Scandi Standard (Buy, TP: SEK74.00) - Solid underlying operations
Scandi Standard released a Q1 trading update on 14 April revealing strong underlying operations. Operational EBIT was indicated at SEK115m (our forecast SEK113m), but SEK50m in one-off costs will be taken in connection with Q1, mostly Covid-19-related. The previously announced 2019 dividend will be cancelled in order to preserve cash. We have lowered our 2020–2022e adjusted EPS by 0.1–2.9%, but reported 2020e EPS by 11%. We have cut our target price to SEK74 (75), but upgraded to BUY (HOLD) due to the share price drop. The full Q1 results are due out on 12 May.Scandi Standard is a supplier of chicken-based food products in the Nordic region. Co. offers a range of chilled and frozen products under brands such as KronfAY=gel in Sweden, Danpo in Denmark and Den Stolte Hane in Norway, as well as for private label. Co.'s customers are found in the retail, food service and food industry sectors. Co. has operations in Sweden, Denmark, Norway and Finland. The Swedish operations are conducted through the companies KronfAY=gel AB, SweHatch AB, AB SkAY=nefAY=gel and Bosarpkyckling. The Danish operations are conducted by Danpo A/S. The Norwegian operations are conducted through Scandinavian Standard AS. The Finnish operation is conducted through KronfAY=gel Oy.
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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