Whitestone Group A Small Stone With The Potential To Become A Large Rock

Whitestone is a relatively new/young holding company that is listed on the Euronext Brussels and that aims to provide a niche exposure to investments in small and medium sized businesses across select European countries. Whitestone's portfolio is divided into 4 sub-portfolios namely ‘Financial Services', 'Industrial', 'Technology' and ‘Environmental'. Over the short to medium-term, Whitestone's performance will hinge on the performance of Gold & Forex International (GFI) as this single stake makes up approximately 45.0% of Whitestone's portfolio. GFI plays an important role in the portfolio as it should insulate (to an extent) Whitestone's portfolio from overall market volatility. Management has a good track record, comes from a diverse background and is looking to expand the portfolio over the medium-term. Our SOTP model indicates a target equity value (TEV) of €15.2ps and after having applied a 10.0% group-level illiquidity discount, we initiate coverage with a BUY rating & €13.7 TP implying a 31.7% upside.