The long-term strategy is proceeding as planned
Cibus’ organization is developing as planned and the company sees some potential to generate more income from the existing asset base through additional services like car washes and parking lots. Cibus continues to focus on the Finnish and Swedish markets for now, however entry to other Nordic markets remains likely in the long-term. Cibus also upped the annual acquisition target from EUR 50m to EUR 50-100m. Q3 was quiet in terms of new acquisitions, yet Cibus remains well on track on the deal front this year after acquiring some EUR 70m in Finnish properties besides the more extraordinary EUR 180m Swedish market entry. Cibus reports very little changes in the daily-goods property markets’ transaction dynamics, with deal flow and valuations basically unchanged throughout the pandemic.
We see current valuation landing within a fair spot
While Cibus still trades at an attractive yield relative to other Nordic public properties we however see the shares’ upside potential limited by the daily-goods property market’s flat valuations. In other words, further meaningful Cibus yield compression would need to be backed by a pricing pick-up in the private markets. Cibus is valued 1.12x EV/GAV and 1.35x P/NAV, hence additional gains would stretch the valuation premium rather large. Considering the relatively high 4.75% yield and the premium to book and private markets valuations we view Cibus’ valuation now fair. Our TP is SEK 165 (160), rating HOLD (BUY).
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