TRENDLINES GROUP: Lots of inherent value in portfolio companies to uncover

Key Takeaways (from visit to company in Israel)
Steve Rhodes, Co-Chairman of Trendlines Group.
Photo by Soh Lin Sin * Two portfolio companies will enter into revenue stage by end-2017 and two more by 2018. Portfolio values of these companies may increase as they meet certain developmental milestones in 2017/18. As at 31 December 2016, the Group has completed six exits, and taken two companies public; while 16 out of 46 of its portfolio companies are in revenue stage. 

* atTerm Technologies, one of the technologies developed by Trendlines Labs, is estimated to have more than US$2 billion market potential in developed countries alone. However, the technology accounts for zero value in Trendlines’ total portfolio value as they are developed in-house. Successful realization in investment would boost the Group’s revenue. 

* Continuous effort to expand portfolio value: 

(i) add more than 30 companies to its portfolio over the next three years; 
(ii) provide support to accelerate the development of the portfolio companies; 
(iii) explore opportunities to expand into new markets, in particular Singapore, China and German; and 
(iv) grow Trendlines Labs to increase royalties’ income which will provide steady income streams to smoothen out the lumpy revenues arising from the volatile portfolio values. 

* Undemanding valuation. Trendlines’ Price-to-Portfolio Value and Price-to-Net Asset Value are trading at c.53% discount to its peers (see table) 

Potential catalyst: Exit from portfolio companies