LHV Institutional 'Baltic Horizon Fund (NHCBHFFT ET) Update, June 8th, 2020'
* According to Baltic Horizon Fund (‘BHF’ or the ‘Fund’), to contain the impact of the COVID-19 pandemic on its operations, it has focused on optimising its operating costs while working with its tenants to ensure the longevity of its rental agreements. It has managed to implement several relief initiatives for its tenants that aimed to alleviate the financial stress for its most vulnerable tenants by deferring rent payment for 90 days and waiving all penalties and interest arising from the rent deferral. The Fund has already warned that the crisis COVID-19 will hurt its Q2 2020 results. The Fund had assessed the impact of the virus on each of its tenants and decided on the various discounts for the quarantine period by mid-May. This included average discounts of 50% to the most affected tenants up until July 2020. Besides, tenants can receive government support measures.* LHV currently covers two property market funds – Baltic Horizon Fund and EfTEN Real Estate Fund III (EFT1T ET). There are a few defining differences between the two securities, which we analyse in this update report. BHF’s fair value range has then been established after applying varying weights to seven valuation metrics (peer multiples and CDDM). Based on the valuation outcomes from these measures, the calculated and revised fair value for BHF is EUR 1.30-1.45 per unit (closing price as of 2nd June 2020: EUR 1.130). Our previous fair value range was EUR 1.40-1.55 per unit.
* This report contains a full set of financial forecasts and is useful for gaining an initial insight into the company. Please also refer to the tables and charts in the attachment.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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