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Russell 2000 Futures
Türkiye Petrol Rafinerileri A.S. (TUPRS.IS)
Istanbul - Istanbul Delayed Price. Currency in TRY
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9 reactions on $TUPRS.IS conversation
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Being cheaper compared to historical prices is a one reason to invest in a Company however I'm also looking forward a growing story supporting the share increase. For instance I have invested in Tupras, it is the main refinery company in Turkey. It is the similar business with Exxonmobil. I invested in Tupras for two reasons. First one is that it is the 30% discounted to lowest price of last 10 years and one third of highest value before pandemia.
The second one is the growth story behind the Company. Since jet fuel is the most profitable segment of refinery business, and there are 3 strong reasons for Tupras to grow its jet fuel business compared to before pandemia. One is the increasing tendency in Turkey to use flight for transportation. That means aviation industry is growing for Turkish citizens. Second is the huge airport investment in İstanbul, one of the largest around globe, which will be the flight hube. That means increasing aviation business. The last one is the growing tourism in Turkey also means growing aviation business.
The third one is related to dividend payments. Before pandemia dividend payment was around 4 USD per share and expected dividend payments were higher. There will not be a dividend in 2021 due to pandemia but dividend payments will be much more higher than 4 USD per share in near future. The higher expectations are related to increasing jet fuel consumptions in Turkey due to 2 main reasons tendency to increase in flights before pandemia and also one of the world largest airport investments has been completed in İstanbul which is expected to be the new flight hub which will increase the jet fuel consumption in Turkey. Jet fuel is the most profitable segment of Tupras refinery.
Briefly, although dividend expectation is much more higher than the before pandemia level, when Tupras reaches 4 USD per share, share price at least will reach to 40 USD as before pandemia.
In my opinion, the share price will be at least 40 USD in very near future as it is before pandemia and additionally the expected dividend payments will increase based on the expectaions are higher in jet fuel consumption which is the most profitable segment in Tupras refinery. My long-term expectation is 100 USD per share. I will enjoy my dividend and wait for the Tupras increasing value.
The second one is privitization of Tupras. Koc Group bought the 51% of the shares of Tupras app. 4 billion USD and made 6 billion investment since 2005. Let's ignore that market value of investments is much more higher than the investment cost. That's to say based on this analysis the share prices should be min 55 USD. Which is now 14 USD per share.
Another analysis should be the Socar's investment amounting to 6,3 billion USD and Goldman Sachs invested in Socar amounting to 1,3 billion USD. App. 30% capacity of Tupras has been built amounting to 6,3 billion USD. Lets ignore that market value is greater than the investment cost. If we make valuation based on this investment, Tupras share price should be around 75 USD which is now 14 USD per share.
+ increasing tourism in Turkey for jet fuel consumption.
There are two producers in Turkey, and Tupras has the higher capacity than the second one. I will make rationalizations for Tupras.
1-) The first one is the the price. Since Tupras all operations are USD and petroluem product base, it is better to ignore the local curreny. The latest price is 14 USD for Tupras which is almost 1 to 3 of highest value of Tupras, 38 USD per share before Covid pandemia. Additionally, it is 30% discounted compared to 10 years lowest price.
Unfortunately there may be bad news for Tupras related to jet fuel business.
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