Sunday, August 7, 2022

How to choose "stocks" in the accounting season?

The first half-yearly balance sheets come on the stock exchange. Despite war, global risks and slowing momentum in the euro zone, growth of over 100 percent on a stock basis is attracting attention.

Exchange companies have started to announce their financial results for the first half of 2022. The financial results of 97 companies were announced. Financial statements are important to see the progress of companies. Companies that have managed to grow in real terms will also create potential for the coming period. Growth is much more important at a time when unexpected developments are occurring, macro risks are increasing and markets are tending to contract.

Real growth matters

In inflationary environments, it is more important for companies to grow in real terms than to increase apparent profits. The fact that Turkey’s credit spread is 767, the slowdown in euro-zone growth, slowing export momentum and rising corporate costs are bound to have a negative impact on companies. In spite of everything, those who can grow have the chance to turn developments into opportunities. This situation means that investors are paying more attention to companies that can continue to grow during this time.

Remarkable Numbers

Şişe Cam and Ford Otosan, which are among the top 10 companies by market value in the announced balance sheets, posted more than 100 percent growth in asset growth, core operating profit growth, EBITDA growth, net income and net sales growth.

The global glass industry is growing at an average of 2-4 percent per year, developing in parallel with the world economy… The positive prospects in the architectural glass sector, in parallel with the increasing demands in the construction industry, are reflected positively on Şişe Cam. Normalization in tourism and consumption as well as prominent health trends are seen as positive developments in the glass packaging and glassware sectors.

Effects of the chip crisis

It is forecast that the congestion effect caused by the chip crisis will decrease in 2022. This is predicted to have a positive impact on the automotive industry, where glass is also an input, as well as many other industries. In the medium term, the glass industry is expected to continue to recover and grow steadily. Ford Otosan increased its assets by 166 percent in the first half of 2022 compared to the same period last year, while its operating profit grew by 155 percent.

The automotive sector occupies an important place in the manufacturing industry. In January-June this year, the total market for automobiles and light commercial vehicles in Turkey fell by 9.3 percent to 357,904 compared to the same period last year. In the first half of 2022, the European automotive sector will shrink by 14 percent compared to demand in 2021.

The chip bottleneck and the Russia-Ukraine war are likely to continue to affect the automotive industry in 2022. However, the fact that many producers have had a good year thanks to price increases and weak demand due to increased capacity are seen as factors that will ease the bottleneck.

Will the ‘record’ take the stock market to 3,200?

BIST 100 index; On Friday, it made an all-time record close on a daily and weekly basis, touching the 2,750 level. The index moves above the averages and maintains its upward trend. As the index surged above 2,700, so did its gradual rise to 3,200. Index stocks will continue to be crucial.

In the case of the dollar exchange rate, the threshold is at the limit of 18 TL. The uptrend remains intact. The room for maneuver has narrowed considerably. Exceeding this level may cause movement in a top lane. Depending on the course of the dollar exchange rate, gram gold will continue to be in demand.

How to choose

Those who break the 200 million TL win bar

Among the companies whose balance sheets were announced in the 2022 half-year are the industrial and service companies that announced profits of over 200 million TL: Şişe Cam, Ford Otosan, Tofaş Oto. Fab., Kardemir (D), Arçelik, Türk Tractor, Çan2 Thermal, Yayla Agro Gıda, Otokar, Çemtaş, Borusan Mannesmann, Kimteks Polyurethane, Akçansa, TAV Airports and Erbosan. All 15 companies, with the exception of Türk Traktör, increased their sales above the inflation rate. Arçelik was the weakest performer in terms of profitability.

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