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Bong: Promising Start to 2021 - Redeye

Redeye is encouraged by Bong’s Q1 report, which showed strong growth in Light Packaging and clearly better margins on group level. The positive impact from last year’s cost reductions are more extensive than we anticipated. We are now growing more confident in the company’s turn-around and raise our forecasts and valuation.

We are raising our forecasts, mainly on the back of good cost containment. We are also a bit more optimistic on long-term growth prospects as packaging is progressing well. We raise our Base case fair value to SEK 1.1 per share (previously: SEK 0.8). The fair value range is still wide: SEK 0.3-2.0 per share, due to high leverage and a good deal of uncertainty.
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