The Emek Mahallesi address in Darıca reads like a corporate headquarters. At Sarkuysan, that address is also a scale. The product list in the annual report counts nearly every form of copper: wire rod, rod, wire, flat wire, catenary wire, tinned wire, copper tube, busbar, CTC, PV ribbon, EDM wire. Copper enters by the ton and leaves by the ton. The shareholder’s question is not tons. It is grams.
In the first quarter of 2026, sales were TL 26.5 billion. Profit attributable to the parent was TL 360.9 million. Put another way, from every 100 lira of sales, only 1.36 lira reached the shareholder as parent-company profit. This matters not because the ratio is small, but because it exposes the nature of the business: Sarkuysan does not own the copper price; it owns the spread left as copper passes through its hands.
2026Q1 was a good quarter. There is no need to hide that. Gross margin rose from 3.40% in 2025Q1 to 5.51% in 2026Q1. Operating profit increased from TL 706 million to TL 1.16 billion. LME copper was USD 9,673/ton on March 31, 2025 and reached USD 12,160/ton on March 31, 2026; the company gives the March 2026 average as USD 12,844.45/ton. The same annual report says financial hedging instruments continue to be used in raw material purchases and product sales against price fluctuations. In other words, this is not a crude commodity wager. It is a question of how many kurus expensive raw material leaves behind between order, inventory, receivables, hedge, and financing.
That is why the best news and the most dangerous news of Q1 must be read from the same place. If the 5.51% gross margin annualizes, Sarkuysan’s earnings power suddenly looks more reasonable. But the same margin was 2.50% in 2025Q4. The last five quarters clearly tell the investor not to trust a single good quarter too much.
| Item | 2026Q1 | Read-through |
|---|---|---|
| Revenue | TRY 26.52bn | Copper volume is large. |
| Gross profit | TRY 1.46bn | 5.51% gross margin; the best of the last five quarters. |
| Operating profit | TRY 1.16bn | Operations recovered versus Q4. |
| Parent net profit | TRY 361m | Only 1.36% of sales reached the parent shareholder. |
| Operating cash flow | TRY -5.6m | Profit has not yet turned into cash discipline. |
The cash side strengthens that warning. In Q1, consolidated period profit was TL 391.3 million, while cash flow from operating activities was -TL 5.6 million. Last-four-quarter operating cash also stays around TL 191 million; so the issue is not merely one quarter’s timing, but how slowly copper volume returns to the till. The main reason is a balance sheet chasing sales: the increase in trade receivables created a -TL 3.23 billion effect on cash flow; the increase in trade payables partly offset this with +TL 1.82 billion. On the March 31, 2026 balance sheet, trade receivables were TL 12.14 billion and inventories were TL 9.69 billion. Together they make TL 21.83 billion, about 1.7 times equity attributable to the parent.
This does not mean the company is badly managed. It describes the capital appetite of the model. As copper becomes more expensive, shelves, shipments, and customer balances also become more expensive. The company explains that it manages receivables risk through insurance, letters of guarantee, DBS, and mortgages; at the reporting date, TL 6.41 billion of non-related trade receivables appears to be secured by collateral. But security is not cash. For the shareholder, the first test remains this: does profit return to the till on time?
Debt is the other pan of the same scale. On March 31, 2026, financial debt was TL 12.60 billion, while cash and financial investments were about TL 2.10 billion. Rough net debt was TL 10.50 billion. TL 8.21 billion of bank loans mature within 12 months. Interest rates are in the 23.58%-31.45% band for TL loans; they are lower for foreign-currency loans, but FX and refinancing risk enter through another door. Interest paid in Q1 cash flow was TL 284.0 million; this size shows how quickly the financing desk can absorb the shareholder’s share even if the spread recovers. The company’s total guarantees, pledges, and mortgages were TL 9.17 billion; the fact that the portion in favor of “other group companies or third parties” is zero is an important relief, but the total size is still a balance-sheet reality.
| Item | 2026Q1 | Why it matters |
|---|---|---|
| Trade receivables | TRY 12.14bn | Customer balances equal 45.8% of Q1 sales. |
| Inventories | TRY 9.69bn | Inventory becomes more expensive as LME copper rises. |
| Net debt | TRY 10.50bn | Calculated as financial debt less cash and financial investments. |
| Bank loans due within 12 months | TRY 8.21bn | Refinancing and interest cost must be read beside the spread. |
| Total guarantees/pledges/mortgages given | TRY 9.17bn | About 70% of total equity; other-group/third-party TRI ratio is 0%. |
Sarkuysan’s better side is that it does not hide most of these risks, and that the business truly rests on a global customer map. In the first three months of 2026, exports were around USD 360 million. Sark Wire in the U.S. produces in New York and Georgia; Sark Bulgaria has entered serial production in Shumen, and the annual report says production has increased. These foreign legs pull the company away from being merely a copper processor tied to Turkish domestic demand. Demisaş, Sarmakina, Sarda, and other affiliates also diversify the structure. But this report does not make a SOTP claim built on live affiliate market values; Demisaş and the other subsidiaries are treated as a limited control element supporting the asset base.
The capital structure is not an ordinary “controlling shareholder” story either. The annual report states that 100% of the capital is publicly traded and that the free float ratio is 83.87%; yet on the same pages, board members and major shareholder names appear with meaningful blocks. Hayrettin Çaycı holds 7.68%, Şükrü Kilimci 7.15%, İbrahim Kilimci 6.00%, Diana Manuş Urun 3.96%, and A. Hamdi Bektaş 3.00%. This structure is not bad; it simply tells the investor this: the control table is not a one-line table, and while the capital appears dispersed, names with historical weight sit at the management table.
But the investor must separate one thing here: geographic quality and share price are not the same thing. The segment note shows that in 2026Q1 the “Copper” segment generated TL 30.30 billion in pre-consolidation revenue and TL 1.10 billion in gross profit. Enamelled winding wire, CTC, reels, machinery, and other businesses add layers to profit; but the group’s center is still copper’s giant-volume, thin-profit main channel.
Valuation has to begin there. According to market data on May 18, 2026, the share price was TL 29.00 and market capitalization was TL 29.0 billion. Adding net debt from the March 31 balance sheet brings enterprise value to about TL 39.5 billion. If Q1 operating profit and depreciation are annualized, EBITDA is about TL 5.05 billion; in that case EV/EBITDA appears to be 7.8x. That may not look like a very expensive number.
But the second approach is harsher. Over the last four quarters, total EBITDA was TL 3.32 billion, and profit attributable to the parent was only TL 392 million. The same enterprise value equals 11.9x TTM EBITDA, while market capitalization equals about 74.0x TTM parent-company profit. If you treat Q1 as permanent, the share moves closer to looking reasonable; if you base the view on the last twelve months, it looks expensive. The knot of this report is exactly here.
| Approach | Calculation | Read-through |
|---|---|---|
| Annualized Q1 EBITDA | TRY 39.50bn EV / TRY 5.05bn = 7.8x | If Q1 margin is durable, the stock approaches fair value. |
| Last four quarters EBITDA | TRY 39.50bn EV / TRY 3.32bn = 11.9x | On trailing numbers, cheapness disappears. |
| Annualized Q1 P/E | TRY 29.0bn market value / TRY 1.44bn = 20.1x | The market pays upfront for the Q1 recovery. |
| Last four quarters P/E | TRY 29.0bn market value / TRY 392m = 74.0x | The Q4 loss still crushes trailing earnings. |
| Asset-adjusted enterprise value | EV - investment properties - equity-accounted investments = TRY 37.16bn | Hard assets exist, but spread durability is still the core question. |
Now look through the asset window. Equity attributable to the parent is TL 12.91 billion; market capitalization is 2.25 times that. Investment properties are TL 1.82 billion, and investments accounted for by the equity method are TL 511 million. Even after subtracting these assets from enterprise value and taking a rough look at the copper machine, the remaining operating value is about TL 37.2 billion. This is not a target-price SOTP; it is a control calculation that conservatively separates the support from booked real estate and affiliates. Because it does not use live affiliate values, it also makes no claim about the upward or downward market gap in publicly traded pieces such as Demisaş. This amount is 7.4x Q1 annualized EBITDA and 11.2x last-four-quarter EBITDA. So valuation does not automatically become cheap because there is real estate and affiliate value on the books; the real question is still the durability of the spread.
The fair anti-thesis is strong. Sarkuysan is not merely the story of a small affiliate whose operations stopped in 2003; it has production legs, exports, LME hedge discipline, an insured receivables policy, and a serious hard-asset base. Q1 gross profit was more than double 2025Q1. Copper and electrification demand do not make the company’s product world meaningless in the long run; on the contrary, more complex conductor products could create better spreads. If in Q2 and Q3 gross margin stays above 5%, operating cash turns clearly positive, and net debt declines, today’s Expensive verdict would remain too strict.
My objection is not to the company, but to the price. A TL 29 billion market value takes a significant part of Q1’s good margin and annualized EBITDA in advance. Yet last-twelve-month profit attributable to the parent is TL 392 million; operating cash over the same period is only around TL 191 million. In a machine producing this much revenue, it has not yet been proven that the share left to the shareholder has grown permanently.
The decision is therefore clear: Expensive. Sarkuysan may be a good industrial machine worth watching; but owning it at this price means believing that the copper in Darıca will flow by the ton every quarter and will now leave the shareholder more than grams of profit.