The weekly navigator

Key takeaways from last week: 1) we share our views on recently listed Flat Capital; 2) Kinnevik invested in food-tech company N!CK’S; 3) Kinnevik saw insider buying by the CEO; and 4) Lundbergs and Industrivärden continued to gradually build positions in their jointly owned holdings.

The weekly navigator

Key takeaways from last week: 1) we continue to see attractive risk/reward in Investor; 2) Kinnevik once again met high expectations in its Q3 results; 3) Industrivärden proposed to cancel 3.3m A shares; and 4) Kinnevik and VNV-owned Babylon started trading on the NYSE, which we believe could become a NAV catalyst.

Kinnevik (Hold, TP: SEK340.00) - Meeting already high expectations

Kinnevik still offers the sector’s most attractive medium-term NAV growth outlook, in our view. As the market implicitly values Kinnevik’s unlisted portfolio ~45% above its reported values, its 19% premium to NAV suggests that the market assumes it can generate an IRR of ~30% from its unlisted portfolio over the next five years (3.5x ROIC). This is below its recent IRR track record for its growth portfolio, which we estimate at ~55%. However, we believe expectations are already high, which makes...

Kinnevik - Impressive Q3 amid tough market conditions

NAV and fair value above our expectations We increase our unlisted portfolio valuation by 13% We stay positive LT and consider the valuation fair

Kinnevik - Q3: Stronger NAV on resilient private assets

NAVPS of SEK 272.97, +5% vs. ABGSCe Valuation of private assets +7% (ABGSCe -7%) Stock should trade up 2-5%

Kinnevik - Weak Q3 on the cards

We expect NAVPS of SEK 260 (-5%)… …amid weakness in both private and public NAV We stay positive LT, but expect better entry points ahead

The weekly navigator

Key takeaways from last week: 1) we upgraded Industrivärden to BUY (HOLD) on our view of an attractive short-term risk/reward; 2) in line with its growth strategy, Kinnevik committed to selling VillageMD shares worth USD340m; and 3) VEF-owned Creditas reported strong, if not outstanding, Q3 results on the way to an IPO in 2022e.

Kinnevik - Partial exit of VillageMD amid WBA transaction

Kinnevik will sell shares worth at least SEK 3.0bn WBA says IPO will be conducted in 2022 A good deal while financial impact is marginally negative

The weekly navigator

Key takeaways from last week: 1) as Kinnevik- and VNV Global-owned Babylon approaches its IPO, it has secured an additional USD200m sustainability-linked investment; and 2) we continue to like Aker, believing it represents value in disguise.

The weekly navigator

Key takeaways from last week: 1) high activity in VEF’s emerging market fintech portfolio, where Konfio and TransferGo announced new funding rounds, driving a ~10% NAV uplift; and 2) Kinnevik-owned robo-advisor Betterment raised USD160m in a new funding round at a USD1.3bn valuation.

The weekly navigator

Key takeaways from last week: 1) Handelsbanken proposed an extraordinary dividend in the form of 30.5m A-shares in Industrivärden, which should slightly strengthen the Lundberg sphere’s influence (see our chart of the week on page 2); 2) Latour was an anchor investor in CTEK, which soared ~100% on its first day of trading; and 3) Svolder saw insider buying by the CFO.

Kinnevik - Analyst meeting focused on Nordic pf.

An exciting portfolio of private Nordic assets Track record of the “new” portfolio is strong HOLD: Excessive valuation but we see a bright future

Kinnevik - Private NAV strong again, high activity level

NAV and fair value in line with our expectations We make only marginal adjustments We remain LT positive but consider valuation too high

Kinnevik - Q2 NAV in line, private assets strong again

NAV of SEK 274 in line with ABGSCe Valuation of private assets +15% (ABGSCe +14%) Neutral overall for the stock

Kinnevik - Mixed quarter, expectations running high

We expect NAVPS of SEK 274 (+4%)… …amid continued strong private NAV, weaker public NAV We remain LT positive but consider valuation too high

Weekly NAV update

The main takeaways from last week include: 1) Investor via Patricia Industries acquired automation company Piab; 2) Latour continued its add-on acquisition strategy by acquiring Johnson Level & Tool for Hultafors, yet its shares traded down 7%, thus resulting in a 5% discount increase; and 3) Lundbergs and Mr. Lundberg increased their holdings in SHB, acquiring 3m A-shares combined. Our sector top picks remain Investor and Kinnevik.

Northern Lights

Kinnevik (Buy, TP: SEK350.00) - Delivering on its 2018 strategy

Kinnevik’s Q1 report supports our positive long-term view of the investment case, driven by an attractive mix of stable TMT cash generators combined with fast-growing digital investments. Given the increased active ownership, strategic transactions seen in TMT assets in Q1, and intensified efforts to identify and accelerate new unlisted ‘winners’, we believe Kinnevik is well positioned for a continued solid 2018. We reiterate our BUY recommendation and have raised our target price to SEK35...

Weekly NAV update

We recently we raised our target price to SEK470 (460) and reiterated BUY for Investor due to its Q1 earnings, which supported our positive view of the case for further recovery signs in Patricia Industries. Other sector highlights from last week include: 1) significant discount increase in Industrivärden (currently at 18%); and 2) Ericsson, comprising 5% of Industrivärden’s portfolio and 4% of Investor’s, soared 15% due to strong margin improvements, signalling that cost cuts are material...

Weekly NAV update

Industrivärden kicked off the Q1 earnings season last week with limited surprises. It highlighted a continued focus on value creation in the existing portfolio whereas deleveraging remains a key focus area. Other sector highlights from last week mainly revolved around Kinnevik, where GFG reported its Q4 2017 figures while it also increased its ownership in Livingo. Our sector top picks remain Investor and Kinnevik.