Ipek Dogal Enerji Kaynaklari Arastirma ve Üretim A.S. focuses on developing and producing renewable energy resources; and petroleum, natural gas, coal, and related natural energy resources in Turkey. The company was founded in 1985 and is based in Ankara, Turkey.

Turkey

Ipek Dogal Enerji Kaynaklari Arastirma ve Üretim A.S.

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

IPEKE.IS reported revenue of TRY 8 516mn in the last 12 months, down 1% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. 

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 84ppts and its growth decelerated by 3ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 15.6% in the last 12 months, up from -16.3% in FY23. 

Historically, IPEKE.IS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -11.3%, down from 2.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -3.1% in the last 12 months, a decrease from 0.9% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -3.3%, below the peers. 

Ipek Dogal Enerji Kaynaklari Arastirma ve Üretim A.S. reported a return on equity (RoE) of -12.6% in the last 12 months, down from 3.7% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 2.0 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are acceptable. In combination with good business standards, shareholder rights are protected.

IPEKE.IS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, excessive margin volatility, and poor working capital management. We note resilient historical revenue growth, robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, IPEKE.IS is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, IPEKE.IS is highly volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change somewhat erratically. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to immense. We would also like to highlight the immense intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is underpriced compared to similar stocks. Specifically, the stock is neutral on EV/EBITDA. 

Ipek Dogal Enerji Kaynaklari Arastirma ve Üretim A.S.

TRY 67.75

4

Ipek Dogal Enerji Kaynaklari Arastirma ve Üretim A.S.

TRY 67.75

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

TRY 67.75

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