Balder (Hold, TP: SEK230.00) - Reduced asset value gains
Keeping its asset valuation yield at 5.0%, Balder reported a 1% asset gain in Q3, well below its historical averages. The greater taxation risk in Sweden means we expect yields to be flat into 2018e and given that tax laws should benefit lower LTVs, we expect the high asset accumulation seen recent years to be lowered. The shares are trading in line with Q3 EPRA NAV; thus we retain our HOLD recommendation, but have raised our target price to SEK230(220) on updated forecasts.Fastighets AB Balder is a Sweden-based company engaged in the acquisition, development and management of residential and commercial real estate. The Company's real estate portfolio is comprised primarily of residential real estate and is located in such cities, as Stockholm, Gothenburg, Lund, Malmo, Norrkoping, as well as in regions outside metropolitan areas of Sweden and in the Copenhagen region in Denmark. The Company's subsidiaries include Balder Storstad AB, Balder Mellanstad AB, Din Bostad Sverige AB, Egby Vindkraftverk AB and Serena Properties AB.
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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