Scandi Standard (Buy, TP: SEK46.00) - Tough times
We expect Q4 EBIT of SEK-6m (consensus: SEK38m) on headwinds from bird flu, low export prices, and tough conditions in some key markets. The company had indicated tough times ahead. However, our expectations are down further on a greater impact from bird flu in the latter part of Q4 and intensifying raw material price inflation. We reiterate our BUY, but have cut our target price to NOK46 (51). With the stock trading at a 2022–2023e P/E of 19–7x, we believe meeting the current challenges could provide scope for higher multiples.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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