Fram Skandinavien AB (publ) publishes interim report Q3 2022
Significant events during the quarter
Fram Skandinavien continues to focus on its new strategy
As of 31st of October 2022, the net asset value amounted to 297 mSEK (82 SEK per share), which was approximately +111% above the closing price of the Fram B share on the same day and represents a decrease of -6% compared to the previous quarter, driven by lowered listed peer group multiples for Carmudi.
The divestment of the IT Development business was completed by mid-July 2022. With this important cash event and structural improvement, Fram can now more clearly continue to operate as a pure play tech-focused investment company.
As another step to further focus the Company's core business on its investment activities, Hanh Mai joined as the new CEO of the Group in September 2022. Fram now has a dedicated investment team of 3 people, backed by Christopher Brinkeborn Beselin (Chairman), as well as a support team of 3 people.
The current portfolio of Fram consists of 8 holdings, in which a total amount of 54 mSEK has been invested to date. As of the 31st of October 2022, these holdings were valued at 267 mSEK, rendering a latent return multiple of 4.9x on the invested capital.
The most important company in the portfolio in terms of NAV as of 31st of October 2022 was Carmudi, representing nearly 58% of the total NAV, followed by EveHR at 18% and DragonLend at 8%. Carmudi has experienced strong growth during 2022, primarily driven by new developments on its car marketplace platform and business model, as well as post-pandemic acceleration in digital adaptation in Vietnam.
Positive outlook for the SEA region despite global turmoil
2022 has been a year of contrasts. Many parts of the economy and the region are rebounding forcefully as a result of the post-pandemic reopening as well as the increased digital adaptation that followed. On the other hand, worrying global macro trends are pulling down sentiment and growth, primarily in the EU and US.
In the midst of the global turmoil, Southeast Asia’s (SEA) economy remains relatively insulated from the volatility of the rest of the world, with a robust GDP growth (+5.2% 2022 forecast) and a strong digital economy (est. ca. 200 bnUSD in Gross Merchandise Value in 2022, growing +20% YoY).
Vietnam is the region’s fastest growing market, with the projected GDP growth of 7.5% in 2022 and 6.7% in 2023.
Tech investments in the SEA region continued to grow in deal value during H1 2022 while the number of deals remained constant. Early stage investments kept growing while later stage investments marked a downtrend driven by gloomy global stock and IPO markets.
Investors are more cautious in the short term because of global market uncertainties. The easy-money era has been replaced by the search for profitable business models and more reasonable valuations. However, the dry powder of the funds in the region remains significant (~15 bnUSD) and will continue to drive the investments throughout the downturn. In general, investors remain confident in the long term prospects of SEA and the attractiveness of its investment opportunities.
The report in its entirety is available on Fram^'s website: investors.fram.asia and attached to this press release.
