Pandox (Hold, TP: SEK210.00) - Continued growth
On 22 November Pandox announced it had acquired seven additional hotels in Germany, which brings the company’s investment over the past six months to EUR537m (13 hotels), with a solid guided initial yield of c5.7%. Despite a solid ROCE on its recent equity proceeds, the changes in market interest rates and stronger SEK lead us to revise down our 2020e EPS by 3% and 2021e by 3,9%. We continue to believe Pandox offers attractive long-term exposure to business and leisure in Northern Europe, but the current NAV premium leaves us reiterating our HOLD and SEK210 target price.Pandox AB is a hotel property company in northern Europe. The Company's principal business activities are the active ownership, development and leasing of large hotel properties in Stockholm, Gothenburg and Malmo, in Swedish regional and university cities and in capitals and other major cities in northern Europe. The Company's hotel properties are situated in such locations as city centers, airports and convention centers. Pandox' hotels are in the upper-medium to high price range and focus on the business and leisure segment. The Company's portfolio is comprised of 44 hotel properties in five countries (Sweden, Denmark, Germany, Belgium and the United Kingdom) totaling 8,143 rooms. The average number of rooms per hotel is 188. The Company's hotels are operated by such hotel operators as Hilton Group plc, Choice Hotels, Rezidor SAS, Best Western, Elite Hotels and First Hospitality, among others.
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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