Kinnevik (Hold, TP: SEK140.00) - Timing is key as VC cycle worsens
As Softbank’s Masayoshi Son said: “the winter for unlisted companies may be longer than the winter for listed companies." We still believe the reset in listed tech valuations has not fully fed through to the VC industry and we expect a further ~25% write-down of Kinnevik’s unlisted portfolio. With the downside cushion from net cash + Tele2 composing 55% of Kinnevik’s NAV and negative positioning in the shares (3.3% short interest of free float), we believe the worst is over and find the risk/reward profile to be balanced. Although the slightest signals of peak interest rates could trigger a large upside potential, a switch to a bullish stance would probably require some negative catalysts to play out. We reiterate our HOLD with a new SEK140 (165) target price.
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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