Hövding: Version 3 ready for launch (Västra Hamnen)
Västra Hamnen Corporate Finance has released a research update on Hövding Sverige AB following its report for Q2 2019. The report shows a higher net loss than expected but more importantly, a sustained higher gross margin. This makes us raise our fair value interval for the share.
- Net operating loss higher than expected in Q2
- Sustained higher gross margin is proof of company progressing
- We raise our fair value interval to SEK 20,10 – 29,30 per share
In its report for Q2 2019, Hövding reported an increase in sold units to 18 435, which is an increase of 8 percent compared to Q2 last year. During the same period, the revenue grew 12 percent. This was below our estimate. In addition, Q2 was marked by extra costs relating to the forthcoming launch of Hövding 3. In combination this put the net loss higher than our estimate. However, we regard this as a short-term issue. More importantly for our valuation, it has now been confirmed that the higher gross margins are likely to upheld in the future, especially with the logistical improvements following the launch of Hövding 3. Therefore we have decided to increase our fair value interval for the share.
The full report is available here.
The research report is prepared as part of Market Focus, Västra Hamnen Corporate Finance's commissioned research offering.