REG - Symphony Int Hdgs - Shareholder Update

Symphony International HoldingsAnnouncement

26/09/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230926:nRSZ5796Na&default-theme=true

RNS Number : 5796N  Symphony International Holdings Ltd  26 September 2023

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

 

26 September 2023

 

Dear Shareholders,

 

·    Symphony International Holdings Limited's ("Symphony" or the
"Company") unaudited Net Asset Value ("NAV") at 30 June 2023 was
US$403,587,911 and NAV per share was US$0.7862. This compares to NAV and NAV
per share at 31 March 2023 of US$457,196,831 and US$0.8906, respectively. The
decrease in NAV by 11.7% quarter over quarter is due to a decline in value of
unlisted investment, particularly in the logistics sector, and the accrual of
dividends payable following a dividend announcement on 29 June 2023.

·    Symphony's share price continued to trade at a discount to NAV. At 30
June 2023, Symphony's share price was US$0.41, representing a discount to NAV
per share of 47.3%. This compares to a share price discount to NAV of 49.5% at
31 March 2023.

 

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

 

·    Minor International Public Company Limited ("MINT"): In Q2 2023, MINT
recorded record core profit growth of THB 3.0 billion, which represented a
148% y-o-y increase from 2Q 2022 and was 52% above pre-Covid 2Q19. On the back
of these results the company announced an interim cash dividend payment of THB
0.25 per share which underscores the company's robust cash flows from
operations, improved balance sheet strength, and confidence in its positive
outlook for sustained growth.

·    Indo Trans Logistics Corporation ("ITL"): ITL faced significant
headwinds during the second quarter, which is reflective of the overall
logistics sector. The weakness is the result of slowing economic growth and
other factors. The challenging environment is expected to continue for the
remainder of 2023.

·    WCIB International Co. Ltd. ("WCIB"): The school generated its first
operating profit for the year ended 31 July 2023 with enrolments running ahead
of budget. The management team plan to further expand the facilities and
student capacity beyond 1,500 students.

·    Creative Technology Solutions DMCC ("CTS"): Symphony entered into
binding agreements and completed the sale of its interest in this business in
Q3 2023. Excluding contingent deferred proceeds, the sale generated a net
return per annum and times the original cost of investment (taking into
account dividend distributions) of approximately 23.1% and 2.4 times,
respectively

·    Meesho, Inc ("Meesho"): In the month of August 2023, Meesho announced
it turned profitable at a consolidated PAT level, encompassing all costs
(including ESOP), across all its divisions and categories. Also during the
same month, Meesho achieved the milestones of registering 500 million
downloads, crossing a one million seller base and was included in TIME
Magazine's TIME 100 most influential companies list for 2023.

·    House of Kieraya Private Limited ("Furlenco"): In Q2 2023 Furlenco
raised new capital by issuing securities to Sheela Foam Limited ("SFL") for
INR3 billion (US$36.6 million). The transaction increased SFL's interest in
Furlenco by 35%. SFL is an Indian publicly listed company that provides foam
products for furniture and other related fixtures and fittings. The investment
into Furlenco will help SFL enter the fast-growing branded furniture market.
Furlenco now is well capitalized to grow the business and increased its
marketing efforts to add customers.

MARKET OVERVIEW AND OUTLOOK

The first half of 2023 was positive for risk assets across the world. In the
US the NASDAQ was up 31.7%, its best start to the year since 1983 while the
S&P500 was up 15.9%. However, inflation continues to remain a key concern
as we enter the second half of 2023. In July, the US Federal Reserve raised
its benchmark interest rate by a quarter of a percentage point to the highest
level in 22 years as it left the door open to further increases during the
year. Having raised its benchmark rate from near zero in March 2022 to more
than 5%, the Fed is now closer to a level of borrowing costs it deems
"sufficiently restrictive" to bring inflation down to its longstanding 2%
target in a timely manner.

As per a recent International Monetary Fund ("IMF") report, following a
reopening boost, China's recovery is losing steam. Manufacturing activity and
consumption of services in China rebounded at the beginning of the year when
Chinese authorities abandoned their strict Covid-19 lockdown policies; net
exports contributed strongly to sequential growth in February and March as
supply chains normalized and firms swiftly put backlogs of orders into
production. Nonetheless, momentum has slowed as a result of continued weakness
in the real estate sector that has weighed on investment, and slowing foreign
demand that is affecting exports. In addition, rising youth unemployment (at
20.8% in May 2023) indicates structural and cyclical issues in the labour
market. As a result, the expectation that China will drive global growth in
2023 has declined.

Expressing confidence in the growth potential of the Indian economy, Morgan
Stanley published an optimistic report on the back of positive foreign direct
investment ("FDI") and the country's "reform and macro-stability agenda" that
supports a positive outlook for capital expenditure and profits. S&P
Global has projected that India's gross domestic product ("GDP") will nearly
double from US$3.4 trillion in FY2023 to US$6.7 trillion in FY2031. This
increase would correspond to a per capita GDP of approximately US$4,500 from
US$2,500 currently. Despite the possibility of a slowdown in GDP to 6% in
FY2024 due to a global slowdown and the delayed effects of policy rate
increases by the Reserve Bank of India ("RBI"), S&P Global maintained that
India will remain the fastest growing economy among the G20 countries.

Thailand's economy grew 2.5% year-on-year in the second quarter, as indicated
from the data from the National Economic and Social Development Council
("NESDC"). Economic growth during the three months to June was largely due to
strong exports, which account for more than 60% of the country's GDP, and the
recovering tourism industry, which has more than a 15% share of GDP. The World
Bank in its semi-annual Thailand Economic Monitor, said that the economy is
projected to grow at 3.9% in 2023 up from 2.6% the year earlier due to
stronger-than-expected demand from China, Europe and the United States,
private consumption growth and a recovery in tourism. The return of tourists,
particularly from China, has strengthened the tourism outlook. Arrivals are
projected to reach more than 28.5 million by the second half of 2024 or 84% of
the 2019 pre-pandemic levels. The increase in tourist arrivals is expected to
benefit our portfolio, particularly our holding in Minor International Pcl
("MINT").

Vietnam's GDP in the second quarter of 2023 grew by 4.1% compared to the same
period the previous year. The figure is greater than the first quarter's 3.3%
growth. This increase marks the seventh consecutive quarter recording GDP
growth. Nevertheless, Vietnam is still coping with challenges from weakening
trade. The total turnover of imports and exports reached US$316.7 billion in
the first half of 2023, down 15.2% over the same period the year before. The
decrease in trade is due to weakening global demand and high logistics costs
making some Vietnamese export goods less competitive than those of other
countries. However, we continue to expect the growing domestic economy and
restructuring of supply chains away from China to continue to benefit trade in
the long-term. Symphony's investment in Indo Trans Logistics Corporation ("ITL
Logistics") will be impacted by these trends in the short-run,  but we remain
positive on the long-term outlook for this business.

While we see our investee companies benefiting from improving economic
conditions, there are heightened risks on the horizon, including inflation and
geopolitical tensions that may again upend economies. Aside from the potential
impact from these risks, we believe our investee companies are well positioned
for future long-term growth.

 

 

COMPANY UPDATE

Symphony's listed investments accounted for 14.7% of NAV at 30 June 2023 (or
US$0.1158 per share), which compares to 13.0% of NAV (or US$0.1154 per share)
at 31 March 2023. The change is due to an increase in share price of MINT,
which was partially offset by a depreciation of onshore Thai baht rate by
3.7%, and a decline in value of unlisted investments.

The value of Symphony's unlisted investments (including property) comprised
88.8% of Symphony's NAV (or US$0.6980 per share), which compares to 88.6% (or
US$0.7890 per share) at 31 March 2023.

Temporary investments accounted for (3.5%) of NAV (or (US$0.0277) per share),
which compares to (1.55%) of NAV (or (US$0. 0138) per share), per share at 31
March 2023.

Symphony's share price continued to trade at a significant discount to NAV. At
30 June 2023, Symphony's share price was US$0.41, representing a discount to
NAV per share of 47.3%. This compares to a share price discount to NAV of
49.5% at 31 March 2023.

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 55 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 23
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 Q2 2023, MINT recorded record core profit growth of THB 3.0
billion, which represented a 148% y-o-y increase from Q2 2022 and was 52%
above pre-Covid Q2 2019. On the back of these results the company announced an
interim cash dividend payment of THB 0.25 per share which underscores the
company's robust cash flows from operations, improved balance sheet strength,
and confidence in its positive outlook for sustained growth.

 

The increase in travel activities across the geographies in which MINT
operates drove a strong  y-o-y core profit growth of 120% for Minor Hotels,
resulting in core profit of THB 2.6 billion for Q2 2023. A robust start of
high travel season in Europe also contributed to the strong result and led to
an average occupancy of 72% and a 18% y-o-y surge in ADR for Minor Hotel's
owned hotels in Europe and Latin America. The sustained upturn in global
travel demand, together with implementation of Minor Hotels' dynamic sales and
marketing strategy, resulted in Q2 2023 RevPar growth of 21% y-o-y.

 

MINT's restaurant business also recorded strong growth in Q2 2023, with core
profit of THB 427 million in Q2 2023 compared with THB 4 million in Q2 2022.
In Thailand, same-store sales recorded an 12% y-o-y increase, primarily due to
Minor Food's continued initiatives to capture returning footfall through viral
marketing campaigns and new product launches. China, in particular, saw a
significant rebound in Q2 2023 with the lifting of lockdowns and dine-in
restrictions, resulting in a 40% growth in same store sales compared to Q2
2022.

 

The company's active capital structure management has resulted in a strong
financial position, with substantial THB 22 billion in cash reserves, THB 31
billion unutilized credit facilities and net interest bearing ratio of 1.09x,
well below MINT's internal threshold of 1.30x and debt covenant of 1.75x.

 

Mr. Dillip Rajakarier, Group CEO of MINT, commented on 2H23 and 2024 momentum:
"The achievement of our recent record-breaking quarterly profit of THB 3
billion, together with continued momentum expected for the rest of the year
have provided us with the confidence to not only reward our shareholders but
also provide room for further expansion throughout this year and into 2024."

 

During the quarter, the value of Symphony's investment in MINT increased from
US$59.2 million at 31 March 2023 to US$ 59.5 million at 30 June 2023. The
change in value is predominantly due to an increase in MINT's share price by
6.2%, which was partially offset by a deprecation in the onshore Thai baht by
3.7% and the sale of warrants 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 30 June 2023 Minuet held approximately
186.75 rai (29.88 hectares) of land in Bangkok, Thailand.

Company Update: The value of Symphony's interest 30 June 2023 was US$59.9
million based on an independent valuation. This compares to US$61.9 million at
31 March 2023. The change in value is predominantly due to a depreciation in
the Thai baht, by 3.3% during the same period.

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. During the Q2 2023, Symphony received a net distribution payment
of US$0.5 million. Based on an independent valuation at 30 June 2023 and
historical distributions, the net return from this investment is expected to
be 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 property market in Niseko has been steadily improving over
the past year, which is partly reflective of the overall growing interest
around real estate in Japan. The development pipeline in Niseko remains strong
with a number of new projects expected to be launched in the coming years
however, there remains a chronic shortage labour resources affecting
operations of existing businesses and developments. Record prices for
condominiums were achieved during the 2022/2023 ski season and there is a
strong expectation that stronger sales will be achieved during the upcoming
season.

The part of the site to be co-developed by the Niseko JV and the Hanwha Group
remains in the planning phase. We expect to accelerate design and marketing
work streams following the 2023/2024 ski season.

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 continues to focus on activating more weekday
visitors from Singapore and Malaysia with various F&B, Spa and Beach
Club-related promotions. Symphony and Destination Resorts are in discussions
with various parties related to planning for the sales launch of the private
residences globally.

Symphony has invested an aggregate of US$58.8 million in the joint venture as
of 30 June 2023. The fair value on the same date was US$27.5 million. This
compares to a fair value of US$27.9 million at 31 March 2023. The change in
value is due to different assumptions used in the valuation for 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 closed the quarter with a strong order book, however
revenues were impacted primarily due to delays in registrations, payments by
clients, permissions and delays relating to vendors raising invoices against
fulfilled orders. The lower than budgeted revenues will catch-up over the next
two months with critical process enhancements being implemented to prevent
delays in the future. In parallel, Isprava is undertaking several technology
implementation initiatives from introducing a project management software and
a firm-wide ERP system to developing generative AI products to augment their
design capabilities. The gross profit margin continues to remain robust; the
company has 170 homes under development at the close of the quarter, all of
which are projected to be delivered on time to clients.

 

Lohono has over 120 homes operational on its platform as of Q1 FY23-24,
aligned with the target. GMV collection in this quarter has been the highest
ever since the company's inception.

 

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 145 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: Following the consolidation of Vasan Health Care Pvt Ltd in
March 2023 that added approximately 90 clinics to ASG's network, the group
continues to grow its pipeline of greenfield and brownfield opportunities.
Management is also focused on improving and integrating operations of recent
acquisitions with success.

Symphony's gross and net investment cost in ASG was US$20.7 million and US$3.7
million at 30 June 2023, respectively. The lower net cost is the result of
proceeds received from the partial sale of shares in 2022 for US$17.0 million.
 The fair value of Symphony's remaining investment at 30 June 2023 was
US$31.0 million, which compares to US$25.8 million at 31 March 2023. 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 from
2020 to 2023.

Company Update: Soothe continues to focus on improving margins and expects to
be monthly EBITDA positive before year end. As mentioned in a previous update,
management revamped its sales teams to grow in key distribution channels. The
changes are beginning to bear fruit with positive momentum associated with key
product lines.

Symphony's gross and net investment cost in Soothe was US$13.4 million at 30
June 2023 following participation in a new funding around in Q2 2023. The fair
value of Symphony's investment on the same date was US$19.5 million, which
compares to US$21.4 million at 31 March 2023. 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 orders year to June 2023 were behind expectations in
Europe and the US while in line in Asia. The interior design business
continues to perform ahead of budget and grow its pipeline of selected
projects. The management team are undertaking several initiatives to further
improve Liaigre's supply chain and deliver on a large order book.

Symphony's gross investment cost in Liaigre was US$79.7 million at 30 June
2023. 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$43.5 million
at 30 June 2023. This compares to US$49.0 million at 31 March 2023. The
difference in value is predominantly due to a decrease in comparable company
market multiples used to value this investment and 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 saw the sales in the furniture business increase
by 54% from the last quarter mainly driven by both developer and residential
projects. Chanintr's sales for H1 2023 was 42% higher y-o-y. The sales closed
(orders confirmed) on the other hand  were 26% lower during the same period
y-o-y and reflective of the slowing economic growth in Thailand. The company
expects a recovery in the second half of the year driven by the buoyant luxury
to ultra-luxury property markets in Bangkok, Phuket and Pattaya. The Gross
Profit margin dropped slightly by 80 basis points due to more revenue and
margin contribution from residential-design services projects which have lower
margins.

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 and work is
ongoing to determine whether conditions for incremental contingent sale
proceeds have been met.

 

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 generated its first operating profit for the year
ended 31 July 2023 and enrolments have been ahead of budget. The management
team plan to further expand the facilities and student capacity beyond 1,500
students.

 

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: Symphony entered into binding agreements and completed the
sale of its interest in this business in Q3 2023. Excluding contingent
deferred proceeds, the sale generated a net return per annum and times the
original cost of investment (taking into account dividend distributions) of
approximately 23.1% and 2.4 times, respectively.

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
27.4% at 30 June 2023.

Company Update: ITL faced ongoing headwinds during the second quarter, which
is reflective of the overall logistics sector. The weakness is the result of
slowing economic growth and other factors that have affected trade. ITL
reported that air and sea freight have been materially impacted in terms of
volume and yield however, some parts of ITL's business continue to perform
well, such as the port business. Management have indicated that the outlook
for the remainder of 2023 continues to look challenging. Nevertheless, the
fundamental long-term drivers for the logistics sector in Vietnam remain
positive.

In Q2 2023, Symphony completed the sale of a small number of shares to a
strategic Asian logistics company as part of a larger secondary offering
mentioned in earlier updates. 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 30 June 2023 was
US$42.6 million and US$35.3 million, respectively. The fair value for
Symphony's interest in ITL on the same date was US$63.6 million, which
compares to US$106.2 million at 31 March 2023. The change in value is
predominantly due to a decline in trailing EBITDA 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.

 

Company 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. On the
back of this the company is seeing increasing deal closures with enterprise
customers that has led to a steady growth of the business in Q2 2023.

 

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 24 operational experience centres
across India.

Company Update:  Melorra continues to focus on reducing EBITDA burn by
reducing marketing spend that has impacted sales. This underscores the
company's efforts towards reaching breakeven in six months at the expense
of growth. Gross margins for the business are also lower as the company
has grown lower margin Marketplace-related revenue, which has become the
largest distribution channel. However, there has been some margin
improvement related to  offline sales, which continue to grow. All channels
had positive contribution margin after marketing spends and direct costs, but
overall sales have trended lower. Work is currently underway to open
franchisee stores before the Diwali festive season kicks-off.

 

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 one new fund investment in the
quarter. The Fund's cumulatively deployed capital is currently US$12.1 million
across 19 core fund investments and 56 Bharat Founders Fund investments
("BFF"), where the cheque size is US$25,000. Currently, the Fund is in closing
conversations for one new core investment and three BFF investments in the
pipeline. At an aggregate level, the MOIC at the close of this quarter is
approximately 2.25x.

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.

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 expenditures in order to extend its runway which has led
to LTM revenues decreasing. The company is currently working on securing
funding and working towards profitability.

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 selling refurbished &
recycled furniture; UNLMTD, an annual furniture and appliance subscription
service and KreateOne, an in-house furniture manufacturing facility.

Company Update: In July 2023, Furlenco raised new capital by issuing
securities to Sheela Foam Limited ("SFL") for INR3 billion (US$36.6 million).
The transaction increased SFL's interest in Furlenco by 35%. SFL is an Indian
publicly listed company that manufactures polyurethane and polyester foam
products for furniture and other related fixtures and fittings, and for
industrial and technical sectors worldwide. . The new investment in Furlenco
will help SFL enter the fast-growing branded furniture market. Furlenco now is
well capitalized to grow the business and has re-started its marketing efforts
to add customers.

 

On the business front, Furlenco's customer acquisitions increased at a
significant pace in the most recent quarter. The equity funding will enable
the company to scale as well as bring down finance costs. The company is
targeting to be profitable in the next six months.

 

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: In the August 2023 Meesho announced turning profitable at a
consolidated PAT level, encompassing all costs (including ESOP), across all
its divisions and categories. In the last 12 months Meesho has seen order
volumes increase to over a billion. Vidit Aatrey, CEO and Founder at Meesho,
said "As the first horizontal e-commerce platform to achieve profitability in
India, we remain committed to driving sustainable growth, democratizing
e-commerce for everyone and unlocking the true potential of India's
heartland." In August 2023 Meesho achieved the milestones including
registering 500 million downloads, crossed a one million seller base and
lastly, earning a position on Time Magazine's TIME's 100 most influential
companies in 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 had a strong quarter with May being the highest
month for residential bookings with 604 orders. The company has onboarded 75+
housing societies in the last 2 years and currently has the largest portfolio
of housing societies in India. During the quarter Solar Square acquired PV
Diagnostics to strengthen its R&D quality control and after sales
services.

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.
Household wealth is growing in South and South-East Asia with the middle class
expanding rapidly. Yet these regions are highly under-insured with a lack of
access to insurance products. 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: Mavi continued to generate revenues in Q2 2023 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 and has signed a contract
with an insurance provider to bring Mavi's insurance products to the Indian
market with an expected launch in H2 2023.

SUBSEQUENT EVENTS

Subsequent to 30 June 2023:

 

·    Symphony completed a follow-on investment in Mavi Holding Pte. Ltd.
The total consideration was less than 1% of NAV.

 

·    Symphony completed a follow-on investment in Smarten Spaces Pte. Ltd.
The total consideration was less than 1% of NAV.

 

·    Symphony funded capital calls related to Good Capital Fund I and Good
Capital Fund II. The total consideration was less than 1% of NAV.

 

·    Symphony paid out ordinary dividends of US$0.025 per share declared
during the period ended 30 June 2023, resulting in a total cash pay out of
US$12,834,000 to shareholders of the Company.

 

·    Symphony received part of the proceeds related to the sale of
Creative Technology Solutions DMCC. The consideration was less than 1% of NAV

·

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

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDQELFLXKLBBBE