Scandi Standard (Hold, TP: SEK73.00) - Stabilising production
Q2 adj. EBIT of SEK115m was c1–5% above our estimate and consensus. The guidance was firm and operations seem to have stabilised after several quarters with operational challenges. We have made only minor changes to our 2020–2021e EPS, but with increased confidence that the operations have turned for the better and the higher peer group multiples, we have reduced our risk premium and increased our target price to SEK73 (65). We reiterate our HOLD.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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