Care Property Invest (AO) | Hold | Q1 - Guidance confirmed

Research evidence excerpt

Care Property Invest (AO) | Hold | Q1 - Guidance confirmed

Care Property Invest Hold | Target Price: EUR12.40

Company description Management

Care Property Invest is a Public Regulated Real Estate Company incorporated Patrick Coutenier, CEO

under Belgian law, which is specialised in the market segment of housing for the Filip Van Zeebroeck, CFO

elderly and people with disabilities. The company was established on the back of Valérie Jonckers, COO

the Flemish government's initiative in 1995, called Serviceflats Invest, for the Key shareholders

building and financing of service flats for PCSWs and social NPOs. This portfolio Free float 93.59%

now seems to be the Achilles' heel of the assets as it could create negative Konrad Invest 3.39%

earnings momentum. Jan Ollevier, Sakolaki nv en Tradesco b 3.02%

Investment case Valuation methodology

CPINV is a pure healthcare player with a portfolio of EUR1.2bn. We value Care Property Invest using a DCF (70% weighting,

Founded in 1995 by the Flemish government to develop 2,000 WACC: 7.3%, OM: 85%, g: 1.7%) and a NAV-based model

service flats, the company completely transformed itself in 2014 adjusted for dividends (30%), for which we add a structural

by enlarging its investment scope to include the broad discount of 20%.

healthcare segment. The structural discount of 20% seems justified for the company

The company will see this initial portfolio being renegotiated that still has an exposure to Finance lease assets where the

with local municipalities as from next year, implying some underlying valuation can be discussed.

downside earnings risks as municipalities could decide to Risks to our rating

exercise their "call options" rights on those municipalities held The first contract with local Public Centres for Social Welfare