Fram Skandinavien AB (publ) publishes interim report Q4 2022
Significant events during the quarter
Fram Skandinavien continues to develop its portfolio and sharpens its new strategy
As of 31st of January 2023, the net asset value amounted to 301 mSEK (83 SEK per share), which was approximately +125% above the closing price of the Fram B share on the same day and represents an increase of +4% compared to the previous quarter.
Since the shift towards the new strategy focusing on investments and the arrival of the inhouse investment team, Fram has engaged in strengthening the profitability of the companies in its portfolio, improving capital efficiency and sharpening its investment readiness. Fram has the ambition to become one of the leading pure-play tech investment companies in the SEA region over the coming years.
The initial accumulation of a new position in a publicly listed tech company (Abaxx Technologies) was started early January 2023. This company is on a path to disrupt the commodity exchange industry by launching the first blockchain-based exchange and clearinghouse for LNG contracts in Singapore this year. The Abaxx management team, board and investor base come with unusually strong track records from the commodity trading industry.
As of the 31st of January 2023, the current portfolio of Fram consists of 8 holdings, of which 5 are private tech and 3 public tech companies. The total invested amount into these companies is 51 mSEK. The same holdings are presently valued at 264 mSEK, rendering a latent return multiple of 5.2x on the invested capital.
During Q4 2022, Carmudi has remodeled its business towards higher profitability, while EveHR, Dragonlend and Liven have stayed on track for their Q4 revenues.
Southeast Asia, as a key alternative to China, is recognized by investors for its high growth potential
2022 was a year full of nuances, dominated by global macro uncertainties and the continuously rising tech disruptions which could wholly reshape the world over the coming years.
Amidst the tumult, Southeast Asia (SEA) region has been having a great momentum by benefiting from the combination of Western companies’ shift of manufacturing capacity out of China and China’s growing demand post Covid. The SEA region also stands out as one of the fastest growing economies in the world, with +5% GDP growth in 2022 (ca. 2x higher than the global average). Vietnam is the fastest growing country in the region, with +8% GDP growth, and expecting the strongest investment inflows in the region over the next 3-5 years.
From the investment perspective, two trends are likely to guide investors’ behavior during 2023: stronger focus on companies’ fundamentals (as opposed to over-emphasizing revenue growth at all costs in the past) and higher pressure to deploy capital as SEA investors’ level of “dry powder” is now unusually high after 2022’s hesitancy to invest.
During 2022, in both public and private markets, a sharp decline in number of IPOs and other transactions was observed, especially during the second half of the year. However, the SEA region and tech still outperformed in terms of transaction activity level, on a relative basis.
Investors’ interest in the SEA region and its tech verticals still remains high and momentum in transactions and IPOs is expected to increase as both the region itself and China have opened up post Covid.
