Page 87 - TURKRptSept19

Breewer Anadolu Efes’ net profit jumped to TRY430mn in Q2 from TRY43mn a year ago while the company also reported a net profit of TRY253mn for H1 versus a net loss of TRY63mn a year ago. The market expected a net profit of TRY307mn for Q2. “In the last three months, Anadolu Efes has surged 46%, reflecting the improving market sentiment and robust operations, outperforming the index by 35%. Due to the valuation date roll, we are increasing our 12-month Target Price 8% to TRY 27. However, that implies an ETR of 15% and so we are downgrading our recommendation from Buy to Hold. We see limited room for further positive surprises in 2019 and note that valuations are already stretched, at 2019F EV/EBITDA of 7.4x,” VTB Capital said on August 14 in a research note entitled “Invest Responsibly”.
Tab Food Investments (TFI), the biggest worldwide franchisee of Burger King, has asked Citigroup to help it sell a minority stake in the business in China and Turkey. The deal could fetch at least $200mn, two sources familiar with the matter told Reuters.
Istanbul-based TFI, founded by the Kurdoglu family, operates nearly 1,700 Burger King outlets in Turkey and China. TFI began investing in China in 2012 and now has a network of more than 1,000 Burger King restaurants in more than 150 Chinese cities.
The company, also a franchisee of fast-food chicken chain Popeyes Louisiana Kitchen and pizza brand Sbarro, last year postponed plans for a $220mn initial public offering in New York amid market jitters.
TFI wants the value of the potential stake sale to imply an enterprise value of around $1bn, the sources said.
First-round indicative bids would be due by the end of next week, one source was cited as saying.
TFI is seeking new partners to help speed up growth in China through new restaurant openings, food-delivery services and digital transformation, the source added.
They also said that TFI was considering listing its businesses in China and Turkey, or only the China franchise, in Hong Kong as early as next year.
TFI made around $70mn in earnings before interest, tax, depreciation and amortisation last year. Its 2019 Ebitda is expected to be around $90mn, one of the sources was quoted as saying.
TFI said its China and Turkey operations continued to attract the attention of potential investors. "In the current period, there is an increasing investor interest in our company," Burcu Bati, TFI's chief financial officer, told Reuters in an emailed statement. "TFI is always open to evaluate strategic options that would be in the best interest of the company."
Burger King's major rivals include the KFC, Pizza Hut and Taco Bell brands in China, for which exclusive licences are held by Yum China , a Yum Brands
87 TURKEY Country Report September 2019 www.intellinews.com