Selvaag Bolig (Hold, TP: NOK52.00) - Q3 miss, but eyeing a KPI rebound
The KPI ‘units to be completed’ and the company’s guidance indicate declining EPS in 2022e. However, as management commentary indicated that starts should exceed completions in Q4, we believe units under construction may have passed a trough. Nevertheless, given the long lead times in residential development, the higher starts are unlikely to yield EPS results until 2023e and 2024e. Q3 missed our forecasts on lower revenue per units sold and lower margins. We reiterate our HOLD and have trimmed our price target to NOK52 (54).Selvaag Bolig ASA. Selvaag Bolig ASA, formerly Selvaag Bolig AS, is a Norway-based company engaged in the development of residential properties. The Company manages the entire process, from the purchase of land to the sale of finished homes. The Company operates through such subsidiaries, as Selvaag Bolig Modulbygg, which develops flats and terrace houses with the aid of modules; Meglerhuset Selvaag, which is an estate agency responsible for the sale of the Company's new homes, and Selvaag Pluss Service, which is engaged in the operation of the Company's Pluss Homes that offer security and services, such as cleaning and booking of tickets, among others. The Company's projects are located in Oslo, Stavanger and Bergen, Norway, as well as in Stockholm, Sweden, and include Lorenskog Stasjonby, Nyhavn Brygge, Lervig Brygge Pluss, Bjornasen Start and Utsikten-Mortensrudhoyden, among others. In the second quarter of 2013, the Company sold 200 homes.
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