Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

In H122, Molten Ventures saw a continuation of the strong performance reported in FY21, with 27% fair value growth in the period taking gross portfolio value to £1,350m. Management reconfirmed its expectation for c 35% fair value growth for FY22 ‘subject to wider market conditions’, well ahead of management’s initial guidance of below-trend 15% growth. H122 NAV per share increased by 19% to 887p per share, with the five-year CAGR now over 20%. With an uncertain outlook, Molten Ventures offers a diversified portfolio across multiple technology segments, with its funds' strategy capturing unique deal flow, delivering the potential for returns uncorrelated to the wider market. Management expects strong markets to persist for at least the next 12–18 months, with the launch of the growth fund a key focus for 2022, now that the preparatory work is complete.

In H122, Molten Ventures saw a continuation of the strong performance reported in FY21, with 27% fair value growth in the period taking gross portfolio value to £1,350m. Management reconfirmed its expectation for c 35% fair value growth for FY22 ‘subject to wider market conditions’, well ahead of management’s initial guidance of below-trend 15% growth. H122 NAV per share increased by 19% to 887p per share, with the five-year CAGR now over 20%. With an uncertain outlook, Molten Ventures offers a diversified portfolio across multiple technology segments, with its funds' strategy capturing unique deal flow, delivering the potential for returns uncorrelated to the wider market. Management expects strong markets to persist for at least the next 12–18 months, with the launch of the growth fund a key focus for 2022, now that the preparatory work is complete.


Molten Ventures - Let the good times keep rolling

Draper Esprit’s management confirmed that H122 NAV per share is expected to be not less than 885p (31 March 2021: 743p), growth of 19% in the period. With portfolio activity remaining strong, management revised its FY22 fair value growth guidance from 15% at the start of the year to c 35% ‘subject to wider market conditions’. Although growth in NAV per share lags fair value growth (H122 estimates: 26% fair value growth, 19% NAV per share growth), 35% fair value growth might suggest an NAV per share of c 930–950p for 31 March 2022, close to where the share price has been trading recently. Management also confirmed an imminent rebranding, including a change of name ‘to better reflect [the group’s] strategy in its latest phase of growth’. Draper Esprit’s H122 results are due on 29 November 2021.

Draper Esprit’s management confirmed that H122 NAV per share is expected to be not less than 885p (31 March 2021: 743p), growth of 19% in the period. With portfolio activity remaining strong, management revised its FY22 fair value growth guidance from 15% at the start of the year to c 35% ‘subject to wider market conditions’. Although growth in NAV per share lags fair value growth (H122 estimates: 26% fair value growth, 19% NAV per share growth), 35% fair value growth might suggest an NAV per share of c 930–950p for 31 March 2022, close to where the share price has been trading recently. Management also confirmed an imminent rebranding, including a change of name ‘to better reflect [the group’s] strategy in its latest phase of growth’. Draper Esprit’s H122 results are due on 29 November 2021.


Draper Esprit - Strong H122, FY22 guidance revised upwards

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Shanghai Stock Exchange Composite Index / Technical Analysis

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Cracks are beginning to show, particularly in EM/China where the MSCI EM index (EEM-US) is breaking below major $52 base support, the Shanghai Composite is breaking below 3500, the CSI 300 is breaking below 4885, and Hong Kong's Hang Seng is breaking below 27,000 support. Thankfully we have stayed away from areas hardest hit since EM/China has had poor relative performance for quite some time. Despite this being largely self-induced and very China-specific due to China's regulatory crackdown, the overhang could linger as additional Sectors/industries could be targeted. Moreover, it certainly does not help our already cautious and neutral outlook, but rather reinforces it.

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Draper Esprit reported a very strong FY21, with a 51% increase in gross portfolio value (GPV) to £984m and a 57% rise in NAV to £1.03bn, together with realisations and exits at a record £206m. As at 31 March 2021, plc cash stood at £160.7m. Immediately following the results, management announced a placing and retail offer raising £111m at 800p per share, a 5% discount to the closing price on 11 June 2021 of 839p per share and an 8% premium to the latest NAV of 743p per share, as at 31 March 2021. The cash raised will be used to increase Draper Esprit’s rate of investment to over £150m pa. Following the raise, net of £48m of post year-end investment, we estimate that Draper Esprit has net cash of over £215m.

Draper Esprit reported a very strong FY21, with a 51% increase in gross portfolio value (GPV) to £984m and a 57% rise in NAV to £1.03bn, together with realisations and exits at a record £206m. As at 31 March 2021, plc cash stood at £160.7m. Immediately following the results, management announced a placing and retail offer raising £111m at 800p per share, a 5% discount to the closing price on 11 June 2021 of 839p per share and an 8% premium to the latest NAV of 743p per share, as at 31 March 2021. The cash raised will be used to increase Draper Esprit’s rate of investment to over £150m pa. Following the raise, net of £48m of post year-end investment, we estimate that Draper Esprit has net cash of over £215m. 

Draper Esprit - FY21 results, £111m placing and retail offer

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to hold above critical support levels and market dynamics remain largely positive. Until this changes, we believe global equities are headed higher in the coming weeks and months. Additionally, we are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

United Kingdom

Princess Private Equity Holding Ltd. is a closed-ended investment company incorporated in Guernsey.  The Fund invests in private equity and private debt investments. The Company seeks to provide shareholders with long-term capital growth and an attractive dividend yield in the mid to long-term.

The Brunner Investment Trust PLC is a closed-end fund incorporated in the United Kingdom. The aim of the Fund is to achieve a total return higher than that of the benchmark index of 30% for FTSE All share and 70% for the World ex UK (ex UK sterling adjusted) over the long term. The Fund invests in UK and international securities.

Tetragon Financial Group Limited is a closed-end investment company. The Company invests in a broad range of assets, including bank loans, real estate, equities, credit, convertible bonds and infrastructure and TFG Asset Management, a diversified alternative asset management business.

XPS Pensions Group PLC operates as an employee benefit consultancy firm. The Company offers pensions actuarial, administration, compliance, and advisory services. XPS Pensions Group serves customers in the United Kingdom.

Blackrock Throgmorton Trust PLC is an investment trust incorporated in the United Kingdom. The aim of the Fund is to provide shareholders with capital growth and an attractive total return from investment predominantly in listed UK smaller companies.

Close Brothers Group PLC is a specialist financial services group. The Company makes loans, trades securities and provides advice and investment management solutions to a wide range of clients. Close Brothers operates through three divisions: Banking, Securities and Asset Management.

Polar Capital Holdings PLC is an asset management group which provides a range of hedge funds and long only funds that are diversified by asset class and geographical location.

Impax Asset Management Group plc, through its subsidiaries, provides investment services to funds specializing in the environmental markets sector, with a focus on alternative energy, water, and waste sectors, primarily in the United Kingdom. It manages a range of funds and segregated accounts on behalf of institutional and private investors. The company was formerly known as Impax Group plc and changed its name to Impax Asset Management Group plc in October 2009. Impax Asset Management Group plc was founded in 1998 and is based in London, the United Kingdom.

BioPharma Credit PLC operates as a closed-ended investment company. The Company provides debt capital for the life sciences industry, as well as focuses on the investments in debt assets secured by royalties and other cash flows derived from sales of approved life sciences products.

IP Group PLC, through partnerships with research institutions, shares in revenue from the commercialization of research results. The Company provides seed capital and resources in return for equity in companies spun off as a result of research. IP Group has partnerships with the University of Oxford's Chemistry Department, the University of Southampton, and King's College London.

China Everbright Limited, through its subsidiaries, provides investment banking, commercial banking, corporate finance, and investment advisory services.  The Company also invests in properties and provides insurance, brokerage, secretarial, and money lending services.

Ares Acquisition Corporation operates as a blank check company. The Company aims to acquire one and more businesses and assets, via a merger, capital stock exchange, asset acquisition, stock purchase, and reorganization.

Avantax, Inc. operates as a technology-enabled financial service company. The Company offers financial advisory, wealth management, and retirement planning services, as well as tax-smart investing services. Avantax serves consumers, small businesses, and tax professionals in the United States.

Cosmopolitan International Holdings Limited, through its subsidiaries, trades securities and invests in properties.  The Company also provides high-speed wireless Internet access technology and property management system solutions.

Cosmopolitan International Holdings Limited (120 HK)

Cosmopolitan International Holdings Limited

JSW Holdings Limited is an investment holding company.  The Company invests in the shares of companies.

Daishin Securities Company offers securities trading, brokerage, and underwriting services to its clients.  The Company also provides various services, such as mutual fund and asset management, securities distribution, online trading, corporate finance, sale of beneficiary certificates, and investment information.

Guotai Junan International Holdings Ltd. is a securities brokerage house. The Company's services include securities and futures dealing and broking services for various financial markets, corporate finance and ECM services, asset and fund management services and financing services such as margin financing and other types of financing.

Religare Enterprises Limited is a holding company for one of India's diversified financial services groups. The Company offers an integrated suite of financial services through its underlying subsidiaries and operating entities, including loans to SMEs, capital markets, wealth management, life and health insurance, and asset management.

Centuria Capital Group manages a diversified portfolio of investment funds and offers financial  services.  The Company manages funds of unlisted property investments; and offers investment  bonds, education plans, insurance and home loans.

PT Pacific Strategic Financial Tbk provides equity and fixed income securities trading, consultations, underwriting and corporate finance services.

Molten Ventures PLC operates as a venture capital firm. The Company invests in high-growth technology companies. Molten Ventures serves clients in Europe.

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Molten Ventures (GROW LN)

Molten Ventures - Let the good times keep rolling

In H122, Molten Ventures saw a continuation of the strong performance reported in FY21, with 27% fair value growth in the period taking gross...

Edison Investment Research

Draper Esprit - Strong H122, FY22 guidance revised upwards

Draper Esprit’s management confirmed that H122 NAV per share is expected to be not less than 885p (31 March 2021: 743p), growth of 19% in the...

Edison Investment Research

Weakness Contained To EM & China Thus Far; Actionable Themes: Tech, Utilities, Financials, Materials

Cracks are beginning to show, particularly in EM/China. Key support violations include the MSCI EM index below $52, the Shanghai Comp below 3500,...

Vermilion Research

Draper Esprit - FY21 results, £111m placing and retail offer

Draper Esprit reported a very strong FY21, with a 51% increase in gross portfolio value (GPV) to £984m and a 57% rise in NAV to £1.03bn, together...

Edison Investment Research

Global Equity Strategy: Small-Caps and Value Stocks Remain in Focus

We are reiterating our overweight recommendations on small-caps and value as we believe outperformance from these areas is likely to continue.

Vermilion Research

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