Mesut Ellialtioglu of Talas Turkey Value Fund presented his investment thesis on Turkiye Sise ve Cam Fabrikalari A.S. (Sisecam) (Turkey: SISE) at Best Ideas 2021.

Thesis summary:

Sisecam is a leading integrated glass manufacturer in Turkey and the EMEA region. It is also one of the top ten global glass conglomerates, with a market capitalization of $3 billion.

The company completed a merger with its listed subsidiaries in the second half of 2020 following a delisting of the subsidiaries, including SODA Sanayii, Trakya Cam, and Anadolu Cam. Sisecam operating as a single entity should result in cost savings, leading to improvement in operating margins in 2021 and beyond.

Mesut expects Sisecam to deliver revenue growth of 35% in 2021, helped by a cyclical recovery in flat glass and glassware volumes, pricing increases across its markets, and a favorable translation effect of a higher EUR/TRY exchange rate.

The company is valued at an EV/EBITDA multiple of 6.5x, based on average  estimated EBITDA in 2021-22. Mesut sees 65% share price upside potential over the next twelve months.

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About the instructor:

Mesut Ellialtioglu, the Fund’s Turkey Investment Officer, has 23 years of Turkey focused equity research and fund management experience and focuses on value investing opportunities in the Turkish equity market. Prior to forming Talas Capital with Mr. Matthew Peterson, Mr. Ellialtioglu worked with Bankers Trust Company as an associate, Korfez Securities (Garanti Bank) as Co-Head of Research, UB Ulusal Securities (formerly SAMBA Saudi American Bank) as Managing Director for research and asset management, Kent Securities as Head of Asset Management, and ABN AMRO Asset Management Turkey as Chief Investment Officer. Mr. Ellialtioglu graduated with BS in Economics degree from the Wharton School of Business of the University of Pennsylvania in 1993.

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