EUR 200.00 For Business Accounts Only

AEDAS: MEETING WITH ANALYSTS (ANÁLISIS BANCO SABADELL)

The company held this morning a breakfast with analysts. No relevant changes were unveiled and the company’s message showed some satisfaction thanks to the resilience of its order backlog and business model, improving the sector figures against an adverse backdrop. Other relevant issues:
 Business plan deliveries: The company keeps its delivery targets for the coming years (slightly < 2,000 in 2020/21, around 2,250 in 2021/22 and around 2,900 in 2022/23). The company has included the consensus delivery forecast, which hints at lower levels (the company’s estimate is between +16% and +26% higher depending on the year), and thus if the group meets its targets the market reaction should be positive. As for the presold percentage on the deliveries expected, the results are as follows: 95% for 20/21, 56% for 21/22 and 11% for 22/23. Most presales are carried out in private contracts. The presale backlog as of 30 September totalled € 1.15 Bn (vs. € 948 M as of June’20). These figures offer visibility and seem moderately positive given the current situation.
 Presales. The company is happy with the performance of presales in July-September, when aggregate figures exceeded last year’s, although it is cautious towards the future due to the uncertainty arising from the economic and public health situation. AEDAS believes that in the areas in which it operates, and within its product niche (medium/high segment), the performance is better than in the rest of the market.
 Land purchases. The company’s strategy continues to be focused on selective purchases, with € 550 M of land purchases expected for the next three years (vs. our estimate of € 440 M).
 General sector outlook in the medium and long term. The company considers that the fundamentals of the housing supply (which will be scarce in the next few years due to the stoppage in new developments) and the demand (which is rising in areas in which the company is present) are positive in the medium and long term in those areas in which the company operates.
MARKET IMPACT
The presale and backlog data as of September’20 are, in our view, moderately positive and underpin our Buy recommendation. With this in mind, the sector and share price performance will continue to be highly linked to the general business cycle, and in this regard, visibility is low at the moment.