Solon Eiendom (Hold, TP: NOK37.00) - Low-margin luxury in Q1
Solon handed over its 18-unit Bygdøy development in Q1, with revenues of NOK448m (NOK24.8m/unit). However, margins were lower than we expected and resulted in an EPS miss in Q1, leading us to cut our 2019e EPS. While Solon has stated an ambitious goal to deliver 700 units to clients from 2024, we want to see higher sales before factoring in this target, which represents a 217% rise versus current run rates. We reiterate our HOLD and NOK37 target price.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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