Hemfosa (Buy, TP: SEK115.00) - Positioning for M&A
Q4 rental income beat expectations but costs were higher than expected. The earnings capacity guidance was below our forecast, which alongside raised market interest rates prompted us to cut our forecasts despite higher rental income. In our view, the plan to split Hemfosa into two could make the new ‘community service’ company a takeover candidate. We have cut our target price to SEK115 (125) on lowered forecasts, but we reiterate our BUY recommendation.Hemfosa Fastigheter AB is a Sweden-based company engaged in long-term management of properties. It specializes in owning, managing and purchasing of properties primarily in Sweden. The Company's portfolio consists of office, commercial and industrial properties both for rental and sale. In June 2014, the Company acquired property in central Sundsvall and sold three properties in Vaxjo, Uppsala and Haninge.
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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