Citycon (Hold, TP: EUR7.70) - Post-Covid boost, as expected
Q2 LFL net rental income growth was 6.2% YOY excluding one-offs, as the occupancy rate climbed to 95% (+120bp YOY) on the back of eased pandemic effects, the opening of the first stage of Lippulaiva, and the divestment of two non-core assets (one of which had a high vacancy rate). While EBIT beat our estimate, FFO was lower on higher interest rates, tax payable, and hybrid dividends. We reiterate our HOLD, but have raised our NAV-based target price to EUR7.7 (7.4).Citycon is an active owner, operator and developer of shopping centers. Co. aims to increase its net yield from shopping centers over the long term through active retail property management and systematic redevelopment efforts. Co. is involved in the day-to-day operations of its shopping centers. As of Dec. 31, 2011, Co. owned a total of 36 shoppings centers: 23 in Finland, 9 in Sweden, 3 in Estonia, and one in Lithuania. Co. also owns 43 other retail properties: 36 in Finland and 7 in Sweden and one undeveloped lot in Finland. Co. manages two commercial shopping centers in Finland.
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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