Selvaag Bolig (Sell, TP: NOK35.00) - Tough market outlook
SBO started only 15 units in Q1 and thus lifted its pre-sales ratio to more comfortable levels. Due to Covid-19 and the significant spike in Norwegian unemployment, we expect sales of new homes to be much weaker over the next 12 months and have cut our 2021–202] EPS forecasts. However, we expect a record quarter in Q1 (results due at 07:00 CET on 20 May), as SBO should record the profits from its January plot sale. We reiterate our SELL and have cut our target price to NOK35 (45) on our lower forecasts.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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