KCHOL.IS

“Koç Holding owns irreplaceable Turkish franchises — Tüpraş's refining monopoly, Ford Otosan's JV, Yapı Kredi, Arçelik — but the investment case collapses under basic arithmetic: 3% ROE against a 35%+ cost of capital means every retained lira destroys value. The 0.75x P/B appears cheap only against Western benchmarks; relative to actual returns delivered, the stock offers no margin of safety. Negative free cash flow, 124% debt-to-equity, and hyperinflation accounting that renders earnings uninterpretable compound the problem. This is not a compounding investment but a leveraged option on Turkey's macroeconomic normalization — an outcome that has been perpetually imminent for a decade while real shareholder returns were annihilated. Capital is better deployed in businesses that earn above their cost of capital.”