Ak Investment Continued To Recommend ‘Yield Above Index’ With A Target Price Of 4.0 Tl For Emlak Konut Gyo

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Housing producers supported low-interest financing in August to support sales. It is thought that housing sales in the short term will be high for Emlak Konut GYO. Housing market in order to support the housing development companies, the housing loan interest rates are lowered and the ongoing campaigns with the interest rates of 0.70 percent per month for the 10 year maturity are effective in the high housing demand.

Emlak Konut GYO maintains its target of 11 thousand residential sales (2015: 9.935 units) and pre-sales revenue of TL 7.6 billion (2015: 5.9 billion TL) for the end of 2016. With the company’s new project launches, it is expected that   4Q16 pre-sales to be strong. Emlak Konut GYO made 6,697 pre-sales in the 2016/10 month period and earned 5 billion TL income. The company lastly sold two turn-key projects in November (Gebze-Istanbul 1.850 units, Niğde 365 units).

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Starting with the end of 9 months, Emlak Konut GYO’s income sharing model has reached 13 billion 770 million TL and it is expected that the net profit will be reflected to the financial statements with the completion of the constructions continuing in 4Q16-2020 period with 8 billion TL.

On the other hand, a significant increase in economic slowdown and interest rates is one of the main reasons that will negatively affect housing demand. This may cause the sales performance of Emlak Konut GYO to remain weak in ongoing projects. A delay in deliveries can negatively impact the net profit estimates and therefore dividends.

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