Solon Eiendom (Hold, TP: NOK27.00) - Q1 on the soft side
Weaker EBIT margins than expected under IFRS accounting fuelled the Q1 miss, while under POC, project margins fell by 600bp YOY. We see significant financial risk at Solon Eiendom, based on our 2020e NIBD/EBITDA of c10.7x. We also highlight sales to ‘Solon Realkapital’, its JV, have accounted for c34% of net sales over the past eight quarters. While we see support for NAV, debt and EV valuations look too high to us; we have edged up our target price to NOK27 (26) and reiterate our HOLD.Solon Eiendom is a biotechnology company. Co.'s focus is the research and development of peptide based vaccines against viral diseases, primarily human immunodeficiency virus (HIV). As of Dec 31 2013, Co.'s clinical development pipeline comprised of two vaccine candidates for the treatment of HIV, Vacc-4X and Vacc-C5. Vacc-4X is being investigated in two phases II trials in collaboration with Celgene Inc.
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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