ONE United Properties: ONE to rule them all? (HOLD - initiation of coverage)
ONE United Properties (ONE) is a Romanian residential and office developer. Initially focusing on high-end projects for affluent clients, the company has quickly gained recognition and a strong following among customers, and is currently ramping-up its operations substantially, expanding into more-affordable segments. Cumulatively, ONE has delivered around 700 apartments in the past seven years. By 2022-23E, we expect that it could be selling 1.0k apartments annually. The projects that it has completed thus far have generated a gross profit margin of 32%, while it expects the 1.6k apartments currently under development, and the c.4k in planning, to generate a GPM of c.40-45%. ONE listed 10% of its shares on the Bucharest market in July 2021, raising EUR 53m in the IPO, and is currently trading at c.2.3x P/B, 9.0x P/E, 8.4x EV/EBITDA and a c.4% dividend yield, on our 2022E estimates. We believe the valuation suggests that the market expects the high margins to be sustainable. ONE has also developed several office projects, and we estimate that by 2024E, these should have a NAV of c.EUR 160-180m and generate rents of around EUR 23-24m annually. We initiate coverage of ONE with a HOLD rating, setting our 12M PT at RON 1.44/share.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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