Burkhalter Group : Additional regulatory tailwind priced in, but dividends still attractive

Burkhalter Group is a leading full-service provider of building technology in heating and cooling, ventilation and air conditioning, plumbing and electrical engineering. The abolition of the so-called “Eigenmietwert” (deemed rental value) by the Swiss electorate pushed the share price to a new level (+50% YTD) in anticipation of a short-term boom in renovation in Switzerland. The above-average valuation (relative to peers and its own historical level) limits further outperformance, in our view. As a result, we are initiating coverage with a Neutral rating, despite the strong visibility enjoyed by the group and its high dividend yield.