Investment Pitches

Pitch Summary:
QuidelOrtho Corp. is a global leader in the medical diagnostics industry. We invested in the third quarter of 2022 following pandemic-related earnings pressure. Our thesis was that Quidel’s 2022 merger with Ortho Clinical Diagnostics positioned the company as a top-tier diagnostics platform with the potential for improved top-line growth, margins, and free cash flow. While the company’s earnings report during the most recent quarter was in line with expectations and guidance was unchanged, the stock struggled due to broader macro concerns. The respiratory business remains soft, and the market has concerns about possible impacts from funding cuts in government health programs. Despite near-term headwinds, we see evidence of business improvements taking place under new leadership, and we maintained our position during the quarter.

BSD Analysis:
QuidelOrtho is positioned for a multi-year recovery as post-pandemic normalization stabilizes test volumes and merger synergies expand margins. The platform’s diversified diagnostic mix reduces cyclicality, while molecular adoption and instrument placements create recurring consumable revenue. Shares trade at a discount to diagnostics peers despite improving free cash flow visibility. Catalysts include synergy realization, new test launches, and easing macro pressures.

Pitch Summary:
Ranpak Holdings Corp. is a manufacturer of paper-based protective packaging solutions. Among the many things we like about Ranpak is the sustainability of its products, which are environmentally friendly compared to plastic, foam, and other packaging materials. We also like its consumable business model and attractive unit economics. While underlying demand remained strong, the stock declined during the quarter when profitability was pressured by higher input and logistics costs due to unexpected volume spikes. We believe that these issues will prove to be short-lived and expect demand strength, combined with labor-saving automation initiatives, to ultimately position the company for margin recovery and eventual expansion. We originally invested… during second quarter of 2025, as we still believe the secular shift away from plastics towards paper and ongoing automation improvements will provide a long-term tailwind.

BSD Analysis:
Ranpak’s model benefits from recurring consumable revenue, rising ESG tailwinds, and structural e-commerce growth. Margin pressures appear transitory, with automation and pricing offering recovery levers. Shares trade below intrinsic value relative to sustainable packaging peers, with catalysts including operating leverage, international expansion, and easing input cost volatility.

Pitch Summary:
Sweetgreen, Inc. operates a chain of fast-casual restaurants across the U.S., focused on fresh, healthy food. The company continues to invest in automation through its "Infinite Kitchen" technology, which has demonstrated early promise in reducing labor costs, improving order accuracy, and increasing throughput. While the financial benefits are currently evident in only a small subset of stores, we believe broader adoption will yield meaningful improvements over the next two years. The stock underperformed during the quarter as weak traffic and sales in several core legacy markets… drove negative sales trends overall. We reduced our position during the period but remain optimistic about the long-term value creation potential of the Infinite Kitchen initiative.

BSD Analysis:
Sweetgreen’s automation strategy introduces a credible path to margin expansion in an industry plagued by labor inflation. Infinite Kitchen reduces throughput bottlenecks and could lift store-level EBITDA meaningfully as adoption scales. Traffic softness appears cyclical rather than structural, with urban recovery and menu innovation offering catalysts. Shares remain volatile but offer upside if automation ROI materializes and unit growth accelerates.

Pitch Summary:
Navitas Semiconductor Corp. designs and manufactures highly efficient power semiconductors, leading the way in Gallium Nitride (GaN) technology, which enables superior energy efficiency and charging speeds compared to traditional silicon. Handling GaN is challenging, and Navitas has a significant competitive advantage with its technology. We initially invested in early 2023 after the stock fell due to weakness in the highly cyclical mobile phone market. The stock performed well during the period on news of technology partnerships with high-profile potential customers, including Nvidia. We remain confident in the long-term secular outlook for energy-efficient semiconductors and Navitas’ continued technological leadership. Navitas remains confident… We trimmed the position during the quarter, selling into strength as part of our risk management process.

BSD Analysis:
Navitas offers pure-play exposure to the fast-growing GaN/SiC power semiconductor market, benefiting from structural electrification and AI-driven data center efficiency needs. Its partnership pipeline with tier-one customers (including Nvidia) underscores the viability of its IP and supports multi-year revenue acceleration. Shares trade at elevated growth multiples, but justified by strong gross margin expansion potential and differentiated technology. Catalysts include design wins in EVs, data centers, and fast-charging consumer devices.

Pitch Summary:
BWX Technologies, Inc. manufactures and services power generation and nuclear components for U.S. government, industrial, and utility customers. We invested in 2023 amid price weakness that resulted from declining earnings tied to the company’s cash-intensive investments in capacity. Our investment was based on the company’s well-established position in the nuclear value chain, including technologies that support the life extension of existing plants, new large-scale reactors, and small modular reactors. The stock performed well during the quarter as global growth prospects improved for nuclear power, reinforcing our long-held thesis. We added to our position early in the quarter, which contributed positively to performance.

BSD Analysis:
BWXT is a strategically critical supplier with quasi-monopolistic positioning in U.S. naval reactors and defense nuclear programs, supporting durable multi-year revenue visibility. Its expansion capex cycle is beginning to normalize, unlocking margin expansion and free cash flow acceleration. The company stands to benefit from rising demand for small modular reactors (SMRs) and upgrades to existing nuclear fleets. Trading at a discount to its historical EV/EBITDA range, BWXT offers defensive growth with embedded government-backed contracts. Key catalysts include backlog expansion, SMR commercialization, and improving operating leverage.

Pitch Summary:
Cameco Corp. is a global leader in the mining, fabrication, and refinement of uranium products for nuclear power plants around the world. The company also has exposure to the construction of new nuclear power capacity through its Westinghouse unit. We view Cameco as a best-in-class operator with world-leading reserves, a low-cost production profile, and reliable, proven technology. After years of being out of favor following the 2011 Fukushima nuclear disaster, Cameco became increasingly attractive as global uranium production fell below demand. We invested in 2020 based on the belief… that uranium prices would recover and that interest in nuclear power would reaccelerate, providing upside optionality. While not without volatility, this thesis has played out largely as we envisioned and has since gained broader investor acceptance. Despite the growing interest in the theme, we believe Cameco remains in the early stages of a long-term structural turnaround.

BSD Analysis:
The nuclear renaissance continues to strengthen Cameco’s pricing power and long-term contract visibility. Supply constraints, aging reactor fleets, and geopolitical shifts have tightened the uranium market, supporting sustained price momentum. Cameco’s low-cost tier-one assets and integrated fuel capabilities position it to capture outsized margin expansion as demand accelerates. Its ownership in Westinghouse enhances vertical integration and optionality in reactor services. Shares still trade below peak-cycle valuation despite improving fundamentals, with catalysts including contract repricing, new reactor builds, and potential supply disruptions from competitors.

Pitch Summary:
We also sold what had become a small (for us) 3.5% position in THG following the mild recovery in THG’s share price in June. Our sale was driven by me no longer having a high degree of confidence in two key aspects of my investment thesis: 1. Management have begun to act in a way which I fear is not necessarily in the interests of all shareholders – this was becoming apparent through the structure of the THG Ingenuity spin-off in December (timed to justify a very low EV for Ingenuity with management taking a large stake in the NewCo), but I think runs deeper still. Matt Moulding is exactly the type of founder that we look to partner with, but ‘partner’ is an important word here. I worry that Matt’s experience of public markets has made him see monsters around every corner and every public market investor (certainly institutional) as part of the problem. That switch in mentality means that, in his mind at least, we are not on the same side; an untenable position for a minority public investor to be in. 2. The MyProtein rebrand has exposed that Nutrition’s market position is weaker than I thought. Earlier this year we conducted a range of interviews with former members of the THG Nutrition’s team with the goal of determining whether the company’s narrative around the MyProtein rebrand was fair. I concluded that there had indeed been issues with the rebrand that were ‘self-made’ rather than run of the mill for a DTC brand repositioning itself. But the conversations also revealed that many customers, including high LTV and high frequency customers, had abandoned MyProtein following the rebrand, even though it remained at price parity or cheaper than competitors. The whey protein business (and sports nutrition more widely) is a business that in my view is best understood through commodity-type behaviour patterns. If you’re after 1kg of whey isolate, you want the best deal, and it shouldn’t really matter to you what the packaging looks like. That’s why there’s so much promotional activity in the sector; after the glitzy new brand launch wears off, price should be the only way to sustainably take custom away from another brand. The fact that MyProtein is losing long-term customers for non-price driven reasons is therefore particularly worrying. Management believe that the rebrand will lead to a new profile of customer that they did not have before. But they have not been transparent that these customers are coming at the expense of many of the customers they built their business on, and we expect better from our management teams.

BSD Analysis:
THG plc (THG.L) THG is a highly volatile, conglomerate-discounted e-commerce and technology platform whose valuation hinges on the separation and re-rating of its core divisions: Beauty, Nutrition, and the THG Ingenuity platform. The "edgy" thesis is that the Ingenuity platform, which provides end-to-end e-commerce solutions for third-party brands, is a massive, high-margin, under-monetized SaaS asset that is obscured by the volatility of its retail units. The critical catalyst is the rumored spin-off or strategic sale of Ingenuity, which would unlock significant shareholder value and force the market to price the remaining retail units more accurately, ultimately serving as a sum-of-the-parts re-valuation play.

Pitch Summary:
7 years after first buying shares in NAHL Group, we sold our entire position in June. My investment thesis throughout our holding period remained consistent: NAHL would use the growing cashflow from its critical care division to fund the development of a vertically integrated claims generation and processing business. Once that business reached cashflow neutrality, the critical care business would be sold leaving the personal injury business to either be sold or run independently. We have been in the endgame for our investment for the last 12 months, with the group confirming in April 2024 that the critical care business was for sale. Despite over a dozen expressions of interest and more than 4 offers being tabled at various points, the group failed to obtain a price they felt provided fair value to shareholders and issued a sale process cessation notice in mid-June. Without this catalyst in place, the range of possible outcomes widened beyond my comfort zone, including a significant risk of a delisting, so I made the decision to fully exit our position in the days following the announcement. Over the past 12 months, I have spent a significant amount of time reflecting on what I have learned from holding NAHL for 7 years. We made a calculated bet with what I considered to be skewed risk/reward dynamics (c.65%+ chance of 100%+ gain with a c.30% chance of a 25% downside) and the outcome went against us. I’m trying not to be guilty of ‘resulting’, but there are a couple of lessons that I will carry forward as inputs into future decisions that are worth laying out: 1. Small scale M&A is an unreliable catalyst – many sub scale businesses have too much execution risk and not a big enough pool of potential buyers to have a high degree of confidence in a deal being completed. 2. Liquidity really matters – once our position was set, the nearly total lack of trading volume meant we were never able to exit it without causing a collapse in the share price by starting to do so. In the end, our sale was a negotiated one with another major holder; an opportunity that only presented as they are pushing for a delisting to occur and want to increase their position size and voting power. In terms of what will change from here because of this experience, the frank answer is not very much, as it has already changed. I have already backed away from this type of deal-catalyst driven investing and we no longer make new investments in very illiquid shares. It is of course possible that I got my probabilities wrong and that NAHL Group was therefore an investment mistake. But either way, it’s not a situation of the kind we are likely to be involved in again. Instead, as reflected by our current portfolio, we will look for similar probabilities of success and failure, but where success depends only on management keeping doing what they’re doing, rather than doing something they’ve not done before.

BSD Analysis:
NAHL Group plc (NAH.L) NAHL is a specialized legal services consolidator in the UK, operating through a high-leverage business model that centralizes marketing and client acquisition for fragmented personal injury (PI) and critical care law firms. The investment is a pure play on regulatory reform and market share gain in the structurally sticky PI claims market. The key edge is its ability to operate a high-volume, low-cost client funnel, essentially acting as a legal fintech lead generator. NAHL offers an aggressive bet on successful cost base management and a re-rating as its core business shifts from volatile credit to predictable, fee-based revenue streams.

Pitch Summary:
We purchased shares in Macfarlane Group in the first quarter of the year, 18 months after first commencing research. We were rewarded for our patience with an average price of 100p/share. Macfarlane is the second distributor to join our portfolio after Midwich. It is the UK’s leading provider of specialist protective packaging, with a focus on complex, high-value industrial goods. It has an attractive combination of high returns on capital/low capital intensity, a long-standing and competent management team, and a valuation that we believe materially understated the quality of the business. We paid less than 10x run-rate free cash flow for a business that has compounded EBIT at c.15% per annum for a decade. Macfarlane is almost completely overlooked in UK public markets. It has fairly low trading volume, with no real broker coverage, and limited investor relations outreach. Incentives throughout the group are built around profitability and decentralised accountability. Each regional distribution centre has its own P&L and EBIT-based bonus structure, and the salesforce is paid on gross profit, not revenue. That focus on profitability is rare, and it’s visible in the culture. Growth has come organically and via bolt-on acquisitions made at sensible prices. Management is currently exploring a European expansion, which is a sensible long-term ambition, but we have not built any significant impact from this into our base case expectations. If successful, it opens up a much longer runway. If not, the downside is modest. Macfarlane has three key attributes that make it unusually resilient: high customer switching costs, disciplined internal incentives, and a recurring, not particularly cyclical revenue base without significant customer concentration. Most of Macfarlane’s customers spend over £100k per year and rely on the company not just for standard packaging solutions, but for bespoke design, just-in-time logistics, and materials procurement. For most customers, replacing Macfarlane would require internalising a host of non-core capabilities such as sourcing, warehousing, supplier management, which few of their customers want to do. Despite this, I spent a fair amount of time during the research process on the probability and implications of customers (particularly large customers) going direct to manufacturers, as that is one of the more significant risks to the business specifically and for any distribution business generally. My conclusion after speaking to both suppliers and customers is that while this is a risk to the business, particularly during periods when suppliers have excess capacity (such as now), it affects mainly higher volume lower margin SKUs, and the customers more likely to go direct to suppliers are those which do not utilise Macfarlane’s high margin value-add services. As one former salesperson put it, “sometimes a customer just outgrows us, but we’ve always had plenty more coming through to take their place.” Another point to make regarding investing in distributors is that these businesses are largely hostages to the near-term prospects of their end markets. As Midwich cannot control the ebbs and flow of the audio-visual market, Macfarlane cannot do much to influence the end demand for paper and packaging. What these businesses can do, and in my view are doing, is further strengthen their position in their markets during periods of weaker demand. If I am right about this, then management should come out of the current period of difficult trading ready to continue their impressive record of growth and we should do very well as a result. If growth does not return to previous levels, or it takes longer than expected, we will still enjoy the effects of a 10% FCF yield being deployed into buybacks. This outcome skew is a good example of why we are so excited by current market opportunities.

BSD Analysis:
Macfarlane Group plc (MACF.L) Macfarlane is a defensive industrial packaging consolidator in the fragmented UK and European markets, benefiting from the structural, non-cyclical growth of the e-commerce and industrial supply chains. The investment thesis is a high-margin, predictable business model driven by a consistent strategy of accretive acquisitions of smaller rivals, which immediately enhances operating leverage and market dominance. Its focus on specialized, protective packaging and long-term contracts provides a durable moat. MACF is a reliable cash compounder that delivers a superior dividend yield and is protected by its necessity in the modern logistics economy.

Pitch Summary:
Japan Elevator Service Holdings (JES) is the largest independent elevator and escalator maintenance and repair service provider in Japan, with a 10% market share. Typical clients are building owners and real estate maintenance and management companies legally required to have annual inspections on their elevators and escalators. They generally enter contracts that include an annual inspection, monthly checkup, and repairs when necessary. This arrangement provides a recurring and stable revenue stream. There are over 900,000 elevators and escalators under such contracts in Japan, and the number has expanded about 3% annually during the past decade. When Chairman, CEO, and President Katsushi Ishida founded JES in 1994, the elevator and escalator service market was over 95% dominated by five manufacturers: Toshiba, Mitsubishi, Hitachi, Fujitec, and Japan Otis. The remaining 5% was shared by hundreds of independent service providers; manufacturers competed for new elevator and escalator sales and installation. However, in this business, once one receives installation orders, the maintenance service contracts naturally accrue the manufacturer, as it already has full understanding of the models; most importantly, it can easily set aside adequate replacement parts. Moreover, manufacturers have no incentive to take maintenance contracts for competitors' models, just like Toyota dealers will not actively seek maintenance work for Ford automobiles. As a result, the service price is set high enough to recoup the low profit, if any, resulting from the price competition around installment. Maintenance and repair services, even for a standard model, require thousands of parts. Covering available models of major brands with guaranteed timely service means having an inventory of more than 150,000 parts. The control panel is the most crucial, in that genuine manufacturers' control panels have unparalleled performance and durability compared to generic versions. The inability to secure these often hinders independent service providers from providing high-quality services on par with manufacturers, and is a hurdle in expanding service networks. Another obstacle is the ability to hire qualified inspectors. In Japan, only inspectors with a national qualification—which requires certain electrical and electronic engineering degrees and years of on-the-job experience—can conduct annual inspections. Independent operators need an appropriate number of such inspectors to sufficiently cover their customer base. At this point in the description of this industry, one might justifiably conclude that this slow-growth sector offers hardly any business opportunity for independent operators, other than competing in a zero-sum game to take small market share. However, in the early 1990s, Chairman Ishida—a licensed elevator inspector himself—saw a business opportunity in an industry whose high barriers to entry could actually become a competitive benefit upon overcoming them and achieving sufficient scale. Having worked for a building maintenance company, and for an independent elevator maintenance service provider, Chairman Ishida was convinced a well-run business could generate double-digit operating margins, even at half the price of the leading manufacturers. To seize market share, he was determined to build a company that would provide services at their level or better. So, in 1994, at age 28, Chairman Ishida founded the company alone—with no funds, no partners, and no employees. Nevertheless, he was determined to provide the highest-quality professional service from day one. When visiting potential customers as a salesperson, he would change into a business suit, then switch back to workwear to do maintenance and inspections. He reviewed inspection reports directly with customers before and after; this was not common among typical industry engineers, who would focus on the inspection work itself and delegate customer communication to a sales department. He often slept at the office to respond to emergency calls. As the number of contracts grew, he needed to hire and train more employees, and he needed to procure enough parts for timely service. For the first three years, JES was literally a hand-to-mouth operation, and Chairman Ishida had to fund the running cost with short-term loans just to meet immediate cash needs. Within ten years, though, the number of maintenance units reached 5,000. At this point, he managed to hire a full management team to run the business. In 2007, JES hit a milestone as an independent service provider: matching the service capabilities of the leading manufacturers upon developing a 24-hour remote monitoring and controlling service. This technology enabled the company to monitor elevator and escalator operating status 24 hours a day, seven days a week—and to detect small irregularities, which enabled targeted preventive repair and parts replacement to reduce the incidence of malfunctions and breakdowns. Until that moment, this type of service had only been provided by the leading manufacturers, as it required access to the control panel, and required resolving their unique data transmission and protocols. Toward this goal, Chairman Ishida had hired system engineers to research and develop a remote monitoring system compatible with various models of elevators and escalators, and even obtained a patent on the technology. That same year, JES established an original engineer-training program and internal qualification system called "Step 24." Even before this program, Chairman Ishida undertook a training program that systematized the skills and experience of top engineers, and collected and researched maintenance information and data for various models. Through what became a 24-lecture series and on-the-job training, new employees could acquire the skills and knowledge needed to attain a national inspection license in one year. Moreover, the program trained engineers to individually conduct full maintenance work for several models, enabling the company to provide equivalent quality services to the leading manufacturers. Critically, and unlike these competitors providing maintenance only to their brands, this meant JES was now able to leverage its operation as its engineers expanded their capabilities and productivities to include more elevators in a given coverage area. Being an engineer himself, Chairman Ishida respected engineers and always knew they were the cornerstone of the operation (later, in 2019, he set up a "Engineer Meister Program" with five accreditation levels to incentivize engineers with the best skill sets to maintain the service quality). At the same time, Chairman Ishida sought to publicly list JES to increase its credibility and transparency in furtherance of expansion. It took just over a decade to prepare for the listing; the focus was on human resource development, enhancing technology and capability, and securing genuine parts. JES went public in 2017. The same year, JES completed construction of an R&D test tower and innovation center with ten elevators to examine control systems and motors. It conducted thousands of tests—allowing further improvement on maintenance and repair offerings and operational efficiency—and developed new services for the market. In 2018, the company developed its next-generation control system, Quick Renewal, which was compatible with the general models of all the equipment manufacturers. Typically, elevators' stated useful life is 20 to 25 years; in practice they operate 25 to 30 years. At that point, they need a full renewal, which entails replacing the control system, motors and all electric systems—and requires about one full week of downtime. Quick Renewal necessitates just a half-day of down time, and at half the price. Illustratively, a building operating for 60 years usually requires three full equipment renewals. With Quick Renewal, three controller system replacements are needed, but only two motor replacements, leading to a significant reduction of customers' downtime and maintenance cost. For JES, Quick Renewal was an important offering to induce customers to switch maintenance companies and add to its service contracts portfolio. The growth in the number of maintenance units accelerated following the company's IPO and introduction of new services. JES's market share reached 10% in 2023; in 2024 it added over 13,000 units, taking another 1.3% of market share. It is important to recognize this "the only one" position Chairman Ishida has built since founding JES. Its maintenance units' failure rate is as low as 1%, equivalent to that of leading elevator and escalator manufacturers, and one-fifth that of the independent service providers. The JES offering price remains about 30% to 40% below that of the leading manufacturers. For independent service providers, it is not easy to set a competitive price without operational scale, since they need to hire licensed engineers and procure parts, essentially where JES was in its early years. As a result, the company is taking market share both from the manufacturers and the smaller independent providers. In the recent inflationary environment, those competitors have been raising their prices, while JES continues to focus on advancing its market share, thereby accumulating more maintenance contracts. The company is also expanding its coverage area, entering second- and third-tier cities and acquiring smaller independent service providers, which usually start from a loss-making position until the branch achieves sufficient scale. Even with the advancements to date, having improved the operating margin from 12.7% to 17.7% during the last five years, management appears confident about reaching 20% in the coming two years. In the longer term, once the growth investment spending decelerates, management sees a 30% margin as a natural, sustainable profitability level. Most recently, inquiries from real estate management companies are rising as they try to lower elevator and escalator maintenance costs as part of broader building maintenance cost reductions. JES also established strategic tie-ups with banks that are financing new real estate development or re-development as another avenue to secure new maintenance contracts. There is an opportunity for even more expansion domestically. In other developed markets outside Japan where major maintenance providers compete, independent service providers typically represent a 50% market share. That should be possible in Japan, too. For the near term, JES is aiming to take at least a 30% market share, approximately three times its current level. At a glance, the company's stock does not appear undervalued relative to its global peers, with a price-to-earnings ratio of 43 and an enterprise-value-to-EBITDA ratio of 24.8. In fact, this would be significantly overvalued for the global-scope companies, which effectively occupy the same mature industry. For instance, Otis Worldwide and Schindler Holding's average annual revenue growth during the past five years were, respectively, 1.8% and flat. However, the valuation figures are quite misleading if viewed on a forward-looking, normalized operating basis. For one thing, as discussed further below, JES could raise its revenues 50% if it were simply to match its incumbent competitors' pricing. But it sees greater long-term value, still, in maintaining its growth spending and market share capture strategy. As the only independent firm of the bunch, Chairman Ishida sees a blue ocean market that is large, substantially untapped, yet—in practical terms—is without significant competitors. Following annualized revenue growth of 18% in the past five years, and annualized per-share earnings growth of about 26%, the company still has only a 10% market share. More importantly, it achieved this with the highest EBITDA margin, 1.3x greater than the next most profitable competitor, and a return on equity that is 1.5x the next-highest among its peers. During the same growth period, JES continued investing in its operational capacity expansion; the number of employments and the inventory accumulation grew about 10% and 28.5% annually. Upon eventually reaching a mature stage at, say, 30% market share, similar to where leading manufacturers are, the company's intensive expansion spending and investments will no longer be necessary. JES could shift focus to improving operational efficiency to reach the 30% operating margin goal, in which case it could generate about $200 million in net income annually. This is based on the revenue reaching $975 million by simply multiplying its current revenue by three, which would happen upon increasing market share to 30% from the current 10%. JES could achieve this by taking shares both in existing markets and new second- and third-tier cities, and reaching 30% operating margin as nationwide service network branches become profitable and reach scale in matured stage. What is not included in this assumption is the overall market growth driven by inflation and the 2-3% volume growth observed in the industry during the past decades. Most importantly, this does not include the potential price hike JES can conduct, which is 50% today. But the difference is widening as competitors are raising prices. The JES share price today represents just over 12x this stable net profit stream. While the industry shares a recurring-revenue-stream business model, JES does not—unlike its peers—manufacture elevators or escalators. It is a pure service company, not constrained operationally as it can target elevators of various brands (installment is mid-single-digit operating margin business). Revenue growth potential is an important factor in determining the future operating cash flow and, hence, the enterprise value with a benefit of compounding. Annual growth of 20% to 25% results in a doubling of the earnings every three to four years. Chairman Ishida owns 21% of JES. As with typical successful owner-operators, this represents more than just a number of shares in financial terms. It is the ownership and responsibilities in operational excellence, safety, building strong corporate culture, and achieving the ultimate goal of surpassing those leading manufacturers. Bringing the shares public is not the goal, but rather a tool to achieve the goal. Owner-operators have no compromise in achieving such goals. Given that JES undercuts its competitors' service prices by 30-40%, it could easily hike prices by about 50%. In an environment where competitors are raising prices, JES keeps them flat and focuses on taking market share—a decades-long strategy. Professional management would find it daunting the point of impossibility to replicate that single aspect of Chairman Ishida's multi-dimensional, generation-long strategy-set. Raising prices in the JES circumstance by just a couple of percentage points could lift margins and annual earnings sufficiently to meaningfully benefit an executive's career and stock-based compensation, at least in the short term. This is the essence of the agency problem in linking management incentive systems to performance. The situation is distinctly different for business owners—they're not hired agents, so the agency problem is nonexistent for them. This is the opportunity—not stocks, per se, but the owner-operators in which we truly invest. And in this instance, their opportunities often exist solely because of the uniquely Japanese business culture.

BSD Analysis:
Horizon Kinetics presents Japan Elevator Service Holdings as a compelling owner-operator story in Japan's elevator maintenance market. Chairman Ishida has built JES from a one-man operation in 1994 to the largest independent service provider with 10% market share, disrupting an oligopoly previously dominated by five major manufacturers. The company's competitive advantages include proprietary 24-hour remote monitoring technology, a comprehensive engineer training program called "Step 24," and the innovative Quick Renewal system that reduces elevator downtime from one week to half a day at half the cost. JES maintains superior service quality with a 1% failure rate while pricing services 30-40% below incumbents, demonstrating exceptional operational efficiency. The investment thesis centers on significant runway for market share expansion, with independent providers capturing 50% market share in other developed markets versus JES's current 10% in Japan. Revenue growth of 18% annually over five years and earnings growth of 26% support the expansion narrative. The valuation appears reasonable when considering normalized earnings potential at 30% market share, where the company could generate $200 million in annual net income on $975 million revenue with 30% operating margins, implying a 12x multiple on this future earnings stream.

Pitch Summary:
Sanuwave continues on with the theme of rapid growth and an imminent Nasdaq uplisting. In March, SNWV announced its uplisting to the Nasdaq and was added to the Russell 2000 index at the end of June. For the first half of the year, Sanuwave has grown revenue 51%. Even more impressive, this growth was achieved without a national sales presence. Following the first half of the year, the company now has a national sales force along with a key account manager focused on pursuing large accounts that have several hundred locations across the country. Management reaffirmed guidance for the year, which appears to be on the conservative side as it doesn't include the potential for any new large accounts. Additionally, management indicated that they have been pursuing options to refinance their debt and have received several options with very attractive terms, removing the fear of a potential equity offering. With a large account manager and their first ever targeted outbound marketing campaign I expect Sanuwave to continue to execute. Gross margins should continue to expand beyond the current 78% through manufacturing improvements. Shares continue to represent an attractive investment as the company trades at a discount to similar medical device companies with less attractive growth prospects.

BSD Analysis:
The manager presents a compelling growth story for SNWV based on impressive operational momentum and expanding market reach. The company achieved 51% revenue growth in H1 2025 without a national sales presence, suggesting significant untapped potential. Recent NASDAQ uplisting and Russell 2000 inclusion provide enhanced visibility and liquidity. The buildout of national sales infrastructure, including dedicated key account management for large multi-location customers, positions SNWV for accelerated growth. Management's conservative guidance excludes potential large account wins, creating upside optionality. Debt refinancing at attractive terms eliminates dilution concerns from equity offerings. With 78% gross margins and further expansion potential through manufacturing improvements, SNWV trades at a discount to medical device peers despite superior growth prospects. The thesis centers on scaling a proven product through enhanced distribution capabilities.

Pitch Summary:
Solésence (SLSN), formerly Nanophase Technologies (NANX), manufactures zinc oxide, a crucial mineral for sunscreens that protects against both UVA and UVB rays. The company caught my attention during the first half of 2024 as an intriguing investment due to its stock price being under pressure despite its rapid growth and attractive product offering. This was due to manufacturing issues that squeezed profit margins and a lawsuit with a long-term customer. However, management's commentary suggested these problems were likely to be resolved favorably in the near term along with continued rapid growth and a potential uplisting to the Nasdaq. The company resolved the litigation favorably last April and continues to do business with the customer, removing an overhang on the stock price. Revenue for the first six months of this year have grown 53%, but the company is still struggling with lower margins due to one-time costs to onboard new large customers. In April, the company uplisted to the Nasdaq and was added to the Russell 2000 index in the most recent reconstitution, this has seemingly led to increased volume and momentum in the stock price. With the stock, at one point, up over 100% for the year and above my estimate of fair value, I chose to exit the majority of our position at favorable prices.

BSD Analysis:
The manager executed a successful turnaround play in SLSN, capitalizing on temporary headwinds that created an attractive entry point. The company manufactures zinc oxide for sunscreens, experiencing rapid 53% revenue growth despite margin pressures from manufacturing issues and customer litigation. Key catalysts materialized as expected: favorable litigation resolution, NASDAQ uplisting, and Russell 2000 inclusion. The thesis proved correct with the stock gaining over 100% year-to-date. However, the manager prudently exited most of the position as shares exceeded fair value estimates. The investment demonstrates disciplined value realization, buying during temporary distress and selling into momentum. SLSN's business fundamentals remain solid with strong growth, but valuation no longer provides adequate margin of safety at current levels.

Pitch Summary:
ImmuCell's thesis remains intact following record first quarter results. The highlight of the quarter was the expansion in gross margins to 42%, resulting in record net income and cash flow. Management is targeting further expansion of gross margins to 45% and it appears this is within sight as there hasn't been a contamination issue since last April and production has been operating at full capacity for two quarters in a row now. With production stabilized, the sales team is now able to pivot to bringing in new business from both existing products and the expansion into the new bulk powder First Defense product line. This new scours product will be targeted at large calf raising ranches that don't individually dose calves for scours prevention, introducing a new market that the company historically has not served. On the mastitis side of the business, Re-Tain's FDA license is still in limbo pending a facility inspection approval at their contract manufacturer. Although the continued delay is frustrating, the company has received authorization for investigational use of Re-Tain. This will allow ImmuCell to market the product for use and receive valuable customer feedback and data. Results of this investigational use should be available around year-end, providing valuable information to bring on a potential strategic partner for a full-scale commercial launch. Additionally, the company brought in a dedicated CFO with an impressive background and industry expertise. Sadly, this was followed with news that our CEO Micael Brigham intends to retire by early 2026. Michael has done a praiseworthy job stewarding the company for more than 25 years as CEO and will be sorely missed, luckily, he still plans to serve on the board of directors. I believe that ImmuCell is at a major inflection point, with scours production finally stabilized and the impending FDA approval of Re-Tain, there is a prime opportunity for any talented executive to take over the reigns with a clear path to create immense value for themselves and shareholders in the immediate future. Clearly, I am still very optimistic about the upside for ICCC as it currently is valued at a single digit multiple of earnings with near term optionality to unlock significant value through the eventual FDA approval of Re-Tain and continued growth of First Defense.

BSD Analysis:
The manager maintains a strong bull thesis on ICCC based on operational improvements and significant catalysts ahead. The company achieved record Q1 results with gross margins expanding to 42% and targeting 45%, driven by production stabilization after resolving contamination issues. ImmuCell is expanding into new markets with bulk powder First Defense for large calf ranches, addressing previously untapped segments. The key catalyst is Re-Tain's pending FDA approval for mastitis treatment, currently in investigational use phase with results expected year-end. Management transition presents both risk and opportunity as longtime CEO Michael Brigham retires in early 2026. The manager views this as an inflection point with clear value creation opportunities for new leadership. Trading at single-digit earnings multiples with FDA approval optionality and First Defense growth provides compelling risk-reward.

Pitch Summary:
ISSC was the largest contributor to our half-year performance. Record results for their fiscal second quarter released in May have propelled the stock significantly higher year to date. I believe the quarter proved what the company is capable of as they continue to expand their business through strategic acquisitions. Revenue increased 104%, gross margins improved sequentially to 51.4%, and most importantly Ebitda margins reached a high of 35% showing the benefits of operating leverage. ISSC's acquisition strategy has been successful to date and has a large runway for continued growth from their ability to bring products in house and fully manufacturing them at their facility in Pennsylvania to increase product margins and company operating leverage. This strategy has continued runway due to their recent facility expansion which has increased capacity by more than threefold. To further this acquisition strategy, the company just recently announced a new $100 million credit facility. Although I'm optimistic about the company's future, I've decided to take advantage of the momentum and volume in the stock to reduce our position significantly prior to the release of their fiscal third quarter results to add to our cash reserves. The current share price offers a smaller margin of safety compared to when shares traded near our average purchase price of $6.50 per share.

BSD Analysis:
The manager presents a compelling bull case for ISSC based on exceptional operational performance and strategic execution. The company delivered record Q2 results with 104% revenue growth, 51.4% gross margins, and impressive 35% EBITDA margins, demonstrating significant operating leverage. ISSC's acquisition strategy focuses on bringing products in-house to their Pennsylvania facility, which recently expanded capacity threefold. The $100 million credit facility provides ample capital for continued acquisitions. However, the manager prudently reduced the position due to valuation concerns, noting reduced margin of safety compared to their $6.50 average cost basis. The thesis centers on ISSC's ability to scale through strategic acquisitions while improving margins through vertical integration. The company appears well-positioned for continued growth given expanded manufacturing capacity and acquisition firepower.

Pitch Summary:
One of the sectors that have most fallen out of grace has to be the Chinese private education sector, and not without. As has almost become custom, every once in a while the Chinese Communist Party (CCP) something is wrong in the world and the only solution is taking a wrecking ball and destroy the profitability of an entire sector. Usually, it then figures out it was a bit too much and then does a bit of backtracking, reviving the industry. For instance, one might remember the CCP wanted to reduce children gaming and all of a sudden banned minors from spending more than one hour a day online. Another example of regulatory overreach was the introduction of financial regulatory guidelines for the Real Estate sector. With their surprise legislation introducing the 'Three Red Lines' (2020), forcing homebuilders to respect very tight leverage ratios, the CCP triggered (or precipitated) perhaps the largest liquidity squeeze in history, bankrupting most of the real estate sector, that accounted for 30% of GDP. So pervasive is the CCP's tendency to destroy entire companies and sectors that they perceive as having committed a political 'sin', that there is even a phrase for it: "Killing the chicken to scare the monkey". Perhaps the most on-the-nose example of this was the demolition of the private education sector for children up to nineth grade (K-9). Overnight and without warning, the CCP banned the private part of the sector from raising capital, going public and making profits! Our hero of the day, China YuHua Education Group, was hit right across the nose, with their extensive K-9 offering. Overnight, YuHua Edu seized being profitable and it would continue to lose -95% of it's share value in the next three years. Most of YuHua Edu's peers shared the same fate: May-21 Jul-25 drawdown China Yuhua Education 8.19 0.53 -94% XJ Int'l Holdings 2.58 0.194 -92% China New Higher 6.4 1.06 -83% TAL Education 60 10.77 -82% JH Education Tech 4.72 0.92 -81% Edvantage 7.96 1.65 -79% China Science and Education 2.34 0.59 -75% China Xinhua 2.3 0.59 -74% New Oriental Education 120.7 34.35 -72% China Gingko Education 3.02 1.7 -44% Tianli Int'l Holdings 6.36 4.03 -37% At least 25 other Chinese education firms closed shop in 2021 after the government banned for-profit tutoring in their 'Double Reduction' policy. In short: a massacre. Interestingly though, many of the aforementioned companies weren't even a direct target of the CCP, offering vocational and/or university education, rather than the K-9 education that were in the CCP's crosshairs. But investors had seen enough and braced for the CCP expanding their scope. In the meantime, YuHua 'successfully' morphed their K-9 segment into vocational schools, abandoning K-9 education completely. After its transformation, China YuHua Education has become a company with a limited private formal high school education segment (grade 10 to 12) (<5% of revenue), and a substantial university and vocational college education segment (vocational education: schooling aimed at specific occupations such as skilled trades, software developer, accountancy, etc.), operating nine schools in mainland China. They used to own 'Stamford Thailand University', but this has been divested since last report. After the 2021 trauma, YuHua Edu has decided strategically focus on vocational teaching, as this aligns best with the CCP's policy directives. YuHua Edu's university and vocational offerings are not top notch, with universities ranking around 500th out of 1500 public & private universities. Fee structure reflect this. Admission rates hover around 40% - mid-tier among Chinese universities- positioning them as an upgrade to public offerings rather than a competition for prestigious universities. Aside from operation and CCP turmoil, YuHua has had its own specific source of drama: After borrowing overseas, YuHua faced an issue unique to Chinese companies: while having enough cash on hand within China, it was not able to get this money out of China to pay back bond owners. While this is especially problematic for bondholders, it is surprisingly enough both a curse as well as a blessing for companies such as YuHua Edu. In case of YuHua, it was the basis for what can best be described as an evil ploy to force a refinancing under very generous conditions. By threatening bankruptcy proceedings under Chinese law, YuHua was able to force a debt-for-equity swap valuing stocks over 100% above the price it was trading at. Usually, a company constraint by cash will have to agree to egregious conditions from their banks in order to stay afloat. But this is China, and things work differently there… Currently trading at 5x earnings, this multiple is set to compress to just 2.5 on projected 2025 earnings - reflecting exceptional value potential. With the debt swap behind us, debt levels have also become very manageable. The biggest question mark is the macro environment. Arguably it is also the only explanation for the cheapness of YuHua Edu. Central to this anxiety is the upcoming 'Fifth Plenum' of the CCP: The party runs in cycles of five years, within which there are seven 'plenums'. By far the most influential one is the Fifth Plenum, in which the party reveals the CCP's focus and broad strategic direction for the upcoming five years. This is scheduled for the 2nd half of 2025. The biggest fear among education investors is that Xi will announce a new set of reforms beyond the earlier banning of for-profit K-9 schools and tutoring, and also include grades 10-12 and/or vocational education and universities. Given we chose to invest in the stock, you probably have already guessed we are less convinced Xi is about to widen his net. I'll share my three reasons for this conviction: 1) The CCP always seems surprised and somewhat regretful of taking harsh action. They tend to walk back rather than double down on their actions. Their K-9 policy implementation was not without hick-ups, so there's reason to believe they'll be reluctant to repeat the same drastic measures. 2) Taking further action against private teaching doesn't align well with Xi's current focus of increasing domestic spending. Aside from the obvious that spending on private education is still [domestic spending], an extended 'Double Reduction' policy would be bad for consumption for two other reasons: 1) The first episode reportedly lead to a million layoffs, I'm sure a second episode won't be a welcome gift to an already sluggish economy either. 2) One of the reported effects of the first episode is that it led to a lot of stress among parents because they were no longer able to improve the chances of their children through spending on tutoring and such. A new episode could exacerbate this stress further, negatively impact consumer sentiment (and henceforth spending). With the economy being at center stage, I believe Xi will be reluctant to rock the boat more than necessary. 3) The CCP has promoted foreign investment in vocational training centers in the last five-year cycle. Strangling these exact same companies one cycle later would be quite the 180 (though nothing can be ruled out with the CCP). As such, YuHua Edu's focus on vocational education should provide it some cover. China YuHua Education's stock is down over -90% since the 'Double Reduction' act, all the while remaining profitable and with profits set to return to pre-2022 levels. Clearly there is an extreme fear for the sector. The complete nationalization of the sector seems all but priced in, leaving extraordinary upside for those who dare to bet on any other outcome. We believe this is another case of 'Be fearful when others are greedy and be greedy when others are fearful'. Even in most bad scenarios, YuHua Edu might survive with somewhat limited damage. But if we are proven right, the returns will be epic.

BSD Analysis:
The manager presents a contrarian deep value play on China YuHua Education, trading at 5x earnings with a projected compression to 2.5x 2025 earnings following the sector's 90%+ decline since China's 'Double Reduction' policy. YuHua successfully pivoted from banned K-9 education to vocational and university education, now operating nine schools focused on mid-tier vocational training aligned with CCP policy directives. The company executed a favorable debt-for-equity swap that significantly improved its balance sheet while trading at distressed valuations. The key risk centers on the upcoming Fifth Plenum where Xi could potentially expand education restrictions, though the manager argues this is unlikely given the CCP's focus on domestic consumption and previous regulatory overreach regrets. The investment thesis relies on extreme pessimism being overdone, with the market pricing in complete nationalization despite the company's strategic repositioning and profitable operations. This represents a classic 'blood in the streets' opportunity where any outcome short of complete sector destruction could generate substantial returns.

Pitch Summary:
Three years after our exit, 1MC has re-initiated an investment in MCFT, a business we know well and have owned profitably several times in the past. I've long believed this to be a good business, but the last several years were challenging while the industry worked through a painful period of dealer inventory destocking. I believe this has finally run its course. MCFT has a loyal customer base and strong brand, while the current valuation is not reflective of its true normalized earnings power. The re-establishment of a position here is a classic example of our strategy in action: buying a great business at an attractive price when the market has given up on the name. The company is a leading manufacturer of water ski and wakeboard boats, an end market that benefits from volume growth driven by the secular trend toward more active, experience-based lifestyles. Importantly, waterski and wakeboard boat buyers are extremely brand-loyal, with the top three manufacturers controlling 2/3 of the market. This allows MCFT to compete primarily on features rather than price. Over the last few years, I have watched from afar as retail demand for boats declined substantially while dealers ordered even fewer new boats than they were selling to reduce inflated inventory. To put some numbers around it, MCFT should sell around 2k boats in FY'25, compared to anticipated retail demand of around 3k. This level of production is approximately 50% below the five-year average leading up to the pandemic, and 60% below FY'22. Impressively, the company will likely still be profitable and generate free cash flow. While it's tough to time the exact bottom in terms of retail demand, I believe we are at or near the end of dealer destocking. Because of this, MCFT should benefit from volume and earnings growth next year even if the retail environment remains challenged. There is a very long way to go before we get back to mid-cycle earnings of $3.50 per share or more today, before any reduction in share count. Investor fatigue with MCFT's depressed earnings and lack of near-term visibility is punishing the stock price. However, I am happy to look forward rather than back. This is a business that, despite its cyclical nature, has consistently demonstrated attractive returns on capital. Additionally, its net cash balance sheet provides a margin of safety while allowing MCFT to reduce the share count over the next few years, driving mid-cycle EPS even higher. I am confident that as the earnings power normalizes and the market recognizes the strength of the business and its valuable brands, we will be well-rewarded for being a bit early and looking forward.

BSD Analysis:
The manager presents a compelling cyclical recovery thesis for MasterCraft Boat, re-entering a position after a three-year absence during the industry's dealer inventory destocking cycle. The investment rationale centers on MCFT being at or near the bottom of its cycle, with current production levels 50-60% below historical averages despite maintaining profitability and free cash flow generation. The manager highlights the company's competitive advantages including strong brand loyalty in the waterski/wakeboard segment where the top three manufacturers control two-thirds of the market, allowing competition on features rather than price. With anticipated retail demand of 3,000 boats versus current production of only 2,000 boats in FY'25, the setup suggests significant operating leverage as dealer destocking concludes. The valuation appears attractive relative to normalized mid-cycle earnings power of $3.50+ per share, while the net cash balance sheet provides downside protection and enables share buybacks to enhance per-share returns. The manager's confidence stems from the company's historically attractive returns on capital and the secular trend toward experience-based lifestyles driving long-term demand growth.

Pitch Summary:
Also subsequent to the quarter, QRHC reported meaningful cash flow generation for the first time in two years. As I wrote in my July email, I would love to put the proceeds from CCRD into QRHC, a long-time position that has more than halved (twice) since September, but I am hesitant until I see the effect of recent managerial changes on operations. Cash flow generation is one of those small but important indicators. We have been selectively adding. However, I continue to think the Board is missing an opportunity to improve as well. Out of the six remaining Board members, three of them – our Chairman Dan Frieberg, plus Stephen Nolan and Audrey Dunning - have a web of interconnects as investors and Board members in what I call 'perpetual microcaps'. The only reason to own microcaps is for the expectation that it grows … beyond … so it's never a confidence builder to see a Board with such heavy microcap-only experience. As I wrote in my July email, I have long had a highly experienced and extremely knowledgeable industry source who has been a helpful and thoughtful resource in understanding the business - this source could see the managerial and technical deficits at our company as far back as 2017 even as our Board couldn't see it through last year – and everything he's ever told me about our company and its managers has proved accurate. He has offered to make himself available to the Board for help. I firmly believe his participation would build confidence for shareholders and help elevate the rest of our Board by offering them perspectives well beyond their experiences. Our Chairman took the time to talk to this person back in June, but it pains me that nothing has been done. Just as they were blind to the problems they themselves caused by levering up with expensive debt to add revenue to a platform that didn't work under the leadership of a CEO that I long complained was out over his skis (and is now gone), they seem blind to the opportunity of an upgrade. I would aggressively add to our position if our Board replaced one of its perpetual microcap Board members with this person, given his experience turning around companies in this industry and his successes in various others. The good news is, this source told me that the changes the company has recently made should yield improvements in 12-to-18 months - again, everything he's told me has proved accurate - offering a sense of hope that our new CEO and his cohort can succeed even as our Board underwhelms.

BSD Analysis:
The manager maintains a cautious but hopeful stance on QRHC despite significant volatility, with the stock declining by more than 50% twice since September. Recent positive cash flow generation marks a critical inflection point after two years of struggles, providing the first tangible evidence that new management changes may be working. The manager's frustration with board composition is evident, criticizing three directors for their 'perpetual microcap' experience and lack of growth orientation. Historical operational issues stemming from excessive leverage and platform problems under previous leadership created substantial value destruction. The manager's industry source, who accurately predicted past problems, expects 12-18 month improvement timeline under new management. While selectively adding to the position, the manager would 'aggressively' increase holdings if board governance improved through strategic director replacement. This represents a classic turnaround situation where operational improvements are beginning but governance concerns limit conviction.

Pitch Summary:
Like CCRD, EEFT is founder led and run by an idiosyncratic thinker. The legacy business is mostly ex-US merchant acquiring, which is the financial services equivalent of trench warfare; salespeople go door to door trying to compel retailers to rent its point of sale device for processing card transactions or to devote a few square feet of their store to an ATM (with outrageous fees). A smaller part of the business is processing debit card transactions for banks, but this business faces competition from lower-cost real time payment platforms and regulated caps on transaction fees. In their effort to grow profits, banks are therefore turning to credit cards, which have lower adoption rates outside the US, and are more profitable. This is where CoreCard fits into EEFT's strategy. Given CCRD's small size it is not expected to be meaningful to earnings in the near term. But if EEFT can sell CoreCard's credit card issuing services through its existing bank customer base, it should do well over the next few years. Given its mid-single digit valuation, mid-teen margins and strong cash flow, I expect we'll continue to own some EEFT but it will be a much smaller position than 25% of the portfolio, which is where CCRD had grown to prior to 2Q's close.

BSD Analysis:
The manager provides a balanced assessment of Euronet's acquisition of CoreCard, viewing it as strategically sound but not transformational. EEFT's legacy merchant acquiring business faces intense competition described as 'trench warfare,' with door-to-door sales tactics and fee pressure from real-time payment platforms and regulatory caps. The company's founder-led management and idiosyncratic approach mirrors the manager's preference for owner-operator businesses. The strategic rationale centers on cross-selling CoreCard's credit card issuing services to EEFT's existing bank customers, capitalizing on banks' shift toward more profitable credit products. With mid-single digit valuation multiples, mid-teen margins, and strong cash generation, EEFT appears reasonably valued. However, the manager plans to significantly reduce position size from the concentrated 25% weighting that CCRD represented, suggesting limited conviction in the combined entity's growth prospects.

Pitch Summary:
At the end of July, CCRD announced its intention to sell itself to Euronet Worldwide (EEFT) in an all-stock deal valued at $30 / share. Our returns were substantially enhanced by doubling the size of the position when the stock declined in late '23 and early '24. As I wrote back in July, I had anticipated a sale before year-end, and although this isn't the one I'd hoped for, it solves multiple problems for both companies. CCRD gains a haven where it can rebuild revenues in a post-Apple Card world (this deal wouldn't happen if the company believed it would keep processing the Apple Card), CCRD shareholders have an offramp for their stock if they want and EEFT adds a substantial and well-tested digital payments platform to its legacy ATM networks, prepaid mobile cards and money transfer business.

BSD Analysis:
The manager successfully executed a contrarian strategy by doubling down on CCRD during its decline in late 2023 and early 2024, which proved prescient given the subsequent acquisition announcement. The $30 per share all-stock acquisition by Euronet Worldwide validates the manager's thesis and provides substantial returns. The deal structure suggests CCRD was facing headwinds from losing the Apple Card processing contract, making the acquisition a strategic necessity rather than opportunistic growth. For Euronet, the acquisition adds a proven digital payments platform to complement its legacy ATM and money transfer operations. The manager's anticipation of a sale demonstrates strong fundamental analysis and understanding of the company's strategic position. The transaction solves operational challenges for CCRD while providing Euronet with credit card issuing capabilities to serve its existing bank customer base. This represents a successful value realization in the manager's concentrated portfolio approach.

Pitch Summary:
JDC Group continues to deliver excellent results. And the stock market is finally starting to understand the potential. In the first 6 months of 2025, revenue grew by 14% YoY and EBITDA by 24%. The bottom line grew even more. Looking over a longer time horizon, the potential is even greater. Revenue has grown by 12% on average while EBITDA has grown by +30% per year. With the full recognition of FMK in 2026, we are quite confident that EBITDA will double to approximately EUR 40 million. This without any dilution. After several years of building their IT platform and landing new customer agreements, they are now starting to reap the benefits and are seeing their platform scale margins upwards, exactly as we expected. JDC announced at the beginning of August that they have acquired 60% of FMK Group. I think most investors have difficulty understanding the potential of this acquisition. FMK is a fantastic business in itself. Since its inception, they have grown revenue by 180% per year, while being very profitable with 30% margins. JDC has paid a multiple of approximately 8x for this, which in itself is very cheap. Although the growth in FMK's Personal Finance segment will come down from here, JDC still expects them to continue to grow. Where the greatest potential for JDC is, is that they can help FMK with their know-how and capabilities within the insurance industry. FMK itself has just started up within insurance with good LTV/CAC. However, it is still only 1% of their revenue, even though it is the potentially largest segment. JDC can help FMK win that market. At the same time, FMK can significantly increase the influx of new customers to JDC's platform. JDC has the data, the contracts and the know-how needed to help FMK succeed in insurance. Today, FMK receives a one-time income of approximately EUR 60 when they refer an insurance customer to a partner. However, JDC will be able to achieve an LTV of at least EUR 300 and often over EUR 1,000 on the same customer via their platform. Via JDC, FMK can therefore: 1) Get access to +200 integrations with insurance partners compared to the few agreements they have today 2) Get access to a large amount of data that can improve their "targeting" – including via Morgen&Morgen. 3) Have the opportunity to significantly increase CAC and therefore get a larger TAM. FMK has already proven that they can buy a customer for EUR 10-30 and get a commission of EUR 40-50. But since the lifetime value of the customer for JDC is 5-20 times higher, FMK has the opportunity to also buy the customers more expensively, which will mean that they will be able to send significantly more of them to JDC. Symmetry is still one of the largest shareholders in JDC Group with an ownership stake of approximately 3%. We believe the journey has only just begun and that the management is building a billion-dollar business.

BSD Analysis:
Symmetry maintains strong conviction in JDC Group as a transformative fintech platform play, holding approximately 3% ownership. The company delivered solid H1 2025 results with 14% revenue growth and 24% EBITDA expansion, building on a longer-term track record of 12% average revenue growth and 30% annual EBITDA growth. The strategic FMK Group acquisition at 8x multiple represents exceptional value given FMK's 180% historical revenue growth and 30% margins. The key investment thesis centers on massive synergy potential as JDC can leverage its insurance platform to dramatically increase FMK's customer lifetime value from EUR 60 to EUR 300-1,000+ per customer. FMK gains access to 200+ insurance partner integrations versus their current limited partnerships, enhanced data targeting capabilities, and expanded total addressable market through higher customer acquisition costs. With FMK's proven EUR 10-30 customer acquisition cost generating EUR 40-50 commissions, the 5-20x LTV uplift through JDC's platform creates compelling unit economics. Management expects EBITDA to double to EUR 40 million by 2026 with full FMK consolidation, positioning JDC as a potential billion-dollar business.