Solon Eiendom (Hold, TP: NOK37.00) - M&A masks Q4 miss
Solon Eiendom sold 20.5 units (net) in Q4, 85% below our forecast, as more delays hit planned sales starts. However, on 18 December it announced it had agreed to buy Kruse Smith Eiendom (KSE) for NOK608m (with NOK2.3bn in EV). Solon Eiendom thus bought 660 units under construction with deliveries due 2020–2021, and a landbank of 2,500 building rights in southern Norway. The units under construction have led us to raise our 2020–2021e EPS, despite the weak Q4 sales, but we have also raised our 2020e NIBD/revenue. We reiterate HOLD, but have raised our TP to NOK37 (34).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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