VEF: Green shoots – DNB


VEF’s share price is down 12% in SEK YTD despite: 1) a 25% recovery in its NAV YTD (in USD), which lags green shoots from its portfolio peers (up 30–70% in USD); 2) a portfolio-weighted FX tailwind of 14% YTD; and 3) a 54% discount to a fairly conservative NAV. We believe balance sheet concerns are receiving too much focus, with USD45m cash available (9% of NAV) and its bond not maturing until Q2 2025e, but sense a more accentuated priority to strengthen its balance sheet in the next 12–24 months. We note VEF’s high-beta characteristics and expect a continued recovery in long-duration growth valuation multiples, should interest rates peak. We have updated our fair value to SEK3.8–5.6 (3.3–5.7).