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Q1 results affected by subdued crypto sentiment

CoinShares International 1 June 2022 Update
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CoinShares International

Q1 results affected by subdued crypto sentiment

Q122 results

Financials

1 June 2022

Price

SEK39.9

Market cap

SEK2,722m

SEK12.2996/£

Gross cash (£m) at end-March 2022

34.5

Shares in issue

68.2m

Free float

28.9%

Code

CS

Primary exchange

Nasdaq First North

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(51.0)

(50.0)

(61.1)

Rel (local)

(50.3)

(47.5)

(57.2)

52-week high/low

SEK104.0

SEK35.5

Business description

CoinShares International develops innovative infrastructure, financial products and services for the digital asset class. It manages and provides liquidity for exchange traded products and undertakes proprietary trading in digital assets. It also acquired a blockchain equity index business and a consumer-facing crypto company in 2021.

Next events

Q222 results

2 August 2022

Q322 results

1 November 2022

Analyst

Milosz Papst

+44 (0) 20 3077 5700

CoinShares International is a research client of Edison Investment Research Limited

CoinShares International (CS) operated under difficult market conditions in Q122, marked by lower digital asset prices versus Q421, muted market volatility and trading volumes, as well as a flat term structure. This has reduced the assets under management (AUM) of its exchange traded products (ETP) and, in turn, management fees versus Q421 (although fees were broadly stable y-o-y). It also meant scarcer opportunities for CS’s delta neutral and fixed income strategies, which were only partially offset by solid decentralised finance (DeFi) income. We note however, that CS will report a £17m exceptional loss in Q222 arising from its exposure to the Anchor protocol due to the collapse of the UST stablecoin.

Year end

Revenue (£m)

Adjusted EBITDA* (£m)

Adjusted
EPS* (£)

DPS
(p)

P/E
(x)

Yield
(%)

12/20

18.4

22.1

0.28

0.00

11.6

0.0

12/21

80.9

121.7

1.64

0.00

2.0

0.0

12/22e

51.9

41.0

0.47

0.00

6.9

0.0

12/23e

37.1

42.6

0.40

0.00

8.1

0.0

Note: *Sum of revenue, income and gains from capital markets infrastructure and gains on principal investments less administrative expenses excluding D&A. **Total comprehensive income (excluding currency translation differences and fair value gain/(loss) on investments recognised in other comprehensive income) per share attributable to shareholders of the parent.

Robust inflows into physical ETPs and equity ETF

CS continues to introduce new physically backed ETPs with embedded staking rewards (see our previous note for details), with the most recent addition of a Solana ETP launched in partnership with FTX, one of the top native crypto exchanges. While CS’s legacy XBT Provider products continue to see outflows of c US$344m ytd (releasing further cash fees to CS), its institutional-grade CoinShares Physical ETPs had solid net inflows of c US$86m (excluding seed assets) despite the crypto bear market. Similarly, its blockchain equity exchange traded funds (ETF) saw net inflows of US$47m. CS’s total AUM was £3.95bn at end-March 2022.

Further investments in the business

CS has significantly expanded its headcount from 44 at end-March 2021 to 95 at end-March 2022, including the creation of a dedicated marketing and design team. Integration of Napoleon (the business-to-customer company acquired in Q421) is in progress, with CS developing Napoleon’s automated trading bots to expand their addressable market. Finally, CS is in the process of uplisting to the Nasdaq Stockholm Main Market. As a result of the above, as well as higher direct costs, its operating expenses went up to £9.8m in Q122 versus £5.8m in Q121.

Valuation: Offering a 100%+ upside potential

We have reduced our crypto price forecasts for FY22e, but as we see continued signs of crypto adoption, we have retained our mid- to long-term allocation assumptions, arriving at a CS valuation of SEK85.0 per share (down from SEK117.2 previously). Our bear scenario now implies a fair value of SEK68.1 (SEK 72.9 earlier). We estimate that the XBT Provider fees accrued so far and CS’s gross cash at end-Q122 cover c 70% of the company’s current market cap.

CS suffered a £17m loss from the UST collapse

Before we examine the Q122 results, we discuss the impact of the recent collapse of the TerraUSD (UST) token on CS’s Q222 results. UST was a stablecoin (ie a cryptocurrency with its value pegged to another asset, in this case the US dollar). Contrary to centralised stablecoins such as Tether (USDT) and USD Coin (USDC), where the peg is facilitated by off-chain reserves held in US$-denominated traditional assets (eg cash and US Treasuries), UST’s peg was maintained through an algorithm executed by a smart contract (ie a blockchain-based computer programme) and initially underpinned exclusively by the value of LUNA, the native token of the Terra blockchain, which hosts the UST. Each UST token could be issued to/redeemed by investors in exchange for one US dollar worth of burned/issued LUNA tokens. Consequently, any deviation from the peg has (until recently) been arbitraged out. While the Luna Foundation Guard (a non-profit entity developing and governing the Terra network, including UST) created reserves in bitcoin (BTC) and selected other digital assets (eg AVAX) earlier this year to defend the peg, UST was still to a large extent reliant on the value of LUNA.

Demand for UST came primarily from users of the decentralised lending protocol Anchor (hosted on the same blockchain, ie Terra), which CS also participated in as a lender, which it disclosed for the first time in its Q122 results published on 3 May 2022. Anchor offered a very attractive fixed deposit rate of c 19.5% pa, which at its peak on 5 May 2022 attracted more than US$17bn (according to defillama.com), significantly in excess of the amounts borrowed from the protocol (and at rates considerably below the 19.5%). This created an interest income shortfall, which had been covered by a so-called yield reserve (which had to be regularly topped up), hence the deposit rate was unsustainable in the long run. The value of native tokens of blockchains hosting smart contracts is normally underpinned by the demand for computing power on the network and the amount of funds deposited in its DeFi applications (referred to as total value locked, or TVL). Given that Anchor represented more than 50% of Terra’s TVL before the UST collapse, there was a significant degree of ‘circular backing’ in the system, making it vulnerable to a ‘death spiral’ scenario in which massive withdrawals from the Anchor Protocol, and the resulting supply of UST tokens, would lead to large, dilutive issuance of new LUNA tokens triggering a fall in LUNA’s price, leading to more withdrawals from Anchor and UST selling pressure, eventually ending with UST de-pegging from the US dollar. This scenario unfolded after 6 May 2022, with LUNA’s price falling from c US$100 to close to zero and UST’s price now at a mere US$0.09.

In the Q122 report, CS highlighted that it deployed US$313m across a number of DeFi protocols, which met the company’s risk-adjusted reward expectations, including Anchor, TrueFi and Maple Finance. The UST de-pegging unfolded gradually, with the Luna Foundation Guard initially trying to defend the peg using its reserves (mostly BTC holdings). As a result, UST traded at or above US$0.90 for most of the time during the two initial days of the de-pegging (after a temporary dip to c US$0.70) before the collapse in subsequent days. This gave CS enough time to withdraw its Anchor deposits before the final meltdown. Still, the company highlighted in its 2021 annual report that it incurred an exceptional loss of £17m on liquidating its UST holdings.

We note that the other two major lending platforms mentioned by CS in its Q122 report are not based on algorithmic stablecoins, but on the centralised stablecoin USDC, the reserves of which are exclusively held in cash and equivalents. TrueFi is a platform offering uncollateralised lending based on on-chain credit scores with an annual percentage yield (APY) of c 9–13% on most of its lending marketplaces and pools (from a combination of interest and native token rewards). Maple Finance is an institutional-grade protocol for under-collateralised lending with an APY of c 7–11% on most of its lending pools.

Q122 results: Softer crypto prices and market activity

CS reported adjusted EBITDA of £18.7m in Q122, visibly down from the exceptionally strong £34.2m in Q121 (and £32.9m in Q421), mostly as a result of lower capital markets infrastructure (CSCM) income/gains and higher operating expenses (see details below). Consequently, its adjusted net income came in at £16.1m versus £32.5m in Q121 and £29.7m in Q421.

Exhibit 1: Q122 results highlights

£m, unless otherwise stated

Q122

Q421

Q321

Q221

Q121

Revenue, of which:

18.0

25.8

18.4

19.6

17.1

XBT Provider

16.3

24.4

17.5

19.5

17.0

CoinShares Physical

0.4

0.5

0.2

0.1

0.1

Block index

0.5

0.6

0.6

-

-

B2C (Napoleon)*

0.7

0.3

-

-

-

Capital market infrastructure income/gains, of which:

10.2

16.2

8.4

14.7

22.8

Liquidity provisioning

2.0

2.4

1.7

3.3

6.3

Delta neutral trading strategies

0.6

5.3

2.6

9.1

10.1

Fixed income activities

1.2

3.5

3.1

1.7

2.7

DeFi

6.3

3.6

-

-

-

Other

0.2

1.5

1.0

0.5

3.6

Principal investment gains/(losses)

(0.1)

0.7

4.8

4.1

0.0

Adjusted administrative expenses

(9.2)

(10.0)

(5.7)

(9.7)

(5.7)

Adjusted EBITDA

18.7

32.9

26.0

28.6

34.2

Adjusted EBITDA margin

66.9%

77.0%

82.0%

74.7%

85.6%

Depreciation and amortisation

(0.6)

(0.5)

(0.5)

(0.1)

(0.0)

Finance expense

(2.2)

(2.9)

(1.5)

(1.6)

(0.7)

Income taxes

0.1

0.3

(0.4)

(0.3)

(0.9)

Currency translation differences

4.1

(0.4)

2.6

(0.1)

(0.4)

Total comprehensive income

20.2

29.5

26.2

26.6

32.1

Adjusted net income

16.1

29.7

N/A

N/A

32.5

Source: Company data. Note: *Acquired in December 2021.

CSCM income/gains affected by more muted crypto markets

CSCM income/gains stood at £10.2m compared with £22.8m in Q121 and £16.2m in Q421. Most notably, CS’s gains on delta neutral trading strategies were quite weak at £0.6m (vs £10.1m during the Q121 ‘crypto hype’ and £5.3m in Q421) and fixed income activities generated income of only £1.2m (vs £2.7m in Q121 and £3.5m in Q421). This was due to lower digital asset market volatility (which is unfavourable for CS’s delta neutral strategies), lower trading volumes (BTC turnover down 60% in Q122 vs Q121, according to CoinText) and a flat term structure (limiting eg ‘cash and carry’ opportunities). More muted market activity has also affected liquidity provisioning income, which stood at £2.0m in Q122 versus £6.3m in Q121 and £2.4m in Q421. Amid more limited opportunities for the above strategies, CSCM’s attention shifted to the DeFi ecosystem, where it generated solid income and gains of £6.3m in Q122 versus £3.6m in Q421 (CS entered the DeFi space in Q321).

ETP/ETF fees down versus Q421 amid lower crypto prices

CS’s asset management fees reached £17.2m in Q122, broadly comparable to the £17.1m reported in Q121, but down from £25.5m in Q421 as a result of the decline in crypto asset prices, which started in November 2021. The company is gradually shifting its fee revenue away from the legacy XBT Provider products, although these still generated £16.3m in fees in Q122, with CoinShares Physical products and the Block Index contributing a further £0.4m and £0.5m, respectively. Overall, CS AUM stood at £3.95bn at end-March 2022 versus £3.36bn at end-March 2021 and £4.18bn at end-2021. Here, we note that the Q121 figure does not include Block Index AUM, as the business was acquired in Q321 (CS’s ETP AUM was £3.07bn at end-March 2022). CS is seeking to further expand the geographical footprint of its ETPs, currently focusing on ‘last mile’ platforms such as Finanzen.net zero it partnered with last year.

Carried interest from VC fund offset by negative revaluations

CS booked a minor £0.15m loss on its principal investments (vs a minor £0.02m gain in Q121), with some of the holdings affected by the decline in digital asset prices during the quarter. The £2.36m carried interest on CoinShares Fund II (earned primarily on the back of Blockdaemon’s successful Series C funding round) was more than offset by, among other things, the downward revaluation of 3iQ (£1.6m), Solana tokens (£0.6m) and DIKO tokens (£0.2m). In Q122, CS increased its stake in FlowBank from 9.02% to 29.3% (which represents voting rights equal to 32.06%) by investing CHF24.7m – see our initiation note for details on FlowBank. Moreover, it made some other minor investments in Impervious (£380.6k), Pocket Network (£223.5k) and Alliance Labs (£184.1k).

Business expansion drives operating expenses up

CS’s direct costs (consisting primarily of custody, trading and issuer fees) went up to £3.3m in Q122 from £1.9m in Q121. This includes £1.6m in the asset management segment, up versus £1.3m in Q121 amid new ETP launches, which reduced the gross profit margin of the asset management platform division from 93% in Q121 to 91% in Q122. The capital markets segment posted direct costs (excluding interest expenses) of £1.4m in Q122 versus £0.6m in Q121, affected by an increase in average trade execution costs. This was coupled with higher interest expense of £2.2m in Q122 versus £0.7m in Q121, arising from higher utilisation of CS’s credit lines with brokers.

Other administrative expenses went up to £6.5m in Q122 versus £3.9m in Q121, which includes £1.2m spent in the consumer platform segment, that is Napoleon Crypto, acquired in Q421. CS highlighted that it is making good progress in the integration of the business and hopes this will be reflected in the results throughout the rest of the year. CS is developing Napoleon’s automated trading bots (NapBots) to support business expansion beyond traders to capture the interest of long-term investors seeking access to digital asset strategies. For now, the consumer platform reported a £0.7m operating loss in Q122. Operating expenses also rose in the asset management and capital markets segments as CS scales up its business. As a result, total headcount across the CS group rose to 95 at end-March 2022 versus 44 at end-March 2021. As an example, CS established a marketing and design team led by Benoit Pellevoizin (previously VP of marketing at Ledger, one of the top crypto security and infrastructure providers) who joined CS as head of marketing and communications.

Seven new ETPs launched to date

As discussed in our Q421 update note, CS received regulatory approval to add a further 46 digital assets to the main CoinShares Physical prospectus (on top of the four ETPs launched in 2021) and began launching new physically backed ETPs in 2022. It has started with native tokens of top proof-of-stake blockchains, such as Tezos, Polkadot and Cardano (described in our Q421 note), as well as Solana. The latter is particularly interesting as it was launched in partnership with FTX, one of the top global crypto exchanges, representing another opportunity for both players to tap into the institutional investors space. Similar to the previous physical staked ETPs, CS’s Solana ETP offers a combination of reduced management fee (to 0.0%) and stable staking rewards at 3.0% pa. The current staking yield on the Solana blockchain stands at c 5% pa (according to stakingrewards.com) and CS will retain rewards in excess of the above-mentioned 3.0% pa. The current AUM of the Solana ETP stands at c US$46m (as at 31 May 2022), of which the vast majority are seed assets provided by FTX (1m SOL tokens). Moreover, CS launched Chainlink, UniSwap and FTX Token ETPs (the latter having c US$40m of seed assets provided by FTX).

We estimate that the total AUM of Western European digital asset ETPs stood at US$9.2bn at end-March 2022, somewhat down from US$9.7bn at end-2021, due to a combination of lower digital asset prices and net outflows (but still up significantly from US$3.1bn at end-2020). Outflows from XBT Provider trackers continued ytd to 27 May 2022 at c US$344m (likely driven by further profit taking), according to CS’s weekly digital asset fund flows reports. Meanwhile, CoinShares Physical ETPs saw notable net inflows ytd of c US$86m (excluding seed assets), even despite the crypto bear market, which suggests that this product group is gaining traction. This compares with net inflows of c US$57m for 21Shares and net outflows of US$147m for ETC Group, CS’s two major European competitors by AUM. We estimate that net inflows into CS’s physically backed ETPs were still primarily driven by its largest products based on bitcoin (BTC) and Ether (ETH).

Finally, the Invesco CoinShares Global Blockchain UCITS ETF saw net inflows of US$47m to 27 May 2022 (according to CS’s above-mentioned weekly fund flow reports), which represents c 29% of total net inflows into blockchain equity ETPs so far this year. This brought its AUM to US$607m as at 27 May 2022, which means it is now the second largest blockchain equity ETF and, together with the first player, it covers c 67% of the total segment’s AUM globally.

Forecast revisions and valuation

The sentiment towards digital assets remains muted amid elevated geopolitical and macroeconomic risks, monetary tightening across a number of regions (most notably in the United States), as well as the UST collapse. Consequently, the price of major digital assets such as BTC and ETH retraced from end-March 2022 levels (reached following the upward price move in the second half of March). Crypto markets have also exhibited a relatively high positive correlation to tech indices such as the Nasdaq Composite Index, which is down c 23% ytd. As a result, we have decided to adjust our near-term assumptions for global allocation to digital assets to 0.4% and 0.8% in FY22 and FY23 from the previous c 1.21% and 1.43%, respectively. Our new assumptions imply a BTC and ETH price at end-2022 of c US$16,600 and c US$1,200, respectively (vs the previous US$48,300 and US$3,700, respectively). This compares with the current BTC and ETH price of US$31,600 and US$1,940, respectively. We now assume net outflows from XBT Provider products of c US$0.5bn in both FY22 and FY23 (vs net outflows of US$0.9bn and US$0.8bn previously), corresponding to a cash fee release of £40m in each year (compared to £28.8m posted in FY21). Despite the negative impact of lower crypto prices on AUM, we expect the CoinShares Physical platform to post solid net inflows of US$312m in FY22 (including the US$90m and US$40m seed assets of CS’s Solana and FTX Token ETP, respectively) and c US$175m in FY23 (vs previous US$250m and US$450m, respectively). We do not account for any meaningful seed assets of newly launched ETPs in FY23. This translates into our management fee forecast of £51.9m in FY22 (£81.3m previously) and £37.1m in FY23 (£82.5m previously).

Moreover, we have significantly reduced our CSCM income/gains expectations for FY22e to factor in the £17m exceptional loss from the UST stablecoin collapse in Q222. We have also reduced our expectations for FY23e and FY24e to reflect lower income from liquidity provisioning (which is a function of XBT Provider’s AUM and inflows/outflows) and fixed income activities (as we expect CS to focus more on DeFi). We assume much lower gains from delta neutral strategies this year (given the weak Q122 and probably also the beginning of Q222) but expect a rebound in subsequent years. We now recognise the excess staking rewards CS will earn on its staked ETPs in other CSCM gains (previously we included it in revenues). We now forecast adjusted EBITDA of £41.0m in FY22 and £42.6m FY23 (after the exceptionally strong £121.7m in FY21). Our revised forecasts in the base case scenario imply a fair value per share of SEK85.0 (compared to our last valuation of SEK117.2 per share), which currently offers c 113% upside potential. We estimate that the XBT Provider fees accrued so far by CS and its gross cash at end-Q122 cover c 70% of the company’s current market cap.

Despite the significant decline in digital asset prices from the November 2021 peak, we continue valuing CS in our base case scenario with the assumption of resumed secular trend of increasing global allocations to digital assets to 2.0% by 2025 and 2.5% by 2030 (which is the key driver within our valuation model). As discussed in the sensitivities section of our initiation note, digital asset prices tend to be volatile and major bull runs occurred after every Bitcoin halving (in 2012, 2016 and 2020) and lasted for one to 1.5 years in the former two cases. The start of the current crypto bear market (c 1.5 years from the May 2020 halving) is in line with the above pattern. However, we have not seen enough indication that global digital asset adoption has been derailed (eg heavy crypto ETP/ blockchain ETF outflows, suspension of new product launches) to apply our ‘Crypto Winter 2022’ scenario outlined in the initiation note in full. A notable example of further interest in the digital asset space is for instance the recent launch of thematic ETFs by Fidelity and BlackRock. Nevertheless, we will closely monitor the developments throughout the rest of 2022 for signs of a halt in crypto adoption. Moreover, we have reduced our assumption of digital asset ETFs/ETPs as a percentage of total European digital assets allocation from 5.0% to 4.0% by FY25e to reflect more conservative forecasts of fund inflows in the near term.

Exhibit 2: Summary of forecast revisions

 

FY21

FY22e

FY23e

FY24e

FY25e

£m

Actual

Old

New

diff

Old

New

diff

Old

New

diff

Old

New

diff

Revenue, of which:

80.9

81.3

51.9

-36.1%

82.5

37.1

-55.0%

94.3

48.6

-48.4%

111.6

69.4

-37.9%

XBT Provider

78.5

71.0

44.7

-37.0%

64.3

29.1

-54.7%

62.4

34.7

-44.5%

61.6

41.6

-32.5%

CoinShares Physical and other*

0.9

3.6

2.4

-33.6%

9.9

4.3

-56.3%

21.4

9.4

-56.3%

37.2

22.1

-40.5%

CoinShares Global Blockchain Equity Index

1.2

2.1

2.2

2.3%

2.7

2.3

-17.4%

3.3

2.8

-13.9%

3.8

3.4

-12.3%

B2C

0.3

4.6

2.6

-42.3%

5.6

1.4

-74.4%

7.2

1.8

-75.4%

9.0

2.3

-74.4%

Capital market infrastructure income/gains, of which:

62.1

54.9

31.8

-42.1%

60.3

51.9

-14.0%

65.5

59.9

-8.5%

70.1

68.8

-1.9%

Liquidity provisioning

13.8

12.2

7.7

-36.7%

12.0

4.6

-61.3%

11.2

6.5

-42.0%

9.6

8.4

-12.6%

Delta neutral trading strategies

27.2

13.4

10.9

-19.0%

18.9

19.0

0.5%

23.8

23.3

-2.4%

29.1

27.5

-5.2%

Fixed income activities

10.9

9.8

6.7

-31.8%

9.9

6.8

-31.8%

10.0

6.8

-31.8%

10.1

6.9

-31.8%

DeFi

3.6

17.5

4.0

-77.0%

17.5

18.8

7.2%

18.4

19.7

7.2%

19.3

20.7

7.2%

Other

6.6

2.0

2.5

25.2%

2.0

2.8

37.6%

2.0

3.8

87.9%

2.1

6.1

194.9%

Principal investment gains/(losses)

9.6

0.0

-0.1

N/A

0.0

0.0

N/A

0.0

0.0

N/A

0.0

0.0

N/A

Administrative expenses excl. D&A

(31.1)

(47.3)

(42.4)

-10.5%

(49.9)

(46.1)

-7.7%

(54.5)

(50.6)

-7.1%

(60.1)

(56.6)

-5.9%

Adjusted EBITDA

121.7

88.9

41.0

-53.9%

92.9

42.6

-54.2%

105.3

57.2

-45.7%

121.7

79.9

-34.3%

Adjusted net income

110.5

73.8

33.9

-54.0%

78.3

29.0

-63.0%

89.1

42.1

-52.7%

102.6

62.0

-39.6%

Source: Company data, Edison Investment Research. Note: *Includes fees from CoinShares Physical, Block Index, 3iQ and Invesco.

Exhibit 3: Financial summary

Year ending December, £000’s unless otherwise stated

FY18

FY19

FY20

FY21

FY22e

FY23e

FY24e

FY25e

INCOME STATEMENT

 

 

 

 

 

 

 

 

Revenues

10,549

11,331

18,389

80,892

51,933

37,100

48,619

69,383

Administrative expenses

(10,927)

(9,284)

(14,312)

(32,167)

(44,611)

(48,320)

(52,878)

(58,815)

Other operating income

4,811

529

607

11,427

20,726

21,348

21,989

22,648

Profit/(loss) on financial instruments

519,988

(64,553)

(1,398,436)

(2,236,196)

2,183,478

(1,215,246)

(785,793)

(2,162,559)

Realised gain/(loss) on investments

(1,074)

(405)

942

5,287

(1,787)

0

0

0

Adjusted EBITDA

12,993

11,171

22,113

121,688

41,015

42,551

57,156

79,909

EBIT

523,347

(62,382)

(1,392,810)

(2,170,757)

2,209,659

(1,205,118)

(768,064)

(2,129,343)

Finance income

693

931

3,793

10,905

14,741

14,271

14,714

15,176

Finance expense

(148)

(404)

(1,191)

(6,810)

(12,408)

(10,892)

(12,190)

(14,837)

Pre-tax profit

523,892

(61,855)

(1,390,208)

(2,166,662)

2,211,993

(1,201,740)

(765,539)

(2,129,004)

Income taxes

(230)

(269)

(401)

(1,284)

(423)

(450)

(591)

(803)

Net income

523,662

(62,124)

(1,390,610)

(2,167,946)

2,211,570

(1,202,189)

(766,131)

(2,129,807)

Total comprehensive income

14,407

8,914

18,419

114,346

33,923

28,965

42,129

62,024

Reported EPS (diluted, £)

N/A

N/A

(21.68)

(32.62)

30.55

(16.61)

(10.58)

(29.42)

Adjusted EPS (diluted, £)*

N/A

N/A

0.28

1.64

0.47

0.40

0.58

0.86

DPS (£)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

BALANCE SHEET

 

 

 

 

 

 

 

 

Property, plant and equipment

214

376

223

510

426

407

455

572

Intangible assets

0

7

20

19,781

18,953

18,080

17,207

16,334

Investments

6,158

5,585

3,626

24,501

44,751

44,751

44,751

44,751

Long term receivables and other

15

323

329

581

1,360

1,360

1,360

1,360

Non-current assets

6,387

6,290

4,199

45,372

65,490

64,598

63,773

63,017

Trade and other receivables

9,350

27,011

62,274

1,075,971

574,321

839,840

1,010,452

1,569,997

Digital assets

217,521

427,524

1,826,695

2,736,481

1,027,043

1,732,590

2,126,788

3,735,866

Cash at bank

32,897

2,350

2,266

11,088

30,953

25,474

89,959

95,390

Amounts due from brokers

N/A

39,405

66,518

118,976

47,074

82,787

103,351

184,250

Current assets

259,767

496,290

1,957,752

3,942,516

1,679,390

2,680,690

3,330,550

5,585,503

Total assets

266,154

502,580

1,961,951

3,987,888

1,744,880

2,745,288

3,394,323

5,648,520

Share capital

2,214

2,215

31

34

34

34

34

34

Share premium

111

111

2,387

30,781

30,781

30,781

30,781

30,781

Other reserves

104,322

168,813

1,209,630

667,846

(1,509,801)

(278,647)

529,613

2,721,443

Retained earnings

(68,003)

(125,795)

(1,155,551)

(497,727)

1,713,843

511,653

(254,477)

(2,384,284)

Total equity

38,644

45,343

56,497

200,934

234,857

263,821

305,951

367,975

Trade payables and other liabilities

227,469

419,340

1,792,936

3,491,612

1,237,724

2,176,725

2,717,442

4,844,537

Amounts due to brokers

N/A

37,631

112,121

292,708

272,299

304,742

370,931

436,008

Current tax liabilities

42

266

398

2,635

0

0

0

0

Current liabilities

227,510

457,237

1,905,454

3,786,955

1,510,023

2,481,467

3,088,372

5,280,545

Non-current liabilities

0

0

0

0

0

0

0

0

Total equity and liabilities

266,154

502,580

1,961,951

3,987,888

1,744,880

2,745,288

3,394,323

5,648,520

Ratios

 

 

 

 

 

 

 

 

Adjusted EBITDA margin

52.1%

54.0%

62.8%

85.1%

49.0%

47.8%

52.7%

57.8%

Adjusted net margin

59.4%

38.4%

47.6%

80.0%

40.5%

32.5%

38.8%

44.9%

Source: Company data, Edison Investment Research. Note: *Total comprehensive income (excluding currency translation differences and fair value gain/(loss) on investments recognised in other comprehensive income) per share attributable to shareholders of the parent.


General disclaimer and copyright

This report has been commissioned by CoinShares International and prepared and issued by Edison, in consideration of a fee payable by CoinShares International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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United States

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

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United Kingdom

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1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by CoinShares International and prepared and issued by Edison, in consideration of a fee payable by CoinShares International. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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