Her Eleftherias Kourtali
The value offered to Lamda Development by Elliniko’s work has not yet been valued on the board of the Athens Stock Exchange, as estimated by Euroxx Securities and raises the target price to 14 euros from 11 euros before, seeing a rise of 90%.
As the stock exchange explains, it estimates the existing “traditional” activities of Lamda Development at 1.191 billion euros (compared to the current capitalization of 1.304 billion euros), which means that Elliniko is offered close to the cost, ie only a small part of it. total upside potential is priced at current levels.
In addition, due to the quality of its assets, Lamda Development should be worth negotiating with a lower discount (or even a premium) relative to its intra-NAV value. At the same time, Lamda Development plans to launch an IPO for Lamda Mall in 2022, in order to capitalize on hidden value and pave the way for dividend distribution.
Euroxx points out that Lamda’s NAV reached 1.392 billion in the first half of 2021, with revaluation profits of 306 million euros from the assets of Elliniko. So, it is now trading at a 6% discount compared to NAV.
Covid-19 continued to burden the results of the listed company, as it adds, mainly rents (with the total turnover declining by 25% compared to the first half of 2019 and by 4.7% compared to the first half of 2020). However, the outlook is improving as no discounts on rents have been applied since July 2021, while its existing activities recorded adjustment gains in the first half, signaling a return to normalcy.
Lamda has already secured € 700 million in pre-sale contracts, mainly villas and marinas (MRTs), and sets the target for the end of 2021 at € 1.2 billion, thus already securing funding for the project. first 5 years and begins to create positive trends in cash flows. In terms of schedule, the start of infrastructure projects is scheduled for the first half of 2022 (the first tender this month) followed by the buildings in the second half. In addition, the expression of interest for Vouliagmeni Mall already cover 60% of the planned capacity.
Based on the revised estimates of Euroxx, Lamda Development offers a significant opportunity to increase NAV, ie there is an upward dynamics of 78% during the period of the Hellenic project, of which a significant part will take place within 5 years.
More specifically, from the estimated value of 2.5 billion euros, another 0.23 billion euros (1.3 euros / share in addition to the 0.3 billion euros that took place in the second quarter of 2021) will come from first phase of the project with minimal execution risk, in terms of the stock market, as it comes mainly from the two shopping centers and residential development, while another 105 million euros (0.6 euros / share) will come from the existing activities of the company , supported by a reduction in yield to 6% from 7% (which could even be considered conservative, given that the European average is below 5%).
Finally, an additional upward momentum in NAV of 0.75 billion euros (4.2 euros / share) will come from the second phase of the Hellinikon project.
Source From: Capital