The visible job of an Aygaz cylinder is simple from the outside: carry LPG safely. The inside of the Aygaz share is not. Of the TL 71.4 billion in parent equity on its 31 March 2026 balance sheet, TL 47.1 billion sits in Enerji Yatırımları A.Ş., the company that holds 46.40% of Tüpraş. Aygaz owns 20% of EYAŞ. Its indirect stake in Tüpraş is approximately 9.28%.
What is bought on the exchange as a cylinder and autogas distributor derives two-thirds of its equity from a refining affiliate. At the price of TL 246 on 11 July and a market value of TL 54.1 billion, the market value is only somewhat above this TL 47.1 billion asset. The question is not only how many tonnes the cylinder sells, but why the refinery inside the cylinder is being discounted.
The first quarter delivered both the defence and the indictment of that discount. Aygaz sold 584 thousand tonnes of LPG and generated TL 21.9 billion in revenue. The LPG and natural gas segment produced TL 59 million in net profit. Refining and electricity added TL 338.6 million in profit; Kolay Gelsin took away TL 262.6 million. Consolidated net profit remained at TL 135 million.
The Thin Margin of the Blue Flame
Aygaz's physical machine is not something to dismiss. It has five marine terminals, five filling plants, eight distribution centres, 1,925 cylinder-gas dealers and 1,991 autogas stations. In the first three months, domestic retail LPG sales were 242 thousand tonnes: 53 thousand tonnes of cylinder gas and 179 thousand tonnes of autogas. A total of 272 thousand tonnes of LPG was sold abroad, generating 157 million dollars in revenue.
On market share, management points to deliveries. Cylinder-gas share rose 1.4 points to 43.1%, while autogas share rose 2 points to 24.4%. Both are above management's 2026 target ranges. The volume picture is more mixed. The first-quarter share of the 200-220 thousand tonne cylinder-gas target is reasonable at 53 thousand tonnes. The first-quarter share of the 750-790 thousand tonne autogas target is 179 thousand tonnes; simple annualisation does not reach the lower bound. Autogas seasonality makes it too early to pass judgment at the end of March, but the conversion of market-share gains into volume needs watching.
Gross margin rose from 9.4% in the same period last year to 11.6%, while operating margin rose from 1.4% to 1.8%. The improvement is real, but the economic distance remains narrow: only TL 59 million of net profit remained for the LPG and natural gas segment out of TL 21.9 billion in revenue. Valuing the company by multiplying first-quarter profit by four produces a P/E of approximately 100; it mistakes the TMS 29 monetary loss, the affiliate calendar and the freight loss for permanent earning power.
| Segment | Q1 2025 | Q1 2026 |
|---|---|---|
| LPG and natural gas | 139.698 | 59.024 |
| Cargo | -120.962 | -262.625 |
| Refining and power | -3.222 | 338.571 |
The most troubling column in the chart is freight. Kolay Gelsin's book value had been reset to zero under TMS 28 because its equity had turned negative. Zero did not mean “it can no longer make losses.” Aygaz injected TL 262.6 million of new capital on 17 March; its share of the loss recorded in the quarter was also TL 262.6 million. In the first quarter of the previous year, the loss was TL 121 million.
Profit Arrived, Cash Demanded a Reconciliation
Against TL 135 million in net profit, operating cash flow was negative TL 2.707 billion. Trade receivables absorbed TL 879 million, other operating receivables absorbed TL 459 million, and the unwind in trade payables absorbed TL 2.025 billion; the reduction in inventories gave back TL 837 million. This is not, on its own, a collapse in demand, but a heavy working-capital quarter. The result for shareholders is still concrete: cash on the cash-flow statement fell from TL 9.400 billion at year-end to TL 4.101 billion.
Aygaz received TL 1.485 billion in total dividends from its affiliates and investments. Against this, it paid TL 2.757 billion to its shareholders, spent TL 890 million on tangible and intangible assets, and injected TL 263 million of capital into Kolay Gelsin. The distribution tradition is valuable, but this quarter's dividend did not come from core operating cash.
| Item | Q1 2026, TRY billion |
|---|---|
| Opening cash | 9.4 |
| Operating activities | -2.707 |
| Investing activities | 0.369 |
| Financing activities | -2.51 |
| Currency-translation effect | 0.063 |
| Monetary-loss effect | -0.514 |
| Closing cash | 4.101 |
At the balance-sheet date, borrowings of approximately TL 3.026 billion, including lease liabilities, stood against TL 4.102 billion in cash. The picture showed net cash. But on 15 April, a shipbuilding contract was signed for two 90 thousand cubic metre VLGCs. The maximum price per vessel, including the modification allowance, is 117 million dollars, or a maximum total price of 234 million dollars. Using the dollar loan exchange rate in the financial report, this is approximately TL 10.388 billion, or 19.2% of the market value on 11 July.
This amount is not an expense. Two vessels will arrive in return; payments are instalment-based, with the majority due on delivery. Capital is not free either. Without knowing the delivery dates, interim instalment details, financing, freight cycle and target return, we cannot treat the order as either an automatic growth premium or a loss paid in advance.
Book Value Shows the Address, Not the Key
EYAŞ's TL 47.1 billion closing value is not a fixed block of marble. It was TL 49.800 billion at the start of the year. In the first quarter, it contributed TL 338.6 million in profit and recorded TL 1.642 billion in other comprehensive loss. The mathematics of the movement between opening and closing shows that approximately TL 1.395 billion in dividends passed from EYAŞ to Aygaz.
This distinction matters. The shrinkage in EYAŞ's book value because of the dividend is not destruction of value; it is value moving from the affiliate line into Aygaz's cash. The movement excluding dividends was negative TL 1.304 billion. In other words, the same quarter proved two things at once: EYAŞ can convert into cash, and EYAŞ cannot escape the cycle.
The Aygaz shareholder's problem is not that the asset is fake. The problem is the key. Aygaz owns only 20% of EYAŞ; it cannot determine the Tüpraş cycle, the dividend decision or the timing of a sale of the stake on its own. For that reason, assigning 1.00x to EYAŞ's book value is not automatically conservative. But if the book value is preserved, distributions recur, and the cash received does not leak into freight and excessive debt, 1.00x can become a conversion scenario.
Once EYAŞ is removed from parent equity, TL 24.277 billion remains. This residual is not a single undifferentiated “other”; it contains TL 2.534 billion of OAGM, TL 896 million of United Aygaz, TL 4.513 billion of financial investments, TL 4.102 billion of cash, and TL 23.343 billion of core and other assets; against this stand TL 3.026 billion of borrowings and TL 8.084 billion of other liabilities.
| Balance-sheet component | TRY billion |
|---|---|
| EYAŞ | 47.101 |
| OAGM | 2.534 |
| United Aygaz | 0.896 |
| Financial investments | 4.513 |
| Cash | 4.102 |
| Core LPG/natural-gas and other assets | 23.343 |
| Bank and lease borrowings | -3.026 |
| Other liabilities | -8.084 |
| Equity attributable to the parent | 71.378 |
These pieces are not equal in quality. OAGM and United Aygaz are 50% joint ventures. United Aygaz contributed TL 116.1 million in profit in the first quarter, but carries Bangladesh and joint-control risk. Of the financial investments, TL 4.493 billion is a 3.93% stake in Koç Finansal Hizmetler alone. The core LPG assets carry a broad distribution network, but produce thin net profit and require investment in vessels. A 30% discount to the residual is not round-number pessimism; it is the combination of control, liquidity, low returns and reinvestment friction.
The Discount Is Already in the Price
The classic calculation suggests visible cheapness. A market value of TL 54.1 billion is 0.76 times parent equity of TL 71.4 billion. Against 2025 parent net profit of TL 5.0 billion, the trailing P/E is 10.8. The TL 2.758 billion gross dividend decided in March yields 5.1% against today's value. But forcing a low-return LPG network, a cyclical refining affiliate and a loss-making freight business into the same multiple does not create cheapness; it merely creates an average.
A calculation suited to the company's anatomy has two layers. Assigning 0.80x to EYAŞ and 0.70x to the remaining net assets produces TL 54.675 billion in the status quo. That is only 1.1% above the current market value. This does not mean the market fails to see EYAŞ. It sees it, but discounts the lack of control attached to a 20% stake and the Tüpraş cycle; it also sends the remaining assets the bill for freight, vessels and low core returns.
The scenario that values EYAŞ at 1.00x and the residual at 0.70x gives TL 64.095 billion, implying 18.5% upside. This is the disciplined-conversion scenario in which cash conversion has been proven. Full book value of TL 71.378 billion and 32% upside is the distant boundary where all control and return discounts disappear. In the hard downside, EYAŞ is valued at 0.60x and the residual at 0.50x, producing a value of TL 40.399 billion, a loss of 25.3%.
| Scenario | EYAŞ multiple | Residual multiple | Value, TRY bn | Versus market | Analyst probability |
|---|---|---|---|---|---|
| Hard downside | 0.60x | 0.50x | 40.399 | -25.3% | 20% |
| Status quo | 0.80x | 0.70x | 54.675 | +1.1% | 50% |
| Disciplined conversion | 1.00x | 0.70x | 64.095 | +18.5% | 25% |
| Full book | 1.00x | 1.00x | 71.378 | +32.0% | 5% |
| Probability-weighted value | 55.01 | +1.7% | 100% |
The probability scale built for the next 12 months changes the verdict. With 20% assigned to the hard downside, 50% to a status quo in which today's discounts persist, 25% to disciplined conversion and 5% to full book value, the value comes out at TL 55.010 billion. The difference from today's market value is only 1.7%. Probabilities are analyst judgment, not a document line; but once stated plainly, it becomes clear which belief is carrying the price. With no near-term catalyst announced, it was not right to use 18.5% upside as the base and leave 25.3% downside as a footnote.
The bull case is still strong and fair. EYAŞ delivered cash in the first quarter. United Aygaz's contribution grew. Gross and operating margins improved. If Kolay Gelsin stops asking for new money, vessel financing does not choke the balance sheet, and operating capital reverses, the market will have written the same risk into EYAŞ twice. Then the path to TL 64.1 billion opens.
The bear case carries a more concrete bill. If EYAŞ's value and dividend fall together, the two vessels are loaded onto debt, freight needs fresh capital again, and operating cash remains persistently negative, then 0.76x book is not cheapness; it is the price of protection.
The Contracts Around the Pipe
The risks are not limited to vessels and freight. Net foreign-currency exposure including hedges is negative TL 2.877 billion. Guarantees provided for gas purchases and other activities total TL 6.754 billion. Aygaz Doğal Gaz carries a TL 861 million provision because the price-revision arbitration between Gazprom and Akfel was decided against Akfel. The national petroleum stock rule continuously ties up capital by requiring at least 20 days of product to be held in storage.
The related-party network runs through the business's veins. In the first quarter, TL 2.743 billion of goods were purchased from Tüpraş and TL 939 million from Opet; TL 2.287 billion of sales were made to United Aygaz. These are natural extensions of operations within the Koç ecosystem, not automatic red flags. For the minority shareholder, the test is this: will intra-group pricing remain reasonable, and will the money flowing into affiliates generate an acceptable return?
The figures for the next judgment are already set. If EYAŞ's value falls below TL 42.4 billion and annual cash distributions to Aygaz remain below TL 1 billion; if net financial debt exceeds TL 8 billion after the vessels; if Kolay Gelsin demands more than TL 500 million in new cash during 2026; or if operating cash is negative in both of the next two quarters and the combined figure is worse than negative TL 2 billion, the share's protection will unravel. If two of these alarms ring together, the view turns down.
The reverse is measurable too. If EYAŞ preserves at least TL 47.1 billion and approximately TL 1.4 billion in distributions, the combined operating cash of the next two quarters is at least positive TL 2.7 billion, Kolay Gelsin needs no new money, and net debt after the vessels remains below TL 3 billion, today's discount will have become too heavy. At that point, the word “reasonable” will no longer be defensible.
Verdict
Aygaz is fairly valued. This verdict is not a safe middle ground that winks at both sides. The market sees the refinery inside the cylinder and applies a discount because the key is not in Aygaz's hands. EYAŞ's cash-generating capacity does not justify the whole of that discount; freight, vessels and the quality of core cash generation do not allow it to be removed today. A probability-weighted 1.7% upside is not a margin against a 25.3% hard downside risk.
The share suits an investor who can measure the asset discount quarter by quarter and wait for evidence of capital allocation. It does not suit someone who sees only a low P/B ratio or is looking for a fixed dividend machine. The return of cheapness should first appear in operating cash, EYAŞ distributions and vessel financing, before it appears in the share price.