Konya Çimento Sanayii Anonim Sirketi manufactures and sells cement, clinker, and ready mixed concrete in Central Anatolia and the Mediterranean Region. The company was founded in 1954 and is based in Konya, Turkey. Konya Çimento Sanayii Anonim Sirketi is a subsidiary of Parficim S.A.S.

Turkey

Konya Çimento Sanayii Anonim Sirketi

Basic Materials

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, and there is a clear trend. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

KONYA.IS reported revenue of TRY 5 052mn in the last 12 months, up 14% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. 

The stock's performance has been mixed in the past six months, with growth following a decline. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 13ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 22ppts over six months and grew 5ppts faster in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 11.8% in the last 12 months, a decline from 14.0% in FY23. 

Historically, KONYA.IS has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -6.4%, down from 15.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -10.8%, below the peers. 

Konya Çimento Sanayii Anonim Sirketi reported a return on equity (RoE) of -11.2% in the last 12 months, down from 45.3% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -7.9% in the last 12 months, a decrease from 25.6% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.3 in the past several years. This ratio implies a average 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.

KONYA.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 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, and poor working capital management. We note resilient historical revenue growth, 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, KONYA.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, KONYA.IS is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from large to substantial. We would also like to highlight the substantial intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is overvalued on EV/EBITDA. 

Konya Çimento Sanayii Anonim Sirketi

TRY 5590

3

Konya Çimento Sanayii Anonim Sirketi

TRY 5590

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

TRY 5590

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