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YATAS:  Business goes strong

June 13, 2019     A robust 2Q is to come…   Recall that VAT cut (to 8% from 18%,…

YATAS:  Business goes strong

June 13, 2019



A robust 2Q is to come…


Recall that VAT cut (to 8% from 18%, re-initiated in October 2018) had been extended until June-end, so the company benefits from it in the quarter together with the positive seasonality. Yatas management thinks that VAT cut may be extended until year-end. Even without VAT extension, the company’s sales and margin performance are strong as competition weakened significantly during this difficult macro environment and Yatas gains more market share.

2019 guidance indicates an upside risk to our estimates…


Yatas targets TL1,200-1,250mn revenues in 2019 (BGC: TL1.18bn), indicating 27-32% y/y growth. On the profitability front, Yatas guides for TL186-194mn EBITDA in 2019 (15.5% margin) vs. our estimate of TL177.7mn (15.0% margin), and TL84-100mn net income at 7-8% margin vs. our current estimate of TL97.3mn at 8.2% margin. For 2019, we understand that the company may beat its EBITDA margin guidance slightly; above 16% margin is likely under current outlook. We estimate 43% top line growth and 15% EBITDA margin in 2020, while the profitability may be higher considering the economies of scale. Based on our current estimates, Yatas trades at very attractive multiples of 3.9x P/E and 3.4x EV/EBITDA on 2020E figures (2019E: 6.7x P/E and 4.8x EV/EBITDA).


“Divan” store opening will take place soon in this month…

Yatas will open its first concept store this month in June (own store, which is under construction now), which will be followed by new franchise store openings as there are 35-40 readily available franchisee.


BUY maintained with 70% upside potential…

We still believe that the company is one of the best long term investment stories. Yatas’ revenue growth should remain solid in the coming years given the demand trends, urbanization, rapid household formation, increasing marriage and divorce rates, decreased replacement cycle for furniture products, low per capita spending, and still higher share of unbranded products in the market. Yatas has a net debt of TL208.7mn in 1Q19 at 1.37x EBITDA, which is relatively low in current environment.


BGC Brokerage Research Report–excerpts


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