Dom Development – Stable business with stable dividend
The goals set by the Management Board of Dom Development for 2019 assume completion of 3.2 ths. apartments and handover ~3.5 ths. units. After Q1 2019, the handover target is delivered in 35%. In our opinion, the risk of delays of handovers in 2019 is limited, taking into account the scale of construction completion in 2018 (4.4 ths.). However, due to the ambitious plan of launching new projects, we slightly increase the total handover forecast for 2020-21 to an average of 3.6 ths. annually (+ 3.2% vs. previously) & NP'20-21 by 6%. In 2020, we expect that the lower level of handovers to be offset by the settlement of projects with a high margin and price, and as a result, the Company to deliver another record result (+12% y/y). We estimate NP @PLN 222 million, PLN 247 million and PLN 225 million in 2019-21, respectively. A stable level of earnings, with strong balance sheet, should also result in a stable level of expected dividends. In 2019, the Company recommended a record dividend of PLN 9.05 per share (+ 19% y/y). We believe that the Company has the potential to maintain DY >11% also in 2019-21. We are maintaining a hold rating and we set a target price @ PLN 82.65.
Dom Development is engaged in the construction and sale of residential real estate in Poland.
Set up in 1986, mBank (originally BRE – Export Development Bank) is Poland’s 4th largest universal banking group in terms of total assets and 5th by net loans and deposits at the end of June 2019. mBank has one of the oldest brokerages in Poland – we have been providing brokerage services since 1991 - and the biggest, serving about 300 ths clients.
We provide all brokerage services available in the Polish capital market (i.e. Warsaw Stock Exchange, non-public markets and forex) in a way that meets the expectations of all groups of investors, both individual and institutional. Participating in the dynamic growth of the Polish capital market since its inception, we have acquired competences and experience needed to provide the highest quality of service and we have won the trust and satisfaction of our Clients.
Over the past decade, mBank's Equity Research Team has been consistently ranked among the top research teams in Parkiet's annual institutional investor surveys (Parkiet is Poland's leading daily business newspaper). mBank analysts provide coverage on an extensive list of companies, mainly in Poland but also elsewhere in the CEE region: Austria, Czechia, Portugal, Ukraine and Hungary.
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- Get direct access to senior management teams at listed companies (over 30 meetings in 2018),
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- Stay informed through an array of enlightening discussion panels, workshops, and briefing sessions with regulatory officials.
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