Bonava (Hold, TP: SEK23.00) - Weak Q1 guided
Bonava issued a Q1 profit warning on 20 April, due to building delays and a weak residential market. It now guides for Q1 revenues of SEK2.4bn and EBIT of SEK45m, with only 700 of the previously guided 940 units to be completed having been delivered to clients. We have cut our Q1 forecasts on the delays and build-up of unsold completed homes. We see a risk that balance sheet improvements might be needed if it does not sell the Norwegian operations (strategic review ongoing), which we believe could be a positive catalyst. However, the stock is already trading at a significant discount on P/B; we reiterate our HOLD, but have cut our price target to SEK23 (30).Bonava AB (publ). Bonava publ AB is a Sweden-based company, which is primarily involved in real estate development industry. The Company operates as a developer of housing units to consumers and investors in Sweden, Germany, Finland, Denmark, Norway, the Russian Federation, Estonia and Latvia. In Germany, the Company's offering is targeted at consumers and investors through both single-family houses and multi-family houses. The Company operates on the basis of an own-produced construction system in Germany, which is used in all new construction, thus enabling an efficient construction process. In Estonia and Latvia, the Company's offering is primarily targeted at consumers, based on multi-family houses. In Russia, it operates solely in Saint Petersburg region with offering comprises of multi-family houses.
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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