Original research: Advanced Blockchain AG – by GBC AG
Transition from GBC AG to Advanced Blockchain AG
Company: Advanced Blockchain AGISIN: DE000A0M93V6
Reason for study: Research Report (Initial Valuation) Recommendation: Buy Price target: 23.32 EUR Sight price target: December 31, 2022 Last rating change: – Analysts: Julien Desrosiers, Matthias Greiffenberger, Felix Haugg
Easy access to DeFi, Crypto & Web 3.0. Significant upside potential of high growth portfolio. The success of the partial disposals and rounds of funding confirms the group’s investment approach.
With this research update, we provide a preliminary assessment. The full 2021 annual report will be published shortly. We will then update the assessment and, if possible, include other projects in the assessment.
Advanced Blockchain AG invests and participates in three areas: (1) investments, (2) participations and (3) incubations.
In the area of holdings and incubations, Advanced Blockchain AG works closely with companies. Here the company tries not to spread investments widely, but to focus on a smaller number of investments. The higher focus is intended to achieve a higher probability of success. Advanced Blockchain AG not only provides financial support here, but also helps to successfully implement blockchain processes. Here, companies benefit from the extensive expertise of the Advanced Blockchain team and numerous industry contacts. Since spin-offs are also often supported, the Advanced Blockchain group is also associated with well-established and high profile companies. In addition to external spin-offs, the Advanced Blockchain Group also supports its own spin-off projects and subsidiaries in the blockchain and decentralization industry. Thanks to internal support and the foundation, many processes can be implemented more easily, while the mentioned advantages for companies continue to exist.
The Advanced Blockchain group relies on extensive in-house analysis for foundations and investments. Thus, the company has an investment and research team of more than 10 people who are constantly on the lookout for new projects. There is also a symbiotic relationship with many outside professional investors who can provide commentary. Once a potential project has been identified and the underlying technology analyzed, a meeting with the founding team will be arranged. The Advanced Blockchain Group can offer a wide range of support, from providing technical resources to assistance with marketing, audits, investor access, and access to their own research group.
Additionally, Advanced Blockchain Group acts as a venture capitalist through its subsidiaries. This space invests not only in startups, but in all types of businesses that are trying to use blockchain technology and decentralization to create solutions to prevalent problems faced by large, established companies.
Advanced Blockchain also invests in blockchain technology companies that offer crypto tokens through its subsidiaries. Consulting services are partly paid in the form of tokens.
In the area of incubations, we have currently identified the following investments/participations: Bribe, Quasar, Angular, Panoptic, Instrumental, Pendulum and Warp.
We have reviewed the company’s valuation approaches with respect to individual items and consider them to be understandable. In the Incubations area, valuations were made on the basis of current financing or the last transaction. In addition, tokens were issued for consulting and software services, which correspond to an evaluation process based on the initial stake. In our view, the current fair value of the incubations (after discounts) is approximately €12 million.
There are 31 different positions in the Investments section, namely Maverick, Sentinel, Alluo, Myso, Etherscore, Polymer, Fractal, Neon Labs, Mekatek, Fragcolor, Element Finance, Zcloak, Fei Protocol, Backd, Arweave, Obol, Forest Park , Component , NEAR Protocol, Sigmadex, Composable, Permanent Ventures, Manta, Light, Moxy, Polkadot, Talisman, SDGX, Contango, Ithil, Peaq and Apricot.
Perhaps the most popular was the big hit Polkadot investment. In 2017, the company invested for an average well below 1 EUR per token and recently achieved the majority. In the meantime, the price was around 47 euros and, according to management, sales were made near the high.
We have discussed the investment portfolio valuation methods with management and consider them understandable. In our opinion, many investment projects are still in their infancy and still have enormous potential for the future. We currently estimate the value of the investment portfolio (after risk deductions) at around 35 million euros.
In the Holdings section, we have identified 12 holdings, namely: FinPro AG, Nakamo.to, FinPro GmbH, Peaq GmbH, Stela Labs Ltd, Tracebloc, Cliso Ltd., Brain Network Ltd., Peaq Ltd., Incredulous Ltd., ADVANCED BLOCKCHAIN LABS (DMCC) and ADVANCED BLOCKCHAIN LABS (FZCO).
We currently view Peaq as the most important value driver in the Holdings portfolio and value the portfolio at €43m.
Many positions in the portfolio are still in their infancy and have great potential for dynamic development. In addition, according to our assessment, some positions in the portfolio have not yet been published, which may also have a value-increasing effect. According to the management, the annual holding costs amount to just under 2 million euros, which we deduct from the valuation of our portfolio according to the NAV approach.
In total, we have determined an enterprise value of around 88 million euros according to NAV. With 3.77 million shares outstanding, this corresponds to a value per share of EUR 23.32. In the context of the strong upside potential, we assign a BUY rating as part of our initial assessment.
Note: As soon as the 2021 annual report is available, we will extend this initial assessment to the initial coverage study with an updated assessment.
You can download the full analysis here: http://www.more-ir.de/d/23899.pdf
Contact for questions GBC AG Halderstraße 27 86150 Augsburg 0821 / 241133 0 [email protected] +++++++++++++++
Disclosure of potential conflicts of interest pursuant to Section 85 WpHG and Section 20 MAR. The company analyzed above has the following possible conflict of interest: (5a,11); You can find a catalog of possible conflicts of interest at:
http://www.gbc-ag.de/de/Offenlegung +++++++++++++++ Study end date and time: 04/26/2022 (4:45 p.m.) Date and time of the first transfer of the study: April 27, 2022 (9:00 a.m.) Validity of the course objective: until December 31, 2022 at the latest
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The publisher or creator of the study is solely responsible for the content of the communication or research. This announcement is not investment advice or a solicitation to enter into any particular stock transaction.