Astoria Investments – Results Note – Quarterly Result & Valuation Update

Share Code: ARA – Market Cap: R515m – Discount to NAV: 34%

Q1:23 Results: High Base Effect in Play

  • For the quarter ended March 2023, Astoria reported USD NAV of 75.60cps & ZAR NAV of 1340.75cps.
  • Compared to Q4:22, this is a -8.5% & -4.6% respective decline but against Q1:22 the year-on-year growth is still +6.4% & +29% respectively.

Quarterly Updates, Results Notes & Forex Volatility:

  • Astoria reports quarterly but its valuation policy is only to perform detailed valuations of its unlisted investments at major Q2 (i.e. H2) and Q4 (i.e. FY) period ends. For Q1 and Q3 results, unlisted valuations are kept unchanged, except in instances where developments require an immediate and material change in value (i.e. ‘no news is good news’ if unlisted valuations remain unchanged). Price changes for listed investments and currencies are reflected on an ongoing basis.
  • Due to this, we will publish one-page Q1 & Q3 results notes with fuller results notes for Q2/H2 and Q4/FY period ends.
  • As per our Initiation of Coverage, we have updated valuations in their respective economic currencies (e.g. OIH in Rands, Trans Hex in USD, etc) and converted either back to Rands or back to USD’s for respective NAVs. Given the weakening in the Rand against the US Dollar, this approach is creating some short-term volatility in our USD-based NAV while our ZAR-based NAV is more “stable”. This should smooth out over time.

Valuation, 12m TP & Implied Return: Discounted Share Price

  • Updating Astoria’s NAV to current prices, the share price is trading at a c.34% discount to current NAV (Previously: 36%).
  • If we take out our calculated “HoldCo discount” of c.14.0% (Previously: 14.6%; narrowed due to the spike in the domestic risk-free rate) from this NAV, we arrive at a fair value for Astoria’s shares of c.1192cps (Previously: 1170cps) or c.23% higher than the current share price (Previously: 25%).
  • Rolling this fair value forward at our Cost of Equity, we arrive at a 12m TP of c.1422cps (Previously: 1381cps) which implies a potential return of c.55% from the current share price.