Kojamo (Hold, TP: EUR13.00) - Interest rates set to hit hard
While operating figures surprised on the upside, the largest asset write-down in the sector so far in Q4 lowered the NAV more than we expected. The drop in the interest-rate hedging ratio from 92% to 84% has led us to raise our funding-cost forecasts and reduce our FFO/share by c11% for 2023e and 20% for 2024e. We reiterate our HOLD, but have cut our target price to EUR13 (13.5).Kojamo Oyj is a Finland-based private residential real estate company. It offers rental apartments and housing services for tenants primarily in the Helsinki region, the Tampere, Turku, Kuopio and Lahti regions, as well as in the cities of Oulu and Jyvaskyla. The Company's portfolio comprises over 35 000 rental apartments. The Company operates within two segments: Lumo and VVO. The Lumo segment includes commercial housing services and apartments primarily are free from restrictions under state-subsidized housing loans (ARAVA) and/or interest subsidy legislation. The VVO segment includes the rental apartments subject to restrictions on rent levels under ARAVA and/or interest subsidy legislation.
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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