Stock Analysis & Valuation Solon Eiendom ASA (0MSG.L)

• Previous Close: £30.65
• Sector Valuation Confidence Level: Low

Valuation method	Value, £	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	27.70	-10
Graham Formula	503.20	1542

Strategic Investment Analysis

Company Overview

Solon Eiendom ASA is a Norwegian real estate company specializing in the acquisition, development, and sale of residential properties in Norway. Formerly known as Bionor Pharma ASA, the company rebranded to Solon Eiendom ASA to reflect its shift in focus to the real estate sector. Headquartered in Oslo, Solon Eiendom operates as a subsidiary of Samhällsbyggnadsbolaget i Norden AB (publ), a prominent Nordic real estate investment firm. The company was taken private in January 2022, marking a significant transition in its corporate structure. Solon Eiendom plays a key role in Norway's residential real estate market, leveraging its local expertise and strategic acquisitions to drive growth. With a strong financial performance in 2022, including NOK 149 billion in revenue and NOK 28.7 billion in net income, the company demonstrates robust operational efficiency and market positioning. Its focus on residential properties aligns with Norway's growing demand for housing, making it a relevant player in the Nordic real estate sector.

Investment Summary

Solon Eiendom ASA presents an attractive investment profile due to its strong financial performance and strategic positioning in Norway's residential real estate market. The company reported substantial revenue (NOK 149 billion) and net income (NOK 28.7 billion) in FY 2022, reflecting efficient operations and profitability. However, its privatization in early 2022 may limit liquidity for public investors. The company benefits from its affiliation with Samhällsbyggnadsbolaget i Norden AB, providing financial stability and growth opportunities. Risks include exposure to Norway's real estate market fluctuations and potential regulatory changes affecting property development. The low beta (0.47) suggests lower volatility compared to the broader market, which may appeal to risk-averse investors. Dividend payouts (NOK 3.15 per share) further enhance its attractiveness for income-focused portfolios.

Competitive Analysis

Solon Eiendom ASA competes in Norway's residential real estate market, leveraging its local expertise and backing from Samhällsbyggnadsbolaget i Norden AB. Its competitive advantage lies in its focused portfolio of residential properties, which aligns with Norway's high demand for housing. The company's strong financials, including high revenue and net income, indicate efficient asset management and development capabilities. However, its privatization limits public market transparency and access, potentially reducing its competitive visibility compared to publicly traded peers. Solon Eiendom's affiliation with a larger Nordic real estate group provides economies of scale and access to capital, enhancing its ability to acquire and develop properties. The company's low beta suggests stability, but its reliance on the Norwegian market exposes it to regional economic risks. Competitors with broader geographic diversification may mitigate such risks more effectively. Solon Eiendom's niche focus on residential properties differentiates it from diversified real estate firms but may limit growth opportunities in commercial or mixed-use segments.

Major Competitors

• Obos BBL (OBY.OL): Obos BBL is a leading Norwegian real estate developer specializing in residential and commercial properties. Its strong brand and extensive project pipeline give it a competitive edge in Norway's urban markets. However, its focus on large-scale developments may limit agility compared to Solon Eiendom's targeted acquisitions. Obos benefits from vertical integration but faces higher exposure to construction cost fluctuations.
• Samhällsbyggnadsbolaget i Norden AB (SBB-B.ST): As Solon Eiendom's parent company, SBB is a dominant Nordic real estate player with a diversified portfolio including social infrastructure. Its scale and access to capital provide Solon with strategic advantages. However, SBB's broader focus dilutes its residential specialization compared to Solon's concentrated Norwegian residential market approach.
• Entra ASA (ENTRA.OL): Entra ASA focuses on office properties in Norway, presenting a different niche compared to Solon's residential focus. Its prime urban office assets attract stable tenants but may face higher volatility in post-pandemic hybrid work trends. Entra's lack of residential exposure contrasts with Solon's alignment with Norway's housing demand.
• Atlantic Sapphire ASA (ASA.OL): Atlantic Sapphire operates in land-based salmon farming, not directly competing with Solon Eiendom. This inclusion highlights the absence of major pure-play residential real estate competitors on the Oslo Stock Exchange, underscoring Solon's unique positioning before its privatization.