In today’s briefing:
- Softbank Group – SenseTime Rally Offsets Some of China Weakness but Q3 Vision Fund in the Red
- Square Enix – Is the 7% NFT Bump Sustainable?
- EClerx Services Limited: Consistent Revenue Growth
- Track Group: An Above Average Business with a Catalyst?
Softbank Group – SenseTime Rally Offsets Some of China Weakness but Q3 Vision Fund in the Red
- We estimate Vision Fund portfolio companies lost $2.1bn in value in Q3 as upside from new listings was not enough to offset valuation losses from the current portfolio.
- A strong debut for SenseTime boosted Q3 gains by $2.3bn and +$1.7bn this week. That takes the sting out of weak Didi Q3 results but China remains a challenge.
- Shares trade at a 49% discount to NAV because investment losses both lower NAV and boost balance sheet concerns.
Square Enix – Is the 7% NFT Bump Sustainable?
- Square Enix rose 7.5% yesterday driven by some New Year commentary on integration of NFTs from President Yosuke Matsuda.
- The share price jump stands in contrast to broadly negative and suspicious reactions from consumers.
- The handling of the issue could be tricky as Ubisoft is finding out but we believe there is positive potential.
EClerx Services Limited: Consistent Revenue Growth
- eClerx Services (eClerx) provides business process management, automation and analytics services.
- It caters to financial services, communications, retail, media, manufacturing, travel and technology companies
- We roll over valuations to FY24E and value eClerx at Rs 2900 i.e. 21x P/E on FY24E EPS
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Track Group: An Above Average Business with a Catalyst?
- The stock is pretty illiquid, and is effectively a nano cap as insiders effectively own 65% of shares outstanding. Average daily trading volume only about $10k.
- I feel quite optimistic about it. Trades <10x earnings while co is growing and only at about 1.5x recurring revenue and a lot of operating leverage.
- The company provides tracking software and services to monitor convicts. Generally contracts are signed on a multi year basis
Before it’s here, it’s on Smartkarma
