Bonava (Hold, TP: SEK30.00) - Long-term low-cycle EPS ahead
Despite asset-backing from development plots, likely multi-year low-cycle earnings mean we do not expect a revaluation of Bonava. The Q4 figures missed on EBIT, even excluding restructuring costs. The strategic review of the Norwegian division should give the company cash to ride out the weak markets. The new 10% EBIT margin target seems ambitious but plausible to us, but only in the longer term. We reiterate our HOLD, but have cut our target price to SEK30 (33).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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