#98 - Portfolio Update Sep2023

TL;DR

Toughest month of the year so far, down 6.4%.

Performance update

Exchange rate contribution: -0.11%

Holdings

Highlights

Top contributors:

• $CPH.TO: the Approval for MOB-015 in the European Union has finally made its way into the stock price.
• $TVK.TO
• $6038.HK

Top detractors:

• $8Z3.F: a temporary blip, hopefully.
• $CXI.TO: a big position at the outset, down significantly.
• $DRM.TO: keeps drifting down.

Changes

Lots of movement this month, a lot of small new positions.

• New:
  • $DR.TO: seemed like a cheap one. I initially bought big but trimmed it afterwards. Not super exciting.
• Added:
  • $8Z3.F: added big time
  • $DRM.TO: added a bit
  • $B3.ST: added a bit
  • $STNE: sold $PAGS to add here
• Trimmed:
  • $WBD: I don’t understand it well and I already own $PARA
  • $PSK.TO: probably solid in the long run but won’t make me rich
• Exited:
  • $PAGS: $STNE seems to be fairing better and I used the loss on $PAGS to tax harvest
  • $LDB.MI: not as cheap as I thought (or as 8Z3.F)
  • $FISH.V: I don’t understand what Akiba is doing

Learnings

The market has pockets of stupidity. I shouldn’t have rushed into 8Z3.F.

Outlook

Tinybuild:

• MC: $21.5M
• Cash: $10M (they currently have $14M)
• EV: $11.5M

Assuming annual xGP of $19M, current EV/GP ~ 0.6.

Their investor presentation for 2023H1 is here.

Here’s the P&L and Cash Flow statements:

Cost of sales in H1 23 was $13.8M, out of $23.3M of revenue (gross profit = $9.5M).

Note: the COGS include an amount for the amortization of software development costs of released games, and from the cashflow statement, I think that amount is $7.3M.

For more details, the 2022 financials can be found here.

Exited $RX.V. I don’t know how they will grow in the future.