In today’s briefing:
- Prosus: Finally, a Catalyst; Cash Flows, Capital Allocation, Should Limit Drop in Discount to NAV
- Kurly: A Market Leader in Fresh Foods E-Commerce Market in Korea
- Softbank Group – First Look at Q1 22 Performance
- Qualtrics: Leading Pure-Play XM Provider. A Solid Risk-Reward Opportunity
Prosus: Finally, a Catalyst; Cash Flows, Capital Allocation, Should Limit Drop in Discount to NAV
- Prosus (PRX NA)’s announced open-ended share repurchase programme, funded by on-market sale of its Tencent shares, is a significant positive catalyst to reduce its discount to NAV.
- Continued operating losses will likely require funding through capital events, in the form of either asset sales or debt issuance.
- Cash flow requirements and continued concerns around capital allocation should limit the reduction in the discount to NAV.
Kurly: A Market Leader in Fresh Foods E-Commerce Market in Korea
- Kurly is the number one player in Korea focusing on e-commerce of fresh foods. Kurly’s most recent valuation was about 4 trillion won in December 2021.
- Coupang is trading at P/S and P/GP multiples of 1.2x and 7.4x (2021), respectively. Using these valuation multiples, Kurly’s valuation would be from 1.9 trillion won to 2.2 trillion won.
- These valuations would represent nearly half of the 4 trillion won in private market valuation it received in December 2021.
Softbank Group – First Look at Q1 22 Performance
- Vision Fund’s public portfolio lost $10bn in Q1 marking the third time in four quarters that valuation losses were in the tens of billions
- Global tech weaness remains the main challenge as portfolio losses are matched with concerns on the private portfolio, especially ARM
- And worries about ARM also feed into leverage concerns as Softbank’s QoQ decline in reported LTV was driven by an ARM upgrade. Meanwhile, CDS prices are near all-time highs
Qualtrics: Leading Pure-Play XM Provider. A Solid Risk-Reward Opportunity
- Qualtrics International (XM US) is the largest XM provider and pioneer in Experience Management. The company was founded in 2002 by Ryan Smith, Jared Smith, and their dad, Scott Smith.
- In 2018, SAP acquired Qualtrics for ~$8B in an all-cash deal, one of the largest-ever acquisitions of a SaaS company.
- We view Qualtrics International (XM US) as well-positioned to continue to take market share with additional growth drivers such as new products and international expansion.
Before it’s here, it’s on Smartkarma
