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 €14.73 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 €2.77 million (PY: €6.65 million), leading to a reduced EBITDA margin of 18.8% (PY: 37.2%). The cost of materials significantly increased by 210.3% to €23.80 million due to rising development costs. However, Advanced Blockchain AG witnessed a notable rise in other operating income to €15.10 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 €1.76 million (PY: €5.32 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 €39.65 million. However, we estimate that the fair value of these holdings is considerably higher and to be around €45 million. The total portfolio value, including remaining investments, is estimated at €90 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 €88 million, with a per-share value of €23.48. 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 €41.74 million or €11.00 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
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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
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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)

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