Loihde: Heading towards a more difficult cycle in a good shape

In Q3, Loihde performed better than our cautious expectations and we made slight upward revisions and added the Onrego acquisition to our estimates. Loihde is making a clear improvement in profitability this year and we see the potential for even better levels with current business mix as we look beyond a more difficult economic cycle. As the acquisitions aimed at allocating the huge net cash (~45% of market value) progress, we expect the uncertainty weighing on the company's accepted valuation to disappear. In this case, the expected return that is based on rising valuation multiples and dividend yield is set at an attractive -1-23% based on our current estimates, depending on the acquisition multiples and accepted valuation levels of the companies bought.