Intrinsic Value Solon Eiendom ASA (0MSG.L)

• Previous Close: £30.65
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

Solon Eiendom ASA operates in the Norwegian real estate sector, specializing in the acquisition, development, and sale of residential properties. The company, formerly known as Bionor Pharma ASA, pivoted to real estate and became a subsidiary of Samhällsbyggnadsbolaget i Norden AB (publ). Its core revenue model is driven by property transactions and development projects, capitalizing on Norway's stable residential real estate demand. Solon Eiendom focuses on strategic urban locations, targeting both long-term value appreciation and efficient asset turnover. The company’s market position is bolstered by its affiliation with a larger Nordic real estate group, providing access to capital and regional expertise. However, its operations were discontinued after being taken private in January 2022, limiting its current market footprint.

Revenue Profitability And Efficiency

In FY 2022, Solon Eiendom reported revenue of NOK 149.0 billion, with net income of NOK 28.7 billion, reflecting strong profitability. The diluted EPS of NOK 9.03 underscores efficient earnings distribution. Operating cash flow stood at NOK 35.1 billion, while capital expenditures were NOK -8.6 billion, indicating disciplined investment in property development and maintenance.

Earnings Power And Capital Efficiency

The company demonstrated robust earnings power, with net income representing approximately 19.3% of revenue. The absence of total debt suggests a conservative capital structure, though this may also reflect post-privatization adjustments. Operating cash flow coverage of capital expenditures highlights efficient capital deployment in its core real estate activities.

Balance Sheet And Financial Health

Solon Eiendom maintained a solid liquidity position, with cash and equivalents of NOK 15.6 billion at year-end. The lack of reported total debt implies a debt-free balance sheet, though this may not fully capture post-privatization liabilities. The financial health appears stable, supported by strong cash generation and prudent asset management.

Growth Trends And Dividend Policy

The company’s growth was driven by residential property transactions, though its privatization in early 2022 halted further public disclosures. A dividend of NOK 3.15 per share was distributed, aligning with its shareholder return policy. Future growth prospects remain unclear due to its private status.

Valuation And Market Expectations

As a privatized entity, Solon Eiendom’s valuation metrics are no longer publicly available. Prior to delisting, its market capitalization was negligible, reflecting its subsidiary status and limited float. The beta of 0.47 suggested lower volatility relative to the broader market.

Strategic Advantages And Outlook

Solon Eiendom’s strategic advantage lay in its focus on Norwegian residential real estate and backing by a larger Nordic parent. However, its privatization limits visibility into future performance. The outlook remains uncertain, with no public updates on its operational or financial trajectory post-2022.

Sources

Company filings, London Stock Exchange disclosures