Turkcell ADR - Company Overview / Quick analysis


I wanted to discuss the following stock on the community: Turkcell Iletisim Hizmetleri AS, listed on the NYSE (ADR). It is available on the T212 invest account, not ISA, under ticker TKC.

I came across this stock whilst I was looking for possible investments. I have done some quick research today, based on Yahoo, the company website and the company’s annual report for 2019 and Quarter report for Q3 2019. I wanted to share this company overview/analysis with you and hopefully discuss if anyone knows a bit more about the company (or Turkish market in general) and compare ideas. It is understood that nothing discussed on this thread is financial advice :smiley:.

I have written the notes quite quickly, and they are just notes, so apologies in advance if it is hard to read or has typos.

What does Turkcell do?

“Turkcell is a converged telecommunication and technology services provider, founded and headquartered in Turkey. It serves its customers with voice, data, TV and value-added consumer and enterprise services on mobile and fixed networks.”

Regions it works in:

I guess in Germany it is likely to be mainly used among the Turkish diaspora. It relies heavily on the Turkish market with a significant present in Ukraine.

"Technological Services"

Apart from traditional Telecom services, it is trying to develop in other areas and highlights the following “Technological services”. My summary of this from their 2019 annual report:

  • Claims to be using AI for its infrastructure

  • Claims to have one of the fastest 5G networks with 2.3 Gbps download speed

  • Mentions deep network intelligence

  • Has a “Fast Login” app

  • “Beehive” a crowdfunding platform

  • Sportsnews app “Gollercepte”

  • “My Sign Language App”

-Probably the thing that they focus on the most is their app “Paycell” which they are developing for money transfer and easier bill payments, mobile Point of Sales and QR payment with 7.3 million users in 2019)

Market share (2019):

“In terms of market share distribution based on the number of subscribers, Turkcell has a 41.5%, Vodafone a 31.1% and TT Mobil a 27.5% market share. Approximately 87.5% of mobile subscribers are consumer and 12.5% are corporate subscribers.” From having a quick look at the number it does not appear to be the market leader in the TV market, it has about half the market share of the leader. Unknown for broadband and fixed voice.

Income statement: (Note, most numbers are in million Turkish Lira)

So between 2016 and 2019 revenues increased at a rate of slightly over 20% per year. Gross profit grew at 16.8% and EBIT increased at 19% per year.

Has a price to earnings ratio of 6.7.

Comparing the first 9 month periods of 2019 to that of 2020 from company Q3 report:

Shows growth year on year of both revenue (17%) and profit (16%), despite the pandemic.

Balance sheet:
I left the equity section out, see source if you want to check it.

It has 13 billion cash against 11 billion current liabilities. If you discard intangible assets, the ratio of debts to assets is quite high: 31239 liabilities / 39529 tangible assets = 79%

Cash flow (Yahoo):

2020 Guidance:

Other points of interest:

According to the company website, it is the only Turkish company listed on the NYSE.

Credit rating in 2019, probably worse today:
I seem to remember that “BB-“ is borderline investment grade, so it is likely that it will be junk grade by now.

Market sentiment seems to not be very good, as it has been fairly flat since it got hit in 2018 (reasons currently unknown). 5 year share price graph below:

Shareholders (Yahoo):

Turkcell has a market cap of 4.35B and these are its main shareholders according to Yahoo, I don’t know when the list was last updated:
Morgan Stanley seems to be the main shareholder, which I guess is a good sign. Any thoughts?



  • Significant growth year on year since at least 2016

  • Market leader in mobile and using this to develop other uses such as Paycell (although financial income was hit hard this year due to pandemic)

  • Low price to earnings ratio of 6.7 and significant cash flow generation in 2019 and 2020, despite large-ish investments.


  • Weakening Turkish lira

  • Turkish politics (attempted coup d’etat in recent years, claims of democracy being undermined by president, large presidential influence on central bank and monetary policy, large interventionism abroad such as in Lybia, Syria, Cyprus and hydrocarbons in the Mediterranean could result in trade sanctions and multinationals and investors leaving country, etc). This could lead any of the main shareholders (which appear to be foreign instutions) to leave, which could lead to the share price plummeting as they would be likely to sell at a discount.

  • Second main market is Ukraine which has been quite unstable in the last decade with the annexation of Crimea and the issue with gas pipes.

Current known unknowns in my quick analysis:

  • What exactly the technological services it offers involve and their potential and their growth

  • Board setup




Market share in the Turkish market? Does this includes TRNC?

This company is very heavily influenced by Turkish politics as can be seen that it only operates in regions closely related to Turkey or allies (only Germany is the exception here), therefore I could Imagine the company aligning with the current Turkish political development.

With that I mean that the company might expand more into Ukraine as Turkey is currently strengthening ties with Ukraine (recently more agreements on sale/purchasing of military equipment by both countries have been made, maybe a similar story as Karabach could play out in the Donbas region of Ukraine) and Azerbaijan could also be a region they expended to as trade ties there also are strengthened due to the Karabakh conflict (EDIT: apparently they already have “entertainment services” in Azerbaijan). When the plan to settle/permanently occupy Turkish held regions of Syria a similar situation to TRNC could develop. Also not forgetting that GNA held Libya when more stable could be a new market. I think that this company will follow the Turkish regional developments. But enough geopolitics.

The main concern would be Turkish lira and Turkish politics (as you pointed out) and I personally don’t see that currency getting any stronger anytime soon and Turkey is pursuing expanding their influence instead of focusing more on inward development (if Syria stabilises the refugee settling project could be a driver though for this company). They operate in very unstable markets and that could or could not deliver. Personally don’t know the situation in Turkey that much (am just really interested in geopolitics) nor do I really know anyone who would so my perspective is just as an outsider who just spent a bit too much-researching conflicts in the region so take everything I say with a pinch of salt :laughing:

Definitely interesting as it operates in regions I don’t have much/any exposure to.

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This was one of the reasons that led to me researching it :smiley:
And I agree, the lira and Turkey’s politics are the main drawbacks.

Turkcell is also present in Northern Cyprus, although I don’t know what its market share is there.

Basically government owned investment fund (TVF) has the 26.2% of the company while LetterOne owns 24.8%. It says that TVF will select 5 seats from the total of 9 in the board.

Here is one of many news articles, you can check the details if the translation works good:

Turkcell is one of 3 major telecom companies in Turkey. Turk Telekom, another of the major companies, is also government owned, so there might be conflict of interests. Also TVF is just founded 4 years ago, so their performance is not well known yet.


@Kali, any thoughts on the Turkish stock market or this company? :smiley:

I have a Turkcell mobile since 1999 but I have no idea about the stocks. Underlying currency TRY is too unstable and randomly eats into profits.

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Interesting, but that also means that the Turkish government has an interest in keeping this company going (albeit for financial or political gains). But with a majority of the board seats controlled by the government that does spike a red flag for me as government actually controlling the business most likely has other plans for the company than just financial ones.

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