Kinnevik (Hold, TP: SEK350.00) - Steep valuation reflects execution
We believe we are still only at the end of the beginning of the accelerated digital-adoption trends that have rejuvenated Kinnevik’s growth strategy across its target sectors, and that it offers one of the sector’s most attractive medium-term NAV growth outlooks. However, as it has executed on its investment strategy, its reported NAV has come closer to our estimate and we find most near-term catalysts are reflected in the share price, as it is trading at a well-deserved 26% premium to NAV. Thus, we have downgraded to HOLD (BUY) but raised our target price to SEK350 (320).Kinnevik is an investment company with holdings in the sectors of communication, e-commerce, entertainment and financial services. Co.'s holdings include Millicom, a telecommunications and media company providing digital lifestyle products and services to emerging markets, and Tele2, a telecom operator, providing mobile services, fixed broadband and telephony, data network services, cable TV and content services. Within e-commerce, Co. has focused its investments in the shoes and fashion segment through companies such as Zalando with geographical presence in Europe and companies such as Lamoda, Dafiti, Jabong and Zalora focused on emerging markets.
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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