Turkcell Iletisim Hizmetleri A.S. (ADR) (TKC)

Sozialista (< 20) Submitted: 6/02/08 10:55 PM : Start Price: $19.33 TKC Score: -2.40

Here is my #1 pick for June 2008...

TKC - Turkcell Iletisim Hizmetleri A.S. (Turkcell) - $19.48
http://www.turkcell.com.tr/

Turkcell Iletisim Hizmetleri A.S. (Turkcell) is a provider of mobile services in Turkey. The Company provides mobile voice and data services over its global system for mobile communications (GSM) network. As of April 1, 2008, Turkcell provided service to its subscribers in 197 countries through commercial roaming agreements with 576 operators. The Company provides wireless and value-added mobile communications services to subscribers throughout Turkey. Subscribers can choose between its postpaid and pre-paid services. As of December 31, 2007, Turkcell had approximately 29 million pre-paid subscribers and 6.4 million postpaid subscribers. The Company has investments in Azerbaijan, Georgia, Kazakhstan, Moldova and the Ukraine.

INTRINSIC STRENGTH: 91%
GRADE: A
RATING: STRONG BUY
INTRINSIC VALUE: $30.19
TAKE-OVER VALUE: $35.14

This one has great fundamentals, is diversified, and is selling at a very cheap market value compared to what the company is really worth. The company has been in a perpetual long-term uptrend for the past 5 years. Recently it has dipped from $27. This represents a buy opportunity in my view.

This stock basically fits into my mantra. High quality, low price. Look at TKC for yourselves. I'm putting down 20% of my portfolio in TKC.

More research on TKC...http://www.turkcell.com.tr/en/investorRelations/WhyinvestinT...

Company Qualities

1. Approximately 57% market share as of December 31, 2007 in a 3 operator environment.
2. By far the strongest operator in brand image, customer satisfaction, network coverage and profitability.
3. Offering exposure to six other high growth markets with additional population of approximately 80 million on top of sizable 70.6 million people in Turkey.
4. Solid operational & financial performance with large subscriber base and high margins.
5. Recorded revenue of US$6,328.6 million, EBITDA of US$2,627.1 million and net income of US$1,350.2 million for the year ended December 31, 2007.
6. As of December 31, 2007 number of subscribers has reached 35.4 million
7. The only company in Turkey with NYSE listing as a result complying with Sarbanes Oxley as well as local capital market requirements.
8. Superior advantage against competition in terms of coverage and capacity with population coverage of 97.8% as of December 31, 2007 of which approximately 81.3% is EDGE enabled.
9. Leading provider of mobile communications services in Turkey in terms of breadth, usage and quality of Value Added Services and one of the pioneers in the world with innovative products.
10. Established dividend policy. The Board of Directors of Turkcell intends to distribute cash dividends in an amount of not less than 50% of Turkcell's distributable profits, based on the financial statements prepared in accordance with the accounting principles accepted by the Capital Markets Board of Turkey, for each fiscal year. On February 27, 2008, the Turkcell Board of Directors decided to recommend distribution of cash dividends in an amount of approximately TRY648.7 million (approximately US$546.0 million as of February 27, 2008) representing a 14% increase compared to approximately TRY567.0 million (approximately US$411.9 million) a year ago. This corresponding to 50% of Turkcell's distributable income of the current year, based on the financial statements prepared in accordance with the accounting principles accepted by the Capital Markets Board of Turkey. This dividend proposal is to be evaluated and decided upon at the Ordinary General Assembly of Shareholders to be held on April 25, 2008. This represents a net and gross cash dividend of TRY0.2948699 (approximately US$0.248165 as of February 27, 2008) per ordinary share with a nominal value of TRY1 and approximately TRY0.737174 (approximately US$0.620412 as of February 27, 2008) per ADR.



The market

1. Robust economic achievements; inflation rate falling from 70% levels to 8% levels and interest rates falling from 100% to 20% levels in 2001 and 2007 period.
2. Political stability with commitment to structural reforms, EU accession process, strong IMF relations and more FDI's coming into the country.
3. A unique investment opportunity with its impressive GDP growth in recent years.
4. Expected GDP growth to continue at approximately 5% levels going forward vs. 2% in average in Europe that is about EU15 countries .
5. Suggesting further room for growth with approximately 88% mobile line penetration as of December 31, 2007, one of the lowest penetrated markets in Europe .
6. The youngest and most dynamic population in Europe with around 35% of the population below age 19 forming a great base of future potential.
7. Continuous population growth in Turkey compared to negative growth in other emerging countries.

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