Original-Research: Advanced Blockchain AG - von GBC AG

Einstufung von GBC AG zu Advanced Blockchain AG

Unternehmen: Advanced Blockchain AG

ISIN: DE000A0M93V6

Anlass der Studie: Research report (Anno)

Empfehlung: Buy

Kursziel: 11.00 EUR

Kursziel auf Sicht von: 31.12.2024

Letzte Ratingänderung:

Analyst: Matthias Greiffenberger, Julien Desrosiers

Considerable upside potential to portfolio valuation. Track record of

successful partial divestments and financing rounds.

In 2022, Advanced Blockchain AG expanded its portfolio by investing in 12

promising blockchain projects and Web3 infrastructure initiatives. Also

three in-house portfolio companies secured over $53 million in funding from

renowned co-investors and investors, solidifying the reputation and

confidence in Advanced Blockchain's ecosystem.

One standout success story is Composable Finance, which raised $32 million

with an implied valuation exceeding $350 million in a Series A financing

round and launched a blockchain cross-liquidity protocol. This achievement

established them as a prominent player in the DeFi ecosystem, attracting a

dedicated community of users and partners. Their focus on interoperability

and innovative financial products positions them for continued growth and

success.

peaq, another portfolio company, introduced DePIN technology, addressing

key challenges in decentralized finance and enhancing security,

scalability, and cost efficiency. peaq secured a total funding of $10.5

million, with a round of funding of $6 million, led by Fundamental Labs,

peaq solidified its position in the industry. Their advancements in

technology and investment efforts demonstrate their commitment to

revolutionizing decentralized finance and driving innovation.

In 2022, Advanced Blockchain AG faced a challenging year in the crypto

market but demonstrated resilience by maintaining its business operations.

Despite a 17.5% decline in revenues to EUR14.73 million, the company remained

committed to navigating the market and pursuing its strategic objectives.

To mitigate the impact of the challenging conditions, Advanced Blockchain

AG implemented a comprehensive cost reduction strategy to align expenses

with the market situation, improving financial stability.

In April 2023 Advanced Blockchain AG announced that Sebastian Markowsky, an

experienced investment banker and skilled dealmaker in the blockchain

industry, has joined as an Advisor and Venture Partner. With a successful

background advising top fintech and software companies on securing global

deals, Markowsky brings a wealth of expertise to the table. His focus is on

digital assets, blockchain, decentralized business models, and cutting-edge

technology. With his experience at notable firms like GP Bullhound,

Blockchain Valley Ventures, and Deutsche Bank, Markowsky has gained a

reputation for his commitment and long-term support.

The company experienced a decline in EBITDA to EUR2.77 million (PY: EUR6.65

million), leading to a reduced EBITDA margin of 18.8% (PY: 37.2%). The cost

of materials significantly increased by 210.3% to EUR23.80 million due to

rising development costs. However, Advanced Blockchain AG witnessed a

notable rise in other operating income to EUR15.10 million, attributed to

capitalizing internal work for software development in its subsidiaries.

Despite the obstacles, the company remained profitable, albeit with a

proportional reduction in net result. The net result for the year amounted

to EUR1.76 million (PY: EUR5.32 million), showcasing Advanced Blockchain AG's

ability to navigate challenges and maintain financial stability. With a net

margin of 12.0% (PY: 29.8%), the company displayed effective cost

management and resilience in the face of reduced revenues.

In fiscal year 2023, Advanced Blockchain AG focuses on sustainable growth

and cost management. The company plans to expand its team, make new

investments and implement cross-chain initiatives to maintain its leading

position as a blockchain incubator and Web3 investor. Ongoing research and

clear strategies will drive the development and adoption of various

blockchain topics and use cases.

The top 10 portfolio holdings (of the more than 30 holdings), including

companies like peaq/EoT Labs GmbH, Mero, and Contango, have a conservative

valuation of EUR39.65 million. However, we estimate that the fair value of

these holdings is considerably higher and to be around EUR45 million. The

total portfolio value, including remaining investments, is estimated at EUR90

million, considering a significant undervaluation in the current market

conditions.

Regarding the market, the recent endorsement of Bitcoin (BTC) by BlackRock

CEO Larry Fink has had a profound impact on the growing acceptance of

cryptocurrencies among Wall Street veterans. Fink, who was previously

skeptical about digital currencies, announced that BlackRock aims to

streamline and reduce the costs of trading and investing in Bitcoin. This

acknowledgment of Bitcoin's potential as a revolutionary financial

instrument marks a significant shift in the public stance of asset managers

and senior executives. It highlights BlackRock's responsiveness to client

demands and further validates Bitcoin's emergence as a mainstream asset

within traditional finance.

We approximate the net asset value (NAV) to be EUR88 million, with a

per-share value of EUR23.48. However, we applied an additional discount of

around 53% due to the ongoing 'crypto winter' and the decline in crypto

markets, resulting in a fair value of EUR41.74 million or EUR11.00 per share.

Based on the significant upside potential, we assign a Buy rating.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/27327.pdf

Kontakt für Rückfragen

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

http://www.gbc-ag.de/de/Offenlegung

Date and time of completion of the study: 11.07.2023 (17:30)

Date and time of the first disclosure of the study: 12.07.2022 (09:30)

-übermittelt durch die EQS Group AG.-

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Quelle: dpa-AFX