Last close As at 05/08/2026
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Research: Financials
CoinShares International (CS) has moved on from the turmoil in digital asset markets in 2022 and has delivered Q123 EBITDA of £8.4m, with a meaningfully positive revenue and income contribution from both its passive asset management services (£9.4m) and its proprietary trading activities (£6.7m). It maintains a prudent cost management approach, with administrative expenses (incl. D&A and direct costs) of £7.6m in Q123, down c 22% y-o-y and broadly comparable with £7.9m in Q422 (excluding a goodwill write-down). It now trades at 0.8x its end-March 2023 book value.
CoinShares International |
Leaving 2022 turmoil behind |
Q123 results |
Financials |
30 May 2023 |
Share price performance
Business description
Next events
Analyst
CoinShares International is a research client of Edison Investment Research Limited |
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CoinShares International (CS) has moved on from the turmoil in digital asset markets in 2022 and has delivered Q123 EBITDA of £8.4m, with a meaningfully positive revenue and income contribution from both its passive asset management services (£9.4m) and its proprietary trading activities (£6.7m). It maintains a prudent cost management approach, with administrative expenses (incl. D&A and direct costs) of £7.6m in Q123, down c 22% y-o-y and broadly comparable with £7.9m in Q422 (excluding a goodwill write-down). It now trades at 0.8x its end-March 2023 book value.
Year end |
Revenue (£m) |
Other gains and income (£m) |
Adjusted |
Adjusted |
DPS |
P/E |
Yield |
12/21 |
80.8 |
70.9 |
121.1 |
1.62 |
0.0 |
1.4 |
N/A |
12/22 |
51.5 |
(19.6) |
(6.5) |
0.04 |
0.0 |
57.4 |
N/A |
12/23e |
37.5 |
25.5 |
31.8 |
0.26 |
0.0 |
9.0 |
N/A |
12/24e |
48.2 |
30.5 |
41.1 |
0.45 |
0.0 |
5.1 |
N/A |
Note: *Sum of revenue, other gains and income (income and gains from capital markets infrastructure and gains on principal investments) less administrative expenses excl. D&A.
Investor sentiment towards digital assets warms up
CS’s passive management fee income benefited from a partial price recovery in digital assets and blockchain equities ytd, with fee revenue up by 7% versus Q422 (but still down 48% y-o-y). Digital assets were supported by (1) an improving risk appetite; (2) greater confidence that a peak in the Fed rate is near; (3) higher demand for bitcoin (BTC) as a hedge against turmoil in the traditional banking system; and (4) technological advancements, most notably Ethereum’s successful Shanghai upgrade. The impact of regulations on digital assets differs by jurisdiction; the US looks less encouraging with the multiple enforcement actions of the Securities and Exchange Commission (SEC) and the dispute over regulatory oversight between the SEC and the Commodity Futures Trading Commission, while in the EU the recent Markets in Cryptoassets regulation provided more clarity.
CS launched two index ETPs recently
With withdrawals of staked Ether (ETH) now enabled, CS is charging a 0% fee on its CoinShares Physical Ethereum ETP to accumulate further AUM while it seeks to introduce a mechanism to pass on some of the staking rewards to unit holders. CS recently introduced two multi-asset CoinShares Physical ETPs, which are also subject to a 0% management fee. Overall, the CoinShares Physical platform and CS’s blockchain equities platform attracted US$29.3m and US$20.8m of net inflows in Q123, respectively. Meanwhile, net outflows from XBT Provider Tracker moderated significantly year-on-year, at just US$40.5m versus more than US$200m in Q122. CS is aiming to complement its passive products with active asset management services and plans to announce its first investment strategy in Q223.
Valuation: Share price still looks undemanding
Assuming continued digital asset adoption, we value CS at SEK79.0 per share (vs SEK77.4 previously). Using a more cautious scenario with digital asset price growth of only 2% pa, we value CS at SEK34.6.
Q123 results: Profitable amid no external shocks
CS’s revenues still come largely from management fees charged on its legacy XBT Provider products (see our latest outlook note for details). The company accrued £8.3m in fees from this product range in Q123 (vs £16.3m in Q122, see Exhibit 1). While these fees are charged on a daily basis, corresponding cash inflow for CS occurs only on redemption by an investor (in Q123, c US$3m in cash was released to CS in that way). Fees from CoinShares Physical and blockchain equities products (which are collected in cash on CS’s request) amounted to £0.6m and £0.3m in Q123, respectively.
CS introduced two multi-asset ETPs earlier this year. The CoinShares Physical Top 10 Crypto Market ETP aims to provide investors with direct exposure to the CoinShares – Compass Top 10 Crypto Market Index, which measures the performance of the largest digital assets (with current BTC and ETH weighted at 35% each, supplemented by Ripple, Cardano, Polygon, Solana, Polkadot, Litecoin, Tron and Avalanche). The CoinShares Physical Smart Contract Platform tracks the CoinShares – Compass Smart Contract Platform Index, measuring performance of the largest native tokens of smart contract-enabled platforms, led by Ether (35% weight), followed by Cardano, Polygon, Polkadot, Tron, Solana, Avalanche, Chainlink, Stellar and Algorand. We believe the introduction of multi-asset ETPs by CS is a good move, as we expect more sophisticated products to attract a considerable share of the total crypto ETP market in the long term. That said, we acknowledge that the products have been launched at quite difficult times for the industry and for now have negligible assets under management.
Management highlighted during the Q123 earnings call that it plans to establish an active asset management business in 2023, seeding several strategies from its own balance sheet. It plans to recruit professionals who will help it transform its pure proprietary business model to a traditional active asset manager platform. In terms of marketing, we understand that CS also plans to leverage its existing sales team, which is responsible for passive products. More details will be communicated during the Q223 earnings call, but management indicated that its first strategy should have capacity of at least US$200–300m.
A moderate level of XBT Provider inflows and outflows resulted in liquidity provisioning income of £0.7m in Q123 (vs £2.0m in Q122). At the same time, in Q123 CS saw an encouraging pick-up in income from delta neutral strategies (£1.4m vs £0.6m in Q122) and fixed income activities (£2.2m vs £1.2m in Q122), despite the reduced number of counterparties CS now trades with. The company’s decentralised finance (DeFi) gains of £3.0m (vs £6.3m in Q122) came largely from ETH staking. According to ethereum.org, the current staking yield stands at c 5.6% pa.
Exhibit 1: Q123 results highlights
£m, unless otherwise stated |
Q123 |
Q122 |
change y-o-y |
Revenue, of which: |
9.4 |
18.0 |
-48.0% |
XBT Provider |
8.3 |
16.3 |
-48.9% |
CoinShares Physical |
0.6 |
0.4 |
49.9% |
Equities platform |
0.3 |
0.5 |
-37.2% |
B2C |
- |
0.7 |
N/M |
Other |
0.1 |
0.1 |
77.3% |
Capital market infrastructure income/gains, of which: |
6.7 |
10.2 |
-34.2% |
Liquidity provisioning |
0.7 |
2.0 |
-65.1% |
Delta Neutral Trading Strategies |
1.4 |
0.6 |
138.9% |
Fixed income activities |
2.2 |
1.2 |
85.3% |
Decentralised Finance (DeFi) |
3.0 |
6.3 |
-51.8% |
Other |
(0.6) |
0.2 |
N/M |
Principal investment gains/(losses) |
(0.6) |
(0.1) |
N/M |
Administrative expenses excluding D&A |
(6.9) |
(9.2) |
-25.4% |
Adjusted EBITDA |
8.4 |
18.7 |
-54.9% |
Adjusted EBITDA margin |
54.7% |
66.9% |
-18.3% |
Depreciation and amortization |
(0.8) |
(0.6) |
35.8% |
Finance expense |
(1.3) |
(2.2) |
-41.6% |
Income taxes |
(0.1) |
0.1 |
N/M |
Currency translation differences |
(3.4) |
4.1 |
N/M |
Total comprehensive income |
2.9 |
20.2 |
-85.5% |
Source: CoinShares International
Forecast revisions
We have raised our FY23 adjusted EBITDA forecast to £31.8m from £25.2m previously on the back of increased expectations in terms of capital market infrastructure income and gains. We have also changed our forecast income/gains split, assuming a higher proportion from staking rewards following the successful implementation of the Shanghai upgrade. That said, our total comprehensive income forecast remains broadly unchanged due to negative currency translation effects. Our FY24 and FY25 adjusted EBITDA forecasts remain largely unchanged.
Exhibit 2: Summary of forecast revisions
£m, unless otherwise stated |
FY22 |
FY23e |
FY24e |
FY25e |
||||||
Actual |
Old |
New |
diff (%) |
Old |
New |
diff (%) |
Old |
New |
diff (%) |
|
Revenue, of which: |
51.5 |
37.8 |
37.5 |
(0.7) |
50.0 |
48.2 |
(3.6) |
73.9 |
71.1 |
(3.9) |
XBT Provider |
46.0 |
31.7 |
31.9 |
0.6 |
35.2 |
34.2 |
(3.0) |
46.4 |
44.9 |
(3.2) |
CoinShares Physical and other* |
2.3 |
4.2 |
3.8 |
(10.5) |
12.0 |
11.3 |
(5.6) |
23.3 |
22.1 |
(5.3) |
Block index |
1.9 |
1.5 |
1.5 |
(3.1) |
2.2 |
2.1 |
(3.2) |
3.0 |
2.9 |
(3.2) |
B2C |
0.9 |
0.0 |
0.0 |
N/A |
0.0 |
0.0 |
N/A |
0.0 |
0.0 |
N/A |
Capital market infrastructure income/gains, of which: |
(17.4) |
20.9 |
26.3 |
25.9 |
32.1 |
30.5 |
(5.1) |
41.0 |
40.9 |
(0.2) |
Liquidity provisioning |
4.5 |
2.6 |
3.0 |
13.2 |
6.6 |
4.6 |
(29.9) |
5.1 |
4.3 |
(15.1) |
Delta Neutral Trading Strategies |
2.6 |
7.6 |
4.6 |
(39.6) |
11.7 |
5.4 |
(54.1) |
16.6 |
12.0 |
(27.6) |
Fixed income activities |
5.0 |
5.0 |
6.7 |
33.7 |
5.1 |
8.0 |
58.8 |
5.1 |
9.6 |
88.7 |
DeFi |
13.9 |
4.6 |
12.0 |
163.6 |
7.7 |
12.5 |
61.2 |
13.2 |
15.0 |
13.8 |
Other |
(43.3) |
1.1 |
0.0 |
(100.0) |
1.1 |
0.0 |
(100.0) |
1.1 |
0.0 |
(100.0) |
Principal investment gains/(losses) |
(4.9) |
0.0 |
(0.7) |
N/A |
0.0 |
0.0 |
N/A |
0.0 |
0.0 |
N/A |
Administrative expenses excluding D&A |
(35.3) |
(33.4) |
(30.9) |
(7.6) |
(41.2) |
(37.0) |
(10.2) |
(50.9) |
(45.7) |
(10.3) |
Adjusted EBITDA |
(6.5) |
25.2 |
31.8 |
26.3 |
41.0 |
41.1 |
0.4 |
64.0 |
65.1 |
1.7 |
Total comprehensive income |
3.0 |
17.4 |
17.4 |
(0.2) |
29.3 |
30.4 |
3.4 |
51.4 |
53.6 |
4.1 |
Source: CoinShares data, Edison Investment Research. Note: *Includes fees from CoinShares Physical, 3iQ and Invesco.
Exhibit 3: Financial summary
Year end 31 December |
FY18 |
FY19 |
FY20 |
FY21 |
FY22 |
FY23e |
FY24e |
FY25e |
FY26e |
FY27e |
Income Statement |
|
|
|
|
|
|
|
|
|
|
Revenues |
10,549 |
11,331 |
18,389 |
80,755 |
51,484 |
37,550 |
48,183 |
71,060 |
88,182 |
96,280 |
Administrative expenses |
(10,927) |
(9,284) |
(14,312) |
(32,059) |
(38,166) |
(33,932) |
(40,007) |
(48,735) |
(56,774) |
(62,308) |
Other operating income |
4,811 |
529 |
607 |
14,665 |
16,599 |
14,000 |
14,700 |
15,435 |
16,207 |
17,017 |
Profit/(loss) on financial instruments |
519,988 |
(64,553) |
(1,398,436) |
(2,483,773) |
2,001,602 |
(803,715) |
(1,022,696) |
(1,749,689) |
(629,959) |
(635,019) |
Realised gain/(loss) on investments |
(1,074) |
(405) |
942 |
5,287 |
(2,800) |
0 |
0 |
0 |
0 |
0 |
Adjusted EBITDA |
12,993 |
11,171 |
22,113 |
121,059 |
(6,521) |
31,844 |
41,108 |
65,076 |
72,927 |
75,797 |
EBIT |
523,347 |
(62,382) |
(1,392,810) |
(2,415,125) |
506,719 |
19,541 |
27,533 |
49,396 |
57,161 |
59,523 |
Finance income |
693 |
931 |
3,793 |
10,905 |
12,964 |
9,093 |
10,527 |
12,632 |
12,717 |
13,226 |
Finance expense |
(148) |
(404) |
(1,191) |
(7,045) |
(6,373) |
(5,538) |
(7,137) |
(7,546) |
(7,598) |
(8,728) |
Pre-tax profit |
523,892 |
(61,855) |
(1,390,208) |
(2,411,265) |
513,310 |
23,095 |
30,923 |
54,481 |
62,281 |
64,021 |
Income taxes |
(230) |
(269) |
(401) |
(1,056) |
(500) |
(443) |
(568) |
(920) |
(1,028) |
(1,059) |
Net income |
523,662 |
(62,124) |
(1,390,610) |
(2,412,322) |
512,810 |
22,652 |
30,355 |
53,562 |
61,253 |
62,962 |
Total comprehensive income |
14,407 |
8,914 |
18,419 |
113,443 |
3,046 |
17,394 |
30,355 |
53,562 |
61,253 |
62,962 |
Adjusted EPS (diluted, £)* |
N/A |
N/A |
0.28 |
1.62 |
0.04 |
0.26 |
0.45 |
0.79 |
0.90 |
0.92 |
DPS (£) |
0.00 |
0.00 |
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 |
1,936 |
1,200 |
534 |
(61) |
(583) |
(1,028) |
Digital assets |
N/A |
N/A |
N/A |
N/A |
112 |
112 |
112 |
112 |
112 |
112 |
Intangible assets |
0 |
7 |
20 |
19,781 |
11,992 |
11,119 |
10,246 |
9,373 |
8,500 |
7,627 |
Investments |
6,158 |
5,585 |
3,626 |
24,501 |
45,020 |
44,389 |
44,389 |
44,389 |
44,389 |
44,389 |
Long term receivables and other |
15 |
323 |
329 |
581 |
1,360 |
1,360 |
1,360 |
1,360 |
1,360 |
1,360 |
Non-current assets |
6,387 |
6,290 |
4,199 |
45,372 |
60,420 |
58,180 |
56,641 |
55,173 |
53,779 |
52,460 |
Trade and other receivables |
9,350 |
27,011 |
62,274 |
1,075,971 |
199,045 |
540,479 |
739,466 |
1,073,650 |
1,229,584 |
1,416,763 |
Digital assets |
217,521 |
427,524 |
1,826,695 |
2,736,481 |
868,944 |
1,505,838 |
2,268,180 |
3,649,609 |
4,174,710 |
4,850,721 |
Cash at bank |
32,897 |
2,350 |
2,266 |
11,088 |
26,565 |
16,952 |
32,710 |
48,460 |
99,242 |
164,837 |
Amounts due from brokers |
N/A |
39,405 |
66,518 |
118,976 |
233,507 |
179,772 |
269,113 |
440,300 |
505,801 |
590,422 |
Current assets |
259,767 |
496,290 |
1,957,752 |
3,942,516 |
1,328,061 |
2,243,041 |
3,309,469 |
5,212,019 |
6,009,338 |
7,022,743 |
Total assets |
266,154 |
502,580 |
1,961,951 |
3,987,888 |
1,388,480 |
2,301,221 |
3,366,110 |
5,267,192 |
6,063,116 |
7,075,203 |
Share capital |
2,214 |
2,215 |
31 |
34 |
34 |
34 |
34 |
34 |
34 |
34 |
Share premium |
111 |
111 |
2,387 |
30,781 |
30,781 |
30,781 |
30,781 |
30,781 |
30,781 |
30,781 |
Other reserves |
104,322 |
168,813 |
1,209,630 |
667,846 |
(22,500) |
(27,758) |
(27,758) |
(27,758) |
(27,758) |
(27,758) |
Retained earnings |
(68,003) |
(125,795) |
(1,155,551) |
(497,727) |
195,644 |
218,296 |
248,651 |
302,213 |
363,466 |
426,428 |
Total equity |
38,644 |
45,343 |
56,497 |
200,934 |
203,959 |
221,353 |
251,708 |
305,270 |
366,523 |
429,485 |
Trade payables and other liabilities |
227,469 |
419,340 |
1,792,936 |
3,491,612 |
1,025,734 |
1,878,051 |
2,902,347 |
4,748,577 |
5,454,992 |
6,367,612 |
Amounts due to brokers |
N/A |
37,631 |
112,121 |
292,708 |
135,385 |
178,415 |
188,653 |
189,943 |
218,200 |
254,704 |
Lease liabilities |
0 |
0 |
0 |
0 |
581 |
581 |
581 |
581 |
581 |
581 |
Current tax liabilities |
42 |
266 |
398 |
2,635 |
236 |
236 |
236 |
236 |
236 |
236 |
Current liabilities |
227,510 |
457,237 |
1,905,454 |
3,786,955 |
1,161,937 |
2,057,283 |
3,091,817 |
4,939,338 |
5,674,009 |
6,623,134 |
Non-current liabilities |
0 |
0 |
0 |
0 |
22,584 |
22,584 |
22,584 |
22,584 |
22,584 |
22,584 |
Total equity and liabilities |
266,154 |
502,580 |
1,961,951 |
3,987,888 |
1,388,480 |
2,301,221 |
3,366,110 |
5,267,192 |
6,063,116 |
7,075,203 |
Ratios |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin |
52.1% |
54.0% |
62.8% |
85.3% |
-19.1% |
49.9% |
52.3% |
58.1% |
57.2% |
55.6% |
Adjusted net margin |
59.4% |
38.4% |
47.6% |
79.9% |
8.9% |
27.3% |
38.6% |
47.8% |
48.0% |
46.2% |
Source: Company data, Edison Investment Research. Note: *Total comprehensive income per share.
|
|
Research: TMT
EMIS reported FY22 results that were in line with management expectations. Revenue increased 4% y-o-y, adjusted operating profit increased 10% and adjusted EPS grew 10%. The company closed the year with net cash of £45.9m, reduced from the prior year due to several bolt-on acquisitions in the year. A final dividend of 21.1p was declared for a full year dividend of 38.7p.