<a id="bm-comp-5d9b1908-f707-44b5-bb32-ab390348e84d" name="bm-comp-5d9b1908-f707-44b5-bb32-ab390348e84d" class="BMCustomAnchor"></a><table><tr><td bm-component-id="5d9b1908-f707-44b5-bb32-ab390348e84d" style="vertical-align: top; width:100.000000%;"><ul><li>Merger motivated by synergies and economies of scale</li><li>New development market to rebound in 2025e</li><li>Adj. P/B and adj. P/E valuations with JM as key peer</li></ul></td></tr></table><a id="bm-comp-a821c862-b402-4249-a861-a7c3704fd37f" name="bm-comp-a821c862-b402-4249-a861-a7c3704fd37f" class="BMCustomAnchor"></a><table><tr><td bm-component-id="a821c862-b402-4249-a861-a7c3704fd37f" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Joining forces amplifies respective strengths</h3><p>Besqab is the result of the merger between Aros Bostad and Besqab, which was completed in March 2024 as the newly-combined company assumed the latter's name and ticker. The two companies were focused on developing residential real estate in the Stockholm and Uppsala regions. Aros was founded in 2005 and listed in 2021, focusing mainly on the premium segment of residential development, developing properties in part through joint ventures and funds. As of YE 2023, Aros had a building rights portfolio of 6,137 for development. Besqab was founded in 1989 and listed in 2014, focusing more on a slightly less premium segment of the market, with 3,000 building rights in its portfolio as of YE 2023.</p><h3 class="bm-h3">Market rebound driven by housing demand backlog</h3><p><font color="#000000">After an initial peak-to-trough drop of 14% (March '22 to Jan '23) following rising interest rates, Stockholm apartment prices have recovered (now -7% from peak and +5% YTD). Additionally, construction cost inflation has come down significantly, now at levels around 2%. Considering the housing demand backlog in Stockholm and the improvements in construction costs, we believe Besqab will be able to ramp up production in late 2024 and into 2025. We include the start of 381 units in 2024e, and 875 in 2025e.</font></p><h3 class="bm-h3"><font color="#000000">Higher gross margins justify P/B above key peer</font></h3><p><font color="#000000">The BVPS in Besqab is SEK 24 per Q1’24. We compare the portfolio and earnings capacity to JM, which we view as the key peer, and reach a fair value range of SEK 25-35. Besqab has historically generated higher margins than JM, although JM has a longer track record.</font></p></td></tr></table>