KMC Properties (Buy, TP: NOK7.00) - Solid growth outlook
The Q3 results were marginally below our forecasts. One small property was sold in Q3, resulting in PFPM 9% below our estimate, but also lowered NIBD. The NOI yield in book values rose to 7% and is set to increase to 7.2% with the new deal from BEWI in Q4–Q1. Given the high yields on assets implied in the share price and KMC’s NIBD/EBITDA below peers, we reiterate our BUY. However, we have reduced our target price to NOK7 (7.5) due to our trimmed NAV forecast on rising interest rates.Storm Real Estate ASA is a Norway-based investment company active in the real estate sector. It is engaged in both direct ownership and management of commercial property in Russia and the European Economic Area (EEA) and in indirect ownership by taking positions in other companies through the purchase of shares or commercial papers. As of December 31, 2013, the property portfolio of the Company consisted of two office buildings: Gasfield in Moscow and Grifon House in St. Petersburg, with a total lettable area of approximately 20 000 square metres. Both buildings are let to companies within the oil, gas and pharmaceutical industries. As of December 31, 2013, the Company had nine wholly owned subsidiaries based in Russia and Cyprus, such as OOO Martex, CJSC Grifon, Tiberton Yard Ltd, Tiberton Yard Holding 2 Ltd, Tiberton Yard Finance Ltd, Gasor Consulting Ltd, Pete Ltd, Avonglade Ltd and Storm Real Estate Ltd.
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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