Teknosa Gains After HSBC Initiates at Overweight: Istanbul Mover

Teknosa Ic & Dis Ticaret AS, Turkey’s biggest electronics retailer, climbed to a record after HSBC initiated coverage at overweight, citing strong growth potential for discretionary domestic consumer spending.

Teknosa, majority-owned by Haci Omer Sabanci Holding AS, rose 4.3 percent to 8.34 liras at the close in Istanbul today, the highest level since the company started trading on the Istanbul Stock Exchange on May 17 last year. The volume of shares changing hands was almost 25 times the average of the last three months, according to data compiled by Bloomberg.

“Teknosa is the best way to play the strong potential growth in the technical consumer goods retail market in Turkey,” HSBC analyst Bulent Yurdagul said in an e-mailed research note today. Teknosa has a 43 percent market share in the “technical superstores” area, which is expected to grow at the fastest rate among consumer goods retailers, Yurdagul said.

Technical superstores are defined as “modern electronics/home appliance retailers that sell products from various brands,” according to the report.

Teknosa has gained 7.6 percent from its initial trading price of 7.75 liras on May 17, trailing the 41 percent gain on the main Istanbul Stock Exchange National 100 index, according to data compiled by Bloomberg. It is one of the cheapest stocks among emerging market and Turkish retailers, HSBC said.

Teknosa operated 280 stores across Turkey as of Sept. 30, with 3,520 workers, according to its website. It reported net income of 13 million liras ($7.4 million) on revenue of 585.6 million liras ($331.1 million), according to data compiled by Bloomberg.

HSBC set a 12-month price target for the shares of 12 liras, implying a return of almost 50 percent.

Revenue in the Turkish electronics retail market was 21.4 billion liras ($12.1 billion) as of the end of 2011, according to a report e-mailed by Erste Securities in Istanbul today.

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