Topic: While Conscious Good ceased operations, 029 sold one of its holdings, Emerald Stay for € 1.6m, a multiple of 2.7x on its invested capital. The group's NAV is now mainly carried by Limestone Capital and TRIP.

Conscious Good. CG was expected to launch a nootropics-based consumer product towards the end of last year. However, due to the chosen manufacturer filed for bankruptcy, the departure of the former CEO and challenging re-financing conditions, the company decided to cease operations at the beginning of February. As a result, we expect 029‘s total investment of € 4.9m to get written down.

It's 5.2% stake in Emerald Stay, which can be seen as an „AirBnB for luxury homes“, has been sold. 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.

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.

TRIP Drinks (9.5% of NAV, eNuW), UK’s leading CBD oils and drinks brand, is further progressing with its geographic expansion. In fact, the company should quickly be gaining traction in the US, allowing to triple sales to € 35-40m in FY23 (eNuW). With this development, TRIP should by now be worth notably more compared to its last funding round in August 2022 where it was valued at roughly € 105m, eNuW.

The company’s remaining holdings, namely hotelbird (3.9% of NAV, eNuW), Brother’s Bond (1.6% of NAV, eNuW), fjör (0.4% of NAV, eNuW), are all showing operational developments in line with expectations. Worth highlighting, hotelbird should reach cashflow profitability in FY24e.

Thanks to the proceeds, 029 should be able to either participate in upcoming follow-on transactions or increase the number of holdings. We reiterate our HOLD rating with a new € 14 PT (old: € 15) based on a sum-of-the-parts valuation (see page 2) with a 5% holding discount.

Source: NuWays Research, company data