Report
Simen Mortensen
EUR 461.03 For Business Accounts Only

Selvaag Bolig (Sell, TP: NOK35.00) - Lower starts = lower sales

Selvaag Bolig’s Q2 new housing sales fell 37% YOY in NOK, versus our forecast of -53% YOY. However, it was the guidance of 1,100–1,200 units under production by year-end that we found most revealing, leading us to cut our 2021–2022e EPS. Combined with Q3e and Q4e completions, YTD starts and reported Q2 production levels, this guiding implies Selvaag Bolig will start between 308–408 units in 2020e, resulting in a cyclical-low 2021–2022e EPS on fewer deliveries. We reiterate our SELL and NOK35 target price.
Underlying
Selvaag Bolig AS

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.

Provider
DnB Markets
DnB Markets

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.

 

Analysts
Simen Mortensen

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