The consensus earnings are understated by at least 10% on 2017, and more on 2018. Looking at the turnaround in economic activity and seeing strong earnings momentum not yet fully recognized by the market, we reckon share price gains will continue in 2H17. The earnings momentum alone warrants 25% upside.

The capacity expansion and upgrade at Lokman's Etlik Hospital, the most profitable location across Lokman group hospitals, should be earnings and value enhancing to shareholders.

Turkish banks' earnings growth has declined steadily since 2005. From as high as 40-50% pa between 2003-05, the EPS growth first fell towards mid-teens by 2010, then slowed to low single digits from 2010 and finally turned negative in 2014/2015. We identify three reasons for the deceleration in pace of earnings growth. The no.1 reason is the decline in the level of inflation hurting core business margins. The second reason is the lower annual volatility in CPI itself, which has had an adverse impact on trading incomes. The third reason is tighter regulation over credit.