{"id":358,"date":"2022-03-22T01:01:00","date_gmt":"2022-03-22T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=358"},"modified":"2022-03-19T10:57:39","modified_gmt":"2022-03-19T10:57:39","slug":"sabvest-capital-fy-21-great-performance-with-more-to-come","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=358","title":{"rendered":"Sabvest Capital &#8211; FY 21 &#8211; Great Performance with More to Come"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: SBP \u2013 Market Cap: R2.4bn \u2013 Dividend Yield: 0.6%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-646e3baf-c4ed-4f69-acc5-3878de3bb3ac\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Sabvest-Capital_Results-Note_FY-21.pdf\">Sabvest Capital &#8211; Results Note &#8211; FY 21<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Sabvest-Capital_Results-Note_FY-21.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-646e3baf-c4ed-4f69-acc5-3878de3bb3ac\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>FY 21 Results: Strong NAV growth, large hike in dividend<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Sabvest\u2019s FY 21 Net Asset Value (NAV) per share grew by +26% y\/y to 9371cps (FY 20: 7444cps), adding to the Group\u2019s fantastic track record as it has compounded NAV per share (excluding dividends) at +16.9% CAGR for a decade &amp; a half!<\/li><li>Updating this NAV (keeping unlisted valuations flat), we see the current share as trading at a c.37% discount. This is despite JSE-listed HoldCo\u2019s average discount-to-NAV being c.30%, <em>and <\/em>despite most of these other HoldCo\u2019s having a <em>worse<\/em> track record than Sabvest. Using this peer-average discount, Sabvest shares should be trading closer to 7000cps.<\/li><li>Sabvest hiked its dividend to 75cps (FY 20: 25cps) as its balance sheet remains comfortably capitalized.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Thoughts: \u201cQuality\u201d growth in NAV, more likely to come\u2026<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>As most of Sabvest\u2019s investments are unlisted (c.86% of NAV), it is important to emphasise that the growth in NAV is <em>not<\/em> due to rising valuation multiples (all valuation multiples are flat from FY 20). The growth in NAV was driven by <em>earnings<\/em> growth &amp;, therefore, we consider it \u201cquality growth\u201d.<\/li><li>As investee companies are trading at-or-<em>better<\/em> than 2019 pre-COVID levels, we expect continuing NAV growth in FY 22E.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Valuation, 12m TP &amp; Implied Return: Lots of value available<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Updating the Group\u2019s NAV for the latest market prices &amp; taking out our present valued \u201cHoldCo discount\u201d, we arrive at defendable (post-discount) fair value for Sabvest Capital shares of 7487cps (previously: 6826cps) or +19% <em>higher<\/em> than the current share price.<\/li><li>Rolling this fair value forward at our Cost of Equity, we see the Group\u2019s 12m TP as 8825cps (previously: 8000cps) with an implied return of +40%.<\/li><li>All these measures <em>exclude<\/em> the potential upside from <a href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=345\">the ARB Holdings delisting, Apex\u2019s Ascendis Medical deal<\/a> &amp; any Rand weakness going forward that will lift hard currency valuations.<\/li><li>Refer to our <a href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=273\">Initiation of Coverage<\/a> for more background.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-48b37244-a70e-45f5-8c37-5af5156517d9\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Sabvest-Capital_Results-Note_FY-21.pdf\">Sabvest Capital &#8211; Results Note &#8211; FY 21<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/03\/Sabvest-Capital_Results-Note_FY-21.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-48b37244-a70e-45f5-8c37-5af5156517d9\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: SBP \u2013 Market Cap: R2.4bn \u2013 Dividend Yield: 0.6% FY 21 Results: Strong NAV growth, large hike in dividend Sabvest\u2019s FY 21 Net Asset Value (NAV) per share grew by +26% y\/y to 9371cps (FY 20: 7444cps), adding to the Group\u2019s fantastic track record as it has compounded NAV per share (excluding dividends) [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[117],"tags":[13,15,60,118,140,20,30,16],"class_list":["post-358","post","type-post","status-publish","format-standard","hentry","category-sabvest_capital","tag-equity-research","tag-jse","tag-research","tag-sabvest","tag-sabvest-capital","tag-small-cap","tag-small-caps","tag-south-africa"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=358"}],"version-history":[{"count":1,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/358\/revisions"}],"predecessor-version":[{"id":360,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/358\/revisions\/360"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}