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Eastnine

Eastnine

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Eastnine is a Swedish long-term real estate manager of modern, sustainable offices and logistics premises at prime locations in the Baltics and Poland. A majority of the property value is located in Vilnius, where EAST is the largest prime office owner. Roughly 20% of the company’s holdings comprise other investments. The Baltics are growing faster than the Nordics and both the office and logistics markets are picking up speed. 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 the next couple of years. The net LTV target cap of 60% is safely above current levels, which we believe supports growth. Attractive yield levels in both the Baltic and Polish real estate markets for offices and logistics provide good business opportunities. Also, a successful divestment of the unleveraged Russian retail holding could provide additional value.

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 macro risks, forex risks and portfolio risks.

Financials

EURm 2021 2022e 2023e
Rental Income 22 30 34
Rental growth (%) 12,2 40 14,2
Net operating income 19 27 31
NOI margin (%) 89,4 89,2 89,3
CEPS Adj 0,43 0,61 0,73
CEPS Adj. growth (%) -8,7 42,3 18,6
DPS 0,28 0,32 0,35
EPRA NAVPS 17,64 19,38 19,48
EPS 3,27 2,23 0,36
EPS Adj 0 0 0
P/CEPS Adj. (x) 35,9 12,8 10,8
P/E Adj. (x) 0 0 0
P/EPRANAV (x) 0,88 0,4 0,4
Implicit yield (%) 4,9 7,4 8,6
div.yield (%) 1,8 4,1 4,5
LTV (%) 19,2 27,2 26,3
EURm 2021 2022e 2023e
Cash earnings 10 14 16
Tax rate (%) -4,8 -6,7 -15
Net investments -75 -107 -2
Acquisitions -76 -121 0
Other investments 5 19 0
Divestments 0 0 0
EPS 3,27 2,23 0,36
CEPS 0,43 0,61 0,73
CEPS adj. 0,43 0,61 0,73
Dividend per share Adj 0,28 0,32 0,35
Payout ratio of CEPS (%) 65,7 51,9 48,9
Rental growth (%) 12,2 40 14,2
NOI growth (%) 9,9 39,7 14,3
CEPS growth (%) -8,7 42,3 18,6
CEPS adj. growth (%) -8,7 42,3 18,6
Balance Sheet 2020 0 0
Properties 470 605 601
Deferred tax asset 0 0 0
Receivables 11 6 6
Cash and liquid assets 29 26 30
Other assets 32 12 12
Current liabilities 16 11 12
Total assets 653 783 784
Shareholders equity 376 416 417
Minority 0 0 0
Deferred tax 14 18 19
Interest bearing debt 246 338 336
Short-term debt 0 0 0
Derivatives 16 11 12
Total liabilities and equity 653 783 784
Other balance sheet related information 2020 0 0
Net IB debt 90 165 158
Rental area m2 (000) 143 183 183
Rent per m2 150 165 188
Equity ratio (%) 57,6 53,1 53,2
Loan to value (%) 19,2 27,2 26,3
Net loan to value (%) 58,6 60,2 60,9
ICR real estate 3 2 3
Interest rate on debt (%) 3 3 3
Occupancy rate (%) 90 92,9 93,4
NAV per share 0 0 0
BVPS 16,93 18,73 18,77
EPRA NAV per share 17,64 19,38 19,48
Valuation 2020 0 0
Shares outstanding adj. 22 22 22
Share price 13,54 7,83 7,83
Market cap. (m) 301 174 174
P/E 4,7 3,5 21,9
Net IB debt / share 10 14 13
P/CEPS 35,9 12,8 10,8
P/CEPS adj. 35,9 12,8 10,8
EV/EBIT 13,7 10,6 16,6
Implicit yield (%) 4,9 7,4 8,6
Yield on BV (%) 4,1 4,4 5,1
Dividend yield (%) 1,8 4,1 4,5
P/NAV 0 0 0
P/EPRA NAV 0,88 0,4 0,4
P/BVPS 0,91 0,42 0,42
EV/NOI 22,52 12,6 10,8
Rental income 22 30 34
Other income 0 0 0
Operating costs -2 -3 -4
Net operating income 19 27 31
NOI margin (%) 89,4 89,2 89,3
Value change realized 0 0 0
Value change unrealized 16 9 -7
Administration costs -4 -4 -4
All other income & costs 0 0 0
EBIT 32 32 20
Net financial items -6 -9 -11
Value change derivatives 6 12 0
Pretax profit 76 53 9
Deferred profit tax -4 -3 -1
Current tax 0 0 0
Net profit 72 49 8
Minority interest 0 0 0
Net profit to shareholders 72 49 8
Other income statement related information 2020 2021 2022

Equity research

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Media

Eastnine - Company presentation with CEO Kestutis Sasnauskas
Eastnine - Company presentation with CFO & Deputy CEO Britt-Marie Nyman

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Main shareholders -

Main shareholders Share capital % Voting shares % Verified
Peter Elam Håkansson 26.7 % 26.7 % 29 Aug 2022
Bonnier Fastigheter Invest AB 13.7 % 13.7 % 29 Aug 2022
Arbona AB (publ) 10.0 % 10.0 % 29 Aug 2022
Lazard Asset Management 4.9 % 4.9 % 31 Aug 2022
Kestutis Sasnauskas 3.8 % 3.8 % 29 Aug 2022
Patrik Brummer 3.7 % 3.7 % 29 Aug 2022
Avanza Pension 2.1 % 2.1 % 29 Aug 2022
Karine Hirn 1.7 % 1.7 % 30 Jun 2022
Dimensional Fund Advisors 1.5 % 1.5 % 31 Jul 2022
Nordnet Pensionsförsäkring 1.4 % 1.4 % 29 Aug 2022
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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