Upscaling
With total funds of >NOK3bn set to be injected into Axactor and its special purpose vehicle (SPV), we believe it will attain higher earnings growth and improved margins, along with significant benefits of scale. We are increasingly confident in our investment case and have raised our capex for 2018e and 2019e to EUR300m for each year (+EUR75m in the SPV). This boosts our EPS from 2019e onwards and thus looks shareholder value-enhancing. We reiterate our BUY recommendation and NOK5 target price as we continue to believe the stock is attractively priced at a 2019e EV/EBIT of 7.5x.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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