Hemfosa (Buy, TP: SEK119.00) - Mixed Q1, forecasts raised
A higher tax rate and seasonal property costs than expected meant Q1 FFO missed our forecast. However, NAV was up on lower yields, and the earnings guidance has prompted us to raise our forecasts. The company has announced the board and name of the planned spin-off, Nyfosa. We expect an equity issue following the demerger of Nyfosa, but continue to see potential upside in the Hemfosa shares. We have raised our target price to SEK119 (115) and reiterate our BUY.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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