<a id="bm-comp-0941055e-dc24-4447-b458-d3b2b4814705" name="bm-comp-0941055e-dc24-4447-b458-d3b2b4814705" class="BMCustomAnchor"></a><table><tr><td bm-component-id="0941055e-dc24-4447-b458-d3b2b4814705" style="vertical-align: top; width:100.000000%;"><ul><li>Solid Q2 report, burdened by non-recs</li><li>High share of booked/sold allows for more starts</li><li>FVR kept intact at SEK 25-35</li></ul></td></tr></table><a id="bm-comp-553783f1-023e-44f3-b9dc-9d2837e1f195" name="bm-comp-553783f1-023e-44f3-b9dc-9d2837e1f195" class="BMCustomAnchor"></a><table><tr><td bm-component-id="553783f1-023e-44f3-b9dc-9d2837e1f195" style="vertical-align: top; width:100.000000%;"><h3 class="bm-h3">Q2 report and cost synergies</h3><p>Besqab's Q2 report (which was the first full quarter of the combined company since the merger of Aros Bostad and Besqab) showcased sales of SEK 487m (-2% vs ABGSCe) and gross profit of SEK 100m (-5% vs ABGSCe) with a GP margin of 20.5% (ABGSCe at 21.1%). Besqab started 82 units during the quarter (Sundbyberg) and completed 526 units, meaning that the number of units in ongoing production now amounts to 1,824. Management notes improved conditions for construction agreements, thanks to the lower inflation, but also to the very low amount of started/ongoing projects in the Stockholm region. Finally, we think it's worth highlighting, once again, that cost synergies for the merger are expected to amount to SEK 100m, a substantial amount (ABGSCe 2025 EBIT at ~SEK 320m). All in all, we make very limited underlying estimate changes, where 2024e EBIT/EPS primarily comes down due to costs related to the merger (recognised in Q2 and more coming in H2), while 2025e EPS comes up thanks to more aggressive interest rate cut expectations.</p><h3 class="bm-h3">Share of booked/sold well above peers</h3><p>Besqab's share of booked/sold amounts to 82%, compared to peers such as e.g. JM and Bonava at 58% and 51%, respectively. One should obviously take into account the high share of rental apartments in ongoing construction (52%), but the share of booked/sold for the condominiums isolated (66%) is also higher than listed competitors. This is positive from a risk point of view, and will allow Besqab to be forward-leaning and engage in multiple starts during H2'24e and going into 2025e.</p><h3 class="bm-h3">Adj. P/E of ~14-6x in 2025/2026e, FVR kept intact at SEK 25-35</h3><p>We argue that Besqab is well positioned to grow in the upcoming years, thanks to the ongoing Patrizia projects, the merger between Aros/Besqab and the attractive land values. FVR SEK 25-35.</p></td></tr></table>