The last few months have been eventful for Serneke, but we nevertheless have a positive view on the recent developments and believe the company is well prepared to improve its profitability in 2021 and 2022. With Balder as a new partner for the Karlatornet skyscraper, the underlying value in the surrounding area (Karlastaden) can be realised. We calculate a theoretical excess value of SEK ~1.1bn (SEK 38 per share) based on 200,000 m2 of building rights in the area. In addition to the potential in Karlastaden, Serneke owns a large community service and housing project development portfolio, of which 100,000 m2 has already been signed with Balder, and we find it likely there will be more project development partnerships during 2021. We believe that reduced uncertainty regarding Karlastaden and the completion of the cost restructuring programme create favourable conditions for Serneke to achieve its targets of financial stability and improved margins announced in August 2020. Marketing material commissioned by Serneke.

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