TIDMSIHL
RNS Number : 0539D
Symphony International Holdings Ltd
19 June 2023
Symphony International Holdings Limited ("Symphony or the
"Company")
19 June 2023
Dear Shareholders,
-- Symphony International Holdings Limited's ("Symphony" or the
"Company") unaudited Net Asset Value ("NAV") at 31 March 2023 was
US$457,196,831 and NAV per share was US$0.8906. This compares to
NAV and NAV per share at 31 December 2022 of US$496,685,868 and
US$0.9675, respectively. The decrease of 8.0% quarter over quarter
in NAV is predominantly due to a decrease in the value of Indo
Trans Logistics Corporation ("ITL").
-- Symphony's share price continued to trade at a discount to
NAV. At 31 March 2023, Symphony's share price was US$0.45,
representing a discount to NAV per share of 49.5%. This compares to
a share price discount to NAV of 53.9% at 31 December 2022.
We would like to highlight some of the key developments in our
portfolio companies during the quarter:
-- In 1QFY23, Minor International Public Company Limited
("MINT") reported significantly improved financial results due to
robust travel demand and increased restaurant store traffic,
together with the implementation of a dynamic pricing strategy and
the addition of new hotels and restaurants to MINT's portfolio. Mr.
Dillip Rajakarier, Group CEO of MINT, reiterated his confidence in
the Company's outlook and performance for the remainder of 2023,
underpinned by strongly positive global travel trends and MINT's
dynamic brand strategies for its restaurant business.
-- The ITL group faced increasing headwinds in Q1 2023. ITL's
management reported that Vietnam was particularly affected by a
slowdown in exports, which impacted key lines of business for the
company. Symphony's agreement to sell a small amount of shares,
mentioned in earlier updates, completed in April 2023. The gross
and net sale consideration received was 5.5 times and 4.6 times
Symphony's cost of shares sold, respectively.
-- ASG Hospitals Private Limited ("ASG") continued to expand
operations with the consolidation of Vasan Health Care Pvt Ltd in
March 2023 that added approximately 90 clinics to ASG's network
taking the total number of clinics to over 150. With greenfield and
brownfield projects as well as M&A, ASG has grown its revenue
at a compounded annual growth rate of 46% for the past three years.
The group currently employs 450 doctors and 4,000 other employees
in 21 states in India, Nepal and Africa.
-- In January 2023 Symphony invested in Isprava Vesta Private
Limited ("Isprava"), a company in the business of construction,
designing and sale of branded villas in non-urban markets in India
such as Alibagh, Goa and Kasauli. The company is also in the in the
business of renting luxury holiday homes under the brand name of
"Lohono Stays" and includes both homes constructed and sold by
Isprava and third party homes in India and overseas.
-- Wine Connection Group ("WCG"): The sale of this business has
been completed. Certain earn-out thresholds have been met, which
has increased the expected sale proceeds that Symphony will receive
over the coming months.
MARKET OVERVIEW AND OUTLOOK
The first quarter of 2023 saw a continuation of tight monetary
policies, high inflation and in the words of the IMF, 'geoeconomic
fragmentation' with Russia's war in Ukraine, and China's economic
reopening. However, there are signs now that inflation is slowing
and there is a general expectation that central banks may pause
interest rate hikes. The unexpected failures of two specialised
regional banks in the United States in mid-March 2022 and the
collapse of confidence in Credit Suisse, a globally significant
bank, have roiled financial markets, with bank depositors and
investors re-evaluating the safety of their holdings and shifting
away from institutions and investments perceived as vulnerable.
A major positive change to this year's global economic outlook
is China's pro-growth policy shift late last year; these include
easing pressures on the real estate sector and boosting private
business confidence. In addition, pent-up demand following a
three-year period of movement restrictions is expected to have a
positive impact on the economy. This is reflected in China's
economic data, which has broadly surprised on the upside,
especially household services consumption (food services sales
surged in March 26% yoy) and the housing sector (contraction eased
to 5.8% in Q1 yoy compared to 10% in December yoy). Chinese
policymakers' official 2023 GDP goal of "around 5%" is now seen as
a floor rather than a ceiling by many market commentators.
India is set to become the second-fastest growing economy in the
G20 in FY2022-23, despite decelerating global demand and the
tightening of monetary policy to manage inflationary pressures. The
Organisation for Economic Cooperation and Development ("OECD") has
projected that the GDP growth will slow to 5.7% in FY2023-24 from
6.6% in FY2022-23, as exports and domestic demand moderate.
However, the Reserve Bank of India's ("RBI") Governor Mr.
Shantikanta Das said, he was "quite optimistic and fairly
confident" that the growth rate would be 6.5% in FY24 meaning that
India will contribute 15% of the world growth in the year,
stressing that this is no mean achievement.
Thailand's economy expanded faster than expected in the first
quarter, as revealed from the data from the National Economic and
Social Development Council ("NESDC"). This was helped by a rebound
in private consumption and tourism, with the return of Chinese
visitors in recent months, helping boost employment and domestic
demand. GDP growth was 2.7% in the first quarter from a year
earlier and 1.9% for the year versus a forecast of 1.7%. Thailand
kept its forecast for foreign tourist arrivals in 2023 at 28
million versus 11 million in 2022; tourism typically accounts for
11%- 12% of GDP. Chinese tourist arrivals, which constituted about
30% of total visitors before the pandemic, are expected to reach
one million per month starting in October this year. Pre-pandemic
2019 saw a record of nearly 40 million foreign tourist arrivals,
who spent 1.9 trillion Thai baht (US$56.6 billion). The increase in
tourist arrivals should benefit our portfolio, particularly our
investment in Minor International Pcl ("MINT").
Vietnam's GDP growth rate moderated to a pace of 3.3% in the
first quarter of 2023, after rapid GDP growth of 8.0% in 2022.
Vietnam's manufacturing export sector faced increasing headwinds
due to slowing demand from the US and EU, which are two key export
markets accounting for over 40% of Vietnam's goods exports.
Vietnam's goods exports fell by 11.9% yoy in the first quarter of
2023. In addition, a government-led anti-graft campaign has also
contributed to slowing economic growth. Anti-corruption
investigations have led to a number of prosecutions and also
resulted in significant delays for licence and project approvals.
This has impacted many businesses and brought a number initiatives
to a halt. However, Vietnam is expected to gradually resume its
growth trajectory in the medium-term, as the country is a key
beneficiary of the shift in global manufacturing supply chains from
China. Symphony's investment in Indo Tran Logistics Corporation
("ITL Logistics") will be impacted in the near term from Vietnam's
slowing economy, but is well positioned to benefit from the
country's long-term secular growth trends.
During the first quarter, Symphony completed a new investment in
Isprava, a luxury residential real estate developer in non-urban
locations in India.
It is with profound sadness that we announce the unexpected
passing of our Independent Director and Audit Committee Chairman
Mr. Rajiv Luthra. Mr. Luthra was an invaluable asset to our
organisation. His leadership, insight and stewardship will be
greatly missed.
COMPANY UPDATE
Symphony's listed investments accounted for 13.0% of NAV at 31
March 2023 (or US$0.1154 per share), which compares to 13.2% of NAV
(or US$0.1279 per share) at 31 December 2022. The decrease is due
to the sale of MINT shares and warrants that was partially offset
by an appreciation of 1.2% in the onshore Thai baht.
The value of Symphony's unlisted investments (including
property) comprised 88.6% of Symphony's NAV (or US$0.7890 per
share), which compares to 86.8% (or US$0.8398 per share) at 31
December 2022.
Temporary investments accounted for (1.55%) of NAV (or
(US$0.0138) per share), which compares to (0.02%) of NAV (or
(US$0.0002) per share), per share at 31 December 2022.
Symphony's share price continued to trade at a significant
discount to NAV. At 31 March 2023, Symphony's share price was
US$0.45, representing a discount to NAV per share of 49.5%. This
compares to a share price discount to NAV of 53.9% at 31 December
2022.
PORTFOLIO DEVELOPMENTS
HOSPITALITY
Minor International Public Company Limited ("MINT"): is a global
company focused on three core businesses: hospitality, restaurants
and lifestyle brands distribution. MINT is a hotel owner, operator
and investor with a portfolio of over 530 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 2,500 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 1QFY23, MINT reported significantly improved
financial results with core EBITDA more than doubling yoy to Baht
6.9 billion from Baht 2.7 billion in the same period last year (a
150% y-y increase). The increase was due to robust travel demand
and increased restaurant store traffic, together with the
implementation of a dynamic pricing strategy and the addition of
new hotels and restaurants to MINT's portfolio. Although MINT
reported a core loss of Baht 647 million in 1QFY23, primarily due
to expected and budgeted European business seasonality, it was a
significant improvement from a core loss of Baht 3.6 billion in
1QFY22.
In 1QFY23, Minor Hotels' business experienced a strong
operational recovery, resulting in a 76% yoy growth in total core
revenue. The system-wide RevPar for the entire portfolio in
1QFY23
increased significantly by 61% yoy, exceeding pre-pandemic
levels by 12%. Continued increase in demand and average room rates
drove strong business growth yoy, led by hotels in Thailand,
Europe, Latin America and Australia.
Minor Food's 1QFY23 total core restaurant revenue grew by 21%
yoy, driven by operational improvement of all hubs, together with a
turnaround of share of profit from joint ventures. The
total-system-sales increased by 19.9% yoy. This included the sales
growth in China which has turned positive and grew by 19.8% in
1QFY23 yoy following the easing of local restrictions since
December 2022 and country reopening in January 2023. All hubs
reported positive total-system-sales growth from higher traffic and
the addition of new outlets.
Despite a high interest rate environment, MINT remains active in
balance sheet management, reducing its net leverage ratio to 0.94
at the end of 1QFY23 from 1.17x as at end 2022 through successful
refinancing initiatives, including the issuance of Baht 10.5
billion unsubordinated perpetual debentures in the quarter.
Mr. Dillip Rajakarier, Group CEO of MINT, reiterated his
confidence in the Company's outlook and performance for the
remainder of 2023, underpinned by strongly positive global travel
trends and MINT's dynamic brand strategies for its restaurant
business.
During the quarter, the value of Symphony's investment in MINT
decreased from US$ 65.7 million at 31 December 2022 to US$ 59.2
million at 31 March 2023. The change in value is predominantly due
to the sale of 6.3 million shares and 6.1 million warrants
(generating US$ 7.8 million in net proceeds) that was partially
offset by a 1.2% appreciation in the Thai baht. Subsequent to 31
March 2023 Symphony sold additional warrants in MINT that generated
US$1.1 million in net proceeds.
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 March 2023
Minuet held approximately 186.75 rai (29.88 hectares) of land in
Bangkok, Thailand.
Company Update: The value of Symphony's interest at 31 March
2023 was US$61.9 million that compares to US$61.1 million at 31
December 2022, which is based on third party valuation. The change
in value is predominantly due to an appreciation in the Thai baht
by 1.3% 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 2023 and November 2025, respectively. As the end of the
lease approaches, occupancy levels are expected to decline as
tenant leases run-off.
Company Update : SG Land continues to make regular distributions
to its shareholders. In April 2023, Symphony received net
distribution payment of US$0.5 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 however, visitor volumes remain below pre-pandemic levels.
Property sales have also rebounded, partially been driven by buyers
taking advantage of a weaker yen. There is an expectation that the
market environment will continue to improve.
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 hotel operates close to full occupancy
during weekends and holiday periods while weekday occupancy remains
below expectations. Management continues to work towards activating
more weekday visitors from Singapore through a number of
initiatives. Planning for the launch of sales of the private
residences at the end of 2023 is progressing.
Symphony invested an aggregate of US$58.8 million in the joint
venture at 31 March 2023. The fair value on the same date was
US$27.9 million. This compares to a fair value of US$30.5 million
at 31 December 2022. The change in value is due to different
assumptions used in the discounted cashflow model to value this
investment.
Isprava Vesta Private Limited. ("Isprava") : In January 2023
Symphony invested in Isprava, a company in the business of
construction, designing and sale of branded villas in non-urban
markets in India such as Alibagh, Goa and Kasauli. The company is
also in the in the business of renting luxury holiday homes under
the brand name of "Lohono Stays" and includes both homes
constructed and sold by Isprava and third party homes in India and
overseas
Company Update: Isprava ended the March fiscal year with an
increase in revenues by 77.5% yoy. The order book, which is the
precursor to the sales in the P&L, was negatively impacted by
the delay in receiving certain regulatory approvals for two
projects in Goa, however it still increased by 9.5% over 2022. The
gross profit margin increased during the year ended 31 March 2023
by 740 basis points yoy. Isprava won awards in three categories at
the Economic Times ("ET") Real Estate Awards 2023 including "Best
Residential Project - Theme based", "Best Interior Design" and
"Best Residential Project - Villa".
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 over 150 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. In
2022, Symphony sold approximately a third of its shares at 2.4
times its cost of shares sold.
Company Update: The group continued to expand operations with
the consolidation of Vasan Health Care Pvt Ltd in March 2023 that
added approximately 90 clinics to ASG's network. With greenfield
and brownfield projects as well as M&A, ASG has grown its
revenue at a compounded annual growth rate of 46% for the past
three years. The group currently employs 450 doctors and 4,000
other employees in 21 states in India, Nepal and Africa.
Symphony's net investment cost in ASG was US$3.7 million at 31
March 2023. The fair value of Symphony's investment on the same
date was US$25.8 million, which compares to US$28.3 million at 31
December 2022. The difference in value is due to changes in certain
assumptions used in the valuation for this investment.
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 continues to focus on improving margins
across its products. Input costs have begun to reduce, which is
reversing the inflationary pressures that had negatively affected
the business over the last year. This has helped the company on its
path to profitability. Management has revamped its sales teams to
enable the business to continue growing key distribution
channels.
Symphony's gross and net investment cost in Soothe was US$12.8
million at 31 March 2023. The fair value of Symphony's investment
on the same date was US$21.4 million, which compares to US$23.4
million at 31 December 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: New showroom orders in Q1 2023 were behind
expectations in Europe and the US while ahead in Asia. The interior
design business continues to perform well with a growing pipeline
of selected projects. Overall sales have been strong as management
continue to improve its supply chain to reduce bottlenecks that has
allowed for a higher velocity of deliveries.
Symphony's gross investment cost in Liaigre was US$79.7 million
at 31 March 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$49.0 million at 31 March 2023. This
compares to US$41.9 million at 31 December 2022. The difference in
value is predominantly due to an increase in comparable company
market multiples used to value this investment and an improvement
in the trailing 12-month EBITDA for the company.
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 sales recorded for Q1 2023 increased
30% yoy mainly driven by the continued developer projects. Retail
sales remains relatively sluggish, with the company planning to
launch sales events and promotions to drive sales. Sales Closed
(Orders confirmed) dropped by 35% from the same period last year as
in the prior year the company had closed a few large developer
projects. Spruce, the online furniture subscription service, was
officially launched in Thailand in early March with good feedback
from design lovers, millennials and small businesses. The company
is focused on improving inventory management by improving the
re-ordering process and reducing the time to deliver the furniture
to clients. These steps enabled the company to reduce the inventory
by 8.0% qoq.
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: The sale of this business has been completed.
Certain earn-out thresholds have been met, which has increased the
expected sale proceeds that Symphony will receive over the coming
months.
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: The school continues to perform ahead of
expectations. The state of the art facilities and strong reputation
of Wellington College International Bangkok has supported growing
admission enquiries. WCIB is on track to be profitable this
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 continues to successfully grow its
businesses in the K12 and higher education markets in the gulf
region. Management have indicated they expect the business to grow
by approximately 30% this current financial year.
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 28.4% at 31 March
2023.
Company Update: The logistics sector faced increasing headwinds
in Q1 2023. ITL's management reported that Vietnam was particularly
affected by a slowdown in exports, which impacted key lines of
business for the company. Aviation, freight management and contract
logistics all performed worse than expected. Guidance by ITL
indicate the logistics market will remain weak until the end of
2024. However, the long-term prospects for the business remain
unchanged with fundamental secular long-term growth trends
remaining intact, such as onshoring of manufacturing, increasing
domestic consumption and growing intraregional trade.
Symphony's agreement to sell a small amount of shares to a
strategic Asian logistics company as part of a larger secondary
offering mentioned in earlier updates completed in April 2023. The
gross and net sale consideration received was 5.5 times and 4.6
times Symphony's cost of shares sold, respectively.
Symphony's gross and net investment cost related to ITL at 31
March 2023 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$106.2
million, which compares to US$152.3 million at 31 December 2022.
The change in value is due to a decline in trailing EBITDA and
market comparable multiples that are used to value this
business.
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
growth in user activity with clients including a number of Fortune
500 companies . Smarten Spaces currently operates in over 30
countries, with significant traction in North America. In Q1
Smarten Spaces launched the full Microsoft Teams integration with
Microsoft as a sales partner for the product. The company is seeing
increasing deal closures which has led to a steady growth of the
business with Q1 2023 recurring revenue increasing 15.2% qoq.
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: Melorra's channel diversification strategy started
taking firm steps in the last few quarters. New channels like
Marketplace (which is Ajio, Flipkart, Amazon etc.) and offline
stores started growing revenues significantly. The Marketplace
channel posted a growth of 848% yoy, albeit off a low base. The
offline stores' footprint grew with 12 new stores being added in
the year to take the total count to 23. Melorra is now expanding
the offline stores via the FOFO model (Franchisee Owned Franchisee
Operated) and has started well on this journey with over half dozen
franchisees already signing up with the company.
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 no new fund investments
in the quarter. The Fund's cumulatively deployed capital is
currently US$11.47 million across 18 core fund investments and 52
Bharat Founders Fund investments ("BFF"), where the cheque size is
US$25,000. Currently, the Fund is in closing conversations for 1
new core investment and 5 BFF investments in the pipeline. At an
aggregate level, the MOIC at the close of this quarter is
approximately 2.45x.
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 adoption of e-commerce and
direct-to-consumer business models in India is continuing to grow,
creating tailwinds for the logistics industry. However, due to the
challenging fund raising environment, the company has reduced cash
spending in order to extend runway which has led to LTM revenues
decreasing by -7.6% yoy.
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: In the last quarter Furlenco launched its new
brand image which brings buying and renting under a common
platform. The company has started its journey from being a tech
enabled company to a tech driven company as they have revamped
their entire tech stack. The marketing spends which were on hold
the last few months has been restarted. This has enabled the
company to increase the brand traffic and customer acquisitions. In
terms of financial performance, the company recorded the highest
monthly revenue in its history in the last quarter. However, EBITDA
margins were lower owing to increased marketing spends. This is
expected to normalize in the coming months as the company
scales.
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 had a strong first quarter in 2023 with
revenues increasing 6% qoq and 42% yoy; this was aided by 681%
take-rate expansion. The company's revenues are primarily driven by
advertising and fulfilment revenue; unlike other marketplaces the
company does not charge vendors any listing fees to be on their
platform. The company continued with its trajectory of managing its
cash burn, which was at the lowest levels seen over the last 2
years. The company has maintained its growth momentum of orders at
26% yoy while reducing user and supplier growth spends by 64% qoq
and 86% yoy. The company is the 2(nd) most downloaded shopping app
globally in the Q1FY23 despite significantly lower spends. Meesho
continues to have a strong cash position on its balance sheet and
remains focused on achieving profitability by the end of 2023.
SolarSquare Energy Private Limited ("Solar Square") : Solar
Square 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 is currently the number 2
residential solar brand in India after Tata Solar by monthly
volumes. Since founding 2.5 years ago the company has enabled 7,000
homes to go solar. The monthly homes booked with the company are in
excess of 500 per month; this is up from 100 plus homes per month
in 2021. The homes that are moving to solar will offset 24 million
kgs of CO2 every year which is the equivalent of planting more than
350K trees. In the first 8 cities where Solar Square was launched
the company has more than 20% market share. The company is well
capitalised having raised US$15 million across seed and Series A
but having burnt less than US$4 million to date.
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. 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.
Company Update: In Q1-2023 Mavi started generating revenues
through both the insurance business in Singapore as well as the
automotive warranty business in India. The Company is continuing to
build and secure partnerships for its insurance and warranty
services across Asia to grow the revenue streams.
SUBSEQUENT EVENTS
-- Subsequent to 31 March 2023, Symphony completed the partial
sale of shares held in ITL. The total consideration was less than
2% of NAV
-- Subsequent to 31 March 2023, Symphony completed the sale of
3.9 million MINT warrants that generated net proceeds of US$1.1
million.
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
UPDEQLFFXQLLBBL
(END) Dow Jones Newswires
June 19, 2023 02:00 ET (06:00 GMT)
Symphony International H... (LSE:SIHL)
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Symphony International H... (LSE:SIHL)
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