Helma Eigenheimbau - High-margin projects starting to pay off

Helma’s decision to maximise margins at the expense of top-line growth amid the present market constraints seems to be bearing fruit, as illustrated by the solid earnings momentum in H118. Residential demand in Germany remains buoyant against the backdrop of a structural housing shortage. In the longer term, Helma’s robust land bank (representing a revenue potential of c €1.2bn according to management) should allow the company to benefit from these fundamentals. Helma’s shares trade at a P/E ratio for FY19e of 8.7x, which is a 17% discount to peer average.