery period could lead to rigidity on the unemployment rate. Hence, we believe reaching back to the historical averages in unemployment ratio (around 10.5%) in 2021 seems unlikely.

G-4 Central Banks Assets (Fed, ECB, BoE, BoJ) G-10 Central Bank Average Policy Rate

Turkey Economic Growth Turkey Inflation and CBRT Policy Rate

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Genel / Public

Key Economic Indicator Forecasts

2017 2018 2019 2020E 2021E GDP (TRY bn) 3,134 3,758 4,320 4,921 5,841 GDP (USD bn) 859.1 797.1 760.8 702.1 750.8 Deflator 11.0% 16.5% 13.9% 12.1% 13.9% GDP Real Growth 7.5% 2.9% 0.9% 1.6% 4.2% CPI (eop) 11.9% 20.3% 11.8% 14.60% 11.56% CPI (average) 11.1% 16.3% 15.2% 12.28% 14.51% PPI (eop) 15.5% 33.6% 7.4% 25.15% 10.29% PPI (average) 15.8% 27.0% 17.6% 12.18% 21.39% Policy Rate (eop) 8.00% 24.00% 12.00% 17.00% 13.50% Policy Rate (average) 8.00% 15.77% 20.00% 10.50% 16.33% Average Cost of Funding (eop) 12.75% 24.06% 11.43% 17.03% 13.50% Average Cost of Funding (average) 11.51% 17.72% 11.34% 10.58% 16.79% 2-y Benchmark Bond (eop) 13.40% 19.73% 11.78% 14.96% 11.73% 2-y Benchmark Bond (average) 11.8% 18.5% 17.7% 12.16% 14.71% USDTRY (eop) 3.79 5.29 5.95 7.44 8.15 USDTRY (average) 3.65 4.84 5.68 7.02 7.79 Primary Balance (% GDP) 0.3% 0.0% -0.6% -0.9% -1.0% Budget Balance (% GDP) -1.5% -1.9% -2.9% -3.7% -4.5% Exports (USD bn, FOB) 164.5 177.2 180.8 169.5 178.0 Imports (USD bn, CIF) 238.7 231.2 210.3 219.4 223.8 Foreign Trade Balance (USD bn) -74.2 -54.0 -29.5 -49.9 -45.8 Services Export (USD bn) 53.5 58.6 63.6 31.0 45.0 Services Import (USD bn) 27.1 28.5 28.1 22.9 26.4 Services Balance (USD bn) 26.3 30.2 35.5 8.0 18.7 C/A Balance (USD bn) -40.6 -21.6 6.9 -38.4 -25.0 C/A Balance (% of GDP) -4.7% -2.7% 0.9% -5.5% -3.3%

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Genel / Public TOP PICKS

ALARKO HOLDING (TP raised to TL12.25) We increase our TP for Alarko Holding to TL12.25/share from TL10.66/share on the back of faster deleveraging on its unconsolidated electric production and distribution subsidiary Alcen. At the end of 2020, we expect Alcen’s combined net debt (Alark share: %49.96) to reach a sub USD500mn level. Management also implemented a prudent early payment policy on its FX-based debt, strengthening our deleveraging thesis. We raise our 2021 net income estimate for Alarko to TL796mn (2021E P/E: 5.0x) thanks to a lower projected financial expense figure on Alcen. On top of the deleveraging on the energy side, we believe additions to Alarko’s construction backlog can be a source of further upside for the conglomerate.

Ticker ALARK Multiples 2020E 2021E 2022E P/E 7.8 5.2 4.2 Rating OUTPERFORM EV/EBITDA n.a. n.a n.a

Target Price (new) 12.25 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 10.66 Revenues 1,131 1,362 1,479 Current Price 9.48 EBITDA 263 374 396 Net Income 528 796 986 Upside Potential 29%

ARCELIK We expect the positive momentum in domestic white goods market to continue until end of 1H21, before the high base would kick in. Meanwhile, the recovery in international markets sped up in the last quarter, which may support the company’s international shipments. The EUR/USD parity remains favorable, while the impact of raw material price increases would come with a lag thanks to fixings made at lower prices. We expect ARCLK’s EBITDA margin would remain above 12% during 1H, around 100bps above the company’s long term target. Sharp increase in net income and strong cash flow generation may lead to a high dividend distribution from 2020 earnings. We expect an 80% pay- out ratio, which implies a dividend yield of 8.7%. Note that the company did not distribute any dividends for the last two years, prior to that the dividend yield hovered around 5%. Our TP stands at TL37 for ARCLK, implying 11% upside.

Ticker ARCLK Multiples 2020E 2021E 2022E P/E 9.2 10.4 9.9 Rating Outperform EV/EBITDA 6.1 5.1 4.4

Target Price (new) 37.00 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 37.00 Revenues 38,258 48,311 55,130 Current Price 33.34 EBITDA 4,584 5,506 6,357 Net Income 2,438 2,171 2,286 Upside Potential 11%

ANADOLU EFES (TP raised to TL32.90) Anadolu Efes has managed to successfully navigate through a tough year thanks to its valuable %50 stake in CCOLA and resilient sales volumes (2.6% growth) on its international beer division. Domestic beer sales volume was down 13.6% but after the Covid-19 period an active tourism season can provide the much-needed support for AEFES’s domestic beer business. AEFES trades at a 2021E P/E of 11.1x and EV/EBITDA of 5.6x, a 48% and 49% discount to our global brewing peer group. Maintaining our exposure to CCOLA through AEFES, we continue to include AEFES in our model portfolio with an increased TP of TL 32.9/share (Previously: TL 29.7/share) and an Outperform rating.

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Genel / Public Ticker AEFES Multiples 2020E 2021E 2022E P/E 16.7 11.1 8.9 Rating Outperform EV/EBITDA 6.4 5.5 4.5

Target Price (new) 32.90 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 29.70 Revenues 27,588 33,304 38,925 Current Price 26.50 EBITDA 5,182 5,949 7,246 Net Income 941 1,414 1,757 Upside Potential 24%

KARDEMIR (TP raised to TL7.80)

We revise up our estimates for Kardemir on the back of c.50% price increase in most steel products since Sep’20, which suggests a strong margin and cash flow performance at least until the end of 1H’2021. With limited exposure to imported iron ore and scrap, each registering sharp price rises in recent months, Kardemir remains well positioned to capture margin expansion opportunity amid tight global supply and cost-push from the raw materials. We raise our EBITDA estimate from USD110/ton to USD140/ton for 2021 (with 1H2021 likely above USD150/ton), resulting in 23% and 38% upward revision in our EBITDA and Net Income estimates, respectively. Our estimates now indicate P/E and EV/EBITDA multiples of 4.6x and 3.6x for 2021E. We maintain Outperform rating on upside potential of 22% to our new TP of TL7.80 (from TL6.30).

Ticker KRDMD Multiples 2020E 2021E 2022E P/E 161.3 4.6 4.8 Rating Outperform EV/EBITDA 7.2 3.6 3.8

Target Price (new) 7.80 Estimates (TLmn) 2020E 2021E 2022E

Revenues 7,777 10,428 12,084 Target Price (previous) 6.30 Current Price 6.41 EBITDA 1,265 2,517 2,418 Upside Potential 22% Net Income 45 1,594 1,525

MEDICAL PARK

We have recently added MLP Care to our model portfolio with a recently increased TP of TL30.75/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.

Ticker MPARK Multiples 2020E 2021E 2022E P/E 86.8 28.7 8.7 Rating Outperform EV/EBITDA 7.1 6.8 5.0

Target Price (new) 30.75 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 30.75 Revenues 3,934 4,742 5,733 Current Price 22.52 EBITDA 952 1,005 1,345 Net Income 54 163 539 Upside Potential 37%

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Genel / Public PEGASUS HAVACILIK

Similar to TAVHL, PGSUS also has a better position for the post-pandemic era, as we believe the recovery in leisure travel and short haul flights would be faster. Their flexible route planning and stricter cost structure should support the financials in our view. In 2021, we expect the capacity and passenger traffic to reach around 90% and 80% that of 2019, respectively. Meanwhile, despite addition of 9 aircraft deliveries in 2021, we believe the net debt may remain stable thanks to strict cost management and effective route utilization. The company currently holds a cash position of EUR469mn, which easily covers the bank loans of EUR238mn and potential cash outflow of c. EUR150mn during the weak season. We have a Market Outperform rating for PGSUS with TL92.20 target price, implying 26% upside.

Ticker PGSUS Multiples 2020E 2021E 2022E

P/E -4.8 11.1 4.5 Rating Outperform EV/EBITDA 49.9 6.5 4.0

Target Price (new) 92.20 Estimates (TLmn) 2020E 2021E 2022E

Target Price (previous) 92.20 Revenues 4,141 11,265 15,460 Current Price 73.25 EBITDA 415 3,194 5,189 Net Income -1,561 675 1,655 Upside Potential 26%

TAV HAVALIMANLARI

After closures and low demand, 2021 is a year of recovery for the aviation sector. We believe the demand pick-up in leisure travel would be faster and since its major airport operations are mainly touristic destinations, TAVHL would be in an advantageous position. With mass vaccination during 1H20, we expect a strong pick up in tourist arrivals in summer months. Hence, following a 70% contraction in 2020, we expect passenger traffic to grow by 95% in 2021 and reach 55mn, around 60% of 2019. According to our estimates, TAV’s Turkey airports may reach c. 80% of the traffic in 2019. Contrary to airlines, TAVHL has relatively lower fixed costs, and the company managed its cash outflow comfortably. As of 9M20, TAVHL has a net debt position of EUR862mn. However, at the holding level, the Company holds a net cash position of EUR284mn and all subsidiary loans are in line with their cash flows. We have a Market Outperform rating for the stock with TL28.66/share target price, which implies an upside of 31%.

Ticker TAVHL Multiples 2020E 2021E 2022E P/E -5.4 32.1 5.3 Rating Outperform EV/EBITDA 65.1 7.5 4.2

Target Price (new) 28.60 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 28.60 Revenues 2,431 5,852 7,962 Current Price 21.94 EBITDA 204 1,765 3,135 Net Income -1,475 248 1,516 Upside Potential 30%

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Genel / Public TEKFEN INSAAT (TP raised to TL24.00) We raise our TP for TKFEN from TL19.5 to TL24.0 as outlook for contracting segment has improved thanks to recovery in oil prices and better prospects for new projects. Backlog performance in 2020 was also more resilient than our earlier estimates with cumulative new contract awards (including project extensions) reaching c.USD900mn last year, which would help TKFEN maintain its backlog above our long-term sustainable level assumption of USD1.5bn. TKFEN’s contracting segment went from an average EBITDA of >USD200mn in 2018- 19 to almost break-even EBITDA figure in 2020E, so a potential swing back to positive EBITDA would lend support to the stock price, which we believe is likely as at least some of the cost overruns from past year could by recovered. Furthermore, recent reconciliation between Qatar and Saudi Arabia (which have combined share of 52% in the company’s backlog) would also support growth prospects. For fertilizer and agriculture segment, including terminal services, we estimate annual EBITDA performance to grow to USD130mn in 2021 from USD120mn in 2020E on the back of increasing price/mix. We estimate net income to increase to TL760mn in 2021E and TL1259mn in 2022E, implying attractive PE multiples of 9.1x and 5.5x. We maintain Outperform rating on upside potential of 29% to our new TP.

Ticker TKFEN Multiples 2020E 2021E 2022E P/E 15.9 9.1 5.5 Rating Outperform EV/EBITDA 5.7 3.4 2.3

Target Price (new) 24.00 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 19.50 Revenues 13,185 12,697 15,898 Current Price 18.60 EBITDA 766 1,280 1,884 Net Income 432 760 1,259 Upside Potential 29%

TUPRAS

We maintain our positive view on TUPRS as we believe the massive margin squeeze for refiners should be over as (1) global supply/demand balance is getting more balanced in the oil market and uptrend in crude oil/product prices would at least contribute to margins via inventory gains (2) demand outlook is set to improve as global stimulus measures and Covid-19 vaccine roll-out in 2021 would lead to increased consumption of distillates (3) heavy crude differentials are expected to widen on the back of easing supply cuts and possible increase in Iranian exports. We expect these factors to play out gradually with wider heavy crude differentials (USD1.5/bbl positive impact in 2021E) likely to be the initial margin driver, followed by a rebound in crack margins in 2022. We estimate clean EBITDA performance of TUPRS to increase to c.USD1bn level in 2022E (still lower than 2018 level of USD1.2bn, but up from USD142mn in 2020E). The stock trades at 8.6x and 4.8x EV/EBITDA on our 2021E and 2022E estimates, compared to historical forward looking average multiple of around 6.5x. Our TP is unchanged at TL142.0, which offers 30% upside potential.

Ticker TUPRS Multiples 2020E 2021E 2022E P/E -9.6 11.2 5.0 Rating Outperform EV/EBITDA 51.9 8.6 4.8

2020E 2021E 2022E Target Price (new) 142.00 Estimates (TLmn) Target Price (previous) 142.00 Revenues 58,270 82,865 101,856 Current Price 109.40 EBITDA 853 5,136 9,124

Upside Potential 30% Net Income -2,839 2,453 5,467

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Genel / Public

TARGET PRICE REVISIONS AND RATING CHANGES

Ticker Company Name Previous New YKBNK Yapi Ve Kredi Bankasi Outperform Market Perform EKGYO Emlak G.M.Y.O. Outperform Market Perform CCOLA Coca Cola Icecek Outperform Market Perform AKCNS Akcansa Market Perform Underperform ENKAI Enka Insaat Market Perform Underperform KOZAL Koza Altin Isletmeleri Outperform Market Perform OTKAR Outperform Underperform

FINANCIALS

AKBANK

We have updated our estimates, TP and recommendation for the Bank last week, following the release of 2021 guidance. Our 2021 net income is in line with the current Bloomberg consensus and points to 12.5% ROE, somewhat lower than the Bank’s mid-teens target. We are more conservative due to risks around interest rate volatility and cost of risk. Our TP is based on 14.2% sustainable ROE, 14.0% risk free rate and a 5% equity risk premium, resulting in 2021 Target P/BV of 0.62x.

Ticker AKBNK Multiples 2020E 2021E 2022E P/E 6.2 4.9 3.6 Rating Market Perform P/BV 0.62 0.55 0.49

Target Price (new) 8.35 Target Price (previous) 8.35 Current Price 7.28 Estimates (TLmn) 2020E 2021E 2022E

Upside Potential 15% Net Income 6,089 7,737 10,426

GARANTI BANK

We have updated our estimates, TP and recommendation for the Bank this week, following the release of 2021 guidance. Our 2021 net income is in line with the current Bloomberg consensus and points to 14.8% ROE, in line with the Bank’s mid-teens target for the year. The Bank remains our Top Pick in the sector due to higher profitability, strong capital and ample provisioning buffers. Our TP is based on 16.0% sustainable ROE, 14.0% risk free rate and a 5% equity risk premium, resulting in 2021 Target P/BV of 0.74x

Ticker GARAN Multiples 2020E 2021E 2022E P/E 6.2 4.8 3.6 Rating Market Perform P/BV 0.68 0.65 0.55

Target Price (new) 12.40 Target Price (previous) 12.40 Current Price 10.47 Estimates (TLmn) 2020E 2021E 2022E Net Income 7,077 9,141 12,197 Upside Potential 18%

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Genel / Public

HALKBANK

Rising TL funding costs would continue pressuring ’s NIM until 3Q21. Last year’s robust loan growth with loan extensions/restructurings remains a risk factor on asset quality. We maintain our TP of TL5.7 (based on 14.0% rfr, 7% equity risk premium and 10.5% sustainable ROE) and our Market Perform rating.

Ticker HALKB Multiples 2020E 2021E 2022E P/E 5.0 3.5 2.1 Rating Market Perform P/BV 0.31 0.28 0.25

Target Price (new) 5.70 Target Price (previous) 5.70 Current Price 5.68 Estimates (TLmn) 2020E 2021E 2022E Net Income 2,810 3,989 6,799 Upside Potential 0%

VAKIFBANK

We expect elevated level of TL funding costs to cause NIM erosion until 2H21, given VAKBN’s TL heavy balance sheet. Similar to HALKB, last year’s robust loan growth in 2020 with loan extensions/restructurings remains a risk factor on asset quality. We maintain our TP of TL5.65 (based on 14.0% rfr, 7% equity risk premium and 12% sustainable ROE) and our Market Perform rating.

Ticker VAKBN Multiples 2020E 2021E 2022E P/E 3.6 3.3 2.6 Rating Market Perform P/BV 0.42 0.39 0.34

Target Price (new) 5.65 Target Price (previous) 5.65 Current Price 4.88 Estimates (TLmn) 2020E 2021E 2022E Net Income 5,310 5,822 7,259 Upside Potential 16%

YAPI KREDI BANK (TP raised to TL3.90, downgraded to Market Perform)

Considering the increasing trend in TL funding costs, we estimate NIM pressure to continue especially in 1H21. Although we agree with the Bank’s guidance for lower cost of risk this year, thanks to the proactive provisioning in 2020, we lower our 2020/21 net income estimates to TL5.4bn/TL6.5bn due to the ongoing NIM pressure and risks around restructuring & refinancing at much higher interest rates for the commercial loan book. We downgrade our recommendation to Market Perform, given limited upside to revised TP of TL3.9. Stock has returned 51% in absolute terms since end Oct’20. Our valuation is based on 14.0% sustainable ROE (unchanged), 14.0% risk free rate (unchanged) and 5% equity risk premium (previously: 6%), resulting in 2021 Target P/BV of 0.58x.

Ticker YKBNK Multiples 2020E 2021E 2022E P/E 5.1 4.2 3.2 Rating Market Perform P/BV 0.57 0.47 0.38

Target Price (new) 3.90 Target Price (previous) 3.50 Current Price 3.25 Estimates (TLmn) 2020E 2021E 2022E

Upside Potential 20% Net Income 5,419 6,504 8,633 11

Genel / Public

NON FINANCIALS

EMLAK REIT (TP raised to TL2.90, downgraded to Market Perform) We believe possibility of further rate hikes and ongoing Covid related restrictions continue to limit unit sales in the sector. Additionally, the sales financed by the Company itself may increase to support homebuyers in the increasing rate environment, which pushes up receivables of the Company. The non-performing part of these receivables are limited, yet it may reduce the cash flow generation performance of the company. We update our TP to TL2.9 by increasing our estimates slightly on updated valuations and higher inflation assumptions, while downgrading our recommendation to Market Perform on limited upside potential. The stock appreciated by 42% since October, while outperforming BIST REIT index by 12% and BIST100 by 3%.

Ticker EKGYO Multiples 2020E 2021E 2022E P/E 7.9 9.8 9.0 Rating Market Perform EV/EBITDA 6.3 9.8 10.3

Target Price (new) 2.90 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 2.70 Revenues 5,824 3,726 3,548 Current Price 2.45 EBITDA 1,747 1,118 1,064

Upside Potential 18% Net Income 1,183 954 1,029

AKCANSA (TP raised to TL15.90, downgraded to Market Underperform)

Akcansa’s stock price has outperformed the BIST-100 index by 50% during the past 12-month period. Depreciation of TL was the main support behind cement producers changing fortunes, while Channel development expectations propelled sharp rallies in cement producers’ share prices. Even though we increase our TP for Akcansa to TL 15.90/share from TL 14.11/share, we cut our recommendation for the company from Market Perform to Underperform. According to our calculations the stock trades at a 2020E P/E ratio of 25.2x and 2021E P/E ratio of 12.9x, levels over 50% higher than our peer group consisting international cement producers and Cimsa.

Ticker AKCNS Multiples 2020E 2021E 2022E P/E 25.2 12.9 7.8 Rating Underperform EV/EBITDA 11.2 7.8 5.0

Target Price (new) 15.90 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 14.11 Revenues 1,942 2,579 3,262 Current Price 18.89 EBITDA 353 510 796 Net Income 144 280 463 Upside Potential -16%

COCA-COLA ICECEK (TP raised to TL84.4, downgraded to Market Perform)

Coca-Cola Icecek has managed to outperform the BIST-100 index over the past 12-month period by 47% thanks to its increased operating efficiency, resilient international volume growth and ongoing deleveraging process. For FY20 we estimate CCOLA’s EBITDA margin to increase from 18.4% to 22.2% in 2019, while its 2020E Net Debt/EBITDA multiple to settle around 0.4x, which opens the gate for potential acquisitions or juicy dividend payments. After the remarkable performance of CCOLA, we downgrade our recommendation for the stock to Market Perform with a TP of TL 84.4/share (Previously: TL 71.48/share). CCOLA trades at a 2021E P/E of 9.8x and at a EV/EBITDA multiple of 5.9x, a 34% and 15% discount compared to its international peer group.

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Genel / Public Ticker CCOLA Multiples 2020E 2021E 2022E P/E 12.2 9.8 8.1 Rating Outperform EV/EBITDA 6.4 5.9 4.9

Target Price (new) 84.40 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 71.48 Revenues 14,275 17,182 20,406 Current Price 74.20 EBITDA 3,168 3,483 4,207 Upside Potential 14% Net Income 1,551 1,935 2,334

PETKM (TP raised to TL5.50)

PETKM has been a beneficiary of low feedstock costs in 2020 as Covid-19 pandemic kept crude oil and naphtha prices under pressure. On the demand side, petrochemicals performed strong thanks to wide use in packaging and healthcare products. Strong recovery in economic activity, led by Asia, also helped spreads widen for petrochemical producers. In 2021, we expect this set-up to be more unfavorable for PETKM as increasing mobility could push crude oil and feedstock costs higher. Stock trades at EV/EBITDA multiple of 9.1x in 2021E (7.5x if adjusted for debt related to pending acquisition of Star refinery stake), which is demanding in our view. We maintain our Market Perform rating with revised TP of TL5.50 (from TL5.0). We note that possible inclusion of PETKM to MSCI Index after the increase in its free float market cap could be a technical short-term catalyst in 1H'21.

Ticker PETKM Multiples 2020E 2021E 2022E P/E 16.5 13.3 10.7 Rating Market Perform EV/EBITDA 11.0 9.1 8.7

Target Price (new) 5.50 Estimates (TLmn) 2020E 2021E 2022E

Target Price (previous) 5.00 Revenues 11,642 14,822 15,903

Current Price 5.29 EBITDA 1,712 2,069 2,173 Upside Potential 4% Net Income 811 1,006 1,255

OTOKAR (TP raised to TL340, downgraded to Market Underperform)

We downgrade OTKAR from Outperform to Underperform as we believe stock price, which doubled in a two-months period, has priced in most of growth prospects and risk-reward seems unfavorable at current levels. We estimate 2021 to be a strong year on the back of recent contract awards (worth around USD195mn in total) and recovery in domestic commercial vehicle demand. On the opex front, we see limited growth due to cancellation of exhibitions, which would lead to continuation of strong EBITDA margin performance (above 20%). However, robust earnings outlook for 2021 seems to be already in the price as the stock trades at P/E multiples of 13.8x in 2021E and 12.3x in 2022E, based on our estimates. Our new TP is TL340 (from TL250) which indicates 15% downside from current price.

Ticker OTKAR Multiples 2020E 2021E 2022E P/E 17.5 13.8 12.3 Rating Underperform EV/EBITDA 15.8 11.0 9.6

Target Price (new) 340.00 Estimates (TLmn) 2020E 2021E 2022E

Revenues 2,979 4,672 5,670 Target Price (previous) 250.00 Current Price 409.90 EBITDA 692 995 1,145 Upside Potential -17% Net Income 563 712 802 13

Genel / Public

KOZA ALTIN (TP raised to TL128, downgraded to Market Perform)

We downgrade our rating for KOZAL from Outperform to Market Perform following recent jump in stock price as we now see limited return potential even after upward revision in our target price to TL128/share (from TL107). Our valuation in based on a DCF, where we assume KOZAL to produce 2.1mn ounces of reserves over 10 years with a gold price estimate of USD1850/ounce. The company's year-end reserve update and potential resolution of ownership case could be key catalysts, but we also see recent pullback in gold price and a stronger TL as potential downside factors. Overall, we now see balanced risk-reward and move to a neutral stance.

Ticker KOZAL Multiples 2020E 2021E 2022E

P/E 8.4 7.0 6.9 Rating Market Perform EV/EBITDA 5.4 4.7 4.5

Target Price (new) 128.00 Estimates (TLmn) 2020E 2021E 2022E

Target Price (previous) 107.00 Revenues 3,499 3,994 4,193 Current Price 119.00 EBITDA 2,331 2,698 2,777

Net Income 2,151 2,604 2,619 Upside Potential 8%

KORDSA (TP raised to TL19.50)

Kordsa faced multiple headwinds in 2020 as tire reinforcement business had to cope with excess supply amid Covid- 19 shock, while newly built composite business took a hit due to its heavy exposure to aviation industry. The recovery already started in tire reinforcement segment as replacement demand for tires jumped after the pandemic, whereas pace of improvement could remain slow for composite business. We estimate EBITDA to increase from USD79mn in 2020E to USD100mn in 2021E, which would remain below pre-pandemic level (USD132mn in 2019). On the other hand, the company's plans to continue its expansion in composite business could continue this year with a potential deal standing as a potential catalyst. We raise our TP from TL16.0 to TL19.50 and maintain Outperform rating on Kordsa, which trades at EV/EBITDA multiples of 7.7x in 2021E and 6.4x in 2022E.

Ticker KORDS Multiples 2020E 2021E 2022E P/E 19.8 12.0 10.9 Rating Outperform EV/EBITDA 10.7 7.7 6.4

Target Price (new) 19.50 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 16.00 Revenues 4,421 5,619 6,459

Current Price 16.38 EBITDA 557 778 929 Upside Potential 19% Net Income 161 266 291

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Genel / Public (TP raised to TL18.20)

Based on the uptrend in global steel prices, we now expect a stronger expansion in EBITDA margin of EREGL in 2021 (USD185/t vs. our previous estimate of USD130/t) leading to 37% upward revision in our EBITDA estimate. We continue to assume longer term margins to average around USD140/t, thus upward revision in our DCF-driven target price is 17% from TL15.5 to TL18.2/share. Stock trades at 3.7x EV/EBITDA in 2021E and 4.3x in 2022E vs. long- term average of around 5.0x. We see 20% upside potential from last close, while estimating dividend yield to be 10.6% in 2021E.

Ticker EREGL Multiples 2020E 2021E 2022E P/E 16.6 6.6 7.6 Rating Outperform EV/EBITDA 7.3 3.7 4.3

Target Price (new) 18.20 Estimates (TLmn) 2020E 2021E 2022E

Target Price (previous) 15.50 Revenues 32,047 47,043 44,387 Current Price 15.12 EBITDA 6,400 12,565 10,823 Upside Potential 20% Net Income 3,196 7,961 6,933

TOFAS (TP raised to TL45.0)

We maintain our Outperform rating on TOASO as the stock could see further rerating on the backing completion of FCA-PSA merger, which could accelerate investment cycle of Tofas and increase longer-term visibility of the company’s roadmap. We believe main investor focus has therefore shifted to potential synergies out of FCA-PSA merger rather than near-term earnings outlook. Geographic expansion (with potential benefits from PSA’s strong footprint in MENA countries), platform sharing opportunities (initially for new generation Doblo investment) and increased market share of the combined group in Turkey (which would hit 30% on pro-forma basis) would be areas of potential synergies for TOASO. We raise our TP from TL34 to TL45 as we lift our terminal value multiple from 6.0x to 7.0x to account for higher potential to utilize the company’s plant within merged FCA-PSA entity. Stock trades at 5.8x and 5.4x EV/EBITDA multiples for 2021/2022 and our revised TP implies 16% upside potential.

Ticker TOASO Multiples 2020E 2021E 2022E P/E 10.6 8.2 7.6 Rating Outperform EV/EBITDA 7.0 5.8 5.4

Target Price (new) 45.00 Estimates (TLmn) 2020E 2021E 2022E Target Price (previous) 34.00 Revenues 23,916 31,031 34,607

Current Price 38.80 EBITDA 2,880 3,453 3,722 Upside Potential 16% Net Income 1,831 2,379 2,557

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Genel / Public (TP raised to TL160)

Following the company’s announcement about investment incentives related to capacity expansion for new generation models, we raised longer-term export volume estimates to 450K by 2024E (vs. 340K previously) also taking into account potential exports to VW after capacity expansion. Despite the increase in our volume forecasts, we note that investments would total more than USD2.0bn according to the incentive certificate and high capex figures partially dilute contribution of higher volumes in our DCF valuation. Based on our revised estimates, we raise our TP from TL130 to TL160/share, but see limited upside potential of 1% due to strong performance of the share especially over the last few weeks.

Ticker FROTO Multiples 2020E 2021E 2022E P/E 14.9 12.5 11.5 Rating Market Perform EV/EBITDA 11.6 9.8 8.8

Target Price (new) 160.00 Estimates (TLmn) 2020E 2021E 2022E

Revenues 50,049 62,420 71,284 Target Price (previous) 130.00 Current Price 158.60 EBITDA 5,057 5,987 6,664 Upside Potential 1% Net Income 3,723 4,442 4,858

ENKAI (TP raised to TL8.50, downgraded to Market Underperform)

We downgrade ENKAI from Market Perform to Underperform as our revised sum of the parts valuation points to TP of TL8.50 (up from TL7.50 previously), which implies 5% downside potential based on last close price. We expect strong financial income from especially Turkish bank Eurobonds as a result of improvement in Turkish asset valuation in 4Q’20, but even taking into account strong financial income figures in 2020, P/E multiple looks rich at 11.3x, which would rise to 15.7x in 2021E due to normalization in financial income. We estimate contracting business to grow to USD1.6bn revenues in 2021 from USD1.4bn in 2020 thanks to new power plant project in Georgia. For real estate segment, we believe negative impact of Covid-19 could be seen for a longer time on rent generation potential as remote working would drive demand for office space down. As for power segment, it remains unclear when the c.4000MW natural gas-fired power plants of Enka would be restarted as production looks not feasible due to high gas tariff and weak spot electricity prices.

Ticker ENKAI Multiples 2020E 2021E 2022E P/E 11.3 15.7 13.2 Rating Underperform EV/EBITDA 7.1 5.5 4.8

Target Price (new) 8.50 Estimates (TLmn) 2020E 2021E 2022E

Revenues 11,680 15,972 19,748 Target Price (previous) 7.50 Current Price 8.94 EBITDA 2,801 3,585 4,167 Upside Potential -5% Net Income 4,428 3,197 3,785

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Genel / Public

VALUATION MULTIPLES

P/E P/BV Ticker Company Name Current Price Target Price Upside Potential Rating 2020E 2021E 2022E 2020E 2021E 2022E AKBNK 7.28 8.35 15% Market Perform 6.2 4.9 3.6 0.62 0.55 0.49 GARAN Garanti Bankasi 10.47 12.40 18% Market Perform 6.2 4.8 3.6 0.68 0.65 0.55 HALKB Halk Bankası 5.68 5.70 0% Market Perform 5.0 3.5 2.1 0.31 0.28 0.25 VAKBN Vakıflar Bankası 4.88 5.65 16% Market Perform 3.6 3.3 2.6 0.42 0.39 0.34 YKBNK Yapı Kredi Bankası 3.25 3.90 20% Market Perform 5.1 4.2 3.2 0.57 0.47 0.38 ANSGR 7.62 8.56 12% Outperform 6.5 6.4 5.4 1.49 1.25 1.07

P/E EV/EBITDA Ticker Company Name Current Price Target Price Upside Potential Rating 2020E 2021E 2022E 2020E 2021E 2022E AEFES Anadolu Efes Biracilik 26.50 32.90 24% Outperform 16.7 11.1 8.9 6.4 5.5 4.5 AKCNS Akcansa 18.89 15.90 -16% Underperform 25.2 12.9 7.8 11.2 7.8 5.0 ALARK Alarko Holding 9.48 12.25 29% Outperform 7.8 5.2 4.2 n.a. n.a. n.a. ARCLK Arcelik 33.34 37.00 11% Outperform 9.2 10.4 9.9 6.1 5.1 4.4 ASELS Aselsan 18.88 20.00 6% Market Perform 10.9 11.1 9.4 15.0 10.9 9.2 BIMAS Birlesik Magazalar 76.30 84.64 11% Outperform 19.5 18.0 16.2 10.3 8.9 7.6 BIZIM Bizim Toptan Satis Magazalari 15.79 16.50 4% Market Perform 31.2 22.7 18.2 2.5 2.2 1.9 CCOLA Coca Cola Icecek 74.20 84.40 14% Market Perform 12.2 9.8 8.1 6.4 5.9 4.9 DOAS Dogus Otomotiv 29.10 26.00 -11% Market Perform 6.0 8.9 7.3 5.2 6.7 5.9 EKGYO Emlak G.M.Y.O. 2.45 2.90 18% Market Perform 7.9 9.8 9.0 6.3 9.8 10.3 ENKAI Enka Insaat 8.94 8.50 -5% Underperform 11.3 15.7 13.2 8.3 6.5 5.6 EREGL Eregli Demir Celik 15.12 18.20 20% Outperform 16.6 6.6 7.6 7.3 3.7 4.3 FROTO Ford Otosan 158.60 160.00 1% Market Perform 14.9 12.5 11.5 11.6 9.8 8.8 KORDS Kordsa Teknik Tekstil 16.38 19.50 19% Outperform 19.8 12.0 10.9 10.7 7.7 6.4 KOZAL Koza Altin Isletmeleri 119.00 128.00 8% Market Perform 8.4 7.0 6.9 5.4 4.7 4.5 KRDMD Kardemir (D) 6.41 7.80 22% Outperform 161.3 4.6 4.8 7.2 3.6 3.8 MAVI Mavi Giyim 54.20 71.00 31% Outperform 45.5 14.4 10.8 7.9 4.7 3.8 MGROS Migros 44.16 58.40 32% Outperform -35.2 46.5 22.0 5.2 4.4 3.5 MPARK Medical Park Saglik Hizmetleri 22.52 30.75 37% Outperform 86.8 28.7 8.7 7.1 6.8 5.0 OTKAR Otokar 409.90 340.00 -17% Underperform 17.5 13.8 12.3 15.8 11.0 9.6 OZKGY Ozak G.M.Y.O. 5.09 5.80 14% Market Perform 3.3 3.6 3.5 3.3 4.9 5.0 PETKM 5.29 5.50 4% Market Perform 16.5 13.3 10.7 11.0 9.1 8.7 PGSUS Pegasus Hava Tasimaciligi 73.25 92.20 26% Market Perform -4.8 11.1 4.5 49.9 6.5 4.0 SOKM Sok Marketler Ticaret 14.02 16.34 17% Outperform 55.6 29.4 23.1 5.1 4.1 3.6 TAVHL Tav Havalimanlari 21.94 28.60 30% Outperform -5.4 32.1 5.3 65.1 7.5 4.2 TCELL 16.69 20.20 21% Outperform 9.1 7.8 6.4 3.7 3.3 2.8 THYAO Turk Hava Yollari 12.86 15.00 17% Market Perform -2.3 -36.8 2.7 30.0 10.4 6.0 TKFEN Tekfen Holding 18.60 24.00 29% Outperform 15.9 9.1 5.5 5.7 3.4 2.3 TOASO Tofas Otomobil Fab. 38.80 45.00 16% Outperform 10.6 8.2 7.6 7.0 5.8 5.4 TTKOM Turk Telekom 8.68 10.25 18% Outperform 10.6 7.8 6.3 3.8 3.5 3.4 TTRAK Turk Traktor 182.70 152.70 -16% Market Perform 13.6 10.8 10.4 8.8 7.0 7.5 TUPRS Tupras 109.40 142.00 30% Outperform -9.6 11.2 5.0 51.9 8.6 4.8 ULKER Ulker 24.20 30.90 28% Outperform 10.9 7.3 5.8 7.1 6.1 5.2

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Genel / Public Yatırım Finansman Securities

Tel: +90 (212) 317 69 00 Meclis - i Mebusan Caddesi No: 81 Fındıklı Fax: +90 (212) 282 15 50 - Beyoğlu / İstanbul 34427 51 TURKEY Bloomberg: YATF www.yf.com.tr

Levent Durusoy Executive Vice President [email protected] +90 (212) 334 98 33 Institutional Sales Burak Demircioğlu Head of Sales & Trading [email protected] +90 (212) 334 98 42 Gülçin Aygün Trading Director [email protected] +90 (212) 334 98 51 Levent Mutlu Trading Director [email protected] +90 (212) 334 98 40 Mehmet Ali Sukuşu Senior Settlements Officer [email protected] +90 (212) 317 68 42 Equity Research Serhan Gök Head of Research [email protected] +90 (212) 334 98 39 Steel, Automotive, Contractors, Oil & Gas, Defence, Serhat Kaya [email protected] +90 (212) 334 98 36 Conglomerates Retail, Aviation, Durables, Food & Beverage, Telcos, Evren Gezer [email protected] +90 (212) 334 98 58 Consumer Mehmet Misoğlu Associate [email protected] +90 (212) 334 98 64 Miraç Başcı Associate [email protected] +90 (212) 334 98 89 Macroeconomic Research Erol Gürcan Economist [email protected] +90 (212) 317 98 37

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Yatirim Finansman Menkul Değerler (YF Securities) research refrains from rating parent companies (TSKB and Isbank) to avoid any potential conflicts of interest between YF Securities and rated companies, in connection with, but not limited to, loan agreements or business deals.

YF Securities, its clients and employees may hold a position in the rated securities and may perform investment banking or other services for the covered companies. Strict limitations on trading apply for analysts; it is prohibited for analysts to trade equities on a daily basis, and any trading of equities by analysts, may only be conducted through the brokerage services provided by YF Securities.

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OutPerform: Rated for stocks which YF Securities expects to outperform the BIST-100 index over a 12-month horizon. MarketPerform: Rated for stocks, which YF Securities expects to perform in line with the expected BIST-100 return over a 12-month horizon. UnderPerform: Rated for stocks, which YF Securities expects to underperform the BIST-100 index over a 12-month horizon.

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