TIDMSIHL
RNS Number : 9101T
Symphony International Holdings Ltd
23 March 2023
Symphony International Holdings Limited ("Symphony or the
"Company")
23 March 2023
Dear Shareholders,
-- Symphony International Holdings Limited's ("Symphony" or the
"Company") unaudited Net Asset Value ("NAV") at 31 December 2022
was US$496,685,868 and NAV per share was US$0.9675. This compares
to NAV and NAV per share at 30 September 2022 of US$444,576,566 and
US$0.8660, respectively. The increase of 11.7% quarter over quarter
in NAV is predominantly due to an increase in the share price of
Minor International Pcl Limited ("MINT"), a strengthening of the
Thai baht and an increase in value of Indo Trans Logistics
Corporation.
-- Symphony's share price continued to trade at a discount to
NAV. At 31 December 2022, Symphony's share price was US$0.45,
representing a discount to NAV per share of 53.9%. This compares to
a share price discount to NAV of 49.2% at 30 September 2022.
We would like to highlight some of the key developments in our
portfolio companies during the quarter:
-- MINT reported robust financial results for the quarter with
the reopening of international borders globally and rising consumer
spending that contributed to year-on-year ("yoy") recovery,
boosting all three of MINT's business units. During the quarter,
Minor Hotels opened the Anantara Plaza Nice Hotel in France and The
Plaza Doha by Anantara in Qatar and introduced the NH brand to Asia
with the debut of NH Boat Lagoon Phuket Resort in Thailand.
Following a significant reduction in our position in MINT, we gave
up our seat on its Board of Directors.
-- The ITL group continues to strategically expand certain
divisions in order to position for future growth. In March 2023,
Symphony entered into a binding agreement with an existing
investor, a large Asian logistics company, to sell a small amount
of shares as part of a larger secondary transaction. The sale will
complete at a price that is 5.52 times our cost of the shares
sold.
-- ASG Hospitals Private Limited ("ASG") continued to expand
operations with the number of clinics growing from 49 to 52 in the
quarter. In March 2023, ASG took control of Vasan Health Care Pvt.
Ltd., following regulatory approval. The acquisition expands ASG's
full service clinics to over 150 with a pan-India footprint.
-- Soothe Healthcare Private Limited's ("Soothe") sales for the
three-months ended 31 December 2022 was marginally higher compared
to the same period a year earlier. Management's continued focus on
improving margins has met with much success. EBITDA margins
improved by 800 basis points on a quarter-over-quarter ("qoq")
basis.
-- August Jewellery Pvt. Ltd. ("Melorra") had a strong fourth
quarter where the company crossed the milestone of achieving US$100
million in annualised revenue run-rate ("ARR"). Melorra has now
entered the elite and limited club of direct-to-consumer ("D2C")
brands in India which are over US$100 million in run-rate. The
company is focused on achieving positive unit economics and
achieving EBITDA breakeven in 2023.
-- Wine Connection Group ("WCG") continued to see a rebound in
its business, particularly in Thailand. In early 2023, we entered
into a binding agreement to sell this business at close to
Symphony's original cost and at a premium to the value that this
investment was held at 30 September 2022.
MARKET OVERVIEW AND OUTLOOK
The year 2022 saw surging inflation and rising interest rates in
response, an outbreak of war in Ukraine, and heightened
geopolitical tensions. Generally, business and consumer sentiment
in most countries have weakened, pointing to a slowdown. The
International Monetary Fund's ("IMF") January 2023 report forecasts
global growth to fall from an estimated 3.4% in 2022 to 2.9% in
2023. The rise in central bank rates to fight inflation and major
geopolitical shifts underway continue to weigh on economic activity
but China's recent reopening may have paved the way for a
faster-than-expected recovery.
For the first time in more than 40 years China's GDP growth of
3% in 2022 was below the global average but, as stated by Larry Hu,
chief China economist at Macquarie, "The exit from the zero-Covid
policy has been much faster than expected and such a dramatic
U-turn implies deeper economic contraction in the fourth quarter
but faster reopening and recovery in 2023." A rebound in demand
from China would help counterbalance the expected slowdown in Asian
exports to the U.S. and Europe.
India's GDP growth slowed to 4.4% in the final quarter of 2022,
primarily due to a 1.1% contraction in manufacturing according to
estimates released by the Ministry of Statistics and Programme
Implementation ("MoSPI"). The rapid slowdown from 13.2% in the
second quarter and 6.3% in the third quarter reflected the impact
of subdued consumption demand and exports amid rising input costs
and interest rates. For the full financial year 2022-23, the
National Statistics Office ("NSO") has retained the growth estimate
at 7.0%. The Reserve Bank of India's ("RBI") Governor Mr.
Shantikanta Das said, "Broad-based credit growth, improving
capacity utilisation, government's thrust on capital spending, and
infrastructure should bolster investment activity."
Thailand's economic growth slowed more than expected in the
fourth quarter of 2022, as exports and manufacturing declined, but
a rebound in the vital tourism sector should continue to boost
recovery. GDP growth was 1.4% in the fourth quarter and 2.6% for
the year. Thailand beat its tourism target in 2022 with 11.15
million foreign visitor arrivals. Before the Covid-19 pandemic
about 28% of Thailand's 40 million annual visitors were from China.
With the return of Chinese visitors the National Economic and
Social Development Council ("NESDC") projects Thailand to receive
28 million foreign tourists in 2023, up from 23.5 million projected
earlier. The increase in tourist arrivals should benefit our
portfolio, particularly our holding in Minor International Pcl
("MINT").
Vietnam's economy grew 8.02% in 2022, the fastest annual pace
since 1997, backed by strong domestic retail sales and exports. The
high annual growth number comes despite fears of a global recession
and its impact on demand for exports from Vietnam, a key
manufacturer of goods like textiles, footwear and electronics for
big-name international brands. Geopolitical factors have resulted
in Vietnam becoming the primary beneficiary of the shift in
manufacturing out of China. Symphony's holding in Indo Tran
Logistics Corporation ("ITL Logistics") stands to benefit from the
country's positive growth momentum.
In the fourth quarter, we made a new investment in MAVI, a B2B
insurance and warranty programme administration services company
headquartered in Singapore with operations in India and Thailand.
We also made a follow-on investment in Good Capital Fund 1, and a
small loan to Smarten Spaces, a Singapore based SaaS
(Software-as-a-Service) company that provides software solutions
for space management in commercial and industrial properties . We
remain optimistic about the prospects of our portfolio companies
despite the geopolitical and economic uncertainties ahead . As we
move forward into 2023, we would like to acknowledge the invaluable
support of our shareholders and we remain committed to delivering
strong long-term returns for our investors.
COMPANY UPDATE
Symphony's listed investments accounted for 13.2% of NAV at 31
December 2022 (or US$0.1279 per share), which compares to 11.1% of
NAV (or US$0.0964 per share) at 30 September 2022. The percentage
change is predominantly due to an increase in the share price of
Minor International Public Company Limited ("MINT") by 21.7% and an
appreciation of 8.3% in the onshore Thai baht.
The value of Symphony's unlisted investments (including
property) comprised the remaining 86.8% of Symphony's NAV (or
US$0.8398 per share), which compares to 87.4% (or US$0.7563 per
share) at 30 September 2022.
Temporary investments accounted for (0.02%) of NAV (or
(US$0.0002) per share), which compares to 1.5% of NAV (or US$0.0133
per share) per share at 30 September 2022.
Symphony's share price continued to trade at a significant
discount to NAV. At 31 December 2022, Symphony's share price was
US$0.45, representing a discount to NAV per share of 53.9%. This
compares to a share price discount to NAV of 49.2% at 30 September
2022.
PORTFOLIO DEVELOPMENTS
HOSPITALITY
Minor International Public Company Limited ("MINT"): is one of
the largest hospitality and restaurant companies in the Asia
Pacific region. MINT is a hotel owner, operator and investor with a
portfolio of over 531 hotels under the Anantara, Avani, Oaks,
Tivoli, NH Collection, NH, nhow, Elewana, Marriott, Four Seasons,
St. Regis and Radisson Blu brands in 56 countries across Asia
Pacific, the Middle East, Africa, the Indian Ocean, Europe, South
and North America. MINT is also one of Asia's largest restaurant
companies with over 2,531 outlets system-wide in 24 countries under
The Pizza Company, The Coffee Club, Riverside, Benihana, Thai
Express, Bonchon, Swensen's, Sizzler, Dairy Queen, Burger King,
Coffee Journey and GAGA brands, in addition to over 1,000 outlets
of MINT's strategic alliances (i.e. S&P and BreadTalk). MINT is
one of Thailand's largest distributors of lifestyle brands and
contract manufacturers. Its brands include Anello, BergHOFF,
Bossini, Charles & Keith, Joseph Joseph, Zwilling J.A. Henckels
and Minor Smart Kids.
Company Update: In 4Q22, MINT reported robust financial results,
growing both yoy and qoq. MINT's 4Q22 core net profit of Baht 2.4
billion was a yoy increase of 44% from 4Q21 and a qoq increase of
18% from 3Q22. MINT reported strong core profit of Baht 2.0
billion, a huge turnaround from the core loss of Baht 9.3 billion
recorded in 2021. The reopening of international borders globally
and rising consumer spending contributed to yoy recovery, boosting
all three of MINT's business units. Mr. Dillip Rajakarier, Group
CEO of MINT, commented, "Alongside our new three-year strategy, the
focus for 2023 and beyond will be seizing new opportunities that
unlock and accelerate growth and profitability, while maintaining
MINT's position as a global market leader. We have emphatically
returned to growth and MINT is uniquely positioned to capture the
exciting opportunities that lie ahead."
Minor Hotels reported core net profit of Baht 1.9 billion in
4Q22, a yoy increase of 57% from 4Q21 and a q-q increase of 25%
from 3Q22. MINT's system-wide RevPar for the entire portfolio
experienced a significant yoy increase of 58% in 4Q22, exceeding
pre-pandemic levels by 25%, largely driven by a surge in global
travel demand and Minor Hotels' pricing strategy. In 4Q22,
Thailand's RevPar recovered to pre-COVID-19 levels for the first
time since the pandemic, due principally to an increase in room
rates. During the quarter, Minor Hotels opened the Anantara Plaza
Nice Hotel in France and The Plaza Doha by Anantara in Qatar and
introduced the NH brand to Asia with the debut of NH Boat Lagoon
Phuket Resort in Thailand. These additions bolstered Minor Hotels'
hotel portfolio, which grew to 531 hotels and 76,996 rooms in 56
countries as at end 2022.
Minor Food's core profit in 4Q22 grew to Baht 402 million,
reflecting both yoy and qoq growth, attributable to stronger
performance from Thailand and Australia hubs due to new store
formats and successful sales and marketing initiatives that
increased customer engagement. During the quarter, MINT entered
into a joint venture transaction for a 50.1% stake in GAGA
Beverages to expand into the beverage retail business in
Thailand.
In addition to strengthening operational performance, MINT
focused on improving its financial leverage and net debt-to-equity
ratio, which fell to 1.17x at end of 2022. MINT further solidified
its equity base through business recovery and the exercise of
warrants. Free cash flow remained positive at Baht 2.9 billion in
4Q22 and at Baht 10.9 billion in year 2022.
Since September 30, 2022, MINT's share price has recovered to
THB 32.25 on December 31, 2022. At this price, the value of
Symphony's holding in MINT is equal to US$65.7 million at the
current Thai baht exchange rate.
LIFESTYLE/ REAL ESTATE
Minuet Limited ("Minuet"): is a joint venture between the
Company and a Thai partner. The Company has a direct 49% interest
in the venture and is considering several development and/or sale
options for the land owned by Minuet, which is located in close
proximity to central Bangkok, Thailand. Since the original
investment, several parcels of land have been sold to local
developers and a large piece has been used to develop the
Wellington International School in Bangkok. As at 31 December 2022
Minuet held approximately 186.75 rai (29.88 hectares) of land in
Bangkok, Thailand.
Company Update: The value of Symphony's interest at 31 December
2022 was US$61.1 million based on an independent third party
valuation. This compares with US$55.8 million at 30 September 2022.
The change in value is predominantly due to an appreciation in the
Thai baht by 8.6% and other minor movements in the assets and
liabilities of Minuet.
Symphony's original investment in Minuet was $78.3 million.
Total distribution receipts from partial sales of land have
amounted to US$65.2 million. We believe, that barring unforeseen
developments, and given the development activity in the area, the
remaining land will enable us to realise proceeds well in excess of
the current valuation.
SG Land Co. Ltd ("SG Land") : SIHL acquired approximately 50% of
the outstanding shares of SG Land in a JV with Thai Factory
Development ("TFD"). SG Land owns the leasehold rights to SG Tower
and Millenia Tower, which are office buildings in central Bangkok,
Thailand. The leases for the two buildings expire at the end of
October 2022 and November 2025, respectively. As the end of the
lease approaches, occupancy levels are expected to decline as
tenant leases run-off.
Company Update : Year-to-date, Symphony received net
distribution payments of US$1.2 million. We expect to continue to
receive distributions from this investment through to the expiry of
the leases.
As the building leases approach expiry, there has been a faster
than expected decline in occupancy levels, which has led to a
revision of our total expected return from this investment. Based
on the latest information, we anticipate that this investment will
give us a return of approximately 8.5% per annum over a period of
approximately 16 years.
Niseko Property Joint Venture ("Niseko JV") : Symphony invested
in a property development venture that acquired land in Niseko,
Hokkaido, Japan. Symphony has a 37.5% interest in this venture, The
Niseko JV sold 31% of the development site to Hanwha Hotels &
Resorts with a further 39% to a new joint venture company that is
equally held and being co-developed by the Niseko JV and the Hanwha
Group. The Niseko JV continues to effectively hold approximately
50% of the total site, which includes a 100% interest in one parcel
of land which is being held for future development and/or sale.
Company Update : The 2022/2023 ski season in Niseko has been
strong following the removal of restrictions on foreign tourist
arrivals. Property sales have also rebounded, partially been driven
by buyers taking advantage of a weaker yen.
Desaru Property Joint Venture in Malaysia : The Company has a
49% interest in a property joint venture in Malaysia with an
affiliate of Destination Resorts and Hotels Sdn Bhd, a hotel and
destination resort investment subsidiary of Khazanah Nasional
Berhad, the investment arm of the Government of Malaysia. The joint
venture has developed a beachfront resort with private villas for
sale on the south-eastern coast of Malaysia and that are branded
and managed by One&Only Resorts ("O&O"). The hotel
operations were officially launched in September 2020.
Company Update: The One&Only Desaru Coast Resort had a
strong Christmas and Chinese New Year period that benefited room
occupancies and food and beverage facilities. Aside from increasing
visitors from Singapore and around the region, the property is
attracting longer-stay European visitors. The management has been
working to activate weekday visitors from Singapore with some
success. Symphony is working closely with its partners to
officially launch sales of private residences during the latter
half of 2023.
Symphony invested an aggregate of US$58.8 million in the joint
venture at 31 December 2022. The fair value on the same date was
US$30.5 million. This compares to a fair value of US$25.5 million
at 30 September 2022.
HEALTHCARE
ASG Hospital Private Limited ("ASG"): is a full-service eye-
healthcare provider with operations in India, Africa, and Nepal.
ASG was founded in Rajasthan, India in 2005. ASG's operations have
since grown to 52 clinics, which offer a full range of
eye-healthcare services, including outpatient consultation and a
full suite of inpatient procedures. ASG also operates an optical
and pharmacy business, which is located within clinics. Symphony
invested in ASG in tranches from October 2019 through to July 2020
and subsequently acquired secondary shares in October 2021.
Company Update: The group continued to expand operations with
the number of clinics growing from 49 to 52 during the quarter.
Revenue and EBITDA for the three-months ended December 2022 was
42.7% and 8.9% higher than the same period a year earlier. Total in
and outpatient numbers grew by 35.0% and 31.4%, respectively,
during the same comparative period. In March 2023, ASG took control
of Vasan Health Care Pvt. Ltd., following regulatory approval. This
acquisition expands the number of ASG's full service clinics to
over 150 with a pan-India footprint.
Symphony's net investment cost in ASG was US$3.7 million at 31
December 2022. The fair value of Symphony's investment on the same
date was US$28.3 million, which compares to US$25.7 million at 30
September 2022.
Soothe Healthcare Pvt. Ltd. ("Soothe"): was founded in 2012 and
operates within the fast-growing consumer healthcare products
market segment in India. Soothe's core product portfolio includes
feminine hygiene and diaper products. Symphony completed an initial
investment in Soothe in August 2019 and subsequently made
investments through convertible notes and securities in 2020, 2021
and 2022.
Company Update: Soothe's sales for the three-months ended 31
December 2022 was marginally higher compared to the same period a
year earlier. Management's continued focus on improving margins has
met with much success. EBITDA margins improved by 800 basis points
on a quarter-over-quarter basis.
Symphony's gross and net investment cost in Soothe was US$12.8
million at 31 December 2022. The fair value of Symphony's
investment on the same date was US$23.4 million, which compares to
US$25.9 million at 30 September 2022. The difference in value is
due to changes in certain assumptions used in the valuation for
this investment.
LIFESTYLE
Liaigre Group ("Liaigre"): was founded in 1985 in Paris and is a
brand synonymous with discreet luxury, and has become one of the
most sought-after luxury furniture brands, renowned for its
minimalistic design style. Liaigre has a strong intellectual
property portfolio and provides a range of bespoke furniture,
lighting, fabric & leather, and accessories. In addition to
operating a network of 24 showrooms in 11 countries across Europe,
the US and Asia, Liaigre has a Design Studio which undertakes
exclusive architecture and interior design projects for select
yachts, hotels, restaurants and private residences.
Company Update: Liaigre saw a pick-up in sales in Q4 2022
following the delivery of a high level of showroom orders and
several large interior architecture projects. With the China
showrooms fully opened, the group is also seeing growing sales in
that region. Management continue to focus on improving supply
chains to cater to a growing number of orders and projects.
Symphony's gross investment cost in Liaigre was US$79.7 million
at 31 December 2022. The net cost on the same date, after deducting
partial realisations, was US$67.6 million. The fair value of
Symphony's investment was US$41.9 million at 31 December 2022. This
compares to US$35.0 million at 30 September 2022. The difference in
value is predominantly due to a stronger cash position following a
high level of sales in Q4 2022 and strengthening of the Euro by
9.2%.
CHANINTR ("Chanintr") : Chanintr is a luxury lifestyle company,
based in Thailand, which primarily distributes high- end U.S. and
European furniture and household accessory brands, including
Liaigre, Barbara Barry, Baker, Herman Miller, Marquee, Minotti,
Bulthaup kitchens amongst others. Chanintr also provides FF&E
solutions for real estate and hotel projects. In 2019, Chanintr
launched a new program called Chanintr Residences which will
showcase custom-designed luxury residences as turnkey projects.
Company Update: Chanintr's orders year to 31 December 2022
reached THB 1.5 billion, up 4.6% y-o-y and up 21.3% q-o-q. Despite
facing numerous challenges during the year, revenues increased, led
by kitchen and wardrobe projects with major developers. Closed
sales (firm orders with deposits) reduced 6% due to normalizing of
demand post the Covid-19 surge experienced in 2021. The gross
profit margin also improved thanks to price adjustments and
contribution from system projects. The soft launch of Spruce, the
online furniture rental business, was successful and a larger
launch is planned in April. The company has signed a multi-year
licensing contract with Martha Stewart's Marquee brand, for
residential and outdoor furniture for South East Asia.
Wine Connection Group ("WCG") : At the end of April 2014,
Symphony invested WCG, one of Southeast Asia's leading wine themed
Food and Beverage chains with approximately 86 outlets in Singapore
and Thailand.
Company Update: Wine Connection continued to see a rebound in
its business, particularly in Thailand. The management focus on
transforming the Thai business by improving operating standards and
product offering allowed the company to achieve the highest
normalised profit level in its history. In early 2023, a binding
agreement was entered into to sell this business at close to
Symphony's original cost and at a premium to the value that this
investment was held at 30 September 2022.
EDUCATION
WCIB International Co. Ltd. ("WCIB") : Symphony entered into a
joint venture with WCIB International Co. Ltd. ("WCIB"), that
developed and operates Wellington College International Bangkok,
the fifth international addition to the Wellington College family
of schools from the UK. WCIB operates a co- educational school that
began operations in August 2018 and will ultimately cater to over
1,500 students aged 2-18 years of age when all phases are fully
complete.
Company Update: WCIB continued to perform ahead of budget, due
to a higher than expected enrolment for the Lent Term. Management
are optimistic on the outlook with growing admission enquiries.
WCIB is on track to generate a profit in the current academic
year.
Creative Technology Solutions DMCC ("CTS") : is a UAE-based
company that provides technology solutions to K12 schools in the
UAE and the Kingdom of Saudi Arabia ("KSA"). The company was
founded in 2013 to provide customized IT solutions to the education
sector, including hardware, software and training. Symphony made
its investment in CTS in June 2019.
Company Update : CTS has continued to win new contracts with K12
and higher education institutions. With growing demand in the UAE
for technology services, the company plans to open a new office in
Abu Dhabi.
LOGISTICS
Indo Trans Logistics Corporation ("ITL "): was founded in 2000
as a freight-forwarding company and has since grown to become
Vietnam's largest independent integrated logistics company with a
network that is spread across Vietnam, Cambodia, Laos, Myanmar, and
Thailand. ITL has grown to national champion status in Vietnam with
over 2,000 employees across its business units and joint ventures.
ITL's strategic plans include supporting small and medium
enterprises in Vietnam and across the Indochina region. Symphony
bought the shares that had originally been held by Singpost, the
Singapore Post office, at a cost of $42.6 million for a roughly
28.6% interest. Following a subsequent issue of shares and share
buybacks by ITL, Symphony's interest was 28.3% at 31 December
2022.
Company Update: The logistics sector continued to face headwinds
in Q4 2022, a trend expected to continue through 2023. Slowing
global consumption as a result of higher interest rates is
affecting demand for exports from Asia. ITL continues to
strategically expand certain divisions in order to position for
future growth. Management remain optimistic on the long-term
prospects for this business, particularly in light of the ongoing
onshoring of manufacturing, increasing domestic consumption and
growing intraregional trade. In March 2023, Symphony entered into a
binding agreement with an existing investor, a large Asian
logistics company, to sell a small amount of shares as part of a
larger secondary transaction. The sale will complete at a price
that is 5.52 times our cost of the shares sold.
Symphony's gross and net investment cost related to ITL at 31
December 2022 was US$42.6 and US$42.1 million, respectively. The
fair value for Symphony's interest in ITL on the same date was
US$152.3 million, which compares to US$131.0 million at 30
September 2022.
NEW ECONOMY
Smarten Spaces Pte. Ltd. ("Smarten") : In November 2019,
Symphony invested in Smarten, a Singapore based SaaS
(Software-as-a-Service) company that provides software solutions
for space management in commercial and industrial properties.
Smarten was founded in 2017 by Dinesh Malkani and offers an
end-to-end solution for workplace flexibility on a single
technology platform, to help businesses navigate the new hybrid
workplace. The SaaS technology includes four key aspects - Desk
Management, Workforce Rostering, Demand & Supply, Expenses
& Chargeback, and Asset Management; bringing together key
workforce and workplace considerations for a future-ready
solution.
Update: The adoption of the hybrid workplace model has led to a
3x growth in user activity in 2022, currently standing at more than
250,000 user transactions per month with clients including a number
of Fortune 500 companies . Smarten Spaces currently operates in
over 30 countries, with significant traction in North America
representing 57% of the sales pipeline. The company has seen
increasing deal closures which has led to a steady growth of the
business with Q4 2022 revenue increasing 23.3% yoy.
August Jewellery Pvt. Ltd. ("Melorra") : Founded in January
2015, Melorra is an omni-channel fast fashion Indian jewellery
company that introduces a fresh collection of 75 new designs every
Friday, resulting in over 300 new designs per month. Melorra adopts
a minimal inventory model that uses 3-D printing technology to
achieve just-in-time manufacturing to bring products to market
efficiently. The company currently has 23 operational experience
centres across India.
Update: In the fourth quarter Melorra crossed a milestone of
achieving US$100 million in ARR (annualized revenue run-rate).
Melorra has now entered the elite and limited club of D2C brands in
India which are over US$100 million in run-rate. The company
achieved the growth in revenue despite reducing marketing spends.
The company is focused on achieving positive unit economics and
achieving EBITDA breakeven in 2023. With the rapid increase in the
price of gold Melorra launched 14KT and 18KT gold jewelry to make
it more affordable for the customer. This initiative has been very
successful. The 23 offline stores continued to perform on the back
of a rapidly improving diamond ratio (diamonds as a share of
merchandise mix) driving gross margins higher. The company saw 7
million visitors online, with the app installed based reaching 4.4
million and Monthly Active Users ("MAU") of 574k+.
Good Capital Partners and Good Capital Fund I ("Good Capital" or
"GCP") : GCP is majority owned by brothers Rohan and Arjun Malhotra
who have been investing their own capital since 2014 to create a
thriving ecosystem of technology start-ups. Symphony announced its
investment in July 2019 with a 10% stake in GCP and serving as an
anchor investor in its first fund, GCF1.
Company Update: Good Capital Fund I made 2 fund investments in
the quarter. There were 8 Bharat Founders Fund ("BFF") investments
in the quarter, where the cheque size is US$25,000. The Fund's
cumulatively deployed capital is currently US$10.9 million across
15 core fund investments and 48 Bharat Founders Fund investments
("BFF"). Currently, the Fund is in closing conversations for 1 new
core investment and 8 BFF investments in the pipeline. At an
aggregate level, the MOIC at the close of this quarter is
approximately 2.28x.
Catbus Infolabs Private Limited ("Blowhorn") : In August 2021,
Symphony invested in Catbus Infolabs Private Limited, the owner of
the Blowhorn platform. Blowhorn is a same-day intra-city last-mile
logistics provider headquartered in Bangalore, India. The company
provides seamless transportation, warehousing, and a fully
technologically integrated system to manage the end-to-end supply
chain process through an asset-light transportation and distributed
micro-warehousing network. The company currently serves enterprise
customers and more than 150 brands with an active presence in more
than 100 cities across India.
Company Update: The growing adoption of e-commerce and
direct-to-consumer business models in India is increasing demand
for same-day intra-city logistics services. Blowhorn's asset-light
full-stack solution is well positioned to scale and capitalise on
this market opportunity and the company is seeing steady growth of
the business with December 2022 LTM revenue increasing 10% yoy. The
company has been building up the fulfilment and warehousing
business which is seeing good traction with revenue increasing 76%
yoy and is now representing 22% of total revenue.
House of Kieraya Private Limited ("Furlenco"): Founded in
October 2012 in Bangalore, India, Furlenco is a residential
furniture rental services business. The business has since expanded
to include Furbicle, a brand selling refurbished & recycled
furniture; UNLMTD, an annual furniture and appliance subscription
service; Prava, which sells high-end retail furniture and
KreateOne, an in-house furniture manufacturing facility.
Company Update: The House of Kieraya ("HOK") saw customer
collections remaining flat in the last quarter. The company has
started increasing marketing spends to restart the growth in
customer acquisitions. With the introduction of sale of furniture
in addition to rental furniture, the company has introduced a new
concept to the Indian consumer called "basket of access" which
allows customers to access furniture in an innovative &
flexible manner. The company's UNLMTD plan, where for a fixed
rental a customer can rent up to 15 items of furniture, saw
renewals in the last quarter which helped grow the cash collections
of the company. The company also introduced KreateOne, an inhouse
manufacturing facility which will enable the company to generate
higher margins on the furniture leased or sold.
Meesho, Inc ("Meesho"): Founded in March 2016 in Bangalore,
India, Meesho is a social e-commerce platform to sell to the next
500 million Indians coming online. Meesho is the most downloaded
app globally and is currently the third largest e-commerce platform
in India behind Flipkart and Amazon.
Company Update: Meesho has pivoted from its social commerce
roots which was being a women-focused, reseller-led, and
zero-commission model to selling directly to consumers; however,
the company still does not charge commissions and is focused on
monetization of advertising from sellers on their platform. Meesho
earns over 70% of its revenues from selling wares to consumers
directly. It boasts over 122 million monthly active users,
including 35 million who transact monthly. Vidit Aatrey, the
Founder & CEO, told a news channel that they have changed their
goals from growth to profitability with the target to be EBITDA
positive by the end of 2023. The company continues to use third
party logistics providers ("3PL") unlike Flipkart and Amazon, as
they believe their customers are more focused on cost than on
delivery experience.
SolarSquare Energy Private Limited ("Solar Square") :
SolarSquare was founded in 2015 and is a rooftop solar power
services company that focuses on residential homes, primarily
standalone houses, gated societies, and small commercial centres.
The company aims to make clean energy affordable and accessible and
become the trusted brand in the space.
Company Update: Solar Square had a strong fourth quarter with
approx. 1200 homes acquired; on a cumulative basis the company has
acquired 5500+ homes. In terms of monthly volume, Solar Square is
now the 2(nd) largest residential solar power company in India,
behind Tata Solar. In October 2022 the company closed a Series A
round with Elevation Capital and Lowercase Carbon leading the
round. The company is currently streamlining their organization
design and is working on improving their NPS ("Net Promoter
Score"), which is a way of measuring customer satisfaction, by
improving the post sales experience.
MAVI Holding Pte. Ltd. ("MAVI") : In December 2022 Symphony
invested in MAVI, a B2B insurance and warranty programme
administration services company headquartered in Singapore with
operations in India, Thailand, and Singapore.
Company Update: Household wealth is growing in South and
South-East Asia with the middle class expanding rapidly. Yet these
regions are highly under-insured with a lack of access to insurance
products. MAVI is an early-stage start-up business with a goal to
develop insurance products that are accessible, competitively
priced, and tailored for the Asian markets. The company will
provide insurance and warranty programme management services and
partner with insurance and carriers in the region to bring these
products to market.
SUBSEQUENT EVENTS
-- Subsequent to 31 December 2022, Symphony completed a new
investment in Isprava Vesta Private Limited. The total
consideration was less than 5% of NAV
-- Subsequent to 31 December 2022, Symphony sold 6.30 million
shares of MINT and 6.1 million warrants for a total net
consideration of US$7.75 million
-- Subsequent to 31 December 2022, Symphony completed a second
tranche of its investment in Mavi Holding Pte. Ltd. The total
consideration was less than 1% of NAV
For further information:
Symphony Asia Holdings Pte. Ltd.:
Anil Thadani +65 6536 6177
Rajgopal Rajkumar
Dealing codes
The ISIN number of the Ordinary Shares is VGG548121059, the
SEDOL code is B231M63 and the TIDM is SIHL.
The LEI number of the Company is 254900MQE84GV5DS6F03.
Notes:
NAV takes into account the fair value of unrealised investments.
In accordance with the valuation policies of the Company, real
estate related investments are valued by third parties on 30 June
and 31 December each year. In addition and in accordance with the
Company's valuation policies, investments that have been held for
less than 12-months are held at cost unless there is evidence of a
diminution in the value of that investment. Although the investment
manager believes there not to be a diminution in the value of
investments held for less than 12- months, the Covid-19 pandemic
has led to a significant increase in economic uncertainty which is
evidenced by more volatile asset prices and currency exchange rates
and therefore cost may not correspond to an appropriate measure of
fair value in the current environment.
IMPORTANT INFORMATION
A more detailed Shareholder Update is available on request from
the Company and can be accessed via www.symphonyasia.com .
THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED
STATES OR ANY OTHER JURISDICTION INTO WHICH THE PUBLICATION OR
DISTRIBUTION WOULD BE UNLAWFUL. THESE MATERIALS DO NOT CONSTITUTE
AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY OR
ACQUIRE SECURITIES IN THE UNITED STATES OR ANY OTHER JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES REFERRED TO IN THIS DOCUMENT HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES LAWS OF SUCH JURISDICTIONS AND
MAY NOT BE SOLD, RESOLD, TAKEN UP, TRANSFERRED, DELIVERED OR
DISTRIBUTED, DIRECTLY OR INDIRECTLY, WITHIN SUCH JURISDICTIONS.
NO REPRESENTATION OR WARRANTY IS MADE BY THE COMPANY OR ITS
INVESTMENT MANAGER AS TO THE ACCURACY OR COMPLETENESS OF THE
INFORMATION CONTAINED IN THIS DOCUMENT AND NO LIABILITY WILL BE
ACCEPTED FOR ANY LOSS WHATSOEVER ARISING IN CONNECTION WITH SUCH
INFORMATION.
THIS DOCUMENT CONTAINS (OR MAY CONTAIN) CERTAIN FORWARD-LOOKING
STATEMENTS WITH RESPECT TO CERTAIN OF THE COMPANY'S CURRENT
EXPECTATIONS AND PROJECTIONS ABOUT FUTURE EVENTS. THESE STATEMENTS,
WHICH SOMETIMES USE WORDS SUCH AS "ANTICIPATE", "BELIEVE", "COULD",
"ESTIMATE", "EXPECT", "INT", "MAY", "PLAN", "POTENTIAL", "SHOULD",
"WILL" AND "WOULD" OR THE NEGATIVE OF THOSE TERMS OR OTHER
COMPARABLE TERMINOLOGY, ARE BASED ON THE COMPANY'S BELIEFS,
ASSUMPTIONS AND EXPECTATIONS OF ITS FUTURE PERFORMANCE, TAKING INTO
ACCOUNT ALL INFORMATION CURRENTLY AVAILABLE TO IT AT THE DATE OF
THIS DOCUMENT. THESE BELIEFS, ASSUMPTIONS AND EXPECTATIONS CAN
CHANGE AS A RESULT OF MANY POSSIBLE EVENTS OR FACTORS, NOT ALL OF
WHICH ARE KNOWN TO THE COMPANY AT THE DATE OF THIS ANNOUNCEMENT OR
ARE WITHIN ITS CONTROL. IF A CHANGE OCCURS, THE COMPANY'S BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY VARY MATERIALLY
FROM THOSE EXPRESSED IN ITS FORWARD-LOOKING STATEMENTS. NEITHER THE
COMPANY NOR ITS INVESTMENT MANAGER UNDERTAKE TO UPDATE ANY SUCH
FORWARD LOOKING STATEMENTS
STATEMENTS CONTAINED IN THIS DOCUMENT REGARDING PAST TRS OR
ACTIVITIES SHOULD NOT BE TAKEN AS A REPRESENTATION THAT SUCH TRS OR
ACTIVITIES WILL CONTINUE IN THE FUTURE. THE INFORMATION CONTAINED
IN THIS DOCUMENT IS SUBJECT TO CHANGE WITHOUT NOTICE AND, EXCEPT AS
REQUIRED BY APPLICABLE LAW, NEITHER THE COMPANY NOR THE INVESTMENT
MANAGER ASSUMES ANY RESPONSIBILITY OR OBLIGATION TO UPDATE PUBLICLY
OR REVIEW ANY OF THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.
YOU SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS,
WHICH SPEAK ONLY AS OF THE DATE OF THIS ANNOUNCEMENT.
THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT
CONSTITUTE AN INVITATION OR OFFER TO UNDERWRITE, SUBSCRIBE FOR OR
OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF THE COMPANY IN
ANY JURISDICTION. ALL INVESTMENTS ARE SUBJECT TO RISK. PAST
PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. SHAREHOLDERS AND
PROSPECTIVE INVESTORS ARE ADVISED TO SEEK EXPERT LEGAL, FINANCIAL,
TAX AND OTHER PROFESSIONAL ADVICE BEFORE MAKING ANY INVESTMENT
DECISIONS.
THIS DOCUMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE
UNITED STATES. THE COMPANY'S SECURITIES HAVE NOT BEEN, AND WILL NOT
BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION
OR AN EXEMPTION FROM REGISTRATION. THERE WILL BE NO PUBLIC OFFER OF
SECURITIES IN THE UNITED STATES .
NEITHER THE CONTENT OF THE COMPANY'S WEBSITE (OR ANY OTHER
WEBSITE) NOR THE CONTENT OF ANY WEBSITE ACCESSIBLE FROM HYPERLINKS
ON THE COMPANY'S WEBSITE (OR ANY OTHER WEBSITE) IS INCORPORATED
INTO, OR FORMS PART OF, THIS DOCUMENT.
TO ENSURE THE COMPANY'S COMPLIANCE WITH SUB-SECTION 8(3)(A)(I)
OF THE PRIVATE INVESTMENT FUNDS REGULATIONS, 2019, THE DIRECTORS
WILL KEEP THE FINANCIAL SERVICES COMMISSION OF THE BRITISH VIRGIN
ISLANDS INFORMED OF THE NUMBER OF SHAREHOLDERS ON THE COMPANY'S
REGISTER OF SHAREHOLDERS.
THE COMPANY AND THE INVESTMENT MANAGER ARE NOT ASSOCIATED OR
AFFILIATED WITH ANY OTHER FUND MANAGERS WHOSE NAMES INCLUDE
"SYMPHONY", INCLUDING, WITHOUT LIMITATION, SYMPHONY FINANCIAL
PARTNERS CO., LTD.
End of Announcement
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END
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