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EQUITY

RESEARCH, TURKEY

Company Update

Aksa Enerji Outperform (prev. Market Perform)

Share Price

TL2.51

TL1,539mn

Bloomberg/Reuters:

Rel. Performance: 1 mth 3 mth 12mth

0% -5% -12%

12M Range (TL):

5.3

YTD TL Return: -1%

Beta (2year, w eekly) 0.96

Weight in BIST-100 0.31%

613.2

Current 12M ago

48% 49%

Kazanci Holding 62.0%

Goldman Sachs International 16.6%

Free Float 21.4%

Financials and Ratios 2015 2016E 2017E 2018E

Net Sales (TLmn) 2,320 2,567 3,585 4,512

YoY 19% 11% 40% 26%

EBITDA (TLmn) 436 490 672 984

YoY 27% 12% 37% 46%

Net Income (TLmn) -227 20 75 267

YoY n.m. n.m. 271% 256%

EBITDA margin 18.8% 19.1% 18.7% 21.8%

Net margin n.m 0.8% 2.1% 5.9%

P/E (x) n.m. 76.0 20.5 5.8

EV/EBITDA (x) 9.1 8.1 5.9 4.0

EV/Sales (x) 1.7 1.5 1.1 0.9

EPS (TL) -0.37 0.03 0.12 0.44

DPS (TL) 0.00 0.00 0.00 0.00

Div. Yield 0.0% 0.0% 0.0% 0.0%

ROE -33% 3% 10% 25%

Analyst: Kerim Gokoz Sales Contact:

+90 (212) 384 1129 +90 (212) 384 1155-58

[email protected] [email protected]

Shareholders Structure

Stock Market Data (11 August 2016)

EV

Aksa Enerji, established in 1997, is the third largest independent

pow er producer in Turkey w ith 2,198MW in installed capacity.

Aksa Enerji’s generation portfolio is comprised of three natural

gas pow er plants (1,412MW), seven w ind pow er plants

(259MW), one hydroelectric pow er plant (15MW), three fuel oil

pow er plants (242MW) and one lignite pow er plant (270MW) in

Turkey.

Potential Return12M Target Price

TL3.20 27%

The Company in Brief

Mcap

2.04 / 3.02

Shares Outstanding (mn):

Foreign Ow n. in Free Float :

Average Daily Vol (TLmn) 3 mth:

USD520mn TL3,978mn

AKSEN.TI / AKSEN.IS

This time for Africa

Aksa Enerji has established a new company in the Republic of

Madagascar to build a 120MW heavy fuel oil power plant, which

we value at TL0.50/share in additional value for our Aksa Enerji

target share price based on our estimates.

Aksa Enerji is the main beneficiary from the local coal incentive

announced on August 9, 2016. TETAS will buy 6,000 GWh of

electricity from local lignite power plants at TL185/MWh in 2016,

while the ytd spot price average is TL131/MWh.

We are revising our recommendation to Outperform from

Market Perform and changing our 12-month target price to

TL3.20 from TL2.70, indicating a 27% upside potential, as we

include the Madagascar investment and new lignite tariff to our

valuation.

Enlarging its footprint in Africa: Aksa Enerji established a new

company in the Republic of Madagascar to build a 120MW heavy

fuel oil power (HFO) plant with guaranteed energy sales for 20

years. Aksa Enerji expects to supply 700 GWh of electricity per

annum. It will have a 58.35% stake in the newly formed Aksaf

Power, while its local partner will hold a 41.65% stake. Aksa Enerji

plans to commence generation gradually in 2017. Meanwhile, Aksa

Enerji is continuing its 370MW HFO Ghana investment to begin

producing electricity in Ghana in 4Q16. The Company foresees an

annual EBITDA of over USD100mn per annum when the Ghana

investment reaches full capacity.

Goynuk now benefits from local coal incentives: TETAS will buy

6,000 GWh of electricity from local lignite power plants at TL185/

MWh in 2016. Considering the TL131/MWh ytd average spot price

in the day before market, the proposed prices will increase the

profitability of all private lignite producers. Aksa Enerji is the main

beneficiary from the incentive thanks to its share of lignite power

plants in generation reaching c.20%. We estimate Aksa Enerji to

sell c.300GWh electricity at TL185/MWh and provide an additional

TL6mn in EBITDA in 2016. We forecast the Goynuk power plant to

generate 1.66bn kWh of electricity in 2016, rising to 1.85bn kWh in

2017 and generating a TL167mn EBITDA contribution in 2017.

Kazanci Holding refinanced its loan: Aksa Enerji’s main

shareholder Kazanci Holding and its group company Aksa Dogal

Gaz signed a new USD800mn loan agreement with a consortium

led by Garanti Bank and Isbank and with the participation of seven

banks on August 2, 2016. With this refinancing any potential risks to

the pledged Aksa Enerji shares have been eliminated.

Valuation: We reflected the Madagascar investment and the new

lignite price to our estimates. Our revised DCF driven 12-month

target price of TL3.20/share, up from TL2.70/share, indicates a 27%

upside potential. We are also changing our recommendation for

Aksa Enerji from Market Perform to Outperform.

Risks: Limited electricity demand resulting in lower than expected

spot prices, a significant depreciation in the TL and a delay in the

Ghanaian and Madagascar projects could pose downside risks to

our valuation.

August 12, 2016

Please see the last page of this report for important disclosures.

2

Aksa Enerji

August 12, 2016

RESEARCH

SUMMARY FINANCIALS (TLmn)

Income Statement 2015 2016E 2017E 2018E

Net Sales 2,320 2,567 3,585 4,512

Gross Profit (Loss) 318 351 555 875

Operating Profit 291 327 499 794

EBITDA 436 490 672 984

Net Other Income/Expense -3 -7 -8 -6

Profit (Loss) from Subsidiaries 0 0 0 0

Net financial Income/ Expense -551 -297 -335 -327

Profit (Loss) before Tax -235 23 156 460

Tax 6 -4 -31 -92

Minority Interests -2 -1 50 101

Net Income -227 20 75 267

Ratios

Gross Margin 13.7% 13.7% 15.5% 19.4%

EBITDA Margin 18.8% 19.1% 18.7% 21.8%

Net Income Margin n.m. 0.8% 2.1% 5.9%

Sales Growth 19% 11% 40% 26%

EBITDA Growth 27% 12% 37% 46%

Net Income Growth n.m. n.m. 271% 256%

Balance Sheet 2015 2016E 2017E 2018E

Current Assets 774 969 1,136 1,331

Cash and Cash Equivalents 48 179 114 126

Short-Term Trade Receivables 183 164 229 288

Inventories 343 308 412 485

Other Current Assets 200 318 381 432

Long Term Assets 3,177 3,424 3,825 3,781

Total Assets 3,951 4,393 4,961 5,112

Short Term Liabilities 1,368 1,490 1,495 1,396

Short-Term Financial Loans 938 1,114 957 746

Short-Term Trade Payables 400 335 478 589

Other Short-Term Liabilities 29 41 60 61

Long Term Liabilities 1,906 2,202 2,687 2,666

Long-Term Financial Loans 1,664 2,148 2,634 2,613

Other Long-Term Liabilities 241 53 53 53

Shareholders Equity 678 701 779 1,050

T. Liabilities & S.holders Equity 3,951 4,393 4,961 5,112

Cash Flow Summary 2015 2016E 2017E 2018E

EBITDA 436 490 672 984

WC Change 33 11 27 21

Operating Cash flow -217 207 123 408

Capex -465 -410 -573 -147

Investing cash flow -456 -417 -581 -153

Dividends paid 0 0 0 0

Change in net debt 721 341 393 -244

CF from financing activities 690 341 393 -244

Cash at the beginning of the year 34 48 179 114

Cash at the end of the year 48 179 114 126

Key metrics 2015 2016E 2017E 2018E

Net Debt/EBITDA (x) 6.3 6.3 5.2 3.3

Net Debt/Equity (x) 4.0 4.4 4.5 3.1

Capex/Sales (%) 0% 16% 16% 3%

WC Change/Sales (%) 1% 0% 1% 0%

ROCE (%) 11% 11% 14% 21%

ROIC (%) 12% 13% 17% 26%

FCF yield (%) -15% 3% 3% 39%


3

Aksa Enerji

August 12, 2016

RESEARCH

INVESTMENT THEME

Aksa Enerji established a new company in the Republic of

Madagascar to build a 120MW heavy fuel oil power plant with

guaranteed energy sales for 20 years. Aksa Enerji expects to supply

700 GWh of electricity per annum. Based on our own estimates, we

calculate an annual EBITDA of c.USD30mn per annum when the

investment reaches full capacity and a TL0.50/share additional value

for our target share price.

Additionally, the long awaited incentive for local coal power plants has

been announced. Accordingly, TETAS will buy 6,000 GWh of electricity

from local lignite power plants at TL185/MWh in 2016. Aksa Enerji is

the main beneficiary from the incentive thanks to its share of lignite

power plants in generation reaching c.20%. We estimate Aksa Enerji

to sell c.300GWh electricity at this price and provide an additional

TL6mn of EBITDA in 2016. We forecast the Goynuk power plant to

generate 1.66bn kWh of electricity in 2016, rising to 1.85bn kWh in

2017 and generating a TL167mn EBITDA in 2017.

We are revising our estimates for Aksa Enerji, including the

contribution from both the Madagascar project and new local coal

incentive. Accordingly, we are revising our recommendation to

Outperform from Market Perform and changing our 12-month target

price to TL3.20 from TL2.70, indicating a 27% upside potential.

Enlarging its footprint in Africa

Aksa Enerji established a new company in the Republic of Madagascar to

build a 120MW heavy fuel oil power plant and to fulfill 20 years of

guaranteed sales orders. Aksa Enerji expects to supply 700 GWh of

electricity per annum. Aksa Enerji will have a 58.35% stake in the newly

formed Aksaf Power, while its local partner will hold a 41.65% stake. Aksa

Enerji plans to start construction in 4Q16, while the plant is expected to

commence generation gradually in 2017. The Company has not

announced its forecasted CAPEX, guaranteed price and thus EBITDA

estimates. According to our estimates, which are based on the Ghana

deal, we estimate an annual EBITDA of c.USD30mn per annum when the

investment reaches full capacity and a TL0.50/share in additional value for

our target share price.

Recall that Aksa Enerji signed an agreement with Ghana to install and

operate a 370MW heavy fuel oil (HFO) plant with a five-year cost plus

fixed fee in USD terms in August 2015. Aksa Enerji expects to complete

this investment with a CAPEX of USD140mn and to generate an annual

EBITDA of over USD100mn. Aksa Enerji expects to begin producing

electricity in Ghana in 4Q16. We project a limited TL19mn in net sales and

a TL7mn EBITDA to be reflected in the Company’s 2016 financials,

increasing to TL596mn in net sales and a TL211mn EBITDA in 2017.

Following the Madagascar announcement, Aksa Enerji stated that further

negotiations in other African countries is continuing.

Goynuk now benefits from local coal incentives

TETAS (Turkey Electricity Trading and Contracting Co. Inc.) will buy 6,000

GWh of electricity from local lignite power plants at TL185/MWh in 2016,

starting from August 22, 2016. Considering the ytd average spot price in


4

Aksa Enerji

August 12, 2016

RESEARCH

the day before market at TL131/MWh, the proposed prices will increase

the profitability of all private lignite producers.

As the installed capacity of lignite power plants stands at c.6,200MW, we

expect that companies will only be able to supply nearly half of their

generation volumes in the remainder of the year to the new tariff. We

calculate a TL6mn EBITDA contribution for Aksa Enerji in 2016. Although

sales volumes and prices have not been announced for 2017 and

onwards, we expect the advantageous prices to continue in the coming

years in line with the government’s support to local sources in electricity

generation.

Recall that Aksa Enerji’s 270MW Goynuk lignite power plant was

completed with a CAPEX of USD390mn. The plant’s first phase (135MW)

became operational in July 2015 and started operating at full capacity in

August 2015. Meanwhile, the Ministry of Energy and Natural Resources

commissioned Aksa Enerji’s Goynuk lignite fired power plant's second

phase (135MW) on January 29, 2016 and the plant reached full capacity

in February 2016.

The average cost of production was TL130/MWh in 1Q16 at the Goynuk

power plant, far above the Company’s average cost forecast of TL80/

MWh due to a one-off expense and high OPEX in the testing period of the

second phase. We forecast the average generation cost for Goynuk to

decline to TL95/MWh in 2017. We estimate 1.66bn kWh in generation

volumes from the Goynuk power plant increasing to 1.85bn kWh in

generation and a TL167mn EBITDA contribution in 2017.

Meanwhile, the Turkish government has levied an additional tax of

USD15/ton on coal imports to be used in electricity generation to support

domestic coal generation. Currently, c.15% of electricity generation is

supplied from imported coal power plants. This will result in slightly higher

prices in the spot market as a result of the rising cost of imported coal

power plants, which are below price setter natural gas power plants in the

merit order system.

Revision to estimates

We have revised our forecasts to include the contribution from the

Madagascar project and the new local coal incentive. We adjusted Aksa

Toptan’s trading volume forecasts, decreasing our 2016 top line estimate

by 29%, without any impact at the EBITDA level. Accordingly, our new 12-

month target price of TL3.20 has increased by 19%.

Source: Garanti Securities estimates

AKSEN OLD NEW % Change

(TLmn) 2016 2017 2016 2017 2016 2017

Net Sales 3,625 4,508 2,567 3,585 -29% -20%

EBITDA 484 654 490 672 1% 3%

Net Profit 31 165 20 75 -34% -54%

EBITDA Margin 13.4% 14.5% 19.1% 18.7% 5.7 pp 4.2 pp

Net Income Margin 0.8% 3.7% 0.8% 2.1% -0.1 pp -1.6 pp

12M Target Price 2.70 3.20 19%


5

Aksa Enerji

August 12, 2016

RESEARCH

Kazanci Holding refinanced its loan

Aksa Enerji’s main shareholder Kazanci Holding and its group company

Aksa Dogal Gaz signed a new USD800mn loan agreement with a

consortium led by Garanti Bank and Isbank and with the participation of

seven banks on August 2, 2016.

With this new loan, Kazanci Holding has fully prepaid its loan to Goldman

Sachs and the pledged Aksa Enerji shares in Kazanci Holding's

ownership have been released. In addition to these released Aksa Energy

shares, shares representing 9.74% of the capital also owned by Kazanci

Holding, totaling 61.98% of the capital, have been pledged by Kazanci

Holding to the security agent, Isbank. The proceeds received from the

new loan will be used entirely for the operation and financing needs of

Kazanci Holding’s companies and no proceeds will be used for Aksa

Enerji.

Goldman Sachs’ ownership of 16.62% of Aksa Energy and its rights for

the upside valuation and cash collateral of Kazanci Holding to Goldman

Sachs as per the old loan agreement are valid without change until April

19, 2018. If the upside right is not exercised by Goldman Sachs, the

ownership of the 16.62% stake in Aksa Energy, which will be transferred

back to Kazancı Holding as of that date, will be pledged by Kazanci

Holding to Isbank to be used as additional security for the new loan. With

this refinancing any potential risks on the pledged Aksa Enerji shares

have been eliminated.

Renewable portfolio directed to the feed-in tariff

Aksa Enerji has been selling all of its generation from renewable power

plants via the feed-in tariff in 2016. The feed-in tariff is the government’s

initiative to support renewable plants by supplying purchase guarantees in

USD terms to reduce imported natural gas dependency. The company will

benefit by USD73/MWh (TL217/MWh) from its wind power plants

(259MW) and hydroelectric power plants (15MW) vs. the expected TL160/

MWh of Aksa Enerji’s 2016 average sale price guidance. We expect the

Company to generate 670GWh of electricity in its renewable plants,

indicating a 9% share in its 2016 generation volume.

High indebtedness will continue

The Company had a net debt position of TL2.4bn at the end of 1Q16.

Considering the African investments and minor ongoing investment

schedule in the domestic market, we estimate its net debt to rise to

TL3.5bn by the end of 2017. Meanwhile, we expect its net debt/EBITDA

ratio to decline to 5.2x by the end of 2017 from 6.3x at the end of 2015.

Risks

Low electricity demand resulting in lower than expected spot prices,

A significant depreciation in the TL,

A delay in the Ghanaian and Madagascar projects could pose

downside risks to our valuation.


6

Aksa Enerji

August 12, 2016

RESEARCH

VALUATION

Based on a DCF valuation, we calculate a 12-month target share price of

TL3.20 for Aksa Enerji, suggesting a 27% upside potential. Accordingly,

we are changing our recommendation to Outperform from Market

Perform.

Turkey Operations

The key assumptions in our valuation are listed below:

Parameters: We employed a TL-based DCF to value Aksa Enerji. We

applied an equity risk premium of 5.5%, a TL risk-free rate of 10.0%

and a corporate tax rate of 20%. We assumed a 0.5% terminal growth

rate and a beta of 1.0.

Net Debt: We used a 1Q16 net debt of TL2.4bn in our net debt

calculations.

Capital expenditures: We project a capex of USD61mn in 2016,

USD30mn for investments and USD31mn for maintenance CAPEX.

Aksa Enerji Valuation Summary

(TLmn) Target Value

Turkey Operations (100%) 1,072

Ghana Operations (75%) 363

Madagascar Operations (58%) 266

TOTAL Valuation 1,701

12M Target share price (TL) 3.20

Current share price (TL) 2.51

Upside (Downside) Potential 27%

Source: Garanti Securities estimates

Main Assumptions 2016E 2017E 2018E 2019E 2020E 2021E

Capacity (MW) 2,295 2,324 2,324 2,324 2,324 2,324

Sales Volume (GWh) 15,235 16,273 16,511 16,622 17,856 17,977

DCF (TLmn)

Revenues 2,548 2,923 3,184 3,434 3,985 4,334

Operating Profit 321 275 337 373 435 484

Taxes -64 -55 -67 -75 -87 -97

Depreciation 162 161 169 165 162 169

Capex -184 -223 -142 -149 -157 -166

Free Cash Flow 224 131 276 302 324 379

WACC 8.7% 8.7% 9.2% 9.8% 11.3% 11.3%

PV of cash flows 1,608

PV of terminal value 1,903

Net cash/(debt) -2,439

Equity Value 1,072


7

Aksa Enerji

August 12, 2016

RESEARCH

Ghanaian Operations


Parameters: We employed a USD-based DCF to value the Ghanaian

investment. We applied an equity risk premium of 9%, a USD risk-free

rate of 5.0% and a corporate tax rate of 25%. We assumed a 0%

terminal growth rate and a beta of 1.0. We assumed the debt to equity

ratio to be 70%.

Sales: We assume an 80% capacity utilization rate for the 370MW

HFO plant, generating 2.6TWh of electricity, c.USD310mn in net sales

and c.USD110mn in EBITDA per annum when the investment reaches

full capacity. Our projection period ends in 2021 as the Company has

a five-year agreement and we project the generation to start in 4Q16.

We do not include any value for the equipment at the end of the

projection period as the generation license for the plant was cancelled

due to low profitability in Turkey. A potential renewal of the agreement

at the end of five years presents an upside risk to our valuation.

Capital expenditures: We project a capex of USD60mn in 2016 and

USD80mn in 2017 and a total of USD140mn for the project.

Stake: We value Aksa Enerji’s stake in the investment at 75%, but

could revise this going forward.


Capacity (MW) 40 370 370 370 370 370

Sales Volume (GWh) 52 1,560 2,600 2,600 2,600 1,690

DCF (USDmn)

Revenues 6 187 312 312 312 203

Operating Profit 2 62 104 104 104 68

Taxes -1 -16 -26 -26 -26 -17

Depreciation 0 4 6 6 6 4

Capex -60 -80 0 0 0 0

Free Cash Flow -58 -29 84 84 84 55

WACC 7.9% 7.9% 7.9% 7.9% 7.9% 7.9%

PV of cash flows 163

Equity Value 163


8

Aksa Enerji

August 12, 2016

RESEARCH

Madagascar Operations


Parameters: We employed a USD-based DCF to value the

Madagascar investment. We applied an equity risk premium of 9%, a

USD risk-free rate of 5.0% and a corporate tax rate of 20%. We

assumed a 0% terminal growth rate and a beta of 1.0. We assumed

the debt to equity ratio to be 70%.

Sales: We assume a 67% capacity utilization rate for the 120MW HFO

plant, generating 700MWh of electricity, c.USD84mn in net sales and

USD29mn in EBITDA per annum when the investment reaches full

capacity. Our projection period ends in 2036 as the Company has a

twenty-year agreement and we project the generation to start in 2Q17.

We do not include any value for the equipment at the end of the

projection period.

Capital expenditures: We project a capex of USD15mn in 2016 and

USD30mn in 2017, a total of USD45mn for the project. We include

USD1.5mn in annual maintenance CAPEX to maintain the equipment

for 20 years.

Stake: We value Aksa Enerji’s stake in the investment at 58.35% per

its share in the newly established Company.


Capacity (MW) 120 120 120 120 120

Sales Volume (GWh) 175 700 700 700 700

DCF (USDmn)

Revenues 21 84 84 84 84

Operating Profit 7 28 28 28 28

Taxes -1 -6 -6 -6 -6

Depreciation 0 1 1 1 1

Capex -15 -30 -2 -2 -2 -2

Free Cash Flow -15 -24 22 22 22 22

WACC 8.1% 8.1% 8.1% 8.1% 8.1% 8.1%

PV of cash flows 154

Equity Value 154


9

Aksa Enerji

August 12, 2016

RESEARCH

Bloomberg vs. our estimates

We differ from the consensus mainly at the top line as we expect a lower

trading volume for Aksa Toptan. Currently, the consensus target price

stands at TL3.22/share, in line with our new target.

Source. Bloomberg, Garanti Securities

AKSEN Bloomberg Garanti Securities % Change

(TLmn) 2016 2017 2016 2017 2016 2017

Net Sales 3,212 3,928 2,567 3,585 -20% -9%

EBITDA 501 727 490 672 -2% -8%

Net Profit -1 185 20 75 n.m. -59%

EBITDA Margin 15.6% 18.5% 19.1% 18.7% 3.5 pp 0.2 pp

Net Income Margin 0.0% 4.7% 0.8% 2.1% 0.8 pp -2.6 pp

12M Target Price 3.22 3.20 -1%


10

Aksa Enerji

August 12, 2016

RESEARCH

THE COMPANY

Aksa Enerji, established in 1997, is the third largest independent power

producer in Turkey with 2,198MW of installed capacity. Aksa Enerji’s

generation portfolio is comprised of three natural gas power plants

(1,412MW), seven wind power plants (259MW), one hydroelectric power

plant (15MW), three fuel oil power plants (242MW) and one lignite power

plant (270MW) in Turkey. Aksa Energy also helps the Turkish Republic of

Northern Cyprus meet its electricity needs with its power plant in Northern

Cyprus.

Shareholder Structure

Source: The Company

Aksa Enerji was offered to the public in 2010. Its main shareholders are

Kazanci Holding with a 61.98% stake, Goldman Sachs International with a

16.62% stake and 21.39% public shares.

Kazanci Holding; 61.98%

Goldman Sachs; 16.62%

Free Float;

21.39%

Aksa Enerji Power Plants Source: The Company


11

Aksa Enerji

August 12, 2016

RESEARCH

Source: The Company

Aksa Enerji Power Plant Portfolio

Operational Portfolio

Plant Licence Owner Installed Capacity % of Total

Natural Gas Power Plants 1,412 64%

Manisa Aksa 115

Antalya Aksa 1,150

Sanliurfa Rasa 147

Wind Power Plants 259 12%

Balikesir Samli Baki 114

Hatay Sebenoba Deniz 60

Manisa Karakurt Deniz 11

Ayvacik Ayres 5

Kapidag Kapidag 24

Belen/Atik Aksa 18

Kiyikoy Alenka 27

Hydroelectric Power Plants 28 1%

Corum Incesu Aksa 15

Fuel Oil Power Plants 242 11%

Mardin Aksa / Rasa 65

Şırnak-Idil Idil Iki 24

Northern Cyprus Aksa Cyprus 153

Lignite Power Plants 270 12%

Goynuk Aksa 270

TOTAL Operational Capacity 2,198

Under Construction

Plant Licence Owner Installed Capacity Exp. Opening

HFO Plants 490.0MW

Ghana 370.0MW 4Q16

Madagascar 120.0MW 2Q17

Hydroelectric Power Plants 81.0MW

Kozbuku Idil Iki 81.0MW 3Q16

Wind Power Plants 33.0MW

Kapidag (Extension) Kapidag 4.0MW 2016

Samli (Extension) Baki 13.0MW 2017

Ayvacik (Extension) Ayres 4.0MW 2017

Manisa-Karakurt (Extension) Deniz 12.0MW 2017

Planned Projects

Plant Licence Owner Installed Capacity Status

Wind Power Plants 12.0MW

Datca Kazanci Holding 12.0MW Planned acquisition

Natural Gas;

1,412MW; 64%

Wind; 259MW;

12%

Hydro; 15MW;

1%

Fuel Oil; 242MW;

11%

Lignite; 270MW;

12%

Installed Capacity by Source Source: The Company


12

Aksa Enerji

August 12, 2016

RESEARCH

Definition of Stock Ratings

OUTPERFORM (OP) The stock's return is expected to exceed the return of the BIST100 over the next 12 months.

MARKET PERFORM (MP) The stock's return is expected to be in line with the BIST100 over the next 12 months.

UNDERPERFORM (UP) The stock's return is expected to fall below the return of the BIST100 over the next 12 months.

Recommendation History and Price Performance

2.00

2.30

2.60

2.90

3.20

3.50

01.1

5

03.1

5

05.1

5

07.1

5

09.1

5

11.1

5

01.1

6

03.1

6

05.1

6

07.1

6

AKSEN BIST-100

Date Rec. TP

1 02.01.15 OP 4.00

2 26.05.15 OP 3.80

3 14.09.15 OP 3.65

4 02.12.15 OP 3.70

5 22.01.16 OP 3.40

6 29.03.16 MP 3.00

7 12.07.16 MP 2.70

1.50

2.10

2.70

3.30

3.90

4.50

01.1

5

03.1

5

05.1

5

07.1

5

09.1

5

11.1

5

01.1

6

03.1

6

05.1

6

07.1

6

Target Price vs. Raw Stock Price (TL)

AKSEN Target Price

Disclaimer

This document and the information, opinions, estimates and recommendations expressed herein,

have been prepared by Garanti Securities Research Department, to provide its customers with

general information regarding the date of issue of the report and are subject to changes without prior

notice. All opinions and estimates included in this report constitute our judgment as of this date and

are subject to change without notice.

This document and its contents do not constitute an offer, invitation or solicitation to purchase or

subscribe to any securities or other instruments, or to undertake or divest investments. Neither shall

this document nor its contents form the basis of any contract, commitment or decision of any kind.

Investor who have access to this document should be aware that the securities, instruments or

investments to which it refers may not be appropriate for them due to their specific investment goals,

financial positions or risk profiles, as these have not been taken into account to prepare this report.

Therefore, investors should make their own investment decisions considering the said circumstances

and obtaining such specialized advice as may be necessary. The information in this report has been

obtained by Garanti Securities Research Department from sources believed to be reliable. However,

Garanti Securities cannot guarantee the accuracy, adequacy, or completeness of such information,

and cannot be responsible for the results of investment decisions made on account of this report.

The market prices of securities or instruments or the results of investments could fluctuate against

the interests of investors. Investors should be aware that they could even face a loss of their

investment. Transactions in futures, options and securities or high-yield securities can involve high

risks and are not appropriate for every investor. Indeed, in the case of some investments, the

potential losses may exceed the amount of initial investment and, in such circumstances, investors

may be required to pay more money to support those losses. Thus, before undertaking any

transaction with these instruments, investors should be aware of their operation, as well as the rights,

liabilities and risks implied by the same and the underlying stocks. Investors should also be aware

that secondary markets for the said instruments may be limited or even not exist.

This report is to be distributed to professional emerging markets investors only. This report is for

private use only and intended solely for the individual(s). No information in this report may be copied,

modified, republished or exploited in anyway without the prior consent of Garanti Securities.

Additionally, with respect to our statements above, all our claims and plea rights are covered in the

regulations which apply in the countries that this report has been sent to.

Garanti Securities

Etiler Mah. Tepecik Yolu

Demirkent Sokak No:1

34337 Besiktas, Istanbul / Turkey

Phone: +90 (212) 384-1155

Fax: +90 (212) 352-4240

RESEARCH

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