LHV Institutional Baltic Insight, June 14th, 2021
* EfTEN Real Estate Fund III (EFT1T ET) is a regulated, evergreen, closed-end fund focused on real estate investments. It was registered in Estonia on 5th June 2015, and, together with the management company, EfTEN Capital AS, is supervised by the Estonian Financial Supervisory Authority. The Fund has been listed on the Nasdaq Baltic Main List since 1st December 2017, following an initial public offering (‘IPO’).* In order to assess the value of the Fund, we used six metrics, including 1) P/E, 2) P/B, 3) EV/EBIT, 4) Cash Distribution Yield, 5) P/EPRA NRV & Net Initial Yield correlation, and 6) Cash Distribution Discount Model (‘CDDM’). We decided to prefer the correlation implied P/EPRA NRV and CDDM as more prominent valuation metrics for the Fund, compared to other peer valuation metrics. Thus, we have given P/EPRA NRV a 40% weight (up from 30% in our previous valuation update) and the CDDM a 20% weight in the total value, leaving the total contribution of other metrics at 40% (down from 50%), including a 10% weight for each multiple. Overall, we decided to upgrade our FVR from EUR 19.30-20.30 to EUR 20.30-21.70 per share. Please note that our new FVR range represents post-money ex-dividend valuation for the stock (i.e. adding the funds from the rights issue and respective investments, but excluding the 2021 dividend). Major risk factors to our valuation are related to the aftermath of the COVID-19 pandemic, including a potential third wave, which may cause a slower than predicted recovery of the economic conditions in the Baltics, pressuring occupancy and rental rates.
* Please also refer to the tables 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.