TINC: Thinking about ESG and New Reporting Structure - TINC BB

TINC is underestimated as a contributor to a better world and can accelerate its growth as Infra investments are high on the agenda. TINC investments enable a dividend yield that will remain attractive in the current low interest rate environment. We estimate a dividend of at least € 0.52 over the next 3 years.

• TINC presented its ESG strategy on our 29-30/09 Sustainability Conference. The company believes that most of its participations contribute positively to a better society (UN SDG). It has defined an ESG roadmap and might over time contemplate issuing a green bond.
• TINC also announced a new reporting structure based on four focus areas: public infrastructure, energy infrastructure, digital infrastructure and support real estate (the latter two used to be defined as ‘demand based infrastructure’). The company has enhanced financial disclosure (including leverage ratio’s) for each focus area.
• Growth opportunities: TINC’s investment approach is inspired by four significant societal trends: a low-carbon world, digitization, building back better and care & wellbeing. These trends drive substantial investment requirements that provide growth opportunities for TINC.
• The infrastructure asset class is protected by barriers to entry such as the complexity of ppp origination/financing. However, low interest rates have attracted new entrants to the infrastructure space looking for yield.
• Conclusion: TINC aims to provide a stable dividend, which grows year on year with inflation. For FY20/21, the dividend is € 0.52 per share, implies a 3.9% dividend yield. We believe that a 4.5% premium to NAV is justified as TINC has a competitive advantage vs. new entrants. The expected premium could increase in future if and when TINC adopts a more aggressive growth stance.