REG - Symphony Int Hdgs - Shareholder Update

Symphony International HoldingsAnnouncement

19/06/2023 07:00

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RNS Number : 0539D  Symphony International Holdings Ltd  19 June 2023

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

 

19 June 2023

 

Dear Shareholders,

 

·    Symphony International Holdings Limited's ("Symphony" or the
"Company") unaudited Net Asset Value ("NAV") at 31 March 2023 was
US$457,196,831 and NAV per share was US$0.8906. This compares to NAV and NAV
per share at 31 December 2022 of US$496,685,868 and US$0.9675, respectively.
The decrease of 8.0% quarter over quarter in NAV is predominantly due to a
decrease in the value of Indo Trans Logistics Corporation ("ITL").

·    Symphony's share price continued to trade at a discount to NAV. At 31
March 2023, Symphony's share price was US$0.45, representing a discount to NAV
per share of 49.5%. This compares to a share price discount to NAV of 53.9% at
31 December 2022.

 

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

 

·    In 1QFY23, Minor International Public Company Limited ("MINT")
reported significantly improved financial results due to robust travel demand
and increased restaurant store traffic, together with the implementation of a
dynamic pricing strategy and the addition of new hotels and restaurants to
MINT's portfolio. Mr. Dillip Rajakarier, Group CEO of MINT, reiterated his
confidence in the Company's outlook and performance for the remainder of 2023,
underpinned by strongly positive global travel trends and MINT's dynamic brand
strategies for its restaurant business.

·    The ITL group faced increasing headwinds in Q1 2023. ITL's management
reported that Vietnam was particularly affected by a slowdown in exports,
which impacted key lines of business for the company. Symphony's agreement to
sell a small amount of shares, mentioned in earlier updates, completed in
April 2023. The gross and net sale consideration received was 5.5 times and
4.6 times Symphony's cost of shares sold, respectively.

·    ASG Hospitals Private Limited ("ASG") continued to expand operations
with the consolidation of Vasan Health Care Pvt Ltd in March 2023 that added
approximately 90 clinics to ASG's network taking the total number of clinics
to over 150. With greenfield and brownfield projects as well as M&A, ASG
has grown its revenue at a compounded annual growth rate of 46% for the past
three years. The group currently employs 450 doctors and 4,000 other employees
in 21 states in India, Nepal and Africa.

·    In January 2023 Symphony invested in Isprava Vesta Private Limited
("Isprava"), a company in the business of construction, designing and sale of
branded villas in non-urban markets in India such as Alibagh, Goa and Kasauli.
The company is also in the in the business of renting luxury holiday homes
under the brand name of "Lohono Stays" and includes both homes constructed and
sold by Isprava and third party homes in India and overseas.

·    Wine Connection Group ("WCG"): The sale of this business has been
completed. Certain earn-out thresholds have been met, which has increased the
expected sale proceeds that Symphony will receive over the coming months.

 

MARKET OVERVIEW AND OUTLOOK

The first quarter of 2023 saw a continuation of tight monetary policies, high
inflation and in the words of the IMF, 'geoeconomic fragmentation' with
Russia's war in Ukraine, and China's economic reopening. However, there are
signs now that inflation is slowing and there is a general expectation that
central banks may pause interest rate hikes. The unexpected failures of two
specialised regional banks in the United States in mid-March 2022 and the
collapse of confidence in Credit Suisse, a globally significant bank, have
roiled financial markets, with bank depositors and investors re-evaluating the
safety of their holdings and shifting away from institutions and investments
perceived as vulnerable.

A major positive change to this year's global economic outlook is China's
pro-growth policy shift late last year; these include easing pressures on the
real estate sector and boosting private business confidence. In addition,
pent-up demand following a three-year period of movement restrictions is
expected to have a positive impact on the economy. This is reflected in
China's economic data, which has broadly surprised on the upside, especially
household services consumption (food services sales surged in March 26% yoy)
and the housing sector (contraction eased to 5.8% in Q1 yoy compared to 10% in
December yoy). Chinese policymakers' official 2023 GDP goal of "around 5%" is
now seen as a floor rather than a ceiling by many market commentators.

India is set to become the second-fastest growing economy in the G20 in
FY2022-23, despite decelerating global demand and the tightening of monetary
policy to manage inflationary pressures. The Organisation for Economic
Cooperation and Development ("OECD") has projected that the GDP growth will
slow to 5.7% in FY2023-24 from 6.6% in FY2022-23, as exports and domestic
demand moderate. However, the Reserve Bank of India's ("RBI") Governor Mr.
Shantikanta Das said, he was "quite optimistic and fairly confident" that the
growth rate would be 6.5% in FY24 meaning that India will contribute 15% of
the world growth in the year, stressing that this is no mean achievement.

 

Thailand's economy expanded faster than expected in the first quarter,  as
revealed from the data from the National Economic and Social Development
Council ("NESDC"). This was helped by a rebound in private consumption and
tourism, with the return of Chinese visitors in recent months, helping boost
employment and domestic demand. GDP growth was 2.7% in the first quarter from
a year earlier and 1.9% for the year versus a forecast of 1.7%. Thailand kept
its forecast for foreign tourist arrivals in 2023 at 28 million versus 11
million in 2022; tourism typically accounts for 11%- 12% of GDP. Chinese
tourist arrivals, which constituted about 30% of total visitors before the
pandemic, are expected to reach one million per month starting in October this
year. Pre-pandemic 2019 saw a record of nearly 40 million foreign tourist
arrivals, who spent 1.9 trillion Thai baht (US$56.6 billion). The increase in
tourist arrivals should benefit our portfolio, particularly our investment in
Minor International Pcl ("MINT").

Vietnam's GDP growth rate moderated to a pace of 3.3% in the first quarter of
2023, after rapid GDP growth of 8.0% in 2022. Vietnam's manufacturing export
sector faced increasing headwinds due to slowing demand from the US and EU,
which are two key export markets accounting for over 40% of Vietnam's goods
exports. Vietnam's goods exports fell by 11.9% yoy in the first quarter of
2023. In addition, a government-led anti-graft campaign has also contributed
to slowing economic growth. Anti-corruption investigations have led to a
number of prosecutions and also resulted in significant delays for licence and
project approvals. This has impacted many businesses and brought a number
initiatives to a halt. However, Vietnam is expected to gradually resume its
growth trajectory in the medium-term, as the country is a key beneficiary of
the shift in global manufacturing supply chains from China. Symphony's
investment in Indo Tran Logistics Corporation ("ITL Logistics") will be
impacted in the near term from Vietnam's slowing economy, but is well
positioned to benefit from the country's long-term secular growth trends.

During the first quarter, Symphony completed a new investment in Isprava, a
luxury residential real estate developer in non-urban locations in India.

 

It is with profound sadness that we announce the unexpected passing of our
Independent Director and Audit Committee Chairman Mr. Rajiv Luthra. Mr. Luthra
was an invaluable asset to our organisation. His leadership, insight and
stewardship will be greatly missed.

 

 

 

 

 

 

COMPANY UPDATE

Symphony's listed investments accounted for 13.0% of NAV at 31 March 2023 (or
US$0.1154 per share), which compares to 13.2% of NAV (or US$0.1279 per share)
at 31 December 2022. The decrease is due to the sale of MINT shares and
warrants that was partially offset by an appreciation of 1.2% in the onshore
Thai baht.

The value of Symphony's unlisted investments (including property) comprised
88.6% of Symphony's NAV (or US$0.7890 per share), which compares to 86.8% (or
US$0.8398 per share) at 31 December 2022.

Temporary investments accounted for (1.55%) of NAV (or (US$0.0138) per share),
which compares to (0.02%) of NAV (or (US$0.0002) per share), per share at 31
December 2022.

Symphony's share price continued to trade at a significant discount to NAV. At
31 March 2023, Symphony's share price was US$0.45, representing a discount to
NAV per share of 49.5%. This compares to a share price discount to NAV of
53.9% at 31 December 2022.

PORTFOLIO DEVELOPMENTS

HOSPITALITY

 

Minor International Public Company Limited ("MINT"): is a global company
focused on three core businesses: hospitality, restaurants and lifestyle
brands distribution. MINT is a hotel owner, operator and investor with a
portfolio of over 530 hotels under the Anantara, Avani, Oaks, Tivoli, NH
Collection, NH, nhow, Elewana, Marriott, Four Seasons, St. Regis and Radisson
Blu 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 2,500 outlets system-wide in 24
countries under The Pizza Company, The Coffee Club, Riverside, Benihana, Thai
Express, Bonchon, Swensen's, Sizzler, Dairy Queen, Burger King, Coffee Journey
and GAGA brands, in addition to over 1,000 outlets of MINT's strategic
alliances (i.e. S&P and BreadTalk). MINT is one of Thailand's largest
distributors of lifestyle brands and contract manufacturers. Its brands
include Anello, BergHOFF, Bossini, Charles & Keith, Joseph Joseph,
Zwilling J.A. Henckels and Minor Smart Kids.

 

Company Update:  In 1QFY23, MINT reported significantly improved financial
results with core EBITDA more than doubling yoy to Baht 6.9 billion from Baht
2.7 billion in the same period last year (a 150% y-y increase). The increase
was due to robust travel demand and increased restaurant store traffic,
together with the implementation of a dynamic pricing strategy and the
addition of new hotels and restaurants to MINT's portfolio. Although MINT
reported a core loss of Baht 647 million in 1QFY23, primarily due to expected
and budgeted European business seasonality, it was a significant improvement
from a core loss of Baht 3.6 billion in 1QFY22.

 

In 1QFY23, Minor Hotels' business experienced a strong operational recovery,
resulting in a 76% yoy growth in total core revenue. The system-wide RevPar
for the entire portfolio in 1QFY23

increased significantly by 61% yoy, exceeding pre-pandemic levels by 12%.
Continued increase in demand and average room rates drove strong business
growth yoy, led by hotels in Thailand, Europe, Latin America and Australia.

 

Minor Food's 1QFY23 total core restaurant revenue grew by 21% yoy, driven by
operational improvement of all hubs, together with a turnaround of share of
profit from joint ventures. The total-system-sales increased by 19.9% yoy.
This included the sales growth in China which has turned positive and grew by
19.8% in 1QFY23 yoy following the easing of local restrictions since December
2022 and country reopening in January 2023. All hubs reported positive
total-system-sales growth from higher traffic and the addition of new outlets.

 

Despite a high interest rate environment, MINT remains active in balance sheet
management, reducing its net leverage ratio to 0.94 at the end of 1QFY23 from
1.17x as at end 2022 through successful refinancing initiatives, including the
issuance of Baht 10.5 billion unsubordinated perpetual debentures in the
quarter.

 

Mr. Dillip Rajakarier, Group CEO of MINT, reiterated his confidence in the
Company's outlook and performance for the remainder of 2023, underpinned by
strongly positive global travel trends and MINT's dynamic brand strategies for
its restaurant business.

 

During the quarter, the value of Symphony's investment in MINT decreased from
US$ 65.7 million at 31 December 2022 to US$ 59.2 million at 31 March 2023. The
change in value is predominantly due to the sale of  6.3 million shares and
6.1 million warrants (generating US$ 7.8 million in net proceeds) that was
partially offset by a 1.2% appreciation in the Thai baht. Subsequent to 31
March 2023 Symphony sold additional warrants in MINT that generated US$1.1
million in net proceeds.

 

LIFESTYLE/ REAL ESTATE

Minuet Limited ("Minuet"): is a joint venture between the Company and a Thai
partner. The Company has a direct 49% interest in the venture and is
considering several development and/or sale options for the land owned by
Minuet, which is located in close proximity to central Bangkok, Thailand.
Since the original investment, several parcels of land have been sold to local
developers and a large piece has been used to develop the Wellington
International School in Bangkok. As at 31 March 2023 Minuet held approximately
186.75 rai (29.88 hectares) of land in Bangkok, Thailand.

Company Update: The value of Symphony's interest at 31 March 2023 was US$61.9
million that compares to US$61.1 million at 31 December 2022, which is based
on third party valuation. The change in value is predominantly due to an
appreciation in the Thai baht by 1.3% and other minor movements in the assets
and liabilities of Minuet.

Symphony's original investment in Minuet was $78.3 million. Total distribution
receipts from partial sales of land have amounted to US$65.2 million. We
believe, that barring unforeseen developments, and given the development
activity in the area, the remaining land will enable us to realise proceeds
well in excess of the current valuation.

SG Land Co. Ltd ("SG Land"): SIHL acquired approximately 50% of the
outstanding shares of SG Land in a JV with Thai Factory Development ("TFD").
SG Land owns the leasehold rights to SG Tower and Millenia Tower, which are
office buildings in central Bangkok, Thailand. The leases for the two
buildings expire at the end of October 2023 and November 2025, respectively.
As the end of the lease approaches, occupancy levels are expected to decline
as tenant leases run-off.

Company Update: SG Land continues to make regular distributions to its
shareholders. In April 2023,  Symphony received net distribution payment of
US$0.5 million. We expect to continue to receive distributions from this
investment through to the expiry of the leases.

As the building leases approach expiry, there has been a faster than expected
decline in occupancy levels, which has led to a revision of our total expected
return from this investment. Based on the latest information, we anticipate
that this investment will give us a return of approximately 8.5% per annum
over a period of approximately 16 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, 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 the Hanwha Group. The Niseko JV continues to effectively hold
approximately 50% of the total site, which includes a 100% interest in one
parcel of land which is being held for future development and/or sale.

Company Update: The 2022/2023 ski season in Niseko has been strong following
the removal of restrictions on foreign tourist arrivals however, visitor
volumes remain below pre-pandemic levels. Property sales have also rebounded,
partially been driven by buyers taking advantage of a weaker yen. There is an
expectation that the market environment will continue to improve.

Desaru Property Joint Venture in Malaysia: The Company has a 49% interest in
a property joint venture in Malaysia with an affiliate of Destination Resorts
and Hotels Sdn Bhd, a hotel and destination resort investment subsidiary of
Khazanah Nasional Berhad, the investment arm of the Government of Malaysia.
The joint venture has developed a beachfront resort with private villas for
sale on the south-eastern coast of Malaysia and that are branded and managed
by One&Only Resorts ("O&O"). The hotel operations were officially
launched in September 2020.

Company Update: The hotel operates close to full occupancy during weekends and
holiday periods while weekday occupancy remains below expectations.
Management continues to work towards activating more weekday visitors from
Singapore through a number of initiatives. Planning for the launch of sales of
the private residences at the end of 2023 is progressing.

Symphony invested an aggregate of US$58.8 million in the joint venture at 31
March 2023. The fair value on the same date was US$27.9 million. This compares
to a fair value of US$30.5 million at 31 December 2022. The change in value is
due to different assumptions used in the discounted cashflow model to value
this investment.

Isprava Vesta Private Limited. ("Isprava"): In January 2023 Symphony invested
in Isprava, a company in the business of construction, designing and sale of
branded villas in non-urban markets in India such as Alibagh, Goa and Kasauli.
The company is also in the in the business of renting luxury holiday homes
under the brand name of "Lohono Stays" and includes both homes constructed and
sold by Isprava and third party homes in India and overseas

Company Update: Isprava ended the March fiscal year with an increase in
revenues by 77.5% yoy. The order book, which is the precursor to the sales in
the P&L, was negatively impacted by the delay in receiving certain
regulatory approvals for two projects in Goa, however it still increased by
9.5% over 2022. The gross profit margin increased during the year ended 31
March 2023 by 740 basis points yoy. Isprava won awards in three categories at
the Economic Times ("ET") Real Estate Awards 2023 including "Best Residential
Project - Theme based", "Best Interior Design" and "Best Residential Project -
Villa".

 

HEALTHCARE

ASG Hospital Private Limited ("ASG"): is a full-service eye- healthcare
provider with operations in India, Africa, and Nepal. ASG was founded in
Rajasthan, India in 2005. ASG's operations have since grown to over 150
clinics, which offer a full range of eye-healthcare services, including
outpatient consultation and a full suite of inpatient procedures. ASG also
operates an optical and pharmacy business, which is located within clinics.
Symphony invested in ASG in tranches from October 2019 through to July 2020
and subsequently acquired secondary shares in October 2021. In 2022, Symphony
sold approximately a third of its shares at 2.4 times its cost of shares sold.

Company Update: The group continued to expand operations with the
consolidation of Vasan Health Care Pvt Ltd in March 2023 that added
approximately 90 clinics to ASG's network. With greenfield and brownfield
projects as well as M&A, ASG has grown its revenue at a compounded annual
growth rate of 46% for the past three years. The group currently employs 450
doctors and 4,000 other employees in 21 states in India, Nepal and Africa.

Symphony's net investment cost in ASG was US$3.7 million at 31 March 2023. The
fair value of Symphony's investment on the same date was US$25.8 million,
which compares to US$28.3 million at 31 December 2022. The difference in value
is due to changes in certain assumptions used in the valuation for this
investment.

Soothe Healthcare Pvt. Ltd. ("Soothe"): was founded in 2012 and operates
within the fast-growing consumer healthcare products market segment in India.
Soothe's core product portfolio includes feminine hygiene and diaper products.
Symphony completed an initial investment in Soothe in August 2019 and
subsequently made investments through convertible notes and securities in
2020, 2021 and 2022.

Company Update: Soothe continues to focus on improving margins across its
products. Input costs have begun to reduce, which is reversing the
inflationary pressures that had negatively affected the business over the last
year. This has helped the company on its path to profitability. Management has
revamped its sales teams to enable the business to continue growing key
distribution channels.

Symphony's gross and net investment cost in Soothe was US$12.8 million at 31
March 2023. The fair value of Symphony's investment on the same date was
US$21.4 million, which compares to US$23.4 million at 31 December 2022. The
difference in value is due to changes in certain assumptions used in the
valuation for this investment.

LIFESTYLE

Liaigre Group ("Liaigre"): was founded in 1985 in Paris and is a brand
synonymous with discreet luxury, and has become one of the most sought-after
luxury furniture brands, renowned for its minimalistic design style. Liaigre
has a strong intellectual property portfolio and provides a range of bespoke
furniture, lighting, fabric & leather, and accessories. In addition to
operating a network of 24 showrooms in 11 countries across Europe, the US and
Asia, Liaigre has a Design Studio which undertakes exclusive architecture and
interior design projects for select yachts, hotels, restaurants and private
residences.

Company Update: New showroom orders in Q1 2023 were behind expectations in
Europe and the US while ahead in Asia. The interior design business continues
to perform well with a growing pipeline of selected projects. Overall sales
have been strong as management continue to improve its supply chain to reduce
bottlenecks that has allowed for a higher velocity of deliveries.

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$49.0 million
at 31 March 2023. This compares to US$41.9 million at 31 December 2022. The
difference in value is predominantly due to an increase in comparable company
market multiples used to value this investment and an improvement in the
trailing 12-month EBITDA for the company.

CHANINTR ("Chanintr"): Chanintr is a luxury lifestyle company, based in
Thailand, which primarily distributes high- end U.S. and European furniture
and household accessory brands, including Liaigre, Barbara Barry, Baker,
Herman Miller, Marquee, Minotti, Bulthaup kitchens amongst others. Chanintr
also provides FF&E solutions for real estate and hotel projects. In 2019,
Chanintr launched a new program called Chanintr Residences which will showcase
custom-designed luxury residences as turnkey projects.

 

Company Update: Chanintr's sales recorded for Q1 2023 increased 30% yoy mainly
driven by the continued developer projects. Retail sales remains relatively
sluggish, with the company planning to launch sales events and promotions to
drive sales. Sales Closed (Orders confirmed) dropped by 35% from the same
period last year as in the prior year the company had closed a few large
developer projects. Spruce, the online furniture subscription service, was
officially launched in Thailand in early March with good feedback from design
lovers, millennials and small businesses. The company is focused on improving
inventory management by improving the re-ordering process and reducing the
time to deliver the furniture to clients. These steps enabled the company to
reduce the inventory by 8.0% qoq.

Wine Connection Group ("WCG"): At the end of April 2014, Symphony invested
WCG, one of Southeast Asia's leading wine themed Food and Beverage chains with
approximately 86 outlets in Singapore and Thailand.

Company Update: The sale of this business has been completed. Certain earn-out
thresholds have been met, which has increased the expected sale proceeds that
Symphony will receive over the coming months.

 

EDUCATION

WCIB International Co. Ltd. ("WCIB"): Symphony entered into a joint venture
with 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. WCIB operates a co-
educational school that began operations in August 2018 and will ultimately
cater to over 1,500 students aged 2-18 years of age when all phases are fully
complete.

Company Update: The school continues to perform ahead of expectations. The
state of the art facilities and strong reputation of Wellington College
International Bangkok has supported growing admission enquiries. WCIB is on
track to be profitable this academic year.

 

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.

Company Update: CTS continues to successfully grow its businesses in the K12
and higher education markets in the gulf region. Management have indicated
they expect the business to grow by approximately 30% this current financial
year.

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 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 buybacks by ITL, Symphony's interest was
28.4% at 31 March 2023.

Company Update: The logistics sector faced increasing headwinds in Q1 2023.
ITL's management reported that Vietnam was particularly affected by a slowdown
in exports, which impacted key lines of business for the company. Aviation,
freight management and contract logistics all performed worse than expected.
Guidance by ITL indicate the logistics market will remain weak until the end
of 2024. However, the long-term prospects for the business remain unchanged
with fundamental secular long-term growth trends remaining intact, such as
onshoring of manufacturing, increasing domestic consumption and growing
intraregional trade.

Symphony's agreement to sell a small amount of shares to a strategic Asian
logistics company as part of a larger secondary offering mentioned in earlier
updates completed in April 2023. The gross and net sale consideration received
was 5.5 times and 4.6 times Symphony's cost of shares sold, respectively.

Symphony's gross and net investment cost related to ITL at 31 March 2023 was
US$42.6 and US$42.1 million, respectively. The fair value for Symphony's
interest in ITL on the same date was US$106.2 million, which compares to
US$152.3 million at 31 December 2022. The change in value is due to a decline
in trailing EBITDA and market comparable multiples that are used to value this
business.

NEW ECONOMY

Smarten Spaces Pte. Ltd. ("Smarten"):  In November 2019, Symphony invested in
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 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 adoption of the hybrid workplace model has led to growth in user
activity with clients including a number of Fortune 500 companies. Smarten
Spaces currently operates in over 30 countries, with significant traction in
North America. In Q1 Smarten Spaces launched the full Microsoft Teams
integration with Microsoft as a sales partner for the product. The company is
seeing increasing deal closures which has led to a steady growth of the
business with Q1 2023 recurring revenue increasing 15.2% qoq.

 

August Jewellery Pvt. Ltd. ("Melorra"): Founded in January 2015, 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 23 operational experience centres
across India.

Update:  Melorra's channel diversification strategy started taking firm steps
in the last few quarters. New channels like Marketplace (which is Ajio,
Flipkart, Amazon etc.) and offline stores started growing revenues
significantly. The Marketplace channel posted a growth of 848% yoy, albeit off
a low base. The offline stores' footprint grew with 12 new stores being added
in the year to take the total count to 23. Melorra is now expanding the
offline stores via the FOFO model (Franchisee Owned Franchisee Operated) and
has started well on this journey with over half dozen franchisees already
signing up with the company.

 

Good Capital Partners and Good Capital Fund I ("Good Capital" or "GCP"): GCP
is majority owned by brothers Rohan and Arjun Malhotra who have been investing
their own capital since 2014 to create a thriving ecosystem of technology
start-ups. Symphony announced its investment in July 2019 with a 10% stake in
GCP and serving as an anchor investor in its first fund, GCF1.

 

Company Update: Good Capital Fund I made no new fund investments in the
quarter. The Fund's cumulatively deployed capital is currently US$11.47
million across 18 core fund investments and 52 Bharat Founders Fund
investments ("BFF"), where the cheque size is US$25,000. Currently, the Fund
is in closing conversations for 1 new core investment and 5 BFF investments in
the pipeline. At an aggregate level, the MOIC at the close of this quarter is
approximately 2.45x.

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. The company
currently serves enterprise customers and more than 150 brands with an active
presence in more than 100 cities across India.

Company Update: The adoption of e-commerce and direct-to-consumer business
models in India is continuing to grow, creating tailwinds for the logistics
industry. However, due to the challenging fund raising environment, the
company has reduced cash spending in order to extend runway which has led to
LTM revenues decreasing by -7.6% yoy.

House of Kieraya Private Limited ("Furlenco"): Founded in October 2012 in
Bangalore, India, Furlenco is a residential furniture rental services
business. The business has since expanded to include Furbicle, a brand selling
refurbished & recycled furniture; UNLMTD, an annual furniture and
appliance subscription service; Prava, which sells high-end retail furniture
and KreateOne, an in-house furniture manufacturing facility.

Company Update: In the last quarter Furlenco launched its new brand image
which brings buying and renting under a common platform. The company has
started its journey from being a tech enabled company to a tech driven company
as they have revamped their entire tech stack. The marketing spends which were
on hold the last few months has been restarted. This has enabled the company
to increase the brand traffic and customer acquisitions. In terms of
financial performance, the company recorded the highest monthly revenue in
its history in the last quarter. However, EBITDA margins were lower owing to
increased marketing spends. This is expected to normalize in the coming
months as the company scales.

 

Meesho, Inc ("Meesho"): Founded in March 2016 in Bangalore, India, Meesho is a
social e-commerce platform to sell to the next 500 million Indians coming
online. Meesho is the most downloaded app globally and is currently the third
largest e-commerce platform in India behind Flipkart and Amazon.

 

Company Update: Meesho had a strong first quarter in 2023 with revenues
increasing 6% qoq and 42% yoy; this was aided by 681% take-rate expansion. The
company's revenues are primarily driven by advertising  and fulfilment
revenue; unlike other marketplaces the company does not charge vendors any
listing fees to be on their platform. The company continued with its
trajectory of managing its cash burn, which was at the lowest levels seen over
the last 2 years. The company has maintained its growth momentum of orders at
26% yoy while reducing user and supplier growth spends by 64% qoq and 86% yoy.
The company is the 2(nd) most downloaded shopping app globally in the Q1FY23
despite significantly lower spends. Meesho continues to have a strong cash
position on its balance sheet and remains focused on achieving profitability
by the end of 2023.

 

SolarSquare Energy Private Limited ("Solar Square"): Solar Square was founded
in 2015 and is a rooftop solar power services 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.

Company Update: Solar Square is currently the number 2 residential solar brand
in India after Tata Solar by monthly volumes. Since founding 2.5 years ago
the company has enabled 7,000 homes to go solar. The monthly homes booked with
the company are in excess of 500 per month; this is up from 100 plus homes per
month in 2021. The homes that are moving to solar will offset 24 million kgs
of CO2 every year which is the equivalent of planting more than 350K trees. In
the first 8 cities where Solar Square was launched the company has more than
20% market share. The company is well capitalised having raised US$15 million
across seed and Series A but having burnt less than US$4 million to date.

MAVI Holding Pte. Ltd. ("MAVI"): In December 2022 Symphony invested in MAVI, a
B2B insurance and warranty programme administration services company
headquartered in Singapore with operations in India, Thailand, and Singapore.
Mavi is an early-stage start-up business with a goal to develop insurance
products that are accessible, competitively priced, and tailored for the Asian
markets. The company will provide insurance and warranty programme management
services and partner with insurance and carriers in the region to bring these
products to market.

Company Update: In Q1-2023 Mavi started generating revenues through both the
insurance business in Singapore as well as the automotive warranty business in
India. The Company is continuing to build and secure partnerships for its
insurance and warranty services across Asia to grow the revenue streams.

SUBSEQUENT EVENTS

·    Subsequent to 31 March 2023, Symphony completed the partial sale of
shares held in ITL. The total consideration was less than 2% of NAV

·    Subsequent to 31 March 2023, Symphony completed the sale of 3.9
million MINT warrants that generated net proceeds of US$1.1 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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