Commissioned Research: Serneke

Serneke is an entrepreneurial construction company with strong growth record and high ambitions to improve its underlying profitability.

Commissioned research: Poor sentiment may overlook value

Sentiment in the Swedish construction sector has been poor owing to Serneke and peers’ project writedowns and fears of a decline in Swedish residential construction activity. We suggest that the focus of Serneke’s high-margin ambitions is misguided and that this has exacerbated the perception of a slowdown. We expect margins to improve gradually, in line with the sector average but with the company experiencing higher growth thanks to its project pipeline and growth ambitions. Better visibility in the ongoing project development portfolio and the Karlastaden project, as well as the detailed planning permit potential not reflected in property management portfolio, could turn investor sentiment and lift the share to the higher end of our fair value range of SEK 80-120 per share, which is based on our SOTP, DCF and peer multiples approaches. Marketing material commissioned by Serneke.

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Marketing material commissioned by Serneke

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