Topic: 029 published FY23 figures. As 029 holds only minority stakes and reports under German HGB (no mark-to-market valuation), it was a non-event. Yet, its key assets continue to perform well.

As 029 had no divestments during FY23 (Emerald Stay was sold in Feb. 2024), the company generated no sales. Operating expenses amounted to roughly € 0.6m, slightly less than last year due to the absence of listing related costs. Going forward, we expect the annual cost base to come in at similar levels. Yet, this does not include one-off expenses related to potential investments/divestments. While cash at hand stood at only € 10k at the end of the year, the € 1.6m inflow from the Emerald divestment should provide 029 with sufficient liquidity.

The group’s key assets, Limestone Capital and TRIP Drinks (eNuW: 95% of the implied fair NAV) remain on a strong growth path. TRIP (10% of NAV, eNuW), the CBD-infused drink is available at more than 25k stores across the UK, France and the US. As a result, sales have grown at 390% p.a. during the past two years to roughly GBP 20m. De­spite the changed interest rate environment, we would expect any potentially upcoming funding rounds to value the company at more than € 140m (industry’s transaction median stands at ~ 10x sales). TRIP is well on the way to continuing its growth trajectory. If TRIP keeps growth at a similar level, the valuation has a lot of room for upside. They just launched a new non-CBD-based product (“Mindful Blend”) and focus on further expansion (e.g., in the US).

Limestone Capital (85% of NAV, eNuW) seems well on track to expand its hotel portfolio. In fact, the company has just purchased a hotel in Madrid. Thanks to its ongoing funding round, Limestone should be able to grow to 20 hotels, operated by its own brand aethos, until the end of 2025e, in our view.

First divestment completed. As a reminder, in February, 029 sold it's 5.2% stake in Emerald Stay. The transaction is expected to generate roughly € 1.6m gross proceeds, reflecting a realized multiple on the FY23 book value of around 2.3x and 2.7x on the invested capital. This was carried by the recently strongly increasing number of vacation rentals on the platform (FY23e: +71% yoy), in our view. The € 0.9m book gain should positively impact 029’s FY24 H1 figures due at the end of September.

We confirm our HOLD rating with an unchanged € 14 PT based on based on a sum-of-the-parts valuation (see page 2) with a 5% holding discount.