REG - Symphony Int Hdgs - Shareholder Update

Symphony International HoldingsAnnouncement

07/06/2022 07:00

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RNS Number : 8903N  Symphony International Holdings Ltd  07 June 2022

Symphony International Holdings Limited ("Symphony or the "Company")

 

7 June 2022

 

Dear Shareholders,

 

·    Symphony International Holdings Limited's ("Symphony" or the
"Company") unaudited Net Asset Value ("NAV") at 31 March 2022 was
US$479,975,896 and NAV per share was US$0.9350. This compares to NAV and NAV
per share at 31 December 2021 of US$488,752,262 and US$0.9521, respectively.
The decrease of 1.80% quarter over quarter  in NAV is due to a decline in the
value of unlisted investments, particularly in the lifestyle, logistics and
education segments, which was partially offset by increase in the value in
hospitality and new economy segments.

·    Symphony's share price continued to trade at a discount to NAV. At 31
March 2021, Symphony's share price was US$0.41, representing a discount to NAV
per share of 56.1%. This compares to a share price discount to NAV of 56.9% at
31 December 2021.

 

We would like to highlight some of the key developments in our portfolio
companies during the quarter:

 

·    Minor International Public Company Limited ("MINT") continued its
positive trajectory during the quarter. The company's core EBITDA for hotel
operations returned to positive territory. The management is confident of
delivering stronger performance during the next few quarters, which reflects
the global turnaround in tourism

·    ASG Hospitals Private Limited ("ASG") saw revenue and adjusted EBITDA
for the 12-month period ended 31 March 2022 increase by 99.5% and 205.1% year
over year, respectively. Following the approval by creditors to acquire Vasan
Health Care Private Limited through the National Company Law Tribunal process
in February 2022, ASG is in discussions to raise additional capital

·    Soothe Healthcare Private Limited ("Soothe") sales for the 3-month
period ending 31 March 2022 were 73.4% higher than the same period a year
earlier. The growth has been driven by strong sales of diapers and also Paree
sanitary products, which achieved the highest ever monthly sales in March
2022. In May 2022, all the institutional investors and one HNWI investor in
Soothe completed a bridge financing round

·    The Liaigre Group ("Liaigre") continued to see strong growth in its
order book at the end of April 2022. However, despite the strong order book,
sales have lagged due to factory and shipment delays and the inability to make
deliveries in China due to Covid-related lockdowns

·    The ITL group continued to see strong performance due to
extraordinary profits being generated from dislocations in the aviation
logistics market segment.

·    August Jewellery Pvt. Ltd. ("Melorra") had a positive quarter with
net revenues growing 13.2% quarter on quarter and 162.2% year on year. For the
financial year ending March 31(st) 2022 the company grew net revenues by 465%
year on year. The company successfully raised US$ 15.0 million in a new round
of financing

·    House of Kieraya ("HOK") reported a 47.8% increase in realized
revenues year on year while only growing 4.2% quarter on quarter. The company
has increased prices across the portfolio of offerings and has undertaken cost
restructuring across operations, marketing and human resources which has
enabled the company to improve cash flows

·    Meesho, Inc. ("Meesho") saw its orders increase 470% year on year to
exceed 200 million in the first quarter. The Monthly Active Users ("MAU"s)
crossed 100 million for the first time in March; this is 100x growth from
January 2019 where MAUs were only 1 million. Meesho continues to be the most
downloaded app on the Google play store in March 2022

 

 

 

 

MARKET OVERVIEW AND OUTLOOK

The global economy is facing a combination of slowing growth and rising
inflation that is being fuelled by the war in Ukraine, covid-related lockdowns
in China and other global supply chain disruptions. In response to the higher
inflationary pressures, central banks in the U.S., Europe and the U.K. have
adopted increasingly hawkish monetary policies, which has dampened growth
expectations and impacted values across asset classes. Due to all these
developments, the International Monetary Fund's World Economic Outlook ("WEO")
reduced the projection for world economic growth in 2022 to 3.6 per cent or
1.3 percentage points below the October 2021 forecast.

In India, the Reserve Bank of India ("RBI"), in an off-cycle meeting on May 4,
raised the repo rate by 40 basis points to 4.40 per cent with immediate
effect, as a result of rising inflation due to high global oil and food
prices. Meanwhile, Morgan Stanley has pared India's growth forecast for FY23
to 7.6 per cent from 7.9 per cent, estimated earlier, while lowering FY24
forecasts to 6.7 per cent from 7.0 per cent. Morgan Stanley said that they
expect both inflation and the current account deficit to deteriorate, and
anticipate that the Consumer Price Index ("CPI") inflation will remain above
6.0 per cent through October 2022 while commodity price pressures will lead to
widening of the current account deficit to a 10-year high of 3.3 per cent of
GDP in 2023 financial year. Although we do not expect higher inflation to have
a material effect on our investee companies, the full impact is not fully
quantifiable.

 

In Thailand, the Finance Ministry trimmed its forecast for 2022 GDP growth to
3.5 per cent from 4.0 per cent. It also raised the headline inflation forecast
for the year to 5.0 per cent from 1.9 per cent. Thailand's Finance Ministry
sees the recovery being supported by local spending and an expected rebound in
tourism, but there are risks related to market volatility, high oil prices,
supply disruptions and a fragile labour market. Nevertheless, the opening of
Thailand to foreign travellers  and reduced covid-related restrictions should
benefit our investee companies, particularly Minor International Pcl
("MINT").

In Vietnam  the General Statistics Office released Q1FY22 data showing the
economy had grown by 5.0 per cent in the quarter, down from 5.2 per cent in
Q4FY21. Vietnam opened its borders last year following stringent pandemic
restrictions. Despite a high number of Covid-19 cases previously, a high
vaccine rollout has kept serious illness and deaths low and factories have
been allowed to remain open. The IMF has estimated Vietnam's GDP will grow by
6.0 per cent in 2022  down from 6.6 per cent, while inflation could reach 3.9
per cent by the end of the year. The IMF indicated that risks for Vietnam
include geopolitical tensions due to the Ukraine war, a slowing of China's
economy and developments in the real estate and corporate bond markets.
Although Symphony's primary investment in this geography, Indo Trans Logistics
Corporation ("ITL"), continues to benefit from economic growth in Vietnam and
dislocations in the aviation logistics segment, management expect growth to
slow and normalise over the course of the year.

COMPANY UPDATE

During the quarter, Symphony completed follow-on investments in Kieraya
Furnishing Solutions Private Limited ("Furlenco") and WCIB International Co.
Ltd. ("WCIB") and made a partial exit of MINT shares. Our portfolio continues
to show strong performance. Noteworthy events include ASG Hospitals Private
Limited's successful bid for Vasan Eye Care being approved by the National
Company Law Tribunal ("NCLT") and Soothe Healthcare Private Limited launching
a state of the art manufacturing facility which will double its capacity, in
Noida, India. We continue to work closely with our investee companies to make
sure they are adequately capitalised as they make strategic decisions for the
next phase of growth.

Symphony's listed investments accounted for 16.6% of NAV at 31 March 2022 (or
US$0.1550 per share), which compares to 13.9% of NAV (or US$0.1324 per share)
at 31 December 2021. The percentage change is predominantly due to an increase
in share price of Minor International Public Company Limited ("MINT") by 16.7%
during the quarter.

The value of Symphony's unlisted investments (including property) comprised a
further 86.7% of Symphony's NAV (or US$0.8106 per share), which compares to
88.2% (or US$0.8399 per share) at 31 December 2021. The percentage change is
predominantly due to the  decrease in value of ITL and CHANINTR during the
quarter, an appreciation in the Thai baht and other movements in the value of
unlisted investments.

Temporary investments accounted for (3.3%) of NAV (or negative US$0.0306 per
share), which compares to (2.1%) of NAV (or negative US$0.0203 per share) per
share at 31 December 2021. The percentage change is due to follow on
investments and expenses that were partially offset by proceeds from the MINT
share sales.

Symphony's share price continued to trade at a discount to NAV. At  31 March
2022, Symphony's share price was US$0.41, representing a discount to NAV per
share of 56.1%. This compares to a share price discount to NAV of 56.9% at 31
December 2021.

PORTFOLIO DEVELOPMENTS

HOSPITALITY

 

Minor International Public Company Limited ("MINT") is one of the largest
hospitality and restaurant companies in the Asia Pacific region. MINT is a
hotel owner, operator and investor with a portfolio of over 520 hotels under
the Anantara, Avani, Oaks, Tivoli, NH Collection, NH Hotels, nhow, Elewana,
Marriott, Four Seasons, St. Regis, Radission Blu and Minor International
brands in 56 countries across Asia Pacific, the Middle East, Africa, the
Indian Ocean, Europe, South and North America. MINT is also one of Asia's
largest restaurant companies with over 2,400 outlets system-wide in 23
countries under The Pizza Company, The Coffee Club, Benihana, Swensen's,
Sizzler, Dairy Queen, Burger King, Riverside, Thai Express, Coffee Journey and
Bonchon. MINT is one of Thailand's largest distributors of lifestyle brands
and contract manufacturers. Its brands include Anello, BergHOFF, Bodum,
Bossini, Charles & Keith, Esprit, Joseph Joseph, Radley, Zwilling J.A.
Henckels and Minor Smart Kids.

 

Update: MINT reported its first quarter 2022 financial results, posting a
significant increase in core EBITDA of more that 5 times yoy to THB 2.7
billion from THB 0.5 billion in the same period last year, driven by the
performance of all three business units. Notably, core EBITDA for MINT's hotel
operations returned to positive territory, while core EBITDA for its
restaurant and lifestyle businesses remained positive and are expected to
continue to improve. Mr. Dillip Rajakarier, Group CEO of MINT commented, "I am
excited to share that MINT continues its positive trajectory to achieve
pre-pandemic business performance. To highlight, MINT achieved April 2022
hotel occupancies of 70%-90% for Rome, Barcelona, Berlin, Amsterdam and
Madrid, all of which are key cities of our hotel business. Coupled with our
hotel forward booking foresight and our strong restaurant platforms, I am
confident that MINT will deliver strong Q2, Q3 and Q4 profit performance,
reflective of global tourism turnaround post-pandemic."

 

Minor Hotels recovered strongly across all regions with core EBITDA turning
positive to THB 1.5 billion from core loss of THB 0.6 billion in Q1FY21, while
the bottom line core loss was significantly lower at THB 3.7 billion in Q1FY22
compared with a core loss of THB 5.3 billion in Q1FY21. This yoy improvement
was attributable to stronger trends especially in Europe, which saw stronger
demand from both leisure and corporate segments; in Thailand the relaxation of
the Test & Go scheme has resulted in  an increase in international
tourist arrivals, while sustained domestic tourism helped contribute to a
rebound in Thailand hotels' performance.

 

Minor Food Q1FY22 EBITDA grew by 8% yoy to THB 1.2 billion and core profit
remained in positive territory due to strong growth of the Thailand hub and in
spite of Covid-19 related lockdowns in China. Restaurants in Thailand showed
improving trends with positive bottom-line growth from increasing traffic in
all sales channels, particularly the dine-in business following the removal of
government restrictions on operating hours and seat distancing. In the
quarter, all of its brands in Thailand achieved positive same-store-sales
growth and put effort into improving customer satisfaction, dine-in experience
and service quality through staff training programs.

 

MINT's liquidity position was strong with THB 20 billion of available cash and
THB 32 billion of unutilized credit facilities as at the end of April 2022. In
terms of leverage ratios, MINT's net interest bearing debt to equity ratio
stood at 1.51x, well below MINT's debt covenant of 1.75x. MINT has secured a
debt covenant waiver to the end of 2022. Additionally Fitch Ratings upgraded
NH Hotels rating from B- to B and revised the outlook from negative to stable.
The rating reflects NH Hotel Group's ongoing business recovery from the
expected improvement and higher predictability of global travel, as well as
improved liquidity, supported by debt refinancing and asset disposals in 2021.

 

During the quarter, the value of Symphony's investment in MINT increased from
US$ 68.0 million at 31 December 2021 to US$ 79.5 million at 31 March 2022,
which includes proceeds receivable related to the sale of approximately two
million MINT shares. The change in value is predominantly due to an increase
in MINT's share price by 16.7%.

 

LIFESTYLE/ REAL ESTATE

Minuet Limited ("Minuet"): is a joint venture between Symphony and an
established Thai partner. Symphony has a direct 49% interest in the venture,
which owns a large piece of land located in close proximity to central
Bangkok, Thailand. As at 31 March 2022, Minuet held approximately 29 hectares
of land. Over the years land prices in this area have appreciated steadily and
we have managed to sell several parcels of land at progressively higher prices
to local developers who have built successful developments and have come back
for more land. Judging from the rate of urbanization in the area, we are
confident that this asset will continue to appreciate as in the past.

Update: The value of Symphony's interest at 31 March 2022 was US$70.9 million
based on an independent third party valuation at 31 December 2021 and
adjusting for contracted land sales that will be completed in 2022. This
compares with US$69.8 million at 31 December 2021. The marginal change in
value is predominantly due to minor movements from the treatment of a minority
interest related to this investment.

Symphony's original investment in Minuet was $78.3 million. We have since
received a total of approximately US$60.5 million in distributions related to
partial sales of land by Minuet and we believe, that barring unforeseen
developments, the remaining land will enable us to realise proceeds in excess
of the current valuation.

SG Land Co. Ltd ("SG Land"): is a joint venture company that owns the
leasehold rights for two office buildings in downtown Bangkok - SG Tower and
Millenia Tower. The two buildings in SG Land's portfolio have high occupancy
rates and offer attractive rental yields. Symphony holds 49.9% of the venture.
Symphony originally invested a total of US$8.5 million for its interest in SG
Land and at 31 December 2021 had received aggregate net distributions of
approximately US$14.1 million.

Update: The value of SG Land as at 31 March 2022 was US$6.0 million based on
an independent third- party valuation 31 December 2021. The change in
valuation from US$5.8 million at 31 December 2021 is predominantly due to an
increase in cash on the balance sheet of SG Land that has not yet been offset
by the reduced lease term used to calculate fair value. We expect to continue
to receive attractive returns for the remaining duration of approximately 1.5
and 3.6 years for each of the tower leases, respectively. By the end of the
lease terms, Symphony is expected to realise an annualised return for this
investment in the low teens over a period of approximately 18 years.

 

Niseko Property Joint Venture ("Niseko JV"): Symphony invested in a property
development venture that acquired land in Niseko, Hokkaido, Japan. Symphony
has a 37.5% interest in this venture, which it acquired for a total investment
of US$10.2 million and has to date received distributions of US$16.7 million
from the partial sale of land held by the venture. The Niseko JV sold 31% of
the development site to Hanwha Hotels & Resorts with a further 39% to a
new joint venture company that is equally held and being co-developed by the
Niseko JV and Hanwha Hotels & Resorts. The Niseko JV continues to
effectively hold approximately 50% of the development site, of which one third
of the total site is held for future development and/or sale.

 

Update:  The project remains in the design and approval phase and is being
positioned as premium ski-in/ski-out landmark property in Hirafu Village.
Hanwha has commenced pre-sales on its wholly- owned development, which land
was acquired from the Niseko JV, and has achieved sale prices that are amongst
the highest in Niseko. The volume of property sales in the Niseko area has
been subdued due to travel restrictions on foreign tourists that has been in
place over the past two years. Japan has begun easing restrictions, which is
expected to benefit the property market in Japan.

Desaru Property Joint Venture in Malaysia: Symphony has a 49% interest in a
property joint venture in Malaysia with an entity owned by Khazanah, the
Sovereign Wealth fund of the Government of Malaysia. The joint venture has
developed a beachfront resort and will offer private villas for sale on the
south-eastern coast of Malaysia, branded and managed by One&Only Resorts
("O&O").

Update: The One&Only Desaru Coast Resort continued to see strong demand
during Q1 2022, which has been driven by easing restrictions, pent-up demand,
a delayed start to the 2022 school term and festivities around Chinese New
Year. The resort sold more higher room categories during the quarter, which
increased average room rates well above budget expectations. Although delayed,
Malaysia opened its borders for fully vaccinated International travellers
without the need for quarantine in May 2022, which is expected to drive
further demand for this property in the coming quarters.

Symphony invested an aggregate of US$58.8 million in the joint venture at 31
March 2022. The fair value on the same date was US$27.4 million and is based
on an independent third-party valuation at 31 December 2021. This compares to
US$29.0 million at 31 December 2021. The change in value is predominantly due
to an increase in liabilities related to the financing structure for the
development.

HEALTHCARE

 

ASG Hospitals Pvt Ltd ("ASG"): is a full-service eye- healthcare provider with
operations in India, Africa, and Nepal. ASG was co-founded in Rajasthan, India
in 2005 by Dr. Arun Singhvi and Dr. Shashank Gang. ASG's operations have since
grown to 46 clinics, which offer a full range of eye-healthcare services,
including outpatient consultation and a full suite of inpatient procedures
(cataract, retina surgeries, Lasik, glaucoma, cornea and other complicated eye
surgeries). ASG also operates an optical and pharmacy business, which is
located within clinics. Symphony invested in ASG in tranches through to July
2020 and subsequently acquired secondary shares in October 2021 that in
aggregate provided a 19.80% interest in the business.

 

Update: Organic growth and contributions from recent acquisitions continued to
drive ASG's business. Revenue and adjusted EBITDA for the 12-month period
ended 31 March 2022 increased by 99.5% and 205.1% year-over-year,
respectively. Newer clinics continued to see a ramp-up in operations while
management have been able to extract synergies from newly acquired facilities.
Following the approval by creditors to acquire Vasan Health Care Private
Limited through the National Company Law Tribunal process in February 2022,
ASG is in discussions to raise additional capital. The acquisition is subject
to regulatory approval and if successful, will add around 90 clinics mainly in
southern India to ASG's network.

Symphony's gross and net investment cost in ASG was US$20.7 million at 31
March 2022. The fair value of Symphony's investment on the same date was
US$22.9 million, which compares to US$24.7 million at 31 December 2021. The
change in value is due to a decline in the median enterprise value to earnings
before interest, tax, depreciation and amortisation ("EBITDA") multiple of
comparable companies used to value ASG and a depreciation in the Indian rupee
by 2%, which were partially offset by an increase in ASG's trailing 12-month
adjusted EBITDA.

Soothe Healthcare Private Limited ("Soothe"): was founded in 2012 and operates
within the fast-growing feminine hygiene and disposable diaper market segment
in India. Together with government initiatives to promote usage, growing
disposable income in India is expected to drive the market size for feminine
hygiene products over the coming decades. Symphony completed its investment in
Soothe in August 2019 and holds a significant minority position.

 

Update: Sales in the month and for the quarter ending March 2022 increased by
81.2% and 73.4% compared the same respective periods a year earlier.  The
growth has predominantly been driven by strong sales of diapers and also Paree
sanitary products, which achieved the highest ever monthly sales in March
2022. Soothe's management continue to focus on improving margins however, the
benefit of such initiatives during the last quarter were partially offset by
inflationary pressures. The manufacturing of diapers inhouse, which is
expected to improve margins significantly,  was also delayed from Q1 2022 to
early Q2 2022. In May 2022, all the institutional investors and one HNWI
investor in Soothe completed a bridge financing round. Symphony's
participation amounted to less than 1% of NAV.

Symphony's gross and net investment cost in Soothe was US$8.9 million at 31
March 2022. The fair value of Symphony's investment on the same date was
US$27.0 million, which compares to US$27.9 million at 31 December 2021. The
movement in value is due to changes in various inputs to an option pricing
model used to value this business. Subsequent to 31 March 2022, Symphony
participated in a bridge investment round with other investors. The size of
Symphony's investment was less than 1% of NAV.

LIFESTYLE

Liaigre Group ("Liaigre"): In May 2016 Symphony acquired, as part of a
consortium, Financier CL SAS, the holding company of the Liaigre Group
("Liaigre"). The Liaigre brand is synonymous with discreet luxury and has
become one of the most sought-after luxury furniture brands. Liaigre has a
strong intellectual property portfolio and offers a range of bespoke
furniture, lighting, fabric & leather, and accessories through a network
of 27 showrooms across Europe, the US and Asia. In addition, Liaigre also
undertakes exclusive interior architecture projects for select yachts, hotels,
restaurants and private residences.

Update:  Liaigre continued to achieve a strong level of orders across its
showrooms globally and also for its interior architecture business. Sales have
however lagged expectations due to delivery delays as a result of supply
chains impediments, manufacturing delays and covid-19 related lockdowns that
has impacted deliveries in China. Management is optimistic that the gap in
sales will be closed in the coming months.

Symphony's gross investment cost in Liaigre was US$79.7 million at 31 March
2022. The net cost on the same date, after deducting partial realisations, was
US$67.6 million. The fair value of Symphony's investment was US$33.6 million
at 31 March 2022. This compares to US$37.4 million at 31 December 2021. The
change in value is predominantly due to lower trailing 12-month EBITDA used to
derive fair value. The lower EBITDA is the result of lagging sales due to the
delay in deliveries explained above.

CHANINTR ("Chanintr"): is a luxury lifestyle company, based in Thailand, which
primarily sells several high-end U.S. and European furniture and household
accessory brands. The current portfolio of furniture brands includes Christian
Liaigre, Barbara Barry, Baker, Herman Miller & Minotti. In addition
Chanintr also sells Bulthaup kitchens, Puiforcat flatware, and St. Louis
crystal. It also provides Furniture, Fixtures & Equipment solutions for
various real estate and hotel projects. Chanintr also has the franchise to
operate the Clinton Street Baking Company ("CSB") F&B outlets in selected
Asian markets. In 2019, Chanintr launched a new program called Chanintr
Residences which will showcase custom-designed luxury residences as turnkey
projects.

Update:  In Q1 2022 CHANINTR saw a 55% yoy increase in sales closed while
sales recorded declined by 20% yoy. The company continues to see strong demand
and hence sales closed continues to perform well; however, sales recorded
declined as a large number of converted sales of sold inventory was recognized
in Q4 FY21. The company has also successfully launched Chanintr + which is
involved in warehouse operations. This business has signed an agreement with
DHL WMS. The company has also decided to exit the Clinton Street Baking
Company restaurant business in Singapore.

 

Wine Connection Group ("WCG"): At the end of April 2014, Symphony invested in
the Wine Connection Group ("WCG"), Southeast Asia's leading wine themed Food
and Beverage chain with approximately 70 outlets in Singapore, Thailand,
Malaysia and South Korea.

 

Update: In Q1FY22 Thailand was able to operate without restrictions in all but
1-2 locations resulting in a revenue growth of 50.2% yoy and + 21.8% Same
Store Sales Growth ("SSSG"). Singapore, however, was faced with Covid-19
restrictions and labour shortages. In this environment Singapore Q1FY22
revenues grew 10.8% yoy. The Wine Retail business remains strong in Thailand
with revenues growing 23.1% yoy (16.4% SSSG), however this segment slowed in
Singapore with Wine Retail revenues growing 0.7%.

 

EDUCATION

WCIB International Co. Ltd. ("WCIB"): In January 2017, Symphony entered into
a joint venture, WCIB International Co. Ltd. ("WCIB"), that developed and
operates Wellington College International Bangkok, the fifth international
addition to the Wellington College family of schools from the UK. Symphony's
investment was made by way of a combination of an injection of a portion of
the land owned by Minuet, in exchange for equity, and some cash. WCIB operates
a co-educational school that will ultimately cater to over 1,500 students aged
2-18 years of age when all phases are fully complete. WCIB commenced
operations for the Primary school in August 2018 with inaugural students
attending Nursery to Year 6.

Update: Despite the record level of admission enquiries, the continuing
disruptions from the pandemic has led to a shortfall in student admissions.
Parents have been unwilling to transfer their children due to risks of
extended remote learning (as was the case during the last term), which has led
to an approximate 3% lower number of students enrolled than expected for the
summer term. Management are optimistic that the number of expected new
students for the next academic year will be achieved based on the current
level of interest. The school is expected to breakeven next academic year.
As mentioned in the 31 December 2021 update, Symphony made a follow-on
investment in WCIB in Q1 2022 that amounted to less than 1% of NAV.

Creative Technology Solutions DMCC ("CTS"): Creative Technology Solutions DMCC
("CTS") is a UAE-based company that provides technology solutions to K12
schools in the UAE and the Kingdom of Saudi Arabia ("KSA"). The company was
founded in 2013 to provide customized IT solutions to the education sector,
including hardware, software and training. Symphony made its investment in CTS
in June 2019.

Update: CTS sales in 1Q22 grew by 16.2% compared to the same period a year
earlier. The growth in revenue is predominantly due to existing mandates with
the Abu Dhabi Education Counsel ("ADEK"). Management continue to focus on
rebuilding K12 and growing the higher education businesses to further
diversify revenue streams.

LOGISTICS

Indo Trans Logistics Corporation ("ITL"): was founded in 2000 as a
freight-forwarding company and has since grown to become Vietnam's largest
independent integrated logistics company with a network that is spread across
Vietnam, Cambodia, Laos, Myanmar, and Thailand. ITL has grown to national
champion status in Vietnam with over 2,000 employees across its business units
and joint ventures. ITL's strategic plans include supporting small and medium
enterprises in Vietnam and across the Indochina region. Symphony bought out
the shares that had originally been held by Singpost, the Singapore Post
office, at a cost of $42.6 million for a roughly 28.6% interest. Following a
subsequent issue of shares and share buyback by ITL, Symphony's interest is
27.7%

Shortly after completing the investment, Symphony assisted ITL in arranging a
financing package from the International Finance Corporation ("IFC"), which
enabled ITL to acquire an additional 55% of a port operator, South Logistics
Joint Stock Company ("SOTRANS"), in which it already held an approximate 42%
interest. The acquisition of SOTRANS has enhanced the valuation of ITL through
the consolidation of its results and, in the longer term, the development
& realization of its significant real estate holdings.

Update: The ITL group continued to see strong performance due to
extraordinary profits being generated from dislocations in the aviation
logistics market segment. The management team is focused on enhancing its
technology infrastructure and making new investments in port assets, logistics
parks, delivery fleets and new verticals, such as cold chain, that will
continue to add value over the medium to long-term.

Symphony's gross and net investment cost related to ITL at 31 March 2022 was
US$42.6 and US$42.1 million, respectively. The fair value for Symphony's
interest in ITL at 31 March 2022 was US$138.7 million. The change in value
from US$144.0 million at 31 December 2021 is due to a slight revision in the
forecast for one of the segments of ITL's business.

NEW ECONOMY

 

Smarten Spaces Pte. Ltd. ("Smarten"):  In November 2019, Symphony invested in
Smarten Spaces Pte. Ltd ("Smarten"), a Singapore based SaaS
(Software-as-a-Service) company that provides software solutions for space
management in commercial and industrial properties. Smarten was founded in
2017 by Dinesh Malkani and offers an end-to-end solution for workplace safety
and flexibility on a single technology platform, to help businesses navigate
the new hybrid workplace. The SaaS technology includes four key aspects -
Desk Management, Workforce Rostering, Demand & Supply, Expenses &
Chargeback, and Asset Management; bringing together key workforce and
workplace considerations for a future-ready solution.

 

Update: The easing of workplace restrictions and the adoption of the hybrid
workplace model has led to a significant increase in sales pipeline for the
company, currently working on more than 800 opportunities globally. The
company has seen increasing deal closures with significant traction in the US
market, which represents 45% of new revenue, as well as reduced deployment
timelines. This has led to a steady growth of the business with Q1 annualised
run-rate revenue ("ARR") increasing 58% yoy, total contract value ("TCV")
increasing 56% yoy, and customer count increasing 119% yoy. The company's
global presence currently spans deployments in over 100 cities across 20
countries.

 

August Jewellery Pvt. Ltd. ("Melorra"): Founded in January 2015 by Saroja
Yeramilli, Melorra is an omni-channel fast fashion Indian jewellery company
that introduces a fresh collection of 75 new designs every Friday, resulting
in over 300 new designs per month. Melorra adopts a minimal inventory model
that uses 3-D printing technology to achieve just-in-time manufacturing to
bring products to market efficiently. The company currently has 11 operational
experience centers across India.

Update:  Melorra had a positive quarter with net revenues growing 13.2% qoq
and 162.2% yoy. Melorra's ARR grew by 170% yoy as of March 2022. The company
also achieved a new milestone of crossing 20,000 orders in the month of March.
The company is witnessing strong growth from marketplace platforms including
Flipkart, Amazon, Reliance Ajio, Tata Cliq, where revenues have grown by 159%
yoy. The company believes this channel will continue to grow strongly in the
future. For the full year FY22 ending March 31(st) 2022 the Company grew net
revenues by 465% yoy. The company also successfully raised US$ 15.0 million
from a new round of financing.

 

Good Capital Partners and Good Capital Fund I ("Good Capital"): Good Capital
is majority owned by brothers Rohan and Arjun Malhotra who founded Investopad
in 2014 by investing their own capital into building substantial
infrastructure across India (Delhi, Bangalore and Gurgaon) and creating a
thriving ecosystem of technology startups. Symphony announced its investment
in July 2019, and has a stake in the General Partner, Good Capital Partners
("GCP") and its first fund, Good Capital Fund I ("GCF").

Update:  Good Capital had no capital calls in Q1FY22; the cumulatively
deployed capital is US$8.6 million across 12 core fund investments and 16
Bharat Founders Fund investments. The Fund recycled partial proceeds from the
simsim acquisition and has deployed approx. 65% of Fund I's investible
capital. The firm's portfolio additions include Zorp, a no-code platform that
helps businesses build applications for their mobile workforce; Oyela, a
company that enables micro-influencers to become entrepreneurs by monetizing
their audience on social platforms; Omah, a company that identifies
high-potential owner-operators of residential real estate and is building a
platform that enables retail investors to provide equity capital to own assets
alongside locally savvy owner-operators. The Fund made follow-on investments
in Buildwealth and Skillbee. Good Capital is in closing conversations with 1
new core investment and two follow-on rounds into portfolio companies.

Catbus Infolabs Private Limited ("Blowhorn"): In August 2021, Symphony
invested in Catbus Infolabs Private Limited, the owner of the Blowhorn
platform. Blowhorn is a same-day intra-city last-mile logistics provider
headquartered in Bangalore, India. The company provides seamless
transportation, warehousing, and a fully technologically integrated system to
manage the end-to-end supply chain process through an asset-light
transportation and distributed micro-warehousing network.

Update: Blowhorn has seen a steady growth of the business, fuelled by strong
tailwinds in the e-commerce space, increasing the annualised run-rate revenue
(ARR) by 36.4% YoY. The company is continuously expanding its presence and is
currently serving enterprise customers in over 100 cities across India
providing 250,000 deliveries daily.

House of Kieraya ("HOK"): HOK was founded in October 2012 by Ajith Karimpana
to be a residential furniture rental services business. The company is
headquartered in Bangalore, India. HOK has 4 brands at present, Furlenco is a
subscription-based furniture rental brand; Furbicle, a brand selling
refurbished & recycled furniture; Unlmtd, an annual furniture and
appliance subscription service and Prava, which sells high-end retail
furniture.

Update: The House of Kieraya ("HOK") saw realized revenues increase 47.8% yoy
while only growing 4.2% qoq. The company was raising additional capital during
the quarter to enable them to procure furniture assets and hence the growth in
the quarter was muted. The company expects to resume the growth trajectory in
the next quarter. The company has increased prices across the portfolio of
offerings and has undertaken cost restructuring across operations, marketing
and human resources which has enabled the company to improve cash flows.

 

Meesho, Inc ("Meesho"): Meesho, founded in March 2016 in Bangalore, India, is
a social e-commerce platform for micro-entrepreneurs and Medium and Small
Enterprises ("MSME") to sell to the next 500 million Indians coming online.
Vidit Aatrey ("VA"), is the Founder and CEO of the Company and his co-founder
is Sanjeev Barnwal ("SB"). Meesho aims to enable small businesses, including
individual entrepreneurs, to succeed online by bringing a range of products
and new customers onto the Meesho platform. Meesho started as a
reseller-focused platform enabling millions to sell online and has now become
a single ecosystem connecting sellers to consumers and entrepreneurs.

 

Given the size and level of interest in this company's latest funding round,
Symphony would not have been able to receive an allocation to invest. However,
because of our investment in and relationship with Good Capital, who's
founders were angel investors in Meesho, we were able to get an allocation in
an otherwise oversubscribed round.

 

Update: During the first quarter of 2022 Meesho saw its orders increase 470%
yoy to exceed 200 million. The Monthly Active Users ("MAU"s) crossed 100
million for the first time in March; this is 100x growth from January 2019
where MAUs were only 1 million. Monthly Transacting Users ("MTU"s) reached
35.2 million, which is a 20% increase over the last high achieved in October
2021, during India's festive Diwali season. The company has increased their
engineering team strength from 135 in January 2021 to 360 in March 2022.
Spontaneus Recall Amongst Customers ("SPONT") has increased by 2.5x since
December 2021 driven by increasing user engagement. The company continues to
have a strong hold in fashion categories, with a view to be the horizontal
ecommerce player of choice for Tier 2+ consumers with expansion into
Non-Fashion such as electronics, personal care and footwear.

 

SolarSquare Energy Private Limited ("Solar Square"): Solar Square was founded
in 2015 by Neeraj Jain and Nikhil Nahar. They have since been joined by Shreya
Mishra to refocus the company on the consumer space. Solar Square is a rooftop
solar power company that focuses on residential homes, primarily standalone
houses, gated societies, and small commercial centres. The company aims to
make clean energy affordable and accessible and become the trusted brand in
the space

 

Update: Solar Square witnessed strong growth in the business in financial year
ending March 2022 over March 2021; number of home sales increased 257% yoy,
sales bookings increased 197% while the number of markets the company operates
in increased from 1 to 3. The company has 40% of new orders coming from
referrals, which given their market share makes them the leader in each market
they operate in. The company is currently focused on removing friction from
adoption of solar by executing one-day installations, providing point-of-sale
financing, and building upon the micro-entrepreneur led acquisition engine.

 

SUBSEQUENT EVENTS

·    Subsequent to 31 March 2022, Symphony completed a follow-on
investment in Soothe. The investment amounted to less than 1% of the Company's
NAV.

·    Subsequent to 31 March 2022, Symphony sold 5 million shares of MINT
that generated proceeds of approximately US$5 million.

For further information:

Symphony Asia Holdings Pte. Ltd.:

Anil Thadani
     +65 6536 6177

Rajgopal Rajkumar

Dealing codes

The ISIN number of the Ordinary Shares is VGG548121059, the SEDOL code is
B231M63 and the TIDM is SIHL.

The LEI number of the Company is 254900MQE84GV5DS6F03.

 

Notes:

NAV takes into account the fair value of unrealised investments. In accordance
with the valuation policies of the Company, real estate related investments
are valued by third parties on 30 June and 31 December each year. In addition
and in accordance with the Company's valuation policies, investments that have
been held for less than 12-months are held at cost unless there is evidence of
a diminution in the value of that investment. Although the investment manager
believes there not to be a diminution in the value of investments held for
less than 12- months, the Covid-19 pandemic has led to a significant increase
in economic uncertainty which is evidenced by more volatile asset prices and
currency exchange rates and therefore cost may not correspond to an
appropriate measure of fair value in the current environment.

 

IMPORTANT INFORMATION

A more detailed Shareholder Update is available on request from the Company
and can be accessed via www.symphonyasia.com (http://www.symphonyasia.com) .

THIS DOCUMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OTHER
JURISDICTION INTO WHICH THE PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
THESE MATERIALS DO NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR THE
SOLICITATION OF AN OFFER TO BUY OR ACQUIRE SECURITIES IN THE UNITED STATES OR
ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.
THE SECURITIES REFERRED TO IN THIS DOCUMENT HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES LAWS OF SUCH JURISDICTIONS AND MAY NOT BE
SOLD, RESOLD, TAKEN UP, TRANSFERRED, DELIVERED OR DISTRIBUTED, DIRECTLY OR
INDIRECTLY, WITHIN SUCH JURISDICTIONS.

NO REPRESENTATION OR WARRANTY IS MADE BY THE COMPANY OR ITS INVESTMENT MANAGER
AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS
DOCUMENT AND NO LIABILITY WILL BE ACCEPTED FOR ANY LOSS WHATSOEVER ARISING IN
CONNECTION WITH SUCH INFORMATION.

THIS DOCUMENT CONTAINS (OR MAY CONTAIN) CERTAIN FORWARD-LOOKING STATEMENTS
WITH RESPECT TO CERTAIN OF THE COMPANY'S CURRENT EXPECTATIONS AND PROJECTIONS
ABOUT FUTURE EVENTS. THESE STATEMENTS, WHICH SOMETIMES USE WORDS SUCH AS
"ANTICIPATE", "BELIEVE", "COULD", "ESTIMATE", "EXPECT", "INTEND", "MAY",
"PLAN", "POTENTIAL", "SHOULD", "WILL" AND "WOULD" OR THE NEGATIVE OF THOSE
TERMS OR OTHER COMPARABLE TERMINOLOGY, ARE BASED ON THE COMPANY'S BELIEFS,
ASSUMPTIONS AND EXPECTATIONS OF ITS FUTURE PERFORMANCE, TAKING INTO ACCOUNT
ALL INFORMATION CURRENTLY AVAILABLE TO IT AT THE DATE OF THIS DOCUMENT. THESE
BELIEFS, ASSUMPTIONS AND EXPECTATIONS CAN CHANGE AS A RESULT OF MANY POSSIBLE
EVENTS OR FACTORS, NOT ALL OF WHICH ARE KNOWN TO THE COMPANY AT THE DATE OF
THIS ANNOUNCEMENT OR ARE WITHIN ITS CONTROL. IF A CHANGE OCCURS, THE COMPANY'S
BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATIONS MAY VARY MATERIALLY
FROM THOSE EXPRESSED IN ITS FORWARD-LOOKING STATEMENTS. NEITHER THE COMPANY
NOR ITS INVESTMENT MANAGER UNDERTAKE TO UPDATE ANY SUCH FORWARD LOOKING
STATEMENTS

STATEMENTS CONTAINED IN THIS DOCUMENT REGARDING PAST TRENDS OR ACTIVITIES
SHOULD NOT BE TAKEN AS A REPRESENTATION THAT SUCH TRENDS OR ACTIVITIES WILL
CONTINUE IN THE FUTURE. THE INFORMATION CONTAINED IN THIS DOCUMENT IS SUBJECT
TO CHANGE WITHOUT NOTICE AND, EXCEPT AS REQUIRED BY APPLICABLE LAW, NEITHER
THE COMPANY NOR THE INVESTMENT MANAGER ASSUMES ANY RESPONSIBILITY OR
OBLIGATION TO UPDATE PUBLICLY OR REVIEW ANY OF THE FORWARD-LOOKING STATEMENTS
CONTAINED HEREIN. YOU SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE OF THIS ANNOUNCEMENT.

THIS DOCUMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN
INVITATION OR OFFER TO UNDERWRITE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE OR
DISPOSE OF ANY SECURITIES OF THE COMPANY IN ANY JURISDICTION. ALL INVESTMENTS
ARE SUBJECT TO RISK. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.
SHAREHOLDERS AND PROSPECTIVE INVESTORS ARE ADVISED TO SEEK EXPERT LEGAL,
FINANCIAL, TAX AND OTHER PROFESSIONAL ADVICE BEFORE MAKING ANY INVESTMENT
DECISIONS.

THIS DOCUMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES.
THE COMPANY'S SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED OR SOLD IN THE
UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION. THERE
WILL BE NO PUBLIC OFFER OF SECURITIES IN THE UNITED STATES.

NEITHER THE CONTENT OF THE COMPANY'S WEBSITE (OR ANY OTHER WEBSITE) NOR THE
CONTENT OF ANY WEBSITE ACCESSIBLE FROM HYPERLINKS ON THE COMPANY'S WEBSITE (OR
ANY OTHER WEBSITE) IS INCORPORATED INTO, OR FORMS PART OF, THIS DOCUMENT.

TO ENSURE THE COMPANY'S COMPLIANCE WITH SUB-SECTION 8(3)(A)(I) OF THE PRIVATE
INVESTMENT FUNDS REGULATIONS, 2019, THE DIRECTORS WILL KEEP THE FINANCIAL
SERVICES COMMISSION OF THE BRITISH VIRGIN ISLANDS INFORMED OF THE NUMBER OF
SHAREHOLDERS ON THE COMPANY'S REGISTER OF SHAREHOLDERS.

THE COMPANY AND THE INVESTMENT MANAGER ARE NOT ASSOCIATED OR AFFILIATED WITH
ANY OTHER FUND MANAGERS WHOSE NAMES INCLUDE "SYMPHONY", INCLUDING, WITHOUT
LIMITATION, SYMPHONY FINANCIAL PARTNERS CO., LTD.

End of Announcement

 

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