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Eastnine

Eastnine

Eastnine is a Swedish long-term real estate manager of modern, sustainable offices and logistics premises at prime locations in the Baltics. 80-85% of the property value is located in Vilnius, where Eastnine is the largest prime office owner. The remaining 15-20% is in Riga, including a smaller development portfolio with expansion potential. ~20% of its holdings comprises other investments. The Baltics are growing faster than the Nordics, and both the office and logistics markets are picking up speed, with an increasing inflow of international companies. The region is also technically advanced and has an attractive tax regime.

Historical growth has come chiefly through acquisitions and we expect that to continue in ’21-’23. Recent years’ uptick in both supply and demand for Baltic prime office properties provides good opportunities for Eastnine to expand its market share. We believe its financial position supports expansive growth since 1) average financing costs are just 2.3%, and 2) other investments for ~20% of total assets are unleveraged and enable – at divestment – significant acquisition volumes without reaching harmful LTVs.

Real estate companies are subject to macro risks, supply of premises risk, supply of capital risk, debt availability risk, forex risk, regulatory risk, rental income risk, property cost risk, property value risk and ownership risk. We argue that the key specific risks related to Eastnine are forex risk and portfolio risk.

EURm 2020 2021e 2022e
Rental Income 19 23 26
Rental growth (%) 43,7 20,9 11
Net operating income 17 21 23
NOI margin (%) 91,2 90,9 90,5
CEPS Adj 0,47 0,58 0,67
CEPS Adj. growth (%) 85 23,6 15,8
DPS 0,3 0,34 0,38
EPRA NAVPS 14,6 15,53 17,03
EPS 1,1 0,75 0,57
EPS Adj 1,1 0,75 0,57
P/CEPS Adj. (x) 26,4 25,2 21,7
P/E Adj. (x) 11,2 19,5 25,6
P/EPRANAV (x) 0,85 0,94 0,86
Implicit yield (%) 5,8 5,8 6,4
div.yield (%) 2,4 2,3 2,6
LTV (%) 40 35,2 32,6
EURm 2020 2021e 2022e
Cash earnings 10 12 14
Tax rate (%) -12,5 -14,7 -15,8
Net investments 65 6 19
Acquisitions N/A N/A N/A
Other investments N/A N/A N/A
Divestments N/A N/A N/A
EPS 1,1 0,75 0,57
CEPS 0,47 0,58 0,67
CEPS adj. 0,47 0,58 0,67
Dividend per share Adj 0,3 0,34 0,38
Payout ratio of CEPS (%) 63,7 58,4 56,4
Rental growth (%) 43,7 20,9 11
NOI growth (%) 46,5 20,4 10,6
CEPS growth (%) 85 23,6 15,8
CEPS adj. growth (%) 85 23,6 15,8
Balance Sheet 2020 0 0
Properties 372 381 401
Deferred tax asset 0 0 0
Receivables 2 2 2
Cash and liquid assets 24 24 24
Other assets 106 106 106
Current liabilities 3 0 0
Total assets 502 511 531
Shareholders equity 310 331 347
Minority 0 0 0
Deferred tax 11 16 21
Interest bearing debt 179 165 162
Short-term debt 0 0 0
Derivatives 3 0 0
Total liabilities and equity 502 511 531
Other balance sheet related information 2020 0 0
Net IB debt 149 134 131
Rental area m2 (000) 121 121 121
Rent per m2 159 192 213
Equity ratio (%) 61,7 64,7 65,4
Loan to value (%) 40 35,2 32,6
Net loan to value (%) 54,5 49,7 46,6
ICR real estate 4 14 5
Interest rate on debt (%) 2 2 3
Occupancy rate (%) 92,6 92,6 92,6
NAV per share 0 0 0
BVPS 14,54 15,51 16,3
EPRA NAV per share 14,6 15,53 17,03
Valuation 2020 0 0
Shares outstanding adj. 21 21 21
Share price 11,33 14,6 14,6
Market cap. (m) 242 311 311
P/E 11,2 19,5 25,6
Net IB debt / share 7 6 6
P/CEPS 26,4 25,2 21,7
P/CEPS adj. 26,4 25,2 21,7
EV/EBIT 13,2 22,8 23,8
Implicit yield (%) 5,8 5,8 6,4
Yield on BV (%) 4,7 5,5 5,8
Dividend yield (%) 2,4 2,3 2,6
P/NAV 0 0 0
P/EPRA NAV 0,85 0,94 0,86
P/BVPS 0,85 0,94 0,9
EV/NOI 23,63 21,14 18,96
Rental income 19 23 26
Other income 0 0 0
Operating costs -2 -2 -2
Net operating income 17 21 23
NOI margin (%) 91,2 90,9 90,5
Value change realized 0 0 0
Value change unrealized 17 3 0
Administration costs -4 -4 -5
All other income & costs 0 0 0
EBIT 31 20 19
Net financial items -4 -1 -4
Value change derivatives -1 0 0
Pretax profit 27 19 14
Deferred profit tax -3 -3 -2
Current tax 0 0 0
Net profit 24 16 12
Minority interest 0 0 0
Net profit to shareholders 24 16 12
Other income statement related information 2020 2021 2022

Equity research

Read earlier research

Media

Eastnine - Company presentation with CEO Kestutis Sasnauskas & CFO/Deputy CEO Britt-Marie Nyman
Eastnine - Interview with CEO Kestutis Sasnauskas following Q3 results

Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Peter Elam Håkansson 25.9 % 25.9 % 8 Oct 2021
Bonnier 11.4 % 11.4 % 7 Oct 2021
Arbona AB (publ) 10.0 % 10.0 % 30 Sep 2021
Lazard Asset Management 6.2 % 6.2 % 30 Jun 2021
ICA-handlarnas Förbund 4.2 % 4.2 % 30 Sep 2021
Patrik Brummer 3.7 % 3.7 % 30 Sep 2021
Norges Bank 3.0 % 3.0 % 30 Sep 2021
Kestutis Sasnauskas 3.0 % 3.0 % 8 Oct 2021
Nordnet Pensionsförsäkring 2.2 % 2.2 % 30 Sep 2021
Avanza Pension 2.0 % 2.0 % 30 Sep 2021
Source: Holdings by Modular Finance AB

Insider list -

Name Quantity Code Date
Britt-Marie Nyman + 2 000 BUY 19 May 2021
Britt-Marie Åfors Nyman + 1 225 BUY 18 May 2021
Liselotte Hjorth + 7 500 BUY 11 May 2021
Christian Hermelin + 2 006 BUY 7 May 2021
Christian Hermelin + 1 000 BUY 7 May 2021
Kestutis Sasnauskas + 4 800 BUY 16 Dec 2020
Kestutis Sasnauskas + 4 000 BUY 16 Dec 2020
Lars Peter Elam Håkansson + 1 541 BUY 24 Nov 2020
Lars Peter Elam Håkansson + 733 BUY 24 Nov 2020
Lars Peter Elam Håkansson + 1 026 BUY 24 Nov 2020

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