Bonava (Buy, TP: SEK130.00) - Q1 beat and still-solid outlook
With few project completions, Q1 was expected to mark the low season, but revenues from sales of completed unsold homes boosted EBIT. The new CEO launched a strategic review of operations, with the findings due by Q4. The Q1 earnings beat led us to raise our 2021e EPS by 8.1%, but the backend-loaded housing start profile in 2021e – prompting us to move project completions from 2022e to 2023e – had a negative impact on our EPS22e. However, we still see the valuation as attractive, and KPIs for unit sales and starts suggests a solid EPS growth in 2023. We reiterate our BUY and SEK130 target price; Bonava remains our top sector pick.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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