Nyfosa (Hold, TP: SEK120.00) - Fairly valued
At a 23% NAV premium, we believe M&A-driven growth is needed for the stock to take the next step, but see a risk of disappointment on: 1) limited low near-term M&A activity due to management changes; 2) it was one of the few still writing down asset values in Q2, and its NIBD/property value of 54% does not offer much room for new secured debt; and 3) amortising the expensive hybrid bond is likely to be prioritised. We reiterate our HOLD, but have raised our target price to SEK120 (105).Nyfosa AB is a Sweden-based real estate investment company. The Company's transaction-based investment strategy is not limited by property category, region, scope of the transaction or holding period. The Company focuses on commercial real estate, with the property portfolio divided into three categories: Offices, Logistics/Warehouse and Other. The properties are diversified geographically, with the office buildings mainly located in Swedish municipalities and the warehouses in transportation hubs across Sweden. The Other category includes retail premises, hotels and industrial spaces. The portfolio comprises more than 170 properties with a total leaseable area of approximately 1,500,000 square meters. The Company develops and adds value to its property holdings through active approach to property management. All of electricity supplied to its properties derives from renewable sources.
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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