Sofina Newsletter 14: NAVps up 4.4% & A Cautiously Positive Outlook
During 1H FY24, Sofina's NAVps came in at €286.0, up 4.4% vs. €274.0 during FY23-end. The much awaited uptick in NAVps comes after 2 consecutive HY numbers that were flat or slightly declining. While the value of Sofina Growth remained flat, every other sub-portfolio contributed to the increase in NAVps. In particular, value of LT Min. stakes rose the most by ~14.0% to €3.2b. The strong performance across the portfolio was due to organic growth at portfolio companies, higher multiples, and stake in Groupe Petit Forestier being recorded at sale price. We think that the tide has started to turn for Sofina with investor sentiment much more positive at the moment, expected rate cuts to happen 2H FY24 across both US and Europe and the a palpable recovery in M&A activity. After having updated our model, we estimate NAVps and TEVps to be €291.5 and 301.8, implying a discount of 27.5% and 30.0% respectively. We stick to our BUY rating and €300.0 TP.SOFINA is an investment company whose portfolio consists of shareholdings in various companies. Co. manages a portfolio of long-term and short-term investments. Its portfolio comprises investments in companies which are active in sectors such as: Energy and Services (GDF Suez, Suez Environnement, bioMerieux and Exmar); Retail (Colruyt, Delhaize); Consumer goods (Danone, Rapala, B & W Group, and Chapoutier); Satellite operators (SES); Finance Companies (Eurazeo, Caledonia, Luxempart, RAB Capital); Industry (Petit Forestier, Landis + Gyr, Carbone Lorraine and Deceuninck) and Alternative assets (Private equity, Hedge funds).
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