You guys are hiding half of your earnings power… True P/E is more like 5x, and the true earnings are likely going to show up in the 2026 reports.

Let’s take this company for a ride…

Overview

Alquiber rents out 22.000 vans and other commercial vehicles to SME’s in Spain.

The company is interesting because:

1. They grow double digit revenues, take market share, deliver consistent profits…

2. They look cheap at 9x P/E on 2025 reported net income of 8 mEUR (74m mkt cap)

3. They are cheaper at 5.5x P/E, after removing consistent fleet over-depreciation

4. Their reported net income likely jumps from 8, to 14 - 16 mEUR in 2026, driven by higher revenue from rental and fleet disposals

Briefly: The company is interesting because it owns 22,000 cars, and depreciates them too fast, down to 21% of purchase value in just 5 years. This results in large gain on sales when they retire and sell the cars.

In reality, they should depreciate at least 26% slower, resulting in 50-100% higher reported earnings, and a P/E of 5.5x conservatively. The company is hiding its real earnings inside the depreciation of its cars… That’s great for taxes, but investors better pay attention…

1. Long-term growth, founder-led

Miguel Angel Acebes is a veteran of vehicle rental. In 1980, he founded Fualsa, Spain’s first flexible commercial rental company. He sold Fualsa to competitor Northgate in 2002, staying on as CEO for 3 years.

After his non-compete expired in 2009, he bought Alquiber together with his daughter. They spent the last 15 years growing the same business while competing with Northgate again in the Spanish market.

Alquiber is focused on medium-term, flexible vehicle rental, mainly of vans like Fiat Ducato. The type of van a florist or a restaurant owner would use. Flexible vehicle rental is growing quickly in Spain, as small business owners switch from owning to renting their vans, enabled by a competitive and flexible vehicle renting eco-system.

Alquiber has achieved double-digit growth in revenue and profit in recent years, driven by expanding market and increased market share.

The company’s fleet and go-to-market strategy is comparable to that of Northgate, although Alquiber tends to focus on slightly larger and more differentiated vans, including earthworks cranes and other equipment.

Alquiber is founder-led and owned, vs Northgate being owned by its corporate acquirer. It looks likely that Alquiber will continue taking market share in Spain. I don’t know exactly how they do it, but they always seem to outperform Northgate…

2. Looks cheap at 9x P/E

Alquiber recently reported record 8 mEUR in net income for 2025, and trades at an undemanding 74 mEUR market cap, or 9x 2025 net income.

Looking at the source of the profits though, we see that they can be attributed to “Gain on sale” of obsolete vehicles. Alquiber retires each vehicle at about 5-6 years old.

We could look at this chart and say: “That’s terrible earnings quality”. The business is not profitable and only makes money selling the vans at the end of their useful life…

This is a fast-growing company though, so the cars they are disposing of now, only represent a small fraction of their fleet. If the fleet was more mature, disposals would be much larger.

The gain on sale on the small group of cars disposed of, is the tip of a larger iceberg of cars in operations, which are being depreciated too quickly. Alquiber’s accounting is taking value out of each of its 22.000 cars, making earnings and book value look lower than they really are.

3. Understating earnings, depreciating too quickly

Alquiber depreciates their fleet at 18% in the first 3.75 years and 9% in the years after. According to this depreciation schedule, an Alquiber van is worth only 21% of its value after 5 years. This feels extremely low, at least according to Fintwit:

Comparing the realized market value to the gross and net book value of the cars sold, we can understand how much depreciation should have been, versus how much it was.

Twitter was right. The average car sold in 2025 (4.2 years old), was sold at 52% of its original value, indicating a 5 year old car would realize about 35-45% of its value.

Flipping this data the other way around, this means actual depreciation over the lifetime of cars sold in year x, was higher than true depreciation:

On average, Alquiber depreciates its fleet about 40-50% too quickly. One could say here, wait a second. Didn’t used car prices go up a lot during Covid? Yes, they did, but have come down since. They are up ~3% per year since 2019, nothing unusual:

A comparison vs Northgate parent ZIGUP, also shows Alquiber’s over-depreciation

• Alquiber in 2025 depreciated gross fleet value at a rate of 18%

• ZIGUP depreciated gross fleet at 13% in 2025

Again Alquiber records over 35% higher depreciation than its competitor.

I will use 35% as conservative over-depreciation number for Alquiber today

True earnings power

Three different approaches (Twitter estimate, gain on sale analysis, peer comparison) indicated that Alquiber’s depreciation is at least 35% too high.

The chart below adjusts this by calculating a 26% (x 100/135) lower depreciation value, getting the resulting book value, net income, and ROE for the company. (setting disposal gains to 0)

Alquiber had a true earnings power of 13 mEUR in 2025 (vs €8m reported), and therefore trades at about 5.5x adjusted P/E (vs 9x reported).

4. Reported net income likely to jump in 2026

Modelling Alquiber’s net income suggests reported net income might almost double in 2026, from €8m to €12-16m. This is driven by 2 factors:

1. The fleet is aging leading to slightly lower depreciation per car

2. More cars getting disposed of, leading to higher disposal gains

This is true at least in theory. In practice, management might delay disposals, depending on how demand in the rental market behaves vs. demand in the used car market.

The good thing is, if they delay disposals, this will push more cars into the 9% and eventually 0% depreciation rate, and if they don’t delay disposals, this will push higher disposal gains…

The company can only keep “hiding” its true earnings power by continuing to grow high teens %. Otherwise the fraction of more mature and disposed cars will grow compared to the newer cars.

Cohort survival math

Looking at Alquiber’s historical fleet purchases, and annual fleet sizes, I can model the survival rate of the cars in Alquiber’s fleet, as a function of the cars years in service.

I’m assuming here, that cars less that 3 years old don’t get sold off. They can only leave the fleet through accidents, at a rate of 1-3% per year:

For example, for 2025, they have 21913 cars, which is the 4615 they purchased in-year multiplied by 99% survival, plus the 3873 purchased in 2024 multiplied by ~97% survival, multiplied … etc., all the way back until 2018, assuming all the cars bought in 2017 and older are all retired…

Solving these equations for x_1 to x_4, gave a survival vector, that helps model the number of cars, and the amount in each age group, for any given year.

RMS solving gave x_1= 10%, x_2=14%, x_3=20%, x_4=83%, which just means that after 4 years, 83% of cars are still in fleet, but after 5 years, this drops to only 20%. It looks like they suggest replacement at about 4.5 years, which the customer either accepts immediately retiring the car, or doesn’t accept keeping the car active until the end of the lease term. So this leads to many cars getting taken out at 4-5 years old.

Survival and depreciation model

Using the solution for X above, I now know how long I should expect cars to remain in Alquiber’s fleet and what the variability around that is.

Based on this, I can calculate depreciation for each year, using the fleet size in each age group for each year.

Rather than working through the matrix formula’s, let me show what this looks like visually. Applying the survival rate found above to the historical purchases, I can calculate the fleet size by year, including age groups:

Red is the actual size of the fleet, and the blue blocks are the modelled fleet size, split into different age cohorts grouping cars of the same purchase year.

This model’s prediction for how many cars Alquiber has at year end (sum of the blocks), works well for most years. 2025 has a larger model error though. The rental market was doing great in 2025, driving Alquiber to retain significantly more cars, and to dispose of less cars than in 2024. This is quite unusual and leads to actual fleet size being higher than what would be expected by the model.

More important to the thesis, I can show the % cars in each age group for each year at year-end. The red line here indicates what % of cars is younger than 3.75 years, which is a threshold for reducing depreciation. As the line goes down in 2025, I could expect slightly lower depreciation in 2026.

Observations on the modelled %s shown above

• The fleet is getting slightly older. The top cohorts, especially with cars 4-5 years old is growing in importance

• Disposal rates are expected to increase in 2026, as 17% of cars are in the 4-5 years old bucket. These are modelled numbers by the way. In reality this fraction is even bigger, driven by low disposal rates in 2025.

• A key reason the fleet is aging, is 2021 purchases. The bottom block in 2021 shows they purchased a lot of vehicles through 2021 coming out of Covid, and those are now nearing their typical disposal age for Alquiber.

So What?

2026 will have ~50% higher disposals and disposal gains, because according to the model, at end of 2025 they have over 50% more cars in the 4-5 year age group.

In reality, Alquiber retired less cars in 2025, so the 2026 effect could be even larger.

Estimating 50% higher disposals than 2025, and a similar gain per car, gets:

This will likely cause 2026 net income to be 5-6 mEUR higher than 2025 net income, mainly driven by higher disposal gains, complemented by higher rental revenues and EBIT, as the business continues growing.

P/E on estimated 13-14 mEUR net income in 2026 is then 5x - 5.5x on reported earnings.

Risks

Used vehicle prices. Gains depend on used cars holding ~50% of cost after 5 years. LEZ tightening and EU 2035 phase-out could drag prices 10-15% lower. I have already incorporated 10% lower prices into the thesis by using 35% over depreciation instead of 40-50%. Still, the company is highly levered to used vehicle prices.

Spanish construction softening. ~30% of customers construction-exposed. Recession hits utilization and used prices simultaneously.

EV transition. Almost all of Alquiber’s fleet are currently ICE. It’s likely that in 5-10 years they will transition to EV. This may create different competitive dynamics or different customer preferences.

Higher interest rates, can form a headwind on earnings as the company is highly levered. The leverage is less problematic than it may seem though, as the company has highly liquid collateral in the form of over-depreciated vehicles.

Summary

Alquiber is a stable grower in the Spanish commercial vehicle market. While already cheap at 9x P/E, we argue that true earnings are understated because of excessive fleet depreciation.

We think this disconnect will temporarily reverse in 2026 mainly driven by the retirement of larger 2021 (post-covid) vehicle cohorts, driving reported earnings up to 13-14 mEUR.

At an undemanding 2026 P/E of 10-11x, Alquiber provides a potential 100% upside from todays 13.8 EUR share price.

Disclosure: Long. Please check out the company before investing.

Disclaimer: This publication’s authors are not licensed investment professionals. Nothing produced here should be construed as investment advice. Do your own research before investing.

Performance

The portfolio returned 16% year to date, compared to 6% for the S&P 500 expressed in EURO. We are working on a potential 18th consecutive positive quarter.

The portfolio is currently not live available to subscribers. I’m afraid that would encourage too much copy-paste trading, exposing you too directly to my mistakes.

Subscribers have done well doing their own analysis of my write-ups though, which actually have performed better so far this year, up 19% on average since pitch.

One new write-up will be out soon on a company which is currently in the portfolio. I have been geek-ing out on it a bit too much and should probably focus on making it a simple and crisp write up rather than a “look at all the work I did on this idea” show.

April 2026 market events

In the last month, the USA and Iran signed a peace treaty. This opens some perspectives for a re-opening of the Strait of Hormuz, although there are still several hurdles to be cleared before that happens.

Meanwhile, markets are making new all time highs. The companies in the S&P500 which have reported Q1 results so far, on average achieved 21% earnings growth, the highest quarterly increase in the last 5 years.

Artificial Intelligence is already driving companies to report higher earnings, not because of what the AI is doing, but because

• AI builders (Big tech) save on labor to allow increased AI capex spending

• AI users (Banks, Telco’s, IT developers) keep headcount low in anticipation

We’re not in an employment recession though, because the AI build-out itself is funding additional GDP growth, driven by that capex.

This puts in perspective why the S&P500 is doing well, and why it would do even better if the Strait of Hormuz were to be re-opened. In that scenario, we would likely have:

• Increased GDP growth because of AI capex

• Increased productivity because of automation & low hiring due to AI fears

• Disinflation driven by productivity and tariff effect roll off

• Fed reducing interest rates

We are talking about markets here though, and so of course, the exact opposite could also happen, with Strait of Hormuz remaining closed, and other trade routes also getting affected, sending oil even higher and creating an inflationary recession much like we had in 2022.

I think Iran and the USA are both so much better off making a deal, that they likely will make one relatively soon.

Changes and Portfolio

In this section:

• Full portfolio with % allocation and change vs last month

• All portfolio moves and their rationale

Read more

When I finally understood the totality of their business model, and how it compounded an inherent advantage, I realized their strong financial results were not a one-off or a case of luck.

While they are growing from a much smaller base, their Quality metrics are better than companies like Microsoft and Google, showing a gigantic moat:

After reading everything about this company in the past weeks, I realized their moat is not just one element, but a mix of process power, network effects, cornered resource, and switching costs.

The company we will cover today…

• Has a moat built over generations

• Has growth and ROE % higher than Alphabet & Microsoft (with 0 cyclicality)

• Has net income compounding at 35% (organic growth + operating leverage)

• Trades at 9.5x forward earnings, with 5% dividend yield

• Is not impacted in any way by Iran war/peace

• Trades ~350 kUSD/day

Read more

1. Narrow down for what we are looking for quantitatively

2. Remove several groups of stocks for Qualitative reasons

3. Add back amazing growth stocks even if P/E or ROE doesn’t fit yet

4. Show the 16 most interesting Polish stocks for the moment

5. Review the most interesting 10 in a preliminary 1 page pitch

Poland is a great place for investing, because it has an amazing economy, a low cost of being public (resulting in a high amount of companies) and valuations are low as international investors are only just finding their way to the country.

There’s over 700 listed companies in Poland. I include only 545 today, having removed some “blacklisted” companies like CDA and Gamivo.

Just under 300 of these are profitable. Most are small-caps:

Filtering out the more expensive ones (P/E >15), and focusing on the growth companies, 31 remain:

I then removed the cyclicals, gaming companies, too hard to understand businesses, too illiquid companies, too lumpy companies… all to check if we can find some cheap, growing easy to understand businesses in this big sea of Polish stocks…

By the way here are some “too illiquid companies” I removed:
DGA, Mostozal plock, Eco5tech, Ampli, Effect capital group, Ultimate games Hub tech, G-energy, Quantum RRH, Verbum, Talex, ATM grupa, Genomed, Examobile, Sakana, Editel, Ekipa, Kancelaria, Prawna-Inkaso, Monnari, Otmuchow, Aqua.

What remained was 13 growing, cheap, liquid companies I think are interesting to consider investing in:

While researching, I like to look at the longer term success of each of these, as a pragmatic way to avoid one-hit wonders and find something durable that will do well for a long time, but is currently undervalued.

This is why I put together a longer term Revenue and Profit chart for the ones I found most interesting here, and some comments on what I found one each of them:

This is the start of research, so as always take it with a grain of salt. I will get back with a longer pitch (as done in Feb 2025 for BSH) on any I like in particular as my research progresses.

Here’s the 11 I like, in the order of how well I know them. I didn’t include Oponeo and Mostozal Zabre here because I don’t know them well enough yet.

As my research progresses, I may buy/sell some of them. If you like any in particular or have questions, let me know in the chat/Discord.

1. Atrem

2. BSH

3. Quercus

Read more

• High quality, recurring revenue, toll bridge type business

• Double digit growth in revenue and profits for several years

• Founder-led, with the founder increasing his stake daily, right now

• Profitability hidden due to Lease accounting. Clears up in 12-18 months

• Multiple free call options (Tech, M&A call options, franchise pipeline)

• Daily ~50 kUSD liquidity (sweet spot of investable & small cap discount)

• Trades at 9x earnings, guides for strong earnings growth to continue

I like each of these properties a lot, but rarely find them all in one stock.

After passing on a truckload of companies because of the Iran situation, I was happy to buy this one given the unique situation.

Let’s work out why.

Read more

Performance

The portfolio returned 9% year to date, compared to ~ -2% for the S&P 500 expressed in EURO. We made a 17th consecutive positive quarter.

The portfolio is currently not live available to subscribers. I’m afraid that would encourage too much copy-paste trading, exposing you too directly to my mistakes.

Subscribers have done well doing their own analysis of my write-ups though, which actually have performed better in this quarter:

Two new write-ups will be out soon, one tomorrow on a stable, consistent EPS grower hiding behind a temporary accounting overhang. A second one later this month on a larger, more liquid company which trades at a single digit multiple but has more than 10x’ed its business in the past 6 years and guides continued 30% earnings growth.

March 2026 market events

In the last month, the USA invaded Iran, the Strait of Hormuz closed, and short term oil prices rose about 50%.

Historically, when oil rises, there’s a very high probability of an immanent recession. As oil rises, the cost of living increases. This drives up inflation expectations, eroding trust in currencies.

Central banks then have to increase the cost of borrowing. Higher oil and higher rates drive down inflation-adjusted spending, which economists call a recession.

The 2022 recession is not indicated in the chart, but it did occur, in the sense that the economy did decline in real terms, and the stock market declined about 20%.

These events have hit the portfolio particularly hard, because of the large exposure to gold as well as construction. It’s good to still come out with a 9% gain for the quarter, and having adjusted the portfolio a little bit to limit the downside.

I think the war in Iran will end in April, but would also like to avoid losing a lot of money if that’s not the case. Let’s look at the current positions, latest changes, and rationale.

Changes and Portfolio

In this section:

• All portfolio moves and their rationale

• Full portfolio with % allocation and change vs last month
  
  

New positions:

• LSI Software

  • Small software and robotics company. The founders are still running the company and have grown it from ~6 mPLN revenue in 2016, to 81 mPLN right now. AI is a tailwind for LSI, as it enables customers to do more with robots. Sales is growing at ~20%, and LSI trades at ~12x earnings. Large investor “Franasik Funds” wants to delist the company, but CEO Mr. Siewiera has not been providing his votes to make that happen. As a consensus, they are buying back stock (~20% in the last 6 months)

    

    I have been buying the 32-33 PLN dips here, as I expect them to continue to raise their offer price, and ultimately buy out the company at 40-45 PLN. This is a stupidly illiquid stock though, and I have resolved to focus on > 40 kUSD stocks from now on too limit distractions.
    

• Chuan Holdings and HPC Holdings

  • Both of these are highly undervalued Hong Kong listed construction companies, active in Singapore.

    • Chuan trades at ~3x earnings of which 2x backed by cash.

    • HPC trades at ~5x earnings, and below cash.

    
    Both are not accessible to international investors, and return very limited cash to shareholders, making it likely that they will remain significantly undervalued. I use this as a tracking position, to expand on if either one of these 2 “problems” changes and turns into a catalyst.

Additions:

• Altyngold

  • I bought a bit more Altyngold this month, as it traded at an implied 2026 P/E multiple of 2.5-3x, even after correcting for higher oil, higher Kazakhstan taxes, and lower gold. Looks like many investors who made money on Altyngold in 2025, where not prepared to risk those gains, became forced/scared sellers on the way down.
    

• Lincotrade

  • I bought a bit more Lincotrade. The thesis is available below. Good to see them doing buybacks here, as well as board members buying shares.
    

Reductions:

• Reductions to protect against the effects of higher oil:

  • Huationg. The companies oil expenses are the same size as their net income, putting any forward earnings estimates at risk. I initially was a buyer of Huationg this month, but when the Gulf nations started attacking each other, I realized the Iran conflict could last for a very long time.

• Reductions to protect against the effects of interest rates staying higher:

  • LGIH. The company already did write downs against some of their assets in Q4, and likely had to do that again in Q1. Higher mortgage rates mean lower demand, lower prices, higher write-offs, higher refinancing needs to restore leverage, and higher funding costs on that refinancing… I like this company for its balance sheet, but sustained higher oil costs could have a devastating effect on that balance sheet.

• As suggested last month, I have sold or reduced many smaller positions, in order to add to the larger positions I like most. (ZTE, Scherzer, Yu, Canaf, Fab-Form, … )

Changes going forward

I would like to study a bit more liquid companies going forward, let’s say above at least 50-100k USD. While these often are still undervalued and underfollowed, they would allow us to put in bigger investments and reap bigger profits when they do well.

Altyngold, OKP, Huationg, Soilbuild and Serabi have all been great examples of this, trading decent 500-1000k/day liquidity but still providing a good source of alpha.

Focusing on more liquid companies will make it much easier to share trades on a going basis, providing more value to subscribers, and getting used to making profits on deeper ideas (like OKP, Altyngold) rather than quick but small gains (like the LSI Software setup, which is interesting but way too small).

I have to force this on myself a bit, changing my ways of working leaving behind the ~10kUSD/day companies, as the portfolio has grown a lot in the last years, and I can’t “just in put more time” anymore to compensate…

I might still share some illiquid names but not invest in them myself. For example,

• AF Legal on the ASX, trades ~5 kUSD per day, grows ~20%, has grown underlying profits since ~2018 but hidden by restructuring expenses. Guides for short-mid term profit before tax of 5 mAUD, on a 15m market cap…

  

That looks like an interesting setup to me, and the theory says that most interesting setups are very illiquid companies like this… So I will keep sharing them with you.

In the past years though, I have done just as well in more reasonably liquid stocks, so I will focus more on those to drive a more sustainable performance and share-able investing journey.

Discussion and Discord

Don’t copy paste and don’t always agree with me, but do check out the ideas I put out. Feel free to reach out when you notice a mistake or have a question. If you’re not on the Discord yet, just DM me on Substack for an invitation link. If someone contacts you on Discord to sell a product, that’s not me. When in doubt, ask me on Substack.

Disclaimer

This is not investment advice, please speak to your adviser before investing, and please do your own work analyzing the company.

• OKP delivered great 2025 results (Revenue +33%, Net income +21%)

• Exposure to higher oil or other inflation looks limited to mainly ~3 mSGD/y in higher fuel costs. This is low, driven by low fuel consumption, long term input contracts and low labor inflation. Other more earthwork focused companies will suffer much more.

• OKP wants to use the large cash balance to bid for more projects and grow within Singapore’s construction boom providing a good environment until ~ 2028-2029.

• OKP currently trades at 8x earnings or 4x ex-cash. The stock is up ~200% since the write up on the company last year and is currently not in the portfolio anymore.

At the end of the interview are some thoughts on why OKP/Soilbuild/Lincotrade are likely much less affected by the oil shock than KTC and Huationg.

Interview

Attendees

• Mr. Daniel Or (Executive Director of OKP)

Thank you for taking the time to speak again, mister Or, and congratulations on another record year.

Thank you, Floe. Happy to speak with you!

Q: Let’s start with the macro. How do you see the construction market in Singapore right now?

A: The Building and Construction Authority is awarding about 50 bSGD in construction activities per year. Last year it was about 51.2 bSGD, and 2026 is going to be around the same amount. We are in a construction boom right now. Contractors have enough supply of projects in the market, so you don’t have to cut short and tender at very low prices. In terms of margins, things are looking good for our industry and this will continue for the next two to three years.

Q: OKP has done much better than other construction companies on margins. Why is that?

A: There are a few reasons. We don’t go after major and complex jobs. We never participated in the Changi Terminal 5 project, or the Changi East corridor. These major contracts have durations of seven to nine years. Once you lock in such long duration projects, you need a lot of people, and you become less flexible. (to price higher in the current boom)

Since there are enough jobs going around in the market, we should not be entering into this arena. The good thing for those major contractors is that they have clear order books for six to eight years. But since there’s enough to go around, we select shorter duration projects. So I can recycle my capital a lot faster than the others.

(Earlier interviews cover Mr. Or’s exceptional focus on project management excellence which he is very modest about but is a key advantage for OKP )

Q: With oil prices rising, are you exposed to higher input costs?

A: Because of the nature of our work, we don’t use much diesel. My consumption is about 200,000 liters per month for the whole group. Assuming it persists, the annual impact would be maybe 2-3 mSGD. Based on my turnover and my gross margins, I don’t think that is significant.

For reference, the largest earthworks contractor in Singapore, KTC (a private firm) consumes 5 million liters per month. A dollar increase costs them 5 mSGD. We are in a very different position.

For materials, concrete and reinforcement steel in my contracts have fluctuation clauses, so I’m covered. The structural steel we use has increased about $100 per ton, but the suppliers and subcontractors are still honoring their contracted rates.

For labor, cost increases are limited and focused on white collar workers, more driven by the construction boom rather than cost of living increases.

Q: What is your biggest challenge right now?

A: Human resources. Everybody is poaching engineers from one another. If you don’t have a strong enough project management team to execute your work, you run into problems. Project delivery is not there, productivity is not there, and risk management and cost management may not be as efficient.

The challenge for cycling paths and sheltered linkways is that there are a lot of stakeholders to deal with. You are working in proximity to residential housing. You deal with trees governed by NParks, drains governed by PUB, and so on. The good thing is that my team has been doing this for the past five to six years. Their experience allows them to tackle all these challenges. It’s not easy for newcomers to come in and just get a contract awarded.

Q: You mentioned that you always strive to improve. Is your team bigger than a year ago?

A: Right now, the whole group has close to 800 general workers. But the management and project management team has grown by about 12 to 15 percent. We are growing, but we are selective. We really look for quality people.

I have also just recruited two new senior engineers who are experts in large-scale tenders. Their main role is to participate in tenders and technical submissions for more complex jobs of 300 to 400 mSGD.

Q: What about the AM208 tender? It has been taking a while.

A: You are very well informed. Even the local analysts don’t know the tender number, haha. AM208 has not been awarded yet, but I think we may face some competition on price there from a Chinese competitor.

I believe my technical submission should score a lot higher, but with 70% of the scoring on price and 30% on technical, I’m not sure my overall score will overcome their pricing.

Q: How much are you tendering for right now?

A: The total value of tenders we have already submitted is about 600 mSGD. There’s another 600 to 700 mSGD in tenders still being prepared. So in total, about 1.3 bSGD.

We just announced the 87 mSGD contract for commuter infrastructure around the Jurong Region Line. This contract has options that will likely grow it beyond 100 million. Besides that win, I hope I can deliver some good news within the next three to four months.

Q: Based on the projects in the pipeline, how many good years do you see ahead?

A: Based on the near future, 2026, 2027, 2028 and 2029, I think these three to four years are going to be fantastic. Beyond that, it’s too far to predict, because you don’t know what changes may come.

Q: Let’s talk about the cash position. It’s grown significantly because of your profitability. How do you think about it? I know you get this question all the time.

A: The reason we are careful with dividends: Some of the jobs I tender for may require heavy upfront cash to purchase sheet piles and temporary structures before the work even begins.

The cash gives us the ability to bid on larger projects. And when clients award contracts, they look at your financial statements. They have become more vigilant since the pandemic, when a lot of contractors went bust.

If one day there is no more growth and the supply of work dries up, I will give huge dividends. But right now, we are still growing.

---

Thoughts on the interview

I no longer own OKP, but clearly the company is still cheap at < 10x earnings, continues growing double digits, while expanding their orderbook by bidding on larger projects. This is one of the best managed companies in the industry.

Surprisingly, the outlook is that the ongoing conflict in Iran will not affect their large margins that much. They will be able to manage costs even if oil remains high, because they don’t consume much oil, and because their key inputs (concrete and construction steel) are bought on long term contracts matching their typical 1-2 year project durations.

When Mr. Or. talks about inflation, we can understand that the impact on companies like OKP (and for example Soilbuild), will be limited as they don’t use much oil or have short (1-2 yrs) project durations.

I think KTC/Huationg will be much more affected. These companies have lower margins to begin with, consume high amounts of fuel, and have multi-year backlogs creating a perfect storm. I would not be surprised though, if they end up making deals to raise prices. The current construction boom in Singapore is so strong, that its unlikely for these companies not to make good money one way or another. Time will tell. H1 2026 might be difficult for these companies.

I think Lincotrade, similar to OKP will not see much negative impact from higher oil, but for a different reason: Their outfitting work requires no earthworks at all. I think their demand is also a bit more price-elastic (data centers or hospitals/hotels needing the final utility and outfitting works before opening).

---

Disclosure: No position in OKP.

Disclaimer: This publication’s authors are not licensed investment professionals. Nothing here is investment advice.

Performance

The portfolio returned 21% year to date, compared to ~ 0% for the S&P 500. We look ready for a 17th consecutive positive quarter.

The portfolio is currently not live available to subscribers. I’m afraid that would encourage too much copy-paste trading, exposing you too directly to my mistakes.

Subscribers have done well doing their own analysis of my write-ups though, which have performed similarly well:

February 2026 market events (old man rant)

In Feb 2026, the market realized SaaS business models were prone to AI disruption, triggered by comments from Anthropic CEO Dario Amodei:

“An AI tsunami is coming”

His words provided context for the exceptional performance of Anthropic’s latest Claude Opus 4.6 model, including Cowork and Code.

As an investor, it’s fine to agree or disagree with Dario. Take a good look at the world, and form an opinion. While doing so in 2026, I think it’s helpful to check out, and be surprised by Claude Opus 4.6, while forming an opinion. I have used it to update my positions table below, right in Excel, based on screenshots of my latest positions. It updated positions, currencies and latest prices. Surprising and handy.

I think the market is still underestimating AI. I wrote a screener for Polish stocks in early 2024 using GPT-3.5, over a year before the market started selling off FactSet, the financial data provider… It took me 4 hours.

The AI disruption in SaaS is similar to the disruption telecom providers and cable TV providers faced when the internet came along… It won’t kill companies like a fox in the night, leaving nothing behind. Rather, it will clip away their pricing power piece by piece until there’s nothing left… Criticism of AI’s limitations will evaporate, just like our complaints about dial-up internet connections did…

I have seen this movie before and I would suggest: Don’t fight the market on this…
Electric light was commercialized less than 150 years ago. Don’t try to be a genius by underestimating technological progress!

Changes and Portfolio

In this section:

• A review of the 6 new positions

• All portfolio moves and their rationale

• Full portfolio with % allocation and change vs last month

New positions:

1. Lincotrade (BFT.SI)

I love these kind of Singaporean construction companies which report growth, profitability and backlog visibility all at the same time. I try to know and follow many of them, to increase the odds of being able to swing at a perfect earnings report like the H1 2026 Lincotrade reported.

Driven by data center demand, Lincotrade reported revenue up 58%, net income up
> 400%. Order book doubled in 12 months. Looking a bit deeper, we notice a new factory coming in March 2026, and insiders still owning ~80% of the company trading at ~5x run rate earnings plus cash.

2. XMH Holdings (BQF.SI)

This is a Singaporean power solution provider, mainly to marine and data center sectors. When you build a ship, or a data center, and you need a propulsion engine, or a backup power generator, then XMH will engineer this for you. They select and integrate a commercial engine, gearbox, shaft, bearings and other parts. They have custom solutions and (semi-)standardized solutions. The company is founder led has been growing for years, but trades at only ~8x P/E.

XMH’s solutions were recently recognized by Mitsubishi for their exceptional assemblies. Mitsubishi not only selected XMH as a preferred partner, but also bought up 15% XMH’s data center subsidiary, providing the company with working capital for growth. A nice win-win.

An unclear backlog, and Indonesian tax issues, caused me to hold off on buying shares in XMH for about a year (price rising from 0.90 to 1.70 SGD).

It looked good, but there was no way to build confidence. No way to suggest that the data center projects were not a one-off… Or two-off…

That was until 2 large insider buys… This was the missing piece for me:

Looks watertight? It never is. I have seen the weirdest reasons why CEOs buy shares. Avoid delisting, avoid lawsuits, avoid bad perception… I have a good impression of this one though. Founder, good fundamentals, big buys.

Time will tell… (Married deal = large block agreed between large owners)

3. Bioxyne (BXN)

Medical cannabis producer growing over 100% and trading at 7-8x 2026 earnings.
I wrote this article on the company last week, just before the company raised guidance.

The write-up already suggested that they would meet guidance on revenue, but beat guidance on EBITDA. The company posted their Q2 cash flow statement in January, making it clear that
(1) Inventory was rising …
(2) Capex investments were being made …
(3) Some suppliers were being pre-paid …
(4) Cash was rising …

Put these things together and it was clear EBITDA/ net income would be great.

I will be reaching out to the company for some more perspective, answering some of the open questions in the article. They sounded very optimistic in the H1 call, but didn’t really provide hard data on their international expansion.

Read more

Ticker: BXN (ASX) Price: AUD 0.045
Fully Diluted Shares Outstanding: ~2.23 billion
Market Cap: 100 mAUD (~65 mUSD)
Net cash: 6.7 mAUD

Overview

Bioxyne is an Australian pharma co making medicinal cannabis products (pastilles, flower, vapes, oils). They make their own brands and ~200 private label brands (e.g. for pharmacy chains).

The company also holds Australia’s first GMP licence for MDMA and psilocybin, and is providing these drugs to hospitals as part of medical trials.

It’s interesting because

1. They grow >100% p.a. since 2022, within a fast-growing medicinal cannabis market. Revenue grew from 2m in 2022 to ~65–75 mAUD in FY26 (guidance).

2. Strong execution across each of their pillars for success.
   The team has built an efficient GMP production facility, pioneered new product categories like pharmaceutical cannabis gummies, and is working with regulators to expand sales into Germany, the UK and LatAm.

3. Shares are undervalued at ~8x FY2026 earnings. At 100 mAUD market cap and 6.1 mAUD net cash, the stock trades at ~8x our FY2026 net income estimate of ~12.5 mAUD. For a company growing revenue at 100%+, this looks cheap.

4. MDMA and psilocybin provide future upside not in the price. Bioxyne has fulfilled 400+ patient doses for clinical trials. Revenue is sub-1 mAUD today, but the global psychedelic therapy market is projected at 14 bUSD by 2032. This is free optionality.

What do they do?

Bioxyne operates across four segments:

1. Australian medicinal cannabis (~29 mAUD FY25 revenue)
   Manufactures pastilles, flower, vapes and oils on a B2B/CDMO basis for ~200 private label brands and pharmacy chains.

2. International CBD (~1.5 mAUD FY25)
   Six years of UK/European presence through the Dr Watson wellness brand, with a 78,000-consumer database. Provides distribution infrastructure for the medicinal cannabis push.

3. International medicinal cannabis (0 mAUD FY25, ramping in FY26)
   Exporting GMP flower to Germany (~6 mAUD initial contract with Farmakem/ADREXpharma, 2.9 mAUD invoiced Q2 FY26) and the UK (~2.5 mAUD first shipment). Flower is 95% of the German market. Management aspires to ship ~10 tons to Germany in 2026 at ~2–2.5 AUD/gram. Czech and Scottish facilities in development.

4. MDMA and psilocybin (<1 mAUD FY25 revenue)
   Holds Australia’s first GMP license for both substances. 400+ patient doses fulfilled for clinical trials and authorized prescribers. 5–10 year horizon for significant scale. The global psychedelic therapy market projected at 14 bUSD by 2032.

History and leadership

Sam Watson has founded what the company now represents, and has listed it through a reverse merger in 2023.

Sam and other insiders collectively hold ~60–65%, and have quickly grown the revenue, the capabilities and the relationships of the company over the past years:

• Feb 2024: Obtained Australia’s first GMP license for MDMA and psilocybin

• Aug 2024: First pharmaceutical cannabis gummies under TGA GMP

• Aug 2024: Increased gummy capacity by 3x

• FY2025: Revenue 30.4 mAUD (up 216%), first profitable and fcf positive year

• Aug 2025: FY26 guidance of 65–75 mAUD revenue, 11.5–13.5 mAUD EBITDA

• Q1 FY25 (Sep 2025): First contract from Germany (5 mAUD)

• Q2 FY26 (Dec 2025): Record 17.2 mAUD quarterly revenue (p&l to be posted)

• Nov 2025: Received permit for UK factory (want to copy paste Australia)

• Dec 2025: Released MDMA capsules for clinical trials (PTSD treatment)

• Dec 2025: 1 mAUD agreement with customer is LatAm

• Feb 2026: Hired UK plant and Quality manager

Financials

Bioxyne has so far reported FY 2025 (July 24 - June 25) statements, and has shared their FY26 H1 revenue and cash flow report, in true Australian style.

FY2026 (Jul ’25–Jun ’26): I use H1 FY26 actuals and estimate ~40 mAUD H2 revenue based on management’s 65–75 mAUD guidance. For the rest of the P&L I use current opex growth rates, factoring in some operating leverage as Australian facility is now fully operational. I used a lower gross margin for H2 (25% vs 30%) as I expect a larger share of revenue to come from the lower-margin international flower segment.

This gives ~71 mAUD revenue, ~14 mAUD EBITDA, ~12.5 mAUD net for FY2026, just above guidance: 65–75 mAUD revenue, 11.5–13.5 mAUD EBITDA. In 2025, Bioxyne delivered revenue more than ~10% above guidance.

Competitive advantages

Cost advantage. BXN sources from >20 cannabis growers globally, and has built the world’s largest medical cannabis gummy facility, in the worlds most cost competitive Cannabis production country.

Strong product development. BXN pioneered pharmaceutical cannabis gummies under TGA GMP. Pastilles went from 4.8% to 25%+ of Australian cannabis prescriptions in a year.

Global footprint. The Australian facility is EU GMP certified, enabling direct supply into Europe, UK, Canada and Singapore. New facilities in the Czech Republic and Scotland will bring manufacturing closer to European customers.

International expansion

The company is taking its first steps into international markets, most importantly Europe, using the supply network of their currently unprofitable CBD business:

Germany: ~6 mAUD supply agreement with Farmakem/ADREXpharma for 1,600kg GMP flower. 2.9 mAUD invoiced in Q2 FY26. The German market is €1B+/year with 1m+ patients. Flower is 95% of the market, probably making it a low GM% market over time.

UK: ~100,000 patients today, expected to reach 420,000 within two years. First medicinal cannabis shipment was ~2.5 mAUD

Other EU: Czech facility and Scottish facility in development, reducing lead times from the current 2–8 weeks for export/import permits.

Warning
What really annoys me here, is the lack of follow-on announcements related to Germany. The company has not detailed guidance across segments, but their inventory comments in the Q2 report suggest they want to ship ~10-15mAUD in products into Germany in H2 FY26. Reaching that would mean they are currently shipping follow-on orders, but a press release confirming that is missing.

Valuation

At 100 mAUD market cap and 6.1 mAUD net cash, BXN trades at ~8x our FY2026 net income estimate of ~12.5 mAUD.

Applying a 13–15x ex-cash P/E to those earnings puts fair value at 169–194 mAUD market cap, or AUD 0.076–0.087 per share. That’s 69–93% upside from today.

Risks and unknowns

• Australia’s medicinal-only focus
  Australian regulations restrict BXN to medicinal cannabis. If European countries change regulations to fully allow cannabis, then Bioxyne will actually no longer be allowed to export from Australia. The UK factory will be up in a year though and will mitigate this.

• Competition
  Although Bioxyne has built a nice pastilles business, the competition in the cannabis sector is ruthless. There’s too many competitors to name, and they are all setting up GMP facilities in Europe to chase the 100-200% growth seen in key countries. I think their current Australia business is relatively safe, but the international expansion is hard to predict.

• Growth in Germany?
  Bioxyne has supplied ~5 mAUD worth of medicinal cannabis to the German market in H1 2026. We don’t have any visibility on continued orders, although German Dr. Watson product reviews are solid, and the Q2 comments about new German regulations pushing products through pharmacy chains instead of e-commerce are very positive. I just don’t understand the lack of PR here.

• European gummies?

  Although gummies are a natural form for medicinal cannabis, none of the European countries has allowed them so far, leading most “patients” to smoke their cannabis. Allowing gummies would provide an amazing opportunity for Bioxyne to use the expertise they have built up.

• Other European countries and the USA
  Several countries are moving closer to a clear framework on medicinal cannabis, providing potential (long term unavoidable) TAM growth for Bioxyne.

Summary

Sam Watson is growing Bioxyne into a unique pharma player, leading the way in medicinal cannabis, mdma and psylocybin. The company will reveal it’s earnings next week, and I think its very cheap at ~8.0x FY2026 earnings.

I think these earnings will have a positive impact on the stock, but further success will depend on positive evolution of their international business, in particular continued demand and follow on orders in Germany.

If the story continues, to be confirmed in the call on 26th of February, then the growth at high ROE can be valued at 13–15x earnings, or AUD 0.076–0.087 per share, or 69–93% upside vs todays price.

Disclosure: Long but keeping a very close eye and might change position quickly if for example Germany turns out to be stalled. Please check out the company before investing.

Disclaimer: This publication’s authors are not licensed investment professionals. Nothing produced by the Floebertus team should be construed as investment advice. Investing involves serious risks, including risk of capital. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge.

1. Growth is 58% yoy (H2 2025), driven by data center demand

2. Backlog is exploding (New orders were 50% above revenue)

3. Gross margins are increasing (Better mix + operational improvements)

4. Capacity increases in March 2026, driven by a new factory

5. Insiders own ~80%, recently raised growth capital at a 5% premium

6. Stock is cheap at ~5x 25H2 annualized P/E (ex-cash of 30%)

We were following this company for a while and noticed their small capital increase at a premium in Dec 2025, but at that time couldn’t see a great investment case yet.

Let’s dig in.

Lincotrade & Associates Holdings Limited

Ticker: BFT (SGX) Price: SGD 0.29

Fully Diluted Shares Outstanding: 182m Market Cap: SGD 53m (USD ~41m)

Focus

Lincotrade is an interior construction company based in Singapore. They upgrade or build a broad set of residential, commercial and public buildings (from apartments and hospitals, to now increasingly offices and data centers).

The company focuses on 3 segments:

• Commercial. Upgrading offices, hospitals and data centers. They improve the overall design, layout, and technical facilities like ventilation, fire safety, air conditioning, cooling…

• Residential. Upgrading or building new houses and flats, with a focus on interior design, but also technical aspects like refurbishing buildings to adapt ceiling heights etc…

• Show-flats. Setting up attractively outfitted demo flats to drive sales (~ legacy business)

In recent years’, the commercial segment has become very dominant at >90% of revenue, driven by accelerating demand in data centers. This is boosting the company’s overall gross margins, as Commercial has ~15% GM vs ~5-10% in Residential and Show-flats segments.

The “Commercial” projects not only have high urgency, but also have a much larger scale, driving up both pricing power and execution efficiency for Lincotrade.

Management

Lincotrade was co-founded in 1987 by Jimmy (Tan Jit Meng) and Jackie (Soh Loong Chow) who still run it today and have brought it public in 2022 together with millionaire investor Wee Henry and COO Tan Chee Khoon.

All 4 still own their original shares, for ~80% of the company. The rest is mainly owned by retail investors.

Financials

Lincotrade has been growing very well since IPO, but the recent results show a true growth and profitability inflection, with net income rising >400% in H1 FY26 which we like to just call H2 2025 CY for easy understanding.

That recent growth and profitability look sustainable, given:

• Increased pivot towards Commercial projects

  Over the past 2-3 years, the company has made a systematic shift toward offices, hotels, malls, and data centers which support the current margins.

• New Tuas factory to enable the growth
  As of March 2026, Lincotrade plans to relocate their assembly to their new factory in Tuas. The factory has a higher capacity and includes a 204-bed worker dormitory and solar panels to drive efficiency.

• Continued demand in Singapore construction & data centers
  Singapore’s building authority projects SGD ~50bn new construction demand in 2026, like 2025 and up from ~44 bn in 2022-2024. Construction is expected to normalize in 2027 while data center demand is expected to continue growing until at least 2030.

• Record Order Book (Doubled in 12 months, driven by 140 mSGD new orders)
  

Let’s look at what their current backlog suggests in terms of forward revenue growth:

The company typically delivers more than their backlog in a year. Average project lead time is 9-10 months. Previous award announcements confirm this. The only exception we can find is 2022, a year of supply chain delays.

Applying a ~120% delivery factor to their current order book, leads to an estimated 140 mSGD revenue in the 2026 calendar year, much higher than the current 107m run rate used in the valuation above. If the current 15% gross margin persists, this will bring additional operating leverage and ~10-14m 2026 net income…

This puts into perspective the 7.7m net income we are using by annualizing the past 6 months. Looks aggressive now, might look conservative in the future.

Valuation

We like to use a 10-12x ex cash fair value P/E multiple for double digit growth companies.

This puts Lincotrade at 0.49 – 0.57 SGD per share, for ~ 100% upside vs today.
(7.5m x [10 to 12] + 14m, or ~ 89 – 104m market cap)

The 12x P/E is not necessarily a sell target. More like a “should trade there quickly unless there’s a dead mouse under the carpet” type target. Then when it gets there and the mouse hasn’t appeared (or is alive and well), we consider if we have a new better idea or not.

Risks

1. Lumpy project demand. Projects are lumpy and customer concentration is not disclosed but seems limited to ~15-20% for 1-2 major projects. Overall demand may cool down 2027-2030.

2. Execution. As projects are getting larger, they could become harder to execute and take longer. Doesn’t seem to be happening, as the recent 29 mSGD data center ordered in November will be completed in <12 mo.

3. Margins. The next 6 months will prove if the company can expand from their modest 8% net income margins, or if they re-rate to prior years’ lower 2-3% net income margins. In the prior years, a big part of the business was residential and show-flats though.

4. Management. Jimmy and Jackie are changing roles a bit with Jackie taking over the CEO role and Jimmy staying around in an executive management role. This can sometimes flag collaboration issues, but we think here the opposite is the case as the 2 have worked well together for ~40 years now.

Summary

This company is very likely growing double digits in the coming 24 months, justifying a double-digit P/E multiple which would make this a double. Do some work on this company before investing rather than just diving in based on what a stranger on the internet thinks though.

Thank you for reading!!

Disclosure: Long. Please check out the company before investing.

Disclaimer: This publication’s authors are not licensed investment professionals. Nothing produced here should be construed as investment advice. Do your own research before investing.

Performance

The portfolio was up ~14% for January 2026, for a total gain of 662% since the start of 2022, versus 47% for the S&P 500 Total Return (EUR).

I saw an interesting conversation this week, where Ian Cassel, the founder of MicroCapClub, spoke with Tobias Carlisle and Jake Taylor, two great value investors. The part that interested me most was the discussion around buying the dip vs adding to winners.

Ian explained—referring to The Art of Execution by Lee Freeman-Shor—that the most successful fund managers don’t have a high hit rate. In their stock selection, they are wrong most of the time.

What then makes these elite fund managers successful? Well, they exit quickly and keep adding to their winners as conviction grows and the thesis plays out.

While this is obvious to most micro and small cap investors, the value investors were very surprised. They are used to going through 52-week low lists, buying stocks at their cheapest, providing maximum margin of safety, on the assumption that the underlying value hasn’t changed.

That last assumption is exactly where most micro and small cap investing is different from pure value investing. The large majority of tiny/small companies we are looking at are clearly not as dominant as Nvidia, or Alphabet, or even challenged large cap companies like Duolingo.

Even though we all try to select the strong business model companies from the universe of micro-caps, the above statement means that the prior probability of success (before we filter going through report and filings) in micro-caps is much lower than in large caps.

Small/micro cap investing is like fishing in the dirt, trying to find exceptional companies where they usually aren’t to be found. This is why in small cap investing, it pays to buy new highs, but sell early when conditions deteriorate. Add slowly as things improve, get out pretty fast when something breaks.

Fast here doesn’t mean minutes or even days. Things typically play out over time, so we have time to analyze, understand, and then act. Many investors freeze when things go wrong. They are caught by stress and inaction.

In the excellent book “On Grief and Grieving: Finding the Meaning of Grief Through the Five Stages of Loss”, Dr. Elisabeth Kübler-Ross and David Kessler explain how the first stage of grief is denial and isolation.

Not Fear or Anger. Rather, denial and isolation is the first thing we feel when things go wrong. The mind and body want to find a safe place to start processing things before accepting them.

As Ian explained, and as Lee Freeman-Shor explained, the most successful investors get out quickly when things fundamentally change. They quickly understand and accept reality and move on. Conversely, they add to companies that are improving (even if the market doesn’t recognize the improvement).

I try to apply these principles as well, because I noticed over time they worked. Having said that, while the companies I look for are exceptional, I don’t pretend to be an exception to what Dr. Kubler-Ross wrote in her book on human psychology.

In the Portfolio update below, I will measure if I applied these ideas well over the past couple of months, and how that worked out.

First, let’s look at the current portfolio and what those changes were.

Portfolio

The top 5 positions going into February are:

1. AltynGold

2. LGI Homes

3. Huationg

4. Grand Banks Yachts

5. Serabi

Below is the full portfolio and the % allocation of the positions

Changes

All changes were made on Thursday/Friday this week except EDU Group, which was sold a bit earlier, whenever I mentioned about going to sell it in the chat:

• Sold EDU Group.
  The context of the company is getting more risky, driven by:

  • November 2025 MD117 - A new Direction by the Ministry of Education to further de-prioritize visa applications related to students willing to enter schools which have already exceeded their National Planning student threshold. (majority of students in EDU group impacted, not clear if the MD will be adhered to or if de-prioritization will have impact)

  • December 2025 Bondi beach attack

  • January 2026 amendments to the National Code for Providers of Education and Training to Overseas Students, banning commissions for agents finding students interested in changing schools within Australia.

  The combination of these events makes it more likely that EDU Group will not be able to enroll the same number of foreign students in the future, putting their business model at risk. The outcome is too hard to predict here, even though I expect 30% growth for EDU in 2026 (trading at 6x 2026 P/E). We will know more when they post T1 or T2 enrollments.

• Added to Huationg

  Huationg has a growing construction business as mentioned in the post below. As the company has been hiring and did a small capital increase to raise funds for working capital, it is becoming very likely that growth will continue. The company has TTM net margins of 6-7%, which are likely to expand, driven by

  • (Higher revenues diluting fixed costs over a larger base)

  • Continued low inflation, protecting margins on long-term contracts

  • Continued strong public and private sector investments in construction in Singapore, creating a “seller’s market”

Both of the 2 transactions can be seen as an application of the mandate in the slide on top which says “Add to winners if fundamentals remain compelling” and “Cut losers quickly on poor operating results or clearly worsening context”.

It’s not certain, that these decisions will make money in the future. All I know, is this process has been working for a while, and I keep applying it, and tuning it if needed, while doing my best to look at as many great companies as possible.

• Reduced Serabi
  I have mentioned a couple of times now in the past 6 months, that gold is a trending asset, which means just hold it on the way up.

  
  Gold usually sits in boredom mode. Savvy (grumpy) wiser investors are then telling each other that gold is a pristine asset, and the government is printing too much fiat… They say “the market is too stupid to care” when gold has done nothing for 1-10 years…
  
  Sometimes though, gold goes into sunshine mode. Gold makes new highs, and everything makes sense. The higher it goes, the faster it goes, the stronger the story becomes. Governments, investors, banks are all getting on, and agree that cash is trash.
  
  The time gold stays in this second mode is shorter than the time in the first mode, but still last years, just looking at the past gold bull markets:

  • 1976–1980: ~700% gain, during the 70s inflation years (until Volcker)

  • 2001–2011: ~650% gain, after tech-bubble and through GFC stimulus

  • Dec 2023–Present: ~133% gain, driven by declining appeal of US Treasuries and Euro/Dollar reserves due to low real interest rates and low trust in Western governments.
    

  It’s interesting to note that the previous 2 bull markets ended when interest rates changed upwards. Investors then replaced gold by (government) bonds.
  
  Gold ended January like it ended December. Significantly higher, but very volatile. Whether the current rally will last as long as those in the 70s or 00s is impossible to predict. What we do know, is that the sentiment of the past few weeks is probably too optimistic, and that typically in the past, bull markets last significantly longer than the 2 years we have just seen and don’t typically end in years when governments around the world cut interest rates. A good scenario for gold to decline would be if oil doubled in the next 3-4 months and the fed started raising rates to cool down the economy to avoid inflation.
  
  Putting all the facts together, gold miners, at their very low valuations, still look very interesting (Many trade at 2-6x earnings with 10-20 years of reserves). The risk level of the situation has changed slightly from ~Q2 last year though, as there’s clearly more optimism and volatility in gold, posing a risk to the ongoing trend.
  
  This is why, just like in December, I have cut back a bit more on 2 gold positions (Serabi gold and Moneymax). Serabi in particular, not only is exposed to gold price risk, but also carries some risk from their ongoing expansion of the Coringa mine (both licensing and resource risks).
  
  I think investors are likely well rewarded for those risks (Serabi trading at < 3x 2026 earnings at 4900$ gold). However, as gold was down 12% to $4600 at some point on Friday, putting more risk to the gold trend, I decided to take some profits on Serabi, from a risk management point of view.
  
  Expect some volatility. As the waves go up and down, so do the birds sitting on the water. The strongest will fly up, while the weaker might go under. The trick is not to avoid the waves but to find the strongest birds.

• Reduced MoneyMax

  Everything is currently going well at Moneymax. Gold and silver are doing well, drawing people to their pawn shops to bring in items in exchange for credit. Existing pawned items can even be used to finance more credit, bringing in more interest income for the company. New pawnshops immediately provide high returns on investment as customers flood into the doors… The company will very likely post great operating results for H2 2025 in February.
  
  There’s a big difference in how pawn shops vs mining companies are linked to precious metal prices. While miners benefit from high commodity prices, pawn shops like Moneymax benefit from rising commodity prices. While I don’t have a high conviction opinion on whether gold prices stay high, I do hope it’s fair to say that they will not continue rising steeply forever.
  
  This means a moderation of pawn shop results is likely, whenever the pace at which commodity prices rocket higher cools down (as of H2 2026 ?). This will lead to a normalization of growth and margins for Moneymax. (while miners will continue to print cash)

Both of the 2 transactions cannot really be seen as an application of the mandate in the slide on top which says “Add to winners if fundamentals remain compelling” and “Cut losers quickly on poor operating results or clearly worsening context”. Gold is up 12% YTD even after yesterday’s drop.

These 2 transactions are therefore mostly “portfolio risk management” changes. These typically cost money but (in theory) provide consistency and downside protection.

Adding to existing positions vs. taking new positions

Looking at the ADDs to the positions in December and early January, we see why adding to small well performing companies is powerful.

• A nice 80% of the additions worked (Average 10%)

• Only 56% of new buys worked (Average -4%)

I’m not showing this to over-analyze my own trades, but rather because I think this is very common. Adding to stocks because we know very well and we know are doing great, often works out.

Main dish?

One attentive reader pointed out that after the “Appetizers” post of January 1st, no main dish has arrived yet. We will need to be a bit patient here though. While finding great microcaps is amazing, our focus has to be on searching them.

Carefully searching, understanding more and more companies in the world. Then suddenly finding an insight worthy to put the hammer down. That’s the focus.

The goal is firstly to “search well”, rather than “trying to find” a new stock idea. When we try to find, we are always successful, but we accept mediocre ideas. When we try to search, we have no measure for success, but the best ideas will somehow find us anyway. That’s how it works for me anyway.

Conclusion (or lack thereof)

If you like any of the ideas or stocks above, this post will not bring a clear conclusion. Make sure to read about the company, get to know them, or discuss them with your financial advisor. Feel free to give the CEO a call.

My goal is to share what I’m doing in a transparent way, trying to optimize my process of building a portfolio of winning companies. It’s been great sharing this to understand it better myself, while getting feedback from readers.

It does come with a sort of “lack of conclusion” though, because well (1) I can’t tell you what to do because fortunately that’s not my responsibility and (2) I can’t even really tell you what I’m going to do, because then I probably would have already done it and (3) There’s really no indication that what I will do in the future will work out or have any benefits.

Thank you

Disclaimer: This is not investment advice, please speak to your adviser before investing, and please do your own work analyzing the company.

• 2025 review

  • Overall performance

  • Main winners & losers

  • Corresponding insights & mistakes

• 2026 portfolio

  • Positions and rationale on Jan 1^st

  • Update as of Jan 17^th (after rebalancing)

  • Watchlist

2025 Review

The portfolio did exceptionally well in 2025, with a 123% return across the positions. It was great to scratch a 100% return year off the bucket list, but we should not expect this to be repeatable (of course haha).

Looking at the past 4 years, it’s becoming clear that we have a big advantage. We have the privilege to invest in exceptional companies which are too small for institutional investors to research, and this enables us to get exceptional returns.

The thesis on some of these investments is very interesting, for example OKP Holdings being primed to win most of Singapore’s upcoming tenders for its large cycling path expansion. This type of thesis is where we can really go deep and build unique insight. (at the time of the write-up)

Others are very simple, for example Soilbuild just winning a huge order book of tenders, or Huationg already having the order book and showing clear hiring (based on LinkedIn figures) to execute on it. These are situations where scouring through annual reports and filings across a huge universe of companies, leads to finding a few with a clear advantage and a very plain thesis.

Whatever the complexity though, the goal is to stack returns here. We don’t have to get too cute if it’s not needed. This has worked pretty well over the past 4 years.

Notice that the chart starts at Jan 1st, 2022. Before that, we were focused on large- caps and consistently underperformed the S&P500. We came to respect the efficiency of the large-cap market, and the strength of the US economy. This is why we still like to compare our performance to the S&P, rather than MSCI World.

Beating the index in large-cap stocks is hard because you’re competing with ~1000 analysts at the big banks teaming up to find and resolve market inefficiencies.

In small and micro-caps though, they can’t participate because their wallets are too big to step in and out of small companies/stocks. As said, this is where we have an advantage, and we think this advantage will remain there for the coming years.

Winners

The biggest winners in 2025 are below, showing the positions contributing more than 1% of the overall 123%.

We recognize 3 main groups

1. Singapore construction +42%

   Some of the most economically favorable countries, and best ran countries in the world, have extremely low stock market valuations. The world has forgotten them. Prime examples of this are Poland and Singapore. In Singapore, construction is set to do well in 2025/2026/2027, as the country awarded record projects in 2025 at ~53 bn SGD. The many micro-cap construction companies in the country are seeing their growth and margins rebound after the post covid slump.

2. Gold miners +38%

   As described in the November 2025 update, and in the Serabi write-up, the price of gold has gone up so quickly, that small mining stocks could not keep up and provided a large opportunity while catching up and doubling in slow motion.
   
   The slow motion was driven by the lack of investor appetite for mining stocks, the large operational leverage (making profits rise faster than revenues) and rebalancing of existing investors leading to large sales.
   
   We have become a participant in the rebalancing, reducing gold miner exposure from ~55% to 35% in December 2025. At some point, this is needed, and it just shows again why the opportunity exists.
   
   Clearly, the rise in gold prices has helped a lot here. This was luck, but also matches earlier patterns. As we can see below, in the past 25 years, once gold started a run, it has typically continued for a couple years. Double digit returns follow double digit returns. The current run might be getting a bit long lived though.

   

3. Other Hyper-growers +13%
   In a sense, almost all the companies in the portfolio in 2025 were hyper-growers. Companies growing >30%.
   
   These are often companies which deliver such good results, that the market needs several quarters to realize, digest and price in the good news. These will often share increasingly good news along the way, providing existing investors the opportunity to buy more at higher prices but cheaper valuations along the way.
   
   A hyper-grower isn’t typically a better investment than a value stock, but does more often trade inefficiently, just because it is changing more rapidly (in revenue/profitability), because it’s hyper-growing…

Next to these themes, there were some other smaller one-off wins:

• Matsa Gold, trading well below the value for which they will very likely sell the Devon Pit to AngloGold Ashanti. This investment was like a merger arb, although it wasn’t the whole company that was being sold.
  

• DBA Group, trading at 4-5x owner’s earnings, hidden behind amortization of goodwill related to past acquisitions. The extra cashflow hiding behind this amortization, will not show up in earnings soon, but does allow the company to acquire small companies representing ~5-10% extra revenue growth every year.
  

• Zoomd sentiment became so bad, it had sold down to 3-4x earnings at 70% growth. This was mainly driven by tariff fears. Some investors in 2025 acted like we didn’t already have a tariff scare in 2018. We were lucky to pick up some shares around the Q2 bottom.
  

• Vilkyškių Pieninė. Throughout 2024, prices of dairy commodities (cheese, cream, protein powder) rose significantly in Europe. This was mainly driven by rising prices of raw milk in many European countries. The rising milk prices were caused by years of unfriendly government policies towards European farmers (Nitrogen policy, etc…) and global warming reducing milk yields in Southern Europe, making the supply side fragile while demand increased significantly.
  
  In the Baltic countries though, milk prices didn’t rise much at all. In fact, the government there is proud and supportive of the dairy sector. The dairy sector also doesn’t create much environmental harm as the region is much less densely populated. Baltic dairy yields were not impacted by global warming at all, the local climate is much colder.
  
  Raw milk cannot be shipped internationally because it goes bad in 24-48 hours, explaining the differences in national milk prices. Cheese, cream and other products though, have 1-12 month shelf life, and therefore exist in a global market.
  
  This created a big advantage for Baltic dairy processors (cheese producers).
  They saw rising pricing power in the European market, but with flat input costs at home in the Baltics. This led to large margin expansion for the Baltic cheese producers like Vilky, which the market only caught up on as results were getting reported in H2 2024 and H1 2025.

  
  We’re surprised these companies stocks are not falling, as cheese and butter prices have come back to earth, and the spread between Baltic and central European milk prices has normalized in the past ~6 months.

  

Before closing on the winners, we have to make an honorable mention of Intellego of course. The company recently turned out to be probably mostly fake.

We first heard about this company in ~2022. They seemed like a scam. Almost nothing on LinkedIn, strange product, and most customers based in China. We decided not to take a position.

In the ensuing years, Intellego grew very quickly, providing clear guidance, delivering on the guidance, having insiders buy shares, having a large deal with Henkel, finally taking Deloitte as their accountant…

We decided to take a small ~2-3% position at ~7x forward earnings in early 2025. Shares had just sold off after weak Q3 2024 earnings, but management was buying shares and raising 2025 guidance.

As expected, management bought more stock at the Q3 post earnings dip, and the stock quickly doubled (2-3x) in a couple of months, after which we sold most of the position. There’s no point holding such a strange company at 20x earnings.

Recently, it turned out that Intellego very likely is largely a fabricated accounting scam, and the remaining 0.5% position will likely get written off.

We think the lesson here is to be much more careful when a companies ecosystem is not clearly visible (employees, customers). Especially if the employees are not visible, that’s a big red flag.

Even if Deloitte is the auditor, if the CEO is buying stock, and if large FMCG are lining up as customers… Employees (on LinkedIn or media of corporate events) are the hardest to fake…

Losers

Now that everyone has dropped off after the lengthy discussion about cheese and butter, we can talk about the losers and the mistakes.

A mistake, is where the standard process is not respected or fails. This should be analyzed and should lead to increased execution discipline, or process improvement.

A loser though, is where money is lost on a position. If the process was followed, we should not be too harsh on losers, as they are unavoidable.

We should look at the losers to find mistakes and process improvements, although not forget that Intellego for example, was a mistake as well, although it was a profitable one.

Below is an overview of the losers in 2025:

Going through:

• Simply Solventless fell about 50% in June 2025, upon announcing changes in accounting treatment of part of their revenue recognition and part of their expenses.
  
  The company had been recognizing part of its incoming raw material shipments as revenue (!) because they were handling the shipment from the supplier. They also had been capitalizing too much of their production overhead into inventory, making operating expenses look lower…
  
  Both of these are not only completely unacceptable, their correction also showed a company that was much less interesting and will likely not win the fierce competition for the Canadian cannabis consumer.

  
  BIG MISTAKE to buy this with >1y inventory on hand being an agricultural products company. Clearly something was wrong. Good to realize it immediately and get out at ~21 CAD ct versus today’s ~11 CAD ct.
  

• LGI Homes and Excellence sa, where not really mistakes but did go down a bit due to volatility. Both have meanwhile recovered. We sold Excellence for the multi bagger in Zoomd and bought more LGIH on the dip making it a nice contributor for 2026 so far. Can’t really call either a mistake.
  

• 4Mass reported a string of bad results in 2025. We think what happened is they moved from hypergrowth mode to normal mode, and this changes 2 things:

  • First, investors give the stock a lower multiple as it’s not growing extremely fast anymore

  • Second, retailers are not begging the company for product, because all the shelves are full and shortages have been mitigated. The retailer then turns around and starts asking for discounts, while looking for alternative competitor or private label products
    

  This creates a double whammy for the hyper-growth company seeing growth, margins and P/E multiple decline. We should expect this to happen and should keep an eye on BSH as a potential victim of this phenomenon in 2026. So far BSH’s car products seem to attract limited local competition though, but this is certainly something to keep an eye on.
  
  Important to remember here that well-filled shelves, and supply matching up to demand, can shift the balance from producer to retailers.

2026 Portfolio

Below is the current portfolio mid January.

There’s a lot of information on many of the positions in the review of the 2025 write-ups, and the latest thoughts on many of them are covered here:

Anchun and A-Sonic were covered in the “Appetizers” post on January 1st. We were a bit wary writing about them as they only have ~10k$ liquidity, but after the post, they didn’t move at all. So we bought some more using increased conviction after writing the post on both of them.

Other ADD/NEW positions not covered in the posts above. We’re still increasing our understanding and knowledge on many of these:

• Soon Lian Holdings. This small company delivers Aluminum parts to the semiconductor industry and mentioned datacenter demand as a tailwind in early 2025. We think they trade below the value of the Aluminum they have on their books (estimate), and they consistently do well in periods of high demand for semiconductors and Aluminum. (because of FIFO and because high prices often indicate high demand). We think their earnings will roughly double in 25H2-26H1 vs year before, to where they were in 2021-2022. It’s not a very transparent company but it trades below 5x earnings before this (potential) tailwind.
  

• General Finance. This Italian receivables factoring company is building a multi-year track record of >20% growth, far outpacing competitors. We think management is just running a very tight ship, running the business in a very effective way, and taking every opportunity in earnings calls to differentiate themselves from competition. We used to own a small position in early 2025 at 15 EUR but let it go for one of the Singapore names. Happy to come back to General Finance much higher, but still trading at ~10x 2026 earnings with ~30% growth. The track record, the investor presentation and the earnings call make us think they really know what they are doing.
  

• Legacy Education. With education companies, we get a good preview of next 12 month results, because we can see school enrollment. LGCY is a California nursing school, in which organic enrollment has grown 19%, through the introduction of new classes and courses.
  (Organic ending enrolment was (3495-463) for 30/09/25 vs 2539 for 30/09/25.)

  

  While revenue in Q1 2026 (Sept) grew almost 40%, net income was stable due to higher operating expenses (~1% bad receivables, higher management comp, one-off expenses to start the year with extra school equipment, post merger integration… ).
  
  Management suggested margins will expand through 2026 but the market didn’t really like the results. We did like this at 10-15x 2026 CY earnings for a US company with 6 years of double digit growth serving an aging demographic and actually doing something good for the world.
  

• Alquiber Quality is a very consistent Spanish car leasing company which has grown 15-25% per year for many many years. They have entered the Italian market recently which we think together with the shift to EVs, will lead to a growth acceleration, offsetting slightly higher interest expenses caused by rolling their large debt. This is not going to be a shocking stock, but is a very consistent performer typically.

  

• Atrem is a Polish (electrical) engineering company which is benefitting and will continue to benefit from every big trend out there. (AI, energy transition, the Polish investment package from the EU, …). We think they grow revenue 30-60% in 2026, and will keep a very strong growth trend beyond that as well, justifying a slightly higher 15-20x forward fair value P/E multiple.
  

• Helio sa is introducing healthy snacks in Poland, and recently pre-announced that Q4 2025 was their 3rd consecutive quarter of >30% revenue growth. The company trades at ~10x earnings and is regularly buying back stock and paying dividends, while investing in organic expansion. Recent growth is largely driven by increased sales of packaged dried fruits, produced on new equipment, which is still being optimized before bringing its full margin contribution.
  
  More on Atrem, Helio, BSH and Yarrl here:

• EDU Group & Tellus Gruppen are both private schools as well, but not comparable to Legacy Education given the large regulatory risk embedded in both of these.

  • EDU: Australian school based on immigration for education. We need to brush up the calculations a bit before sharing them, but their T3 2025 student enrollment, and 2026 price increase suggest 25-40% growth in 2026 at a 5x P/E multiple on 2026 earning.
    
    That sounds crazy cheap, but the Australian Labour Party (which provides the minister of education) seems to want to partially ban or scale down their immigration based system.
    
    The recent events on Bondi beach may provide the minister with the necessary momentum to finally pass a law on capping education driven immigration.
    
    We think the likelihood of a material adverse impact is ~40%, making this a very risky bet. If adverse policy doesn’t come, EDU’s profit and P/E multiple likely both double in the next 3-4 years.
    

  • Tellus Gruppen is a Swedish school like Cedergrenska, but a bit smaller. Shares are even cheaper than Cedergrenska at ~3.5x TTM owner’s earnings, and they actually grow 2-3% organically. The company has funded a 2023 or 2024 acquisition with debt and shares + warrants, expecting to re-pay some of the debt from the warrant income. As the warrants have expired worthless in Dec 2025, they are sitting on ~25m SEK short term liabilities which we don’t think they can repay from operating cash flows. Likely a new debt or shares placement is coming. If it’s shares it might move them to 4x P/E, but they will still appear underpriced.
    

• Scherzer & CO is a German special sits and micro-cap investing company buying back shares at 70% of NAV. They are buying back their own stock aggressively, potentially forming a rising floor under the stock.
  

• Alphamin is a well-known producer of tin, which is used mainly in solder and electric vehicles. The price of tin rose aggressively over the past days, elevating Alphamin’s 2026 potential profits.
  
  It’s sitting below 3x 2026 profits at current Tin prices. Since entry into this position last week though, tin is down ~12% in a short term correction. We will get out of this position, if in the coming weeks, the uptrend in tin is not shown to clearly resume to new highs, or if we find a better stock to participate in the upside in tin.

• CanPR and Fab-Form, 2 tiny new positions

  • CanPR is a growing platform for Canadian immigration with a nice founder with past successful exits.

  • Fab-Form supplies smart construction products that enable builders to save wood and concrete. It will do well again at some point when construction improve (and lumber prices rise), but it might take some quarters or years.

Sales:

• We sold a tiny part of the ZTE position to resolve a tiny negative cash balance due to rounding errors or transaction costs.

Watchlist

The near term future purchases (if any) will likely be additions to existing positions. There’s really nothin better than “doubling down” at higher prices when a company you know well does something amazing.

We’re always looking at new companies, here’s some examples we’re still getting to understand a bit better:

Bioxyne (BLS), Enogia, FSA Group, Porto aviation, Performance Technologies, Profile Systems and Software SA, Soditech SA, Tarczynski, FNM spa, Makolab, Auxly, Cannara, Instabank, Integrated Wind Solutions, Malvern International, Mediazest, Wiseway, DH Group Nyilvánosan, Pasquarelli, Xtant Medical Holdings, Directa sim, Made Tech, Logic instrument, ATC Cargo, DWS (Diamond Estates Wines & Spirits Inc.), YesAsia, Humm Group, Budapesti Értéktozsde Nyilvánosan, Primoco AUV

Be careful, bull market genius

This was another wonderful quarter. We started writing “returns of x positive quarters in small cap investing” a few years ago, and x just keeps incrementing, now to 16.

Please note that while this did happen and all 16 quarters had positive returns, you should read that as a bit of a joke, because concentrated investing as we do, comes with volatility, and no one should expect having positive results over any short-term period, whether it’s days, weeks, months, quarters or years. We’re all getting fat and happy and this is exactly when the market likes to punish investors that stop putting in the work to find and understand the best companies and stocks out there. Take positions carefully and with conviction.

Thank you for reading!

Disclaimer: This is not investment advice, please speak to your adviser before investing, and please do your own work analyzing the company.

In practice though, I often find myself distracted… My favorite part of investing, is the story each company has. Going through these stories sometimes helps us understand something more about the reality every companies faces and handles in their own way.

It’s in that mode of distraction, that I have looked deeper into 2 companies, that I should usually discard at hand, due to low liquidity (~10k$/day)… I have loved discovering their story and have invested a small sum in both.

They are too small though, to put a lot of money into due to low liquidity.

We’ll call them appetizers… Small bites before something bigger arrives…


Today’s 2 companies both:

• Are Singapore listed

• Are founder-led, over 25-year old businesses

• Have more net cash than their market cap (& Negative EV)

• Are growing and profitable

• Are actively buying back stock

• Trade near 52 week highs

• Have liquidity of only ~$10k/day (buyer beware)

Let’s have a look - I will try to keep it concise…. As we have work to do finding the real big fish after this little detour…

1. Anchun International Holdings ($BTX.SI)

Anchun is a technology company that provides reactor equipment, services and chemical catalyst products, to global chemical players, mainly to convert coal into hydrogen and other gasses, play around with those gasses and turn them into methanol and ammonia.

Founder Xie Zhong started the company in 1993 as “Anchun Energy Savings”, using 15 years of experience teaching chemistry at Hunan University in China. He has meanwhile handed over the CEO role, but his passion for technology remains in the company, shown by their large R&D focus resulting in the over 100 technical papers and patents the company has published and obtained.

Anchun’s proprietary reactors are optimized for creating iso-thermic reactions that generate H2 from CO & H2O. Most chemical reactions in the process of generating H2 (and ammonia), release substantial heat. Until ~10 years ago, most equipment design would accept this, leading to incomplete chemical reactions, because closer to the exit of the reactor, the temperature would be so high that the reactions catalysts would decay and production of byproducts like hydrogen sulfide would increase… Anchuns isothermal reactors maintain a constant temperature throughout the reactor, enabling a better result (more pure reaction and more energy-efficient).

Anchun is mainly present in China, where coal gasification provides way to produce artificial fertilizer in the absence of natural gas. China converts coal into syngas, then H2, ammonia and finally nitrates (aka Urea) used in fertilizers

As most of Anchun’s tech is used in the artificial fertilizer industry, they are heavily exposed to Urea prices and investments. This caused the stock to get killed from 2013 to 2017 as Urea prices dropped about 50%.

The company has since focused on reducing fertilizer exposure, which finally seems to be working, as 49% of 2024 revenue was non-fertilizer, and 74% of current orderbook is non-fertilizer. This non-fertilizer revenue seems to mainly represent “green” energy projects in China but also in the Netherlands, Turkey, Thailand, and Africa.

Looking at the financials, below are the companies LTM Revenue and Net Income for the past 8 reported periods. We see financials coming down a bit after Urea spiked in 2021-2022 at the start of the Ukraine war, and then picking up again in the 2 most recent half years.

It’s easy to estimate H2 2025 revenue, because Anchun basically tells us their current orderbook and planning and resulting future revenue recognition. For H2 25, the company plans to deliver 58.5 RMD (8.4 mUSD) in revenue from orders confirmed before H1 2025. In practice, some additional design orders and catalyst orders likely come through leading to ~60-65m RMB for H2 2025 making full-year 2025 revenue ~135 mRMB (19.3 mUSD).

Looking at 2026 though, the company had already planned deliveries of 121m RMB as of end H1 2025, which is much larger than usual at the mid point of the prior year, as you can see below. This suggests above 210 mRMB (30 mUSD) in revenue for 2026:

Given they already have these orders, much of it will likely be recognized in H1 2026 already, at which point, we are looking at a company that will have just posted 30-40% organic growth, driven by green energy projects, and has a strong orderbook for the rest of 2026...

Looking at the valuation, Anchun trades at a P/E of 5.5x on TTM earnings. As suggested above, H2 2025 might be down year over year, but 2026 will likely be a record year.

From a balance sheet point of view, things get a bit crazy:

• Market cap is ~15mUSD (19 mSGD with 0 options/warrants/pref./perf. shares)

• Cash & cash equivalents is ~23 mUSD (no debt)

• Net working capital is ~12 mUSD
  (Almost exclusively contract assets aka work partially done but not billed yet)

Fair value imho is ~12x net operating earnings + net cash equivalents. This would give
= 12x ( 2.65 net earnings - 0.4m interest income) + 23m cash & cash eq
= 49.6 mUSD

which implies >200% upside versus the current market cap of 14.6 mUSD. Per share fair value in SGD is estimated at ~1.4 SGD.

Finally, Anchun has a 10% buyback authorization outstanding, and bought back just over 1% of their shares in November-December 2025. I think the buybacks likely were the result of a shareholder contacting the company and them being happy to take over the shares through on-market share repurchases. This suggests further buybacks may be spotty rather than consistently recurring.

Disclosure: I am an investor in Anchun but sized it small to leave space for the main course.

Disclaimer: This is not investment advice, please speak to your adviser before investing, and please do your own work analyzing the company.

2. A-Sonic Aerospace ($BTJ.SI)

I need to hurry up a bit here, as the next company is close to getting to zero EV. That sounds like they are going bankrupt or something, but of course, zero EV just means that the company has its full market cap and debt in cash, meaning no value is given for the enterprise, and we just get it for free.

Also, appetizers shouldn’t take you more than 10 mins to read, so let’s make it relatively quick to the finish here. A-sonic was started in the 90s by Jenny and Janet Tan, initially as “Janco Aviation”, a distributor of airline control systems for Boeing airplanes.

While the sisters initially branched out from airplane control systems to engines and other airline parts, it became clear to them over the years, that their true skill was not sales of Boeing spare parts, or even expertise in airline parts, but rather in global distribution and logistics.

They re-named the company from Janco to “A-Sonic”, for “A-rated Solutions On-time, leveraging on our Network, working with Integrity and Commitment to provide customer satisfaction” and started a Logistics branch which now represents 99% of the business.

A-Sonic now helps individual and corporate customers ship goods from point to point globally, setting up the optimal combination of transport methods, and driving efficient custom clearance for simple products as well as complex products (e.g. food, batteries, radio-active parts, etc…).

A-Sonic’s revenue and profits have been weak in recent years. There was always a problem on the global stage, from 2022 post-covid weakness in demand, to the Chinese economy falling into a recession, to the recent tariff troubles. Over the past 12 months though, revenues were ~20% higher than the year prior, driven by a slightly stronger global consumer, driven by subdued inflation fears, leading to ~11% higher global airfreight volumes.

The company books most revenue around Thanksgiving and Christmas, and is highly dependent on global trade as well as economic growth driving higher and more creative consumer expenditures… For example, more people will ship a new BMW into the USA in a good economic year vs. during a crisis, and this is the kind of unusual activity A-Sonic helps manufacturers or other logistics and fulfillment companies with.

H2 2025 is very interesting for A-Sonic, because on August 29th, 2025, the USA ended the “de minimis” exemption for shipment of small packages into the country. This regulation used to be in place and exempted all packages with <$800 value (like your $16 Temu “Soft cabbage novelty blanket”) from full customs documentation and full customs clearance. Customs documentation and clearance is now needed for all packages without exemption.

This seems horrible for global airfreight volumes, and global logistics players. In fact several companies halted shipments of parcels into the US for multiple days and weeks when the regulation was introduced, given the unpredictability of the resulting situation (stringency, waiting times, disorder… at US customs).

It’s potentially great for A-Sonic though, as a large part of their business is to enable fast-tracked and seamless customs clearance, enabled by ~600 employees with offices across 13 countries, bringing expertise, experience and a network to drive frictionless logistics. More friction likely means more business for A-Sonic, at least short term. And more is coming, because Europe has already introduced similar regulations ending their “de minimis” exemptions as well.

It’s hard to predict the exact positive/negative impact on A-Sonic. We do know though, that similar to last year, A-Sonic’s CEO has turned on the Buy-Back machine, buying back 1.5% of shares outstanding in Q4 2025, most of which happened in December (~1%).

CEO Janet Tan already owns over 60% of the business, but is adding to that stake through those buy-backs. Note that H2 2025 is behind us, so good/bad results have been achieved, but have not been published yet. Mrs. Tan clearly thinks the shares are undervalued, making a great H2 very likely.

Mrs. Tan thinking A-Sonic is undervalued also became very clear already in 2021. At the time, she bought over 1 million shares from her sister, in a private transaction at 0.80 SGD per share, while the shares were trading at 0.57 SGD on the SGX exchange.

Looking at the balance sheet, A-Sonic is another company with a market cap below net cash and cash equivalents. The current earnings power provides potential upside, especially given the current aggressive buybacks, but the true upside could come from the relationships and customers the company is finding while helping companies adapt to the new US and EU regulations.

Disclosure: I am an investor in A-Sonic but sized it small to leave space for the main course.

Disclaimer: This is not investment advice, please speak to your adviser before investing, and please do your own work analyzing the company.

Note: Both companies covered today have large insider ownership (~40% and ~70%) but those positions are not at all large enough to exposed minority shareholders to delisting or squeeze-outs by majority shareholders.

Thanks all!

Overview

Before we dive in, below is the overview of the 8 ideas covered this year:

The average return was 44% vs 6% for the S&P 500, creating a remarkably large gap in only ~3 months on average since writing. This is not unique. It’s our microcap advantage and the result of working through all the reports to find the diamonds in the rough. The median liquidity is ~222k USD providing several pitches which even our wealthiest subscribers can act on.

I still own all the companies above except OKP Holdings. The goal of this post is to provide an updated point of view on each of them. You can find the links to each of the write-ups at the bottom of this post. At least 7 of them should have no paywall.

Bridge Solutions Hub

I originally bought BSH a couple of years ago after they reported their first quarter of growth and profitability. They bought an asset in April ‘23 and launched a new A/C repair product with it, being profitable in Q3 and achieving triple-digit growth. That’s a crazy achievement from April to Q3!

With some months over the winter to professionalize things and get into more sales and distribution channels, it was clear they would report much stronger growth and profits in 2024.

Buying the stock was horrible. At that time you had to make a Polish XTB account as IBKR didn’t have it yet. I bought 5 kEUR of the stock making it rise from 4 to 5 PLN, and patiently tried to get more but didn’t get much.

In 2024 and 2025, BSH delivered double-digit growth and their profits grew from 0.4 mPLN in 2023 to 5.4 mPLN in the past 12 months. Strong earnings often gave an opportunity to add at 5-6 P/E multiples.

I still own BSH and have increased my position to ~1% of the company. Earnings for Q3 came in at 26% revenue and profit growth, putting the stock at an ~5.5x P/E. I had expected a weaker Q3 as the summer in Poland was a bit less warm than usual, leading people to search for “air-conditioning” 18% less in Q3:

The write-up came at a strange time in February, when insiders sold the stock down from 19 PLN to 12 PLN to cash out. My perception at that time was that these were people close to the original founders of BSH. They started BSH as an outdoor advertising company, before it got disrupted to become the product-driven company it is now. They didn’t have a relationship with the business anymore, and wanted to get out in February to do something else with their money, rather than wait until August 15th for the Q2 earnings report. They made ~10x on their initial investment and wanted out. That odd insider sale created the opportunity at ~13 PLN. Today at ~18 PLN though, BSH is still very cheap at 5x earnings with 26% growth.

The question for the year ahead is whether they keep the growth trend, or retailers try to copy them with private label brands, getting into a position to negotiate discounts from BSH, eating into their margins. Looking online, the top two products I would buy today to replenish the car air-conditioning are both from BSH, so the competitive position still looks good. It will be interesting to see if growth inflects higher than 26% again, when we get a warm Q2 or Q3 next year.

OKP Holdings

So we just talked about Polish people looking for the word “air-conditioning” in Polish on Google… Am I Polish? No, but I did make some Polish friends over the past years.

It’s kind of crazy to move top-down all the way from screening through the universe of 100,000 stocks, narrowing down to one stock, just to then dig so deep into Google searches, product reviews, employer reviews, and other bottom up work to become the biggest/smartest geek on the stock out there. I love that aspect of MicroCap investing.

Taking that up a notch, earlier this year, I built a Python script that scans through the 200 most recently awarded Singaporean tenders every 5 minutes all the time, and sends me an email when a tender larger than 20 mSGD gets awarded.

I built this after discovering OKP, which was a Singaporean construction company coming out of years of struggles after a lethal work accident and the resulting lawsuits.

The company won 3/4 government tenders for cycling paths, something the Singaporean government is extremely serious about. They want to build thousands of kilometers of new cycling paths across Singapore. They even got Dutch engineers to come to Singapore to give their opinion on the design and planning aspects of the project, which is a key priority for the Singaporean Land & Transport Authority.

Not only did these contract wins give OKP a nice backlog and 20% growth, the company also had its entire market cap in cash, and was bidding on projects that would 3x their revenue overnight…

I talked to their CFO and Executive Director in the summer, who told me they don’t use bikes themselves, because they drive to 5-12 of their work sites every day to track productivity and safety. They even implemented a tracking app that shows the CEO how much concrete each of the crews pours every hour, on his phone. This is an exceptional management team, very engaged, passionate and very kind.

Meeting them made it a bit saddening to sell the stock a few months later, when the thesis broke. They lost their big ambitious tenders, making the future of the company less clear, and causing me to exit the stock. OKP with their management team will do great, but I had to get out.

I sold OKP at a ~135% gain, when the below Tender was Awarded to Chye Joo, and was communicated on the Gebiz website on about September 15th. The stock didn’t move and has not done much since, just because of how cheap it is and how no one cares about lost tenders.

Soilbuild Construction

If it hadn’t been for the great interview with OKP’s management, I might have invested more or earlier in Soilbuild. Before I finally bought this and wrote about it, it was already up 60-70% in 1-2 months, after winning a large private sector tender.

It’s interesting that Singaporean companies, when they win a large tender, they announce the win, but they also announce their resulting net order book at the time of the win. This gives you future revenue visibility, but also current quarter revenue visibility, as the new order book figure implies the amount of booked revenue (going out of the order book).

Anyway, when Soilbuild had that big win, just the day after, I looked through 800 companies, and I thought well, that’s such a massive win, and the net order book implies ~50% growth in the current half year already, and this trades at single-digit P/E. That’s kind of crazy.

My head was fried from screening through so many companies though, so I decided I was going to read all their filings in the next week, to understand what was wrong with them, or what I was missing. The stock then went up ~50% in a couple of days. I did still do the work on them but was struggling to buy the pop…

They reported H1 earnings mid-August, with revenue up almost 2x and profits about 4x. Looking at the report after hours, I knew I was going to stay up all night buying the stock in Singapore, and making a write-up about it.

From there it doubled in about 2 months, and then gave back a bit. I have sold a bit around 3.40 SGD but keep part of the position. There are a lot of cheap growing construction companies in Singapore, but I think Soilbuild Construction is doing best in terms of digitalization and sales, driving their order book up massively. Notice how high new sales bookings are compared to revenue booked:

This chart even excludes their largest one-off contract win earlier this year.

Serabi Gold

In May this year, I had a surgery that didn’t really work well initially. It’s fine now but I basically couldn’t eat anything except plain vanilla ice cream for about 8 weeks. I still have 16 liters of that if anyone wants them, as I can’t enjoy that anymore. Anyway, at some point during this time, I had 2 days where I was feeling pretty good, probably because I had just mixed a full Neapolitan pizza converting it into a 100% drinkable liquid fuel. I got out of bed and the first thing I wanted to do was to screen through companies and find something new.

I then found AltynGold and Serabi Gold. Two companies that had been popping up on the screen for months, but I didn’t really look at, because I always hated mining stocks. When I was 16, I put my savings into junior mining stocks, which seemed to have dilutive rights offerings every Monday afternoon. They declined 90%, causing my first car to be a 12-year old Ford rather than a 5-year old Audi…These days, things have changed a bit for mining stocks though, at least temporarily.

What is special about Altyn and Serabi, is that the market just could not (and cannot) keep up with the progress they were making. I already wrote about this in the December portfolio update, but these companies are doubling production, while the gold price has also doubled… This is leading to 3-4x higher revenue on a 30-40% higher cost base, resulting in 10-15x higher net profit…

Nobody wants to see their gold mining allocation go up 15x, so people have been selling these into the market, creating a drag on the price and the multiple, and frankly giving late joiners like me a free ride.

In August, Ian Cassel wrote up one of these stocks, and I read the pitch and thought, “ok he is seeing what I am seeing, but I like my 2 gold stocks better, even after the run-up they have had…”

So I wrote up Serabi gold at that point. Serabi is a risky stock with a very large potential upside, interesting even for those who are not bullish on gold. Both AltynGold and Serabi continue to be my top positions, and I have added a bit more to both since the write-up.

As these stocks keep rallying, I’m trying to not rebalance out of them at the current 2-3x forward P/E multiples they trade at, but this is becoming more and more difficult as they become such a large part of the portfolio. A problem everyone in mining stocks is facing, which is exactly why the opportunity exists.

Huationg Global

When I wrote about OKP, someone asked me why I didn’t own Huationg, because they were even cheaper. I agreed but explained the attractive OKP tender pipeline. I also noticed that Huationg was going to lose revenue from their highly profitable dormitory management contract, which was responsible for the majority of their profits.

I was hoping for this contract loss to show up as a revenue drop in the H1 2025 results, and to buy Huationg on the dip for their strong construction business.

The construction business however, did so well in H1, that it completely compensated for the lost dormitory revenue.

I bought Huationg in August and described in the write-up how the ~40% growth in the core construction business, is hidden behind the disappearing dormitory business:

Still today, Huationg is very cheap with more cash than its market cap (half offset by contract liabilities, but still), having a backlog above 500 mSGD. Just compare that to the current revenues shown above, and note that they have their next 2-3 years of great results already contracted.

Huationg is a less shiny business than Soilbuild or even OKP. They do ground excavation type work, and some tactical engineering work, rather than the end to end design of large buildings or the management of infrastructure projects interfacing with 6 levels of government…

But Huationg is delivering very strong results and is very cheap. The stock is taking some rest here after the 3x in the past year, but it still has a lot of work lined up for it, so I still own it.

Recent headcount figures on LinkedIn indicate continued growth in H2, as can be expected from the backlog:

This is only a small subset of Huationg’s employees, as most workers don’t have a LinkedIn account, but it still provides a great KPI to track besides the order book evolution.

Cedergrenska AB

There are some stocks out there, that just have such an odd name that they just have to be cheap. This was the case with Vilkyškių Pieninė a few years ago, and it’s also the case with Cedergrenska AB. It just sounds like a Danish taxi company or something. Not exactly as fancy as Spyrosoft.

Like most of the companies above, Cedergrenska is the growing result of a strong founder, having a vision and executing well for several years in a row.

When I look at an interview with Niklas Pålsson, I want to be in the boat with this guy. Great vision, but more importantly great energy and storytelling, which I’m sure works well to create a strong culture.

If you don’t speak Swedish, it’s possible to turn on subtitles in your favorite language. First turn them on in Swedish, then use the settings wheel again to auto-translate them to your preferred language.

Cedergrenska is a Swedish private school group, that has grown through acquisition and operational excellence, professionalizing schools and building strong central support functions (for IT, facility management, canteen, … )

This company is also very cheap but plays on an uncertain regulatory field. It can easily be seen as the most risky company written up. Locals gave a lot of push-back to the pitch, saying politicians are already planning to ban the whole sector.

I did read these political opinions, but I don’t think it will be that bad. Unfortunately, and in this case fortunately, politicians don’t always implement everything they talk about. The reality is that Cedergrenska, before adding back goodwill amortization, makes less than 3 million USD annual net profit per year, bringing high quality education to ~10,000 students. I just don’t think governments will want to hurt their education sector, nor think they can do it better themselves.

Since the write-up we had some positive news with a debt-funded acquisition making the company ~8% bigger, and some negative news with the founders selling 2-3% stock to “improve liquidity”.

I still like and own the company and have also added a tiny position in Tellus Gruppen, a smaller company with a similar approach as Cedergrenska, trading at 3x net income + amortization a few weeks ago.

LGI Homes

The write-up on LGI is just about a month ago, so it’s too early to look at the scoreboard for how it did. The stock is up a bit though, so we might just act like it doesn’t matter and take the win.

Seriously though, LGI Homes was a bit of a different write-up. I bought this company once in 2020 or 2021 when it met my typical criteria of single-digit P/E multiple, and double digit growth over several years. Sold it in 2021 when it traded at 3x book value and it became clear that interest rates were going to have to go up a lot for a long time.

Since then, I kept looking at LGI and a few other builders, thinking I would like to once buy a home builder for less than its book value. These companies not only perform very well over time, since the 2005-2007 housing and financial crisis, their risks are highly overestimated by the market.

The home-builders trade at single-digit P/E multiples, as if the next US debt crisis will lead to austerity, creating a new housing crisis… In reality, we have learned during COVID, that when bad things happen in the economy, we turn on the fiscal and the monetary stimulus machine to create a way out. This thinking made the 2020 crisis much better than the 2008 crisis. (which ultimately was “solved” in the same way)

We can agree/disagree with the governments and central banks, on the merits of the stimulus approach to resolving crisis, but we have to be clear that this will be their approach when the next crisis hits, and this makes the probability of a large housing/credit crisis much lower at least in the next 5-10 years.

By November 2025, LGIH had traded down to ~50% of its book value, with limited leverage and a book of American residential construction land and homes. This is quite unique and presents an “easy double” in my personal non-investment advice view.

The company reported improving sales bookings in their Q3 call, which so far marked the bottom in the stock, providing the last reason I needed to make a write-up about it.

There is no catalyst here, so it will take time for the thesis to play out, making it different from my other ideas this year. I like the safety I perceive in LGIH and I have added to the position after the write-up.

Grand Banks Yachts

Finally, the most recent write-up I did was on Grand Banks. When I posted it for MicroCapClub, they asked me if I saw Iqbal’s write-up on it, which I hadn’t. Iqbal had written about the company ~ 2 months before me. If you don’t know him, I recommend following him on the bird app on “Iqbal_yusuf1994”.

I mentioned sales bookings vs. revenue above, when looking at Soilbuild. It is important here as well. I decided to write about Grand Banks Yachts after seeing their large updated backlog in their Q4 press release, which implies massive Q4 sales orders.

The high orders are likely the result of hiring a new Chief Marketing Officer, together with several other operational, commercial and strategic initiatives highlighted in the write-up about this company.

This company had almost 100% higher sales orders in 2025 vs 2024, but yes, you guessed it, it still trades at a single-digit P/E multiple in Singapore.

Summary

It was great searching companies in 2025. I found some interesting situations and had fun sharing them with you and discussing them in the chat. In 2026, the market will likely be more difficult, and so I look forward to search harder and potentially find even better companies. Below is link to the write-ups mentioned above:

Bridge Solutions Hub:

OKP Holdings:

Soilbuild Construction:

Grand Banks Yachts:

Disclaimer

This publication’s authors are not licensed investment professionals. Nothing produced by Floebertus should be construed as investment advice. Investing involves serious risks, including risk of capital. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge.

Performance

In November, the portfolio was up ~3% again for the month, for a total of over 102% YTD, or 506% since Jan 1st, 2022 vs. 67% for the S&P500. (measured in Euros)

It’s odd to have 16 consecutive positive quarters, but it doesn’t matter. What’s important is to achieve continued longer term returns, without worrying if they come continuously, or if a bit is taken back sometimes. The top 5 positions going into December are:

1. AltynGold

2. Serabi

3. Huationg

4. LGI Homes

5. Grand Banks Yachts

Below is the full portfolio and the % allocation of the positions

Not a lot has changed

The thesis laid out in the write-ups on Serabi, Huationg, LGI Homes, Grand Banks Yachts, Bridge Solutions Hub, and Soilbuild is playing out. It has been great seeing them perform well over time. We continue to like and hold them and have not found comparable opportunities in the past month.

Before going through the small changes in the portfolio, let’s reflect on the opportunity in small cap mining stocks today.

Why most smart investors hate small mining stocks

Small mining stocks have performed poorly for almost 20 years, before waking up in 2024. Most investors rightly hate them because
(1) They often create more shares diluting the interests of current owners
(2) They use funds to execute risky capex projects with low returns
(3) When they do a big discovery, they often get taken out by a larger miner

So, generally we should not like miners. The current gold rally provides a good reason to make a temporary exception though, in exceptional times…

What happens to a miner’s P&L when gold doubles?

In late 2023, gold broke through its high of ~$2100 and started a run higher, driven by the loose policies of developed countries. Loose in terms of fiscal policy, monetary policy and in terms of credibility. Russia was moved off the SWIFT system (and its USD & EUR reserves within Euroclear are currently being taken from them). This drives global central banks and investors away from US Treasuries and USD reserves, to gold.

The run in gold has completely changed the economics of these miners, and has created a stock market distortion. Look at Serabi Gold’s 2023 income statement for example, as a baseline:

Nothing extra-ordinary. The market priced Serabi at a $51m market cap, or a ~7x P/E multiple when the 2023 report was published in April 2024.

Let’s do an experiment here. When gold increases 2x, then …

• Revenue doubles from $64m to $128m

• All operating expenses remain the same

• Operating profit increases from $8m to $72m …

• Debt and Interest expense quickly disappear …

• Net income rises more than ~9x …

Does the stock just 9x then?

Theoretically, we could expect the stock price of the company to 9x over night. In reality though, this is not what happens:

• Existing share-holders see their position 2x, 3x, 4x … and start selling to keep their portfolio in balance. Being up 2x on the initial investments in both of our top positions, we are trying to stay out of this “forced seller” camp, looking at the current valuations…

• New buyers step in, attracted by lower forward valuations
  (and lower convexity of outcomes)

To give the stock its 9x run in this experiment, new buyers have to be found. Not a lot of investors are pragmatic towards gold though. They either like it, or they don’t. This makes it hard to find these “new buyers”. A long and troublesome search for additional owners is started, and the miner(s) meanwhile trade at low valuations.

The mining stocks meanwhile trend slowly higher, not because their “momentum” reinforces itself, but because rebalancing and profit taking by the original investor base, creates an inertia that delays the share price reaction in response to the dramatically improved fundamentals.

Stuck a low valuations forever?

We could wonder if the lack of new owners means that small gold miners will trade at low valuations forever. Fortunately, the answer is “NO”.

At these prices, every single day, massive cash flows are being generated in the mining sector. The large miners return this cash to shareholders and invest in organic growth, but also acquire smaller peers.

This takes out smaller miners and puts cash in the hands of their owners, who re-deploy that cash into other small mining stocks, helping them re-rate higher

We so far not seen that many acquisitions yet in the sector, although they are ramping up:

Meanwhile, although the process is slow, especially for small companies, new mining investors are attracted by the lower valuations and increasing stock prices, providing a second driver for valuations to normalize.

In theory, markets are efficient. In practice, fund flows take time, and create large temporary market inefficiencies, which pragmatic investors, can benefit from.

Serabi and AltynGold

The narrative above applies to both Serabi and AltynGold, with some extra spice on top. Both companies are not only benefitting from the higher gold price, but are also ramping up production. Below are their forward ex-cash P/E ratio’s.

We see that these growing companies both trade at ~3x forward net income, with ~100% Return On Assets. We are early in the process described above, and the market still has work to do to price in the strong rally in gold.

3x earnings?

At 3x earnings, SBI.TO earns its entire market cap in 156 weeks. The stock trades at 514 cents CAD today, so it earns ~3 cents CAD per week, organically… without multiple expansion. Management is looking into buybacks and dividends to return part of this cash to shareholders, while deploying part of it to grow the company at these attractive ROA %s.

Changes to the portfolio

Exits

During November, we have exited the following positions as discussed in the chat:

• Matsa resources - Balance sheet thesis played out, and sold at ~60% gain

• Hydreight - We found a cheaper way to own this through VST which holds twice the amount of NURS shares for every CAD invested, compared to owning NURS directly.

Since the start of December, we have exited 2 very small positions:

• Victory Square Technologies - There are several reasons for this exit, which can be summarized by saying we were not comfortable owning it. Main reasons:

  1. The main service Hydreight ( inside VST) provides is to remove regulatory hurdles for medical operators. This does not mix well with having a director run a Discord account focused on Investor Relations, as” The Alchemist”

  2. Hydreight claims to have 3000 Nurses at $3000 license fee per year. This implies $9mUSD x 1.4 CAD/USD /4 = 3.15 mCAD per quarter. The reported revenue from this activity was less than 1mCAD though.

  3. The main growth driver for Hydreight now is pharmacy sales, which has missed managements gross margin guidance in Q3 (reaching only ~10% GM), putting a big question mark on future net profit growth

  4. Insiders are not buying, likely because of 1-2-3 above
     

  This caused us to exit NURS/VST at a ~35% gain. The company is interesting but we should find lower risk high performing stocks.
  

• Zoomd Technologies - We have exited Zoomd because based on the Q3 call, 2 of their main 4 customers are reducing spend. We thought the result was less concerning then the outlook. Zoomd has exceptional management, but if they can’t say “the momentum continues” with regard to the P&L, then it’s likely that the next quarters will also be down in revenue and profits. We keep ad tech businesses on a very tight leash and are happy with the run in Zoomd.

New positions - nothing exciting this month

• Vindexus. Entered 0.1% position in November, and already exited it after the company significantly increased CEO compensation to unreasonable levels.

• ZTest Electronics. Opened a 0.1% starter position after Trevor Treweeke joined the board. We will watch for insider buying, buybacks and/or business improvement before adding more. ZTest has ~800k CAD net income run rate. We could see them implement quick wins to get this to 1m CAD relatively quickly, which is interesting at a ~3.5 mCAD EV.

Other changes

• Slightly reduced Lexibook. Their H2 report indicated difficulties around tariffs, license costs and US competition making the company less attractive in the short term, although still clearly undervalued.

• Slightly reduced Canaf. The stock is very cheap, but its limited growth make it potentially less attractive to other stocks that can be found in the future. Its limited liquidity though, make it hard or impossible to quickly act when such a more attractive stock is found. Scaling down that position a bit is a way to enable quickly deploying cash when such a new stock arrives.

Disclaimer

This publication should not be construed as investment advice. Investing involves serious risks, including risk of capital. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge of the companies involved.

1. Narrow down for what we are looking for quantitatively

2. Remove several groups of stocks for Qualitative reasons

3. Add back amazing growth stocks even if P/E or ROE doesn’t fit yet

4. Show the 16 most interesting Polish stocks for the moment

5. Review the most interesting 10 in a preliminary 1 page pitch

Poland is a great place for investing, because it has an amazing economy, a low cost of being public (resulting in a high amount of companies) and valuations are low as international investors are only just finding their way to the country.

There’s over 700 listed companies in Poland. We include 692 in our population, having removed some “blacklisted” companies like CDA and Gamivo.

We are going to be a bit greedy because that just works well in this market. In the sense that we want an amazing growth stock at an unreasonably low valuation. Start by removing unprofitable companies.

That light blue part above. That’s like the Polish Russel 2000. Not saying it’s garbage… Not saying it’s not… To further side step low quality companies, we only include those with ROE > 15%, showing some quality.

We didn’t come all the way to Poland to pay for these high quality companies though, so we include only stocks with P/E < 21

As we will see soon, many of these cheap high quality companies will be small and micro caps. Not many people are looking at them, and that’s our opportunity. The best scenario occurs when they are also growing fast. So they are already undervalued, but their growth makes them visible to more consumers and investors. We then get paid for the earnings yield, the growth, and the increased visibility showing up in multiple expansion.

We are left with 42 companies that screen well. You know what’s the problem with companies that screen well? Most are still terrible businesses. This is why we exclude most of them, because they are too unpredictable (gaming, solar, energy retail, … ), too cyclical (steel, coal, paper, …) or too hard (biotech).

Finally, we add back some companies that may not have great P/E or ROE yet, but are showing such nice growth that they are hard to ignore. Today those were Inpro, Marvipol, Vindexus, Helio, Yarrl and Torpol.

We end up with 16 wonderful companies at wonderful prices.

Below are our 10 favorites from reading the Q3 reports, in no particular order.

First is Inpro, a growing residential construction company at a very low price.

Marvipol is a very similar company, even cheaper but doing significantly less well in terms of signing new sales for next year. We think next year they will come behind Inpro in sales and profits.

Next we have Passus. The company signed a contract to buy 26% of its shares in the coming 2 years, buying from early family office investors. Since locking in the price in June, the stock is up over 60%. Taking into account the buyback, the stock trades at ~8.5x implied market cap.

Vindexus is one of the cheapest companies in Poland today, at cash +3x earnings. Insiders are doing block trades at a 20% premium…

Atrem is a high quality grower playing into several growth trends

Newag is a train builder with revenue visibility for the next 5-6 years.

Yarrl is a Polish software co. This could be the next Spyrosoft, a company we found in 2022 growing 50% trading at 12x earnings. Yarrl needs to work on margin expansion though. It will happen but might take some quarters/years

Helio is one of the two growing Polish packaged nuts and dried fruits companies. This one initially didn’t make the ROE cut, but delivers growth so consistently that we included it. It reminds us a bit of Tarczyński, another Polish consumer brand which quickly doubled a few years ago after catching some operating leverage, resulting into higher net income, driving P/E down and ROE up.

Bridge Solutions Hub is next up. The company keeps executing and growing.

Finally we have Quercus. The current P/E of this funds manager is probably too low, although time will tell how much the E goes down in a bear market.

We like to study Polish companies and we like your thoughts on them as well. Let us know which one you like.

Disclosure: We own BSH, Inpro, Vindexus and Yarrl, as well as other under the radar names in Poland that didn’t make the list for Q3.

We like all of the above companies and will do some more work on them (employee evolution, cash flow conversion, business moat, employee reviews, e-commerce stats, … ) before likely buying a new position in one of them, or increasing an existing position.

Disclaimer: This is not investment advice. Before investing, validate the data within the companies audited reports, and speak to an advisor.

Thank you

• 9 years of profitability in a cyclical sector

• 15% average growth since 2015

• Hidden 100%+ growth in new orders in FY25
  (Implied within revenue and backlog numbers)

• Growing while competitors decline

• Reducing its own cyclicality

• < 6x cash adjusted P/E

• ~20% ROIC

We watched this company since 2022, but new bookings and backlog evolution always kept us away. Recently, the CEO’s targeted actions led to explosive growth in new orders, increasing 110% over 2025, and 175% in H2 2025 (!!).

This is why, today we wanted to dive in with you!

Grand Banks Yachts

Ticker: G50 (SGX)
Price: SGD 0.775
FDSO: 190m (incl. 4m dilutive employee options)
Market Cap: SGD 147m (USD 113m)

Overview

Grand Banks Yachts is a company that builds and sells yachts under the Grand Banks, Eastbay and Palm Beach brands. The company is interesting because it:

• Grew revenue from 39 mSGD to 162mSGD in the past 10 years led by CEO Mark Richards

• Is expanding sales efforts in the USA and Europe, leading to 110% order growth in 2025, (also enabled by its recently expanded and optimized Malaysian production facility)

• Trades at less than 6x earnings + cash, with ~35% gross margins

We cover a quick intro to the history and focus of the company, dive into the 3 points above, come up with a price target, and summarize after talking about the risks.

History & focus

Grand Banks Yachts was founded in 1956 as “American Marine”. The company in 1963 built the “Grand Banks 36” Yacht, which was the first trawler type yacht.

The boat was unique because of its shape, which is rather flat on the bottom, behind the sharp nose. This makes the boat sit less deep in the water, reducing its water contact surface and making it much more fuel efficient, and more stable or comfortable at sea.

This idea of creating a long range, slightly slower boat, intended for couples wanting to go on a comfortable trip at sea, was an innovation in boat design, and is still part of the company’s value proposition today.

Not spending too much time on the history, it’s further important to note that Grand Banks in 2014 acquired Palm Beach Motor Yachts, an Australian competitor who had started building similar trawler style yachts.

As of the acquisition, the Palm Beach CEO Mark Richards took over the CEO role of the entire Grand Banks company, leading it for the past 10 years. Mr. Richards is an excellent manager both on the operations and on the sales side, and he has contributed everything Grand Banks is doing today. Below is a recent interview showing his mindset on operations as well as sales.

An alternative (realistic) way to look at the acquisition, is that in 2012 the original Grand Banks was struggling and organized a refinancing with Malaysian billionaire Lim Kok Thay, who obtained 30% of the companies shares. As things didn’t turn around by 2014, he contacted Mark Richards of Palm Beach, and brought him in to turn around the company, while keeping the iconic Grand Banks name, given the heritage.

Past 10-year growth story

As mentioned, Mark Richards came in in 2014. He re-organized the factory in Malaysia to make it profitable and capable of producing the whole range of yachts of the combined Grand Banks and Palm Beach entity. The company even decided to produce less for a year, to focus on re-organizing the yacht designs and the factory operations, still retaining the same crew size, but setting up a better production model. Reading between the lines of the 2015 report, it sounds like Mark and his team also just replaced many of the management and workers to create a new way of working. After driving production improvements, Mark turned to the sales and product design side driving the company forward as a whole.

In the 10 years, since turning the ship around, Grand Banks Yachts under Mark’s leadership has grown ~15% per year while making profit every year after the turn-around.

Notice how the company struggled in 2021 and 2022. This is unusual for a boat/ship building company, because in 2020/2021, COVID created large demand for yachts, which lead to strong 21 and 22 revenues. In Singapore and Malaysia though, severe COVID shutdowns and travel restrictions were in place, that made it impossible for Grand Banks factory to produce during several months.

We see that in 2023 and 2024 the order backlog built up during the COVID years, is finally processed into actual deliveries and revenues. The same happens at other boat/ship builders like Catana or San Lorenzo, although slightly earlier.

Given the large 2021 demand spike, followed by a weaker economic/financial environment, many of the ship builders have been using up their order backlog. This created a situation where their stocks are very cheap, but are value traps. The companies are sitting on expanded factories that are slowly becoming idle due to sinking demand.

Look at Catana for example, a European Catamaran builder of similar size to GBY. Here’s what Catana says about their sales backlog:

Catana (~200mEUR revenue) has basically built a massive orderbook in the 2020 and 2021 heydays, and has then completely lost touch with its customers, while slowly delivering those orders. This leads to them now having ~20% less revenue than last year, while being unable to achieve a stabilization in the orderbook. In 2023, the company acquired a Portuguese motorboat production company, a move that created more trouble for the company, as it targets cyclical or price-sensitive customers.

We don’t blame Catana, it’s in fact an interesting company to follow, but it seems to have been trapped in a capacity overbuild, as many players have. We expected this to happen to Grand Banks Yachts as well, but the opposite actually started happening over the past couple of quarters.

Expanding sales efforts in the US and Europe, leading to 110% order growth in 2025

Grand Banks Yachts has taken excellent steps over the past years:

• Strategically:

  • Merged Grand Banks and Palm Beach organizations and brands, coming out together as “Grand Banks and Palm Beach Motor Yachts”

  • Introduced larger ships (Grand Banks 85 in 2021/2022 and Palm Beach 85 in 2024/2025) which target less price-sensitive / macro-sensitive consumers

• Commercially:

  • Increased physical US sales and service presence

    • 2022: Purchased a marina in Florida

    • 2024: Established a San Diego sales & service center

    • 2025: Purchased a large marina in Rhode Island

  • Planned to increase presence in Europe through…

    • 2026 upcoming San Remo sales and service center (recently announced)

  • Assigned a global CMO, Lynn Fisher, who previously worked as CMO at Vista, a private jet company

• Operationally (all in 2025):

  • Expanded floor capacity by 25% at the Malaysian factory

  • Increased manufacturing efficiency by introducing robots in the new plant

  • Streamlined production steps & reduced energy costs through solar panels

Strategic focus

Throughout its growth journey, Grand Banks has continually expanded its product range, including increasingly larger yachts. Demand for larger ~20m+ long yachts bought by centimillionaires or billionaires, is much less cyclical than demand for smaller trawler yachts bought by millionaires. This is just like Hermès demand being much less cyclical than LVMH’s.

As Grand Banks production and design capabilities grew over the past decade, so did the max size of their yachts, gradually providing an entry in the more stable super yacht market.

Below table shows the gradual increase in Yacht sizes announced by Grand Banks Yachts:

They are slowly entering the super-yacht segment of less price-sensitive consumers.

Operational Excellence

Meanwhile, continuous improvement at the Malaysian production facilities, makes Grand Banks production more efficient over time, supporting gross margins of ~30-35%, driven by economies of scale creating labor efficiency.

Margins in 2025 came down a bit because of a higher mix of trade-in vs new construction, new construction GMs still being 36%. This was slightly lower than 2024 due to lower USD/MYR exchange rates.

Commercial Excellence

The commercial initiatives listed in the overview above, complement the operational and strategic initiatives. Grand Banks through its marinas and service centers, is getting closer to US customers, better positioned to hear their feedback, to support them with maintenance, and to help them consider a new ship purchase.

This is why, contrary to most boat/ship builders, Grand Banks Yachts sales team has been on fire this year. The company signed 199 mSGD in new orders, over 2x higher than prior years, and in particular signed 142 mSGD in yachts in the past 6 months, which was about as much as the 6 quarters before that, combined.

The momentum seems to continue into 2026. Mark Richards at the Annual Meeting in August 2025, mentioned:

These PB85’s are ships priced at ~9 mUSD each, so if only half of them lead to orders, and nothing else happens, Grand Banks Yachts sales team is off to a strong start of FY26.

Source: https://links.sgx.com/FileOpen/Minutes_of_AGM_2025.ashx?App=Announcement&FileID=867608

Valuation

Grand Banks Yachts trades at a 147 mSGD market cap, taking into account both outstanding shares and dilutive employee share options and grants. The company has a cash position of 47 mSGD, on which it earns ~1 mSGD per year. Removing cash from market cap, and interest income from the earnings, Grand Banks Yachts trades at:

Cash-adjusted P/E = (mkt cap – cash) / (net income – interest income)
= (147 - 47) / (18 - 1)
= ~ 6x earnings

We estimate Grand Banks Yachts revenue will be up ~22% in 2026, driven by a 30% higher orderbook to start the year. Gross margins will likely be a bit lower, caused by exchange rates, and a slightly higher contribution of repairs and trade-ins revenue. Net income margin % will likely be similar to 2025, driven by beneficial fixed cost leverage. This drives our 2026 earnings estimate of ~22 mSGD. (18 +22%). Taking out 1m interest income, we work with 21 mSGD cash adjusted earnings.

It’s hard to put a multiple on the company, as comparable companies trade anywhere from 10x to 65x earnings, mainly depending on size, growth stability, and size of boats/ships produced (which affects margins and competitive advantage in general).

At 10-12x cash adjusted forward P/E, we find a value at which Grand Banks Yachts can still be considered cheap. This drives a market cap of 47 + [10 to 12] x 21 = 257 – 300 m SGD, or a share price of 1.35 – 1.58 SGD.

Risks

There are 2 key risks to this idea:

1. Margins. Grand Banks Yachts is currently earning ~35% gross margins, higher than in pre-covid years, and higher than most competitors. We think this is the result of running an efficient, well-utilized, cheap production facility in Malaysia, and creating yachts with a unique value proposition. There’s a risk of gross margins coming down, due to overcapacity at competitors’ driving price decreases, or less optimal factory utilization as Grand Banks grows, or any other reason. Inflation can also affect margins, particularly because the company commits to build the yacht before building it, so any inflation between signing and building the yacht goes straight out of gross margins.

2. Macro/demand. Demand for yachts may fall driven by a global recession or by increasing interest rates. We think this risk is already partially affecting Grand Banks Yachts, driving their focus to larger ships purchased by more affluent less price or macro sensitive customers. A declining global economy and stock market though, would certainly further affect Grand Banks’ demand.

We made this a small starter position in our own portfolio, as we find these risks hard to rule out (hard to judge if margin follows from great execution or shorter term benefits). When the company shows consistency in order growth and high margin execution, we look forward to buying more shares higher.

Other players

Here’s a quick overview of the players in the recreational boat/ship market, which is a market of ~9 bUSD per year, expected to grow 6-7% from 2025 to 2032, driven by increasing wealth concentration. (K shaped economy at work).

Catana, is mentioned is interesting to watch but might have to go down deeper or consolidate for a few years before turning around.

Ownership structure

Grand banks Yachts has ~7% insider ownership, almost all of which are held by the CEO. Other investors include billionaire Kok Lim who is not involved in the management of the company, and 2 other investors who are not involved in the day-to-day of the company. The company has a healthy free float providing
~50 kSGD in daily liquidity.

Summary

Grand Banks Yachts is a solid compounder, which under the leadership of Mark Richards has grown revenue over 4x in the past 10 years.

The company had strong new order inflow in 2025 as a result of well-targeted commercial efforts, a factory expansion, and continued addition of larger ships.

The near-term outlook looks positive, given a strong orderbook and ongoing sales of 7 PB85 ships providing visibility on short-term growth.

We think the shares look attractive at 6x earnings + cash and are undervalued at 0.775 SGD s a fair value range of 1.41-1.63 SGD per share. Main risks to watch are margin sustainability and global macro affecting demand for discretionary spending.

Disclosure

We own shares in Grand Banks Yachts (G50.SI) and may buy/sell shares at any time.

Disclaimer

This publication’s authors are not licensed investment professionals. Nothing produced by the Floebertus team should be construed as investment advice. Investing involves serious risks, including risk of capital. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge.

Appendix: Review of the 2021 launched Grand Banks 85 yacht, the largest ship produced by Grand Banks until the launch of their Palm Beach 85 model this year.

It’s one of the most interesting setups we have ever seen, because it

• Is founder-led and owned

• Delivered ~50 consecutive profitable quarters since IPO

• Compounded value per share at 22% CAGR over 12 years (11x !! )

• Trades at 0.5x price / book (10x P/E)

• Reported 8% bookings growth, 20% backlog growth in Q3 2025

• Bought back 2% of its shares in the past 12 months

• Considers one-off asset sales to increase buybacks

• Surged 3x in 4 months the last time it traded below book (03/2020)

Write-up Nov 9th, 2025:

Overview

LGI Homes is a U.S. homebuilder, delivering entry-level single-family homes (95%) and townhomes (5%). The company is mostly active in the Sun Belt, and has ~6,000 annual closings, or ~1% of the U.S. new-home market. The company offers homes in 21 states.

History of the company and the founders

LGI was founded by Thomas Lipar in the 1990s, who together with his son Eric, started a land development business called LGI (Lipar Group Inc). The company was initially focused on acquiring undervalued raw land in emerging suburban areas, and developing it into empty plots ready to be built on. This involves going through regulatory processes like zoning and entitlements, as well as preparing the sites with essential infrastructure such as roads, utilities and drainage, before selling them to home builders.

In 2003, Thomas and Eric renamed the company to LGI Homes, and entered the Texas housing market with their inaugural homebuilding project in Conroe, a fast-growing suburb north of Houston. This first community included 337 affordable, energy-efficient starter homes designed for first-time buyers and young families. Priced under $150,000 at the time, these quick-move-in properties quickly gained traction, setting the foundation for LGI’s expansion across the state and beyond.

The Lipars consistently focused on building entry-level homes for first time buyers, aiming to increase the number of Americans able to own their home. The company has often selected cheap land near rental communities, developed the land, and sent out flyers to the nearby renters, showing the small monthly difference in mortgage payments vs rent expenses to attract buyers.

In 2013, LGIH went public at a ~$250m market cap. The market had high expectations of the Lipars, given their incredible performance up to that point. In fact, driven by their smart land acquisition and development strategies, vertically integrated with their home building business, they were the only one among the 200 largest U.S. home builders to deliver profits and growth throughout the 2005-2010 global financial crisis. Page 63 of LGIH’s 2013 IPO prospectus reads:

“Since commencing operations in 2003, we have constructed and sold over 5,000 homes, have been profitable every year despite the housing downturn, and have never taken an inventory impairment. According to Builder magazine, we were the only homebuilder among the 200 largest U.S. homebuilders to report closings and revenue growth from 2006 to 2008 when the housing market experienced a significant decline. We increased our revenue from $55.3 million ($50.5 million for our predecessor) in 2010 to $143.4 million ($76.2 million for our predecessor) in 2012, representing a compound annual growth rate of 61.0% (20.2% for our predecessor). We increased our closings from 439 homes in 2010 to 1,062 homes in 2012. Among our public homebuilder peers, we had the highest revenue and closings growth between 2010 and 2012. Since 2010, we achieved profitability within six months of our first home closings in each of our new communities in these markets.”

49 consecutive profitable quarters, driving
22% CAGR in book value per share

Since the 2013 IPO, the company has continued firing on all cylinders, being profitable every single quarter. This consistent profitability leads LGIH’s book value per share to rise, every single quarter as well:

As shown in the chart, LGI Homes grew per share book value from $8 to $90 in 12 years, for an impressive 22% CAGR, while paying small dividends along the way. This is testament to the Lipars lifelong craftsmanship of selecting the right lands, developing them into construction areas, and building attractive single-family homes on them, while opportunistically buying back stock when it is offered at a discount.

The housing cycle

LGI Homes achieves a ~20-25% average Return on Equity through the cycle, as necessary for its stellar book value per share growth. The past 2-3 years have been tough for housing, as we can see in the chart below or read in the corresponding article.

Rising interest rates have put a strain on affordability, causing home prices and home sales to stop rising and start to decline. In a typical year in the United States:

• Slightly more houses are sold than the year before (0-1%)

• Home prices increase ~4-5%

• First-time buyers represent ~30% of new home buyers

• Monthly costs of new mortgages are somewhat higher than rental alternatives

This creates a healthy environment for LGIH to convert their opportunistically acquired land into new homes and convert nearby renters into buyers. With every year passing, the assets LGIH hold (homes and land) increase in value. This provides a tailwind to Gross Margins, which asset-lighter competitors don’t have, because in a good market, the homes LGIH sells have been built on land that has appreciated significantly over the years the company held it.

This is why LGIH has the highest Gross Margins in the industry in such a market, and has consistently had about the largest GMs from ~2015-2021:

In 2024 and 2025 however:

• Marginally more houses are sold than the year before

• Home prices declined 1% YTD 25 (and even -2% for 2024)

• First-time buyers represent ~21% of total home buyers in 2025 so far

• Mortgage rates at 6-8% making buying significantly harder than renting

This causes LGIH to currently have more normal looking margins compared to competitors, not feeling the tailwind from holding land rather than land call options.

Besides the lack of land value appreciation, and home prices appreciation, and overall demand softness in housing, the current cyclical headwind is hitting LGIH extra hard. Higher interest rates are pushing first-time buyers out of the new homes market, as mortgages for new homes are currently much more expensive than monthly rent alternatives. This makes it extremely hard for LGIH’s target customer to buy a new home in 2024 and 2025.

LGIH’s performance in the 12 months until Oct 2025

Looking at how LGIH does during these tough years, we see that in the last 12 months:

• Revenue was ~$1.8 billion, vs $2.2b the year prior (-18%)

• Profits were $106m, vs $197m the year prior (-46%)

• Book value increased from $2b to $2.08b (+4%)

• Basic shares out reduced from 23.5 to 23.1 by (-2%)

• Book value per share increased from $85 to $90 (+6%)

• (No Dividend)

It’s remarkable that a 6% increase in Book Value Per Share is a bad year for LGIH, given that a good year is a 25-35% increase. There seem to be many more good years than bad years through the cycle, leading to LGIH’s 22% CAGR. The company clearly knows the art of consistently adding value, although the stock market does not always notice it immediately.

The market did like LGIH’s Q3 results, because the company stated:

- Q3 Sales orders for new homes were 8% higher than the year before

- Q3 ending order backlog was 20% higher than a year before

- LGIH is looking into selling lower priority land assets, for debt reduction

- LGIH is looking forward to buying back more shares in 2026

While this provides signs that the market may be improving and management may be able to quickly reduce the book value discount by selling assets and buying stock, LGIH is clearly not out of the woods yet, and guided for ~20% lower Q4 revenues. Longer term though, we think the housing cycle will turn and LGIH will get priced well above book value again as first-time buyers return to the market.

Current valuation

LGIH currently trades at 0.52x book value. We think the company is worth ~1.2x-1.5x book value, given its long-term track record compounding value at above 20% ROE.

The current share price is equal to 10x LTM EPS. We prefer not to value LGIH based on an earnings multiple though, given (1) They could achieve significantly higher short term earnings by lowering prices, should they like to (2) Regardless of current earnings, they own the houses and the land, and we think both are worth more than historical book value and (3) earnings of cyclical companies always look the worst at the best possible time to buy them and best at the worst possible time to buy them.

Note that in 2020 and 2021, book value per share (in chart 1 above) increased very significantly as the housing market was very strong. People had just spent their whole 24/7 life stuck inside their homes or apartments during Covid and couldn’t wait to buy a new home. Credit was cheap and rising inflation and interest rates were whispering fear into the ears of first-time buyers. “It’s now or never… “.

This caused LGIH’s book value to increase 72% in 2 years! One might think that real estate investors would turn cautious in such an environment, but instead they bid up LGI Homes to over 2x, and some days even 3x book value.

The market didn’t think LGI Homes was going to sell their inventory at 3x book value in 2021, but the market’s reliance on P/E ratio did create a stock price which implied a decade of growth at above average margins, which is possible but extremely unrealistic.

Similarly, we think today’s assessment of the market, pricing LGIH at 0.5x book, which implies a decade of low single digits Returns on Equity, is possible but extremely unrealistic.

We think LGI Homes is worth ~1.2-1.5x book value, or $108 – 135 per share. The next time it gets there though, it will likely be posting double-digit growth rates, the P/E will likely be lower than today, and the market will likely take it back to well above 2x book value before correcting, as it did in previous cycles.

What we have seen in previous cycles is that LGI Homes stock price keeps rallying well after the housing market overheats and the Fed starts rising interest rates. Similarly, today, investors are selling off LGIH while the first rate cuts provide signs of improvement for the housing market.

Why the opportunity exists

We think the opportunity exists because:

1. Investors predominantly rely on profit-based valuations, not suited to value a cyclical, interest-rate dependent company like LGIH.

2. Investors in LGIH throw in the towel after multiple years of softness in the housing market, particularly at the low end served by LGIH

3. The market cap of LGIH has declined from $4 Billion to <1 billion, likely causing some forced selling among institutional holders limited to companies with market cap > 1 or 2 billion USD, or linked to daily USD liquidity constraints

4. Tax loss harvesting, the stock being down ~50% coming into November

5. Lack of imminent turn around. While it is appealing to buy a profitable business at 50% of the value of its real estate assets, it’s not clear when the market will turn around. Compared to 1 year ago, not much has improved. In fact, margins have deteriorated and book value increased by only 6%. There is no narrative here of how and when improvement will occur. This makes it hard for investors to buy or justify buying LGIH, even trading at 50% of book value.

Risks

• Land and Home prices may decline because of population/migration declines

• Competition in the housing market may increase, suppressing margins

• Rising interest rates may cause continued weak demand and worsening credit availability, causing the company to raise capital through an equity financing

• Government regulation to unlock existing housing inventory may negatively affect home builders

Summary

LGIH has a strong track record of growing book value per share by ~20% per year, under the leadership of its founders. The stock is being thrown out after a couple of bad years in the housing market, first-time buyers staying out of the market due to rising mortgage rates. We think LGIH will quickly revert back to 1.2-1.5x book value.

Disclaimer

This publication’s authors are not licensed investment professionals. Nothing produced by the Floebertus team should be construed as investment advice. Investing involves serious risks, including risk of capital. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge.

• Update you on the current portfolio

• Share the latest changes and rationale for each

• Give the Top 3 stock in the portfolio we like most today

This is not meant to be an analysis but rather a quick info sharing.

Portfolio:

The portfolio was up just over 3% in October, mainly driven by Altyngold closing Oct at 930 vs closing Sep at 840. (The % weights reported in the last update were those of ~ Oct 1st 09:30, at which point Altyn was already up 10% for the day. This meant that the reported weight was 35%, while it was only 32% at Oct 1st 00.00 am. So we now make sure to take the snapshot at 00.00 am to avoid confusion)

Also, in the previous update some 0.4% positions were shown as 1% positions. We now just show them as 0% to keep it simple. To make things more clear, we highlighted the changes above.

Changes:

• Added to Huationg
  A very cheap growing Singaporean builder.
  The write up on this company can be found here:
  

• Reduced a little bit of BSH, to add to Inpro
  BSH and Inpro are both small growing Polish companies trading at ~6x P/E with great prospects. We wanted to give Inpro a slightly bigger weight and reduced some BSH. We think BSH looks great but we own a lot of it compared to its liquidity, so we can allow taking some out to put into Inpro. Maybe we will do more of this, but we don’t imagine selling it below 20 PLN for the moment.

• Added to Grand Banks Yachts
  The company delivered a great Q4, and the comments in their Annual meeting suggest a very strong 25/26 fiscal year. The sales strategy with more US local presence seems to be working very well, leading to record sales bookings. They did not report sales bookings, but we could of course calculate it as { end Q4 orderbook) - (end Q4 orderbook) - Revenue}. What appears then is record sales bookings of S$92m, almost twice as high as sales in any other quarter in the companies history. TTM net income is 18 vs market cap minus cash of ~$105m today. The cash position is a bit debatable because some customers pay up front, but then also some boats are already partially completed and the revenue is not booked yet so that is not a visible asset… Potential philosophical discussion there but anyway we look at it, the company continues to grow double digits and trades at 6-7x market cap ex cash. Below is how we like to look a these companies. Note that with Grand banks, the market buys/sells the stock based on net earnings, but the true leading indicator is sales bookings. This would become a top 3 position if they get another quarter of sales bookings > S$60m. Worth mentioning much of the latest sales bookings are likely maintenance bookings which have lower margins, so the improvement in new sales is not as large as it looks. Anyway great progress specially compared to other yacht builders like Catana for example.

• Bought some more Lexibook

  Very cheap French toy manufacturer (~ 40m mkt cap, 7m TTM net income) with ~5 years of growth behind it. They make things like a 100 Euro “laptop” for your 7 year old, which runs some safe games and educational exercises.

  
  Their continued geographical expansion across Europe and the USA, combined with lower container freight rates, should drive additional growth in revenues and margins.

  

• Bought Cedergrenska

  We think this is mostly a very well run company which will do well over the long term, improving every day and navigating the changing regulatory landscape in Sweden, a country that thrives thanks to its great education.
  

• Bought Intellego
  We don’t really think they would do buybacks and CEO purchases if the company was fake. We like their dosimeters and can understand why Henkel likes them too. This is too risky for a bigger position though, and too crowded as well.

• Bought Yarrl

  Yarrl is a growing Polish IT company. We like their execution, we like that headcount on Linkedin is up 30% year over year. We like that together with Euvic, they recently signed a ~200m PLN frame agreement with the Polish ministry of finance (vs 55m market cap). We don’t strongly like/dislike their acquisition plans or intentions. Good for a starter position.

• Reduced Matsa
  We reduced this to invest in Huationg and Grand Banks and reduce gold exposure. We like Matsa from a balance sheet point of view, but their press releases seem quite promotional, and they have 100 different upcoming ideas which they can burn cash on, and then they also raised cash which seemed unnecessary. They will likely continue do well, but We wanted to free up some cash and reduce gold exposure, and this was certainly our least favorite gold stock.

• Sold DBA because their organic growth was a bit too low in our opinion. They will do well long term though. One thing with DBA is they amortize 1-2m in goodwill every year, which the market seems to never give them credit for. They end up spending this on small acquisitions which helps them grow faster. They then also amortize the goodwill on the new acquisitions, creating a bit of an extra hidden engine for returns… We don’t think this will get “unhidden” so there’s some lack of a catalyst here, but long term we think it will contribute to 10%+ annual returns for DBA. Looking at that setup, we preferred to sell it and allocate to the Singaporean companies and to Cedergrenska.

• Sold Atlas Pearls.
  The latest pearl auction in Kobe was pretty bad in terms of quality Atlas could bring, as well as price per quality point paid by the market. It’s still very cheap at 4-5x forward earnings, but its not as ridiculous as before.

Top 3 stocks today

1. Altyngold/ Serabi

2. Huationg

3. Grand banks yachts or Lexibook
   (or the builders LGIH and Inpro but those are much longer term and maybe with a bit less conviction as we don’t usually invest based on balance sheet)

We hope you enjoyed this update, and really hope that before buying/selling any stocks, you do your own work on them and discuss the actions with your advisor. The goal of course is to share the journey, thought process and potential ideas, rather than to provide a copy paste portfolio. It’s probably helpful still to share monthly updates so everyone can use recent information to follow the story and consider new ideas. Let us know if you have any questions/feedback! Next write-up will likely be about one of the two housing stocks mentioned above.

Disclaimer

This publication’s authors are not licensed investment professionals. Nothing produced by the Floebertus team should be construed as investment advice. Investing involves serious risks, including risk of capital, as well as health risks. Do your own research before investing, and size your positions appropriately, in line with your own conviction and your own knowledge.

• Founder led education leader

• <5x forward P/E hidden by amortization charges

• 10% buyback completed, but not shown in Tikr/Factset/…

• 5 years of profitable growth

• 30% ROE target

The great performance of this business is hiding behind amortization of goodwill, and the great capital returns are hiding behind an out of date share count and market cap shown in commercial screeners/tools. Let’s study this one together.

Ticker: CEDER (Stockholm) Price: SEK 37.4
Shares Outstanding: 12.66m (No dilutive shares/options/warrants)
Market Cap: SEK 473m

Overview

Cedergrenska is a Swedish private school group, providing education across pre-schools (9%) elementary schools (29%), high schools (60%), and adult education classes (2%). The group is mostly active in the East of Sweden, and has ~9500 students, or 0.4% of the Swedish student population.

The company was founded by a stock market broker who dropped out of Wall Street in 2007 to become a history teacher, and a school quality auditor. Together, they built a teacher training program and improved the quality of their first school (Tibble Gymnasium).

They started acquiring schools, and enrolling them into their systems, compounding their investment, and their positive impact on Swedish education. It’s great to see these 2 combine their joint vocation for high quality education, with a private equity-style capital allocation.

The stock is highly attractive because:

• High Quality service and brand
  Cedergrenska’s schools have better reviews than other private or public schools, over 85% of teachers and students recommend them, and students are well prepared for university.

• Capital allocation

  Management is exceptional at capital allocation, balancing accretive acquisitions with opportunistic buybacks, while measuring all investments against a 30% ROE target.

• Operational excellence

  Newly acquired school groups are quickly optimized. The acquisition of the Aprendere Skolor school group acquired in Dec 2024, with trailing EBITDA of ~11 mSEK, will contribute at least 20 mSEK in 25-26 FY EBITDA.

  
  Cedergrenska optimizes schools with a focus on:

  • Margin expansion, through efficiency improvements in overhead, and corporate and facility support functions (IT, HR, payroll, cleaning, catering, … )

  • Quality improvement, through standardized training plans and digital infrastructure

• Undervaluation

  Cedergrenska’s trades at a 4-5x P/E calculated as
  (Net income – Interest income + Goodwill amortization) /
  ( Market cap – Unrestricted cash)

• Tailwinds for large private schools

  Both privatization and consolidation provide tailwinds for Cedergrenska:

  • Since allowing private (government-funded) schools in Sweden in 1993, their share has increased each year, to now ~22%. Private organizations often work better than government organizations, and schools are no exception.

  • Higher expectations on quality and digital infrastructure, from students, governments and teachers, benefit larger school groups coming with a strong offering, and drive consolidation of the highly fragmented school landscape.

History & founders

The company was founded by Håkan Söderström and Niklas Pålsson, who still have active leadership roles today.

Mr. Söderström has worked in the Swedish school system for all his career and took over a high school called “Tibble Gymnasium” in 2011. Stepping out of his role as school Quality auditor, he replaced the retiring school principal of the school.

Mr. Pålsson had left his 10-year career as a stock market broker in 2007 and joined the school as a history and economics teacher in 2010.

Together, the 2 aspired to create the best secondary school in northeast Stockholm. They set up a training program for new teachers, which drew interest from young graduating teachers, and led to a steep increase in both teachers and students wanting to join their school.

In 2018, Cedergrenska started its expansion, acquiring multiple schools or school groups per year, and providing them with Cedergrenska’s support functions and training, improving quality and profitability of the schools. Since 2018, Cedergrenska has added new schools every year.

In 2023, Cedergrenska acquired David Ebbesen AB, a food company which provides lunch to the students in the Group. The founders pride themselves on the increase in the % of students eating at the schools where David Ebbesen AB (now Cedergrenska Mat AB) provides food, saying it creates a better experience for the students, and a tighter school community.

High Quality service and brand

Before we consider investing in an education company, of course we must wonder if the education is any good? Is the company building a reputation and creating a positive impact on its communities, or is it cutting investments, delivering poor service, and exchanging its reputation for short-term profits?

Cedergrenska is an amazing education company, by several KPIs:

• Online reviews:

  Cedergrenska: Average score of 3.8/5

  Municipal schools: Average score of 3.6/5

  AcadeMedia: Average score of 3.3/5
  

• Stakeholder satisfaction:

  86% of parents recommends their pre-schools

  96% of high school students gain university entrance qualifications

  87% of teachers recommend their workplace

While each of these KPIs may be biased or influenced in their own way, the overview gives a picture of a high-performance education group, as one would expect from hearing an interview with one of its founders. Online reviews based on 10 schools per school group randomly picked, and using review on School Parrot.

Ownership & Capital allocation

Cedergrenska aims to grow 10-15% per year through a mix of organic and inorganic growth. We like 6 aspects of the company’s ownership structure and capital allocation:

1. Cedergrenska’s CEO (L. Smith) background as a Director at Morgan Stanley

2. Cedergrenska’s founders (both still active) own over 28% of the company

3. Cedergrenska has bought back ~10% of its shares at a P/E < 7x

4. New acquisitions or investments are measured against a target of 30% ROE

5. New acquisitions have mainly been debt funded, to optimize leverage

6. ~33% of (net income + amortization) is paid as a dividend

Operational Excellence

Cedergrenska’s management team is doing an excellent job operating existing and newly acquired schools. Their approach seems to rest on 4 main pillars:

1. Attract the best teachers (employer brand & training program)

2. Consolidate corporate functions (HR, IT, Finance, branding, real estate)

3. Consolidate and insource school support functions
   (maintenance, cleaning, kitchen)

4. Measure quality and cost-effectiveness, and run small scale improvement initiatives in pilot schools, which when successful are quickly ramped up
   (e.g. inhouse cleaning, kitchen, … )

The effect of these pillars though is quite spectacular. Since CEO Lotta Smith took her position in 2022, revenue has grown ~20% per year (organic & inorganic), and EBITDA margins have improved from 7% to 9%, while acquiring several schools at a lower EBITDA margin, in particular the large school group Aprendere Skolor, which was acquired in December 2024, having an EBITDA margin of only 3%, and contributing over 25% of the Groups revenue today.

The increase in margins, even while running large acquisitions, combined with the great capital allocation, creates the flywheel of value you want to see in a serial acquirer. Let’s dig deeper into the Aprendere Skolor acquisition:

Financials at time of acquisition:

• Revenue: 352 mSEK

• EBITDA: 10.8 mSEK (~3%)

• Acquisition price: 78.1 mSEK

• Multiple: ~7-8x EV/EBITDA

The rationale for the highly accretive acquisition is clearly articulated:

• Drive efficiency improvements and synergies worth ~9m SEK

• Implied EV/EBITDA upon successful execution: 78/(20) = ~4x

• Group EV/EBITDA at the time: 6x

Execution:

• “The integration of Aprendere Skolor AB is progressing and the EBITDA contribution from the acquisition is estimated to amount to at least SEK 20 million, starting in the 2025/26 academic year at the latest” (Q2 report)

• TTM EBITDA margin improved to 9% for Cedergrenska as a whole

Undervaluation

Cedergrenska has executed a synthetic buyback over the past 6 months, buying back 1.4m of the 14.06m outstanding shares, leaving 12.66 million currently outstanding. The company paid a total of ~50 mSEK and executed the buyback through a 3^rd party acting on their behalf.

After this buyback, the market cap is now 12.66 x 37.4 SEK = 473 mSEK, and the remaining cash position is 128 mSEK – 50 mSEK = 78 mSEK. The company has raised debt to fund this 10% buyback, although they could have also funded it from strong TTM cash flows, explaining the large cash position.

To come up with a good valuation, we take into account not only the shares repurchased, and the cash removed to do it, but also the interest rate on the debt taken on to initially obtain the cash. Cedergrenska recently took up 90 mSEK in debt using a revolving credit facility with Danske Bank, and will likely pay an annual interest of around 3.3% or 3mSEK, or ~2.5 mSEK after tax.

Cedergrenska trades at a TTM ex-cash P/E of below 6x:

• Market cap (473) – cash (78) = 395 mSEK cash-adjusted market cap

• Net income + amortization – interest adjustment = 71.5 -2.5 = 69 mSEK

• 395/69 = ~ 5.7x P/E

We consider Cedergrenska’s forward guidance of at least 67 mSEK net income + amortization, their past year performance, exceeding earlier minimum guidance by ~25%, and their current strong run rate of ~93mSEK based on the strong H2 of 2025. We estimate forward earnings + amortization to be around ~80 mSEK, resulting in a multiple of just under 5x P/E. (395/80)

Looking at the current cash availability, the share price, and the Net Debt/EBITDA target of 2x versus current net debt of ~0.2x EBITDA, it is likely that Cedergrenska will buy back additional shares in the coming years, while acquiring additional schools and paying a high single digit dividend.

We think Cedergrenska is attractive until a forward P/E multiple of ~12x to 15x, which implies a fair value per share of (12 to 15 … x80 + 78) /12.66 = 82 – 101 SEK per share, compared to the current share price of ~37.4 SEK.

Large cap competitor AcadeMedia trades at just over 13x P/E with high debt and lower ROE/ROIC measures (~10%) and looks slightly undervalued as well.

Tailwinds

We see 2 industry trends that act as long term tailwinds for large private school groups like Cedergrenska:

1. Increased privatization of schools

Over the past 32 years, schools in Sweden, have become increasingly privatized. Finding good management or continuation of management is often difficult for communes, which sometimes leads to considering privatization, when the school transfers to a new principal, which then also becomes the owner.

2. Increased consolidation of private schools

As the government, as well as teachers and parents, raise the bar on schools in terms of digital infrastructure, learning methods, and communication, larger schools have a growing operational advantage. This drives larger schools to attract better teachers, and more students, and drives the ongoing consolidation of private schools, with currently more than 80% of private schools still being independent single schools, rather than part of a group.

Risks

Investing is very risky. We think the key risks to consider before investing in Cedergrenska are:

• Grant risks. Cedergrenska is approximately free for students. The schools are paid a per student fee by the communes. The fee is calculated taking into account various factors that influence the needs of the student, while adjusting for inflation. Policy changes could change the fee and therefore impact on the profitability of Cedergrenska.

• Regulatory risk. Government’s expectations of private schools may change. Although this has so far mainly been a tailwind (driving consolidation), it could also be a headwind in the future. Recently, governments have suggested limiting capital returns of private schools, after some smaller school principals pulled out all resources from a couple of schools only for their own benefit. This barrier would be linked to the school’s quality results and would again likely be a benefit to Cedergrenska but should also be considered as a risk. We think this is a real risk, but one which the market may be overestimating.

• Inflation. When the cost-of-living increases, so does the cost of running a school, as well as many other government-related costs like health care etc. In that situation, the grants paid by the communes to private schools are adapted only slowly, creating a short or mid-term drag on profitability.

• Reputation risk. Single school events or mismanagement can lead to a loss of trust or reputation of all schools in the school group or company. A recent HBO documentary shows the scandal of children being photographed by a teacher in the English International Schools in Sweden. This is another (publicly listed) private company, which runs a school group where parents pay to get their kids educated in English. Not only the events, but also the reaction of the school and company leadership, will likely have a short to mid-term negative impact on the school’s reputation.

• Demographics. Birth rates in Sweden are declining, creating a demographic drag on Cedergrenska’s inflow of new students. This is offset by government per student budget increases, making the revenue organic growth of each school approximately ~1-2% per year, driven by 1-3% increase in fees per student, offset by 0-1% demographics and market share gains. Further declines in birth rate will likely be offset by further per student budget increases but could increase competition.

Summary

Cedergrenska is a well-led group of schools, with solid reviews, students and teachers’ well-being. The company is rapidly and consistently expanding through well-executed acquisitions, which are integrated well into the company, creating large integration synergies.

At a current market share of 0.4% of the school market in Sweden, Cedergrenska has a long growth runway ahead of it. We think shares currently priced at ~5x forward P/E or 37.4 SEK, are attractive until about 82-101 SEK per share, providing ample upside and margin of safety.

Disclosure - long