reports
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Changes ahead on the new EU Green Deal White Paper
Green building-code regulations have so far targeted only newbuilds and some large renovations; however, a recent EC White Paper aims to regulate and speed up the renovation and modernisation of existing buildings. The EC is initially targeting the worst-performing 15% of building stock (requiring an upgrade from energy class G to at least F). While we expect the impact of the new regulation to be limited in our forecast period, we have raised our long-term growth assumptions and changed our sec...
- Simen Mortensen
Solon Eiendom ASA: 1 director
A director at Solon Eiendom ASA bought 4,000,000 shares at 38.182NOK and the significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
- Simen Mortensen
Solon Eiendom (Hold, TP: NOK44.00) - Fair exit
Q3 EBIT was below our forecast as units delivered had a lower than expected value and margins were lower. However, with the sale of the operations in Rogaland booked as a financial gain, EPS was in line with our expectation. Given SBB Norden’s upcoming mandatory offer for all shares in Solon Eiendom at NOK44 each in cash, we reinstate our recommendation with a HOLD (NO REC) and a target price of NOK44 (N/A).
- Simen Mortensen
Returning to normal-ish
Construction stock prices appear to have normalised, with valuations falling back on rising interest rates and inflation concerns. However, we expect demand to remain solid despite rising building costs, and that building for third parties will, as before, pass price fluctuations and inflation through the system. Development gains are more likely to be at risk on higher costs. New housing markets have normalised since the pandemic-sparked boom, while commercial construction – including public bu...
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Solon Eiendom (No_rec, TP: NOK) - Spreading its wings
The Q2 results were broadly in line with expectations, but the reported income figures still do not reflect Solon’s strong sales over the past year. With LTM sales of NOK4.5bn in Norway, we expect significant IFRS-based income growth until 2024e. Also, we expect Solon’s design and quality residential development style to be a hit with buyers when it enters the Stockholm market, and we see solid potential long-term. This planned entry into Sweden seems ROE-efficient, as its partnership with SBB l...
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Solon Eiendom (No_rec, TP: NOK) - Another solid quarter
Solon Eiendom sold 160 homes net* in Q2 worth NOK1,039m, and NOK3.65bn over the past 12 months. With more units than we expected delivered to clients in the quarter, we have increased our forecasts ahead of the Q2 results (due at c07:00 CET on 25 August). We have raised our 2021e EPS by 11.7%. DNB Markets is acting as financial advisor to Solon Eiendom in connection with a possible secondary listing on Nasdaq First North Growth in Stockholm. As a result, we have withdrawn our recommendation and ...
- Bengt Jonassen
- Daniel Vårdal Haugland
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Solon Eiendom (Buy, TP: NOK45.00) - Heading for ‘Solon v2.0’
The Q1 report beat our forecasts, with a higher-than-expected EBIT margin. However, the new joint venture with SBB Norden, Kristiansand plot acquisition, upcoming entry into Stockholm and secondary listing on Nasdaq Stockholm were the highlights of the webcast. The ‘governance reboot’, with a new, more independent board composition and rebalancing of the large shareholders, aims to bring its governance more in line with its well-known prime developments. We reiterate our BUY and have raised our ...
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Solon Eiendom (Buy, TP: NOK43.00) - Punching above its weight
Q1 saw housing sales of NOK1.2bn, with 12-month rolling sales at 698 homes; thus, Solon Eiendom is almost at the same level as peer Selvaag Bolig (SBO). The shareholder lock-up (c75% of capital) was extended to 30 June in connection with the ongoing strategic review. However, in our view there should have been no need for a lock-up, if there were no ongoing discussions. Given the sales level reported, we see potential upside should Solon Eiendom remain a listed company. On its share price perfor...
- Simen Mortensen
Solon Eiendom (Hold, TP: NOK40.00) - Good things take time
Solon Eiendom reported a Q4 EPS beat, but did not comment on the ongoing strategic review, only saying it continues and that it could extend beyond the end-March shareholder lock-up period. Sales impressed again, and long-term we see prospects of a material re-rating if they remain at the same level and cost savings materialise under the new CEO’s stewardship. However, we believe this will take time, and with the strategic update pushed forward again, we see less likelihood of M&A providing a ne...
- Bengt Jonassen
- Daniel Vårdal Haugland
- Simen Mortensen
Markets booming despite Covid-19
As interest rates are likely to remain low for years, and consumers have been ordered to stay at home and work remotely, demand in the Nordic residential market is at a record high, despite slowing population growth. Commercial transaction markets are also booming, but the rental market is a concern even though Nordic bankruptcies are down 17% in 2020e. Valuations look rich to us, but not alarming, thus we maintain a neutral sector view. Our top picks are NCC, NRC and Bonava.
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