Original-Research: Advanced Blockchain AG - from GBC AG

Classification of GBC AG to Advanced Blockchain AG

Company Name: Advanced Blockchain AG
ISIN: DE000A0M93V6

Reason for the research: Research Report (Anno) Recommendation: Kaufen
Target price: 17.64 EUR
Target price on sight of: 31.12.2025
Last rating change:
Analyst: Matthias Greiffenberger, Julien Desrosiers

Update on the separate financial statements 2023. Significant upside potential at group level on the portfolio valuation.  
Advanced Blockchain AG has so far only published their individual financial statements for the 2023 fiscal year. Therefore, the currently available figures are only of limited significance. The consolidated financial statements, which will provide more comprehensive information on the company's development, are expected to be published in the coming weeks. The consolidated financial statements will contain detailed information about the financial situation and performance of the subsidiaries, thus providing a clearer picture of the entire corporate group.  
The company (individual entity) nearly doubled its revenue in the 2023 fiscal year, increasing from €0.06 million in 2022 to €0.11 million. Despite this growth, the absolute revenue level remains low. The operating investment business is outsourced to Incredulous Labs Limited, so the majority of revenue and profitability lies with the Incredulous Labs sub-group.
 
The earnings development shows a deterioration of EBITDA from -€0.5 million in 2022 to -€0.72 million in 2023. This deterioration is due to significantly lower other operating income, despite cost reductions. Other operating income drastically fell from €0.65 million to €0.08 million, while personnel costs were significantly reduced to €0.11 million (previous year: €0.33 million) due to staff reductions. Additionally, write-downs on current assets of €0.19 million were made due to lack of recoverability, whereas no such write-downs were made in the previous year. This resulted in a net loss of €0.88 million (previous year: €0.51 million).  
This led to a decrease in equity from €10.75 million to €9.56 million. The total assets decreased from €15.68 million to €13.71 million, due to the increased balance sheet loss and the reduction of provisions and liabilities. Despite the decrease in equity, we believe the company remains well-positioned. Receivables from affiliated companies amounting to €11.31 million are considered nearly cash-equivalent. These mainly consist of loans to Incredulous Labs Ltd., whose portfolio should significantly exceed the loan value upon liquidation.
 
The group's focus for the 2024 fiscal year is on sustainable growth, diversification of revenue sources, and increased activities in Switzerland and the United Arab Emirates. The group also plans to expand its team and implement cross-chain initiatives to leverage network effects.  
The revaluation of the top ten investments by AVS-Valuation GmbH shows a significant increase in the portfolio value by 45% to €57.5 million. The estimated total value of the portfolio as of December 31, 2023, is around €105 million, which corresponds to a net asset value (NAV) of approximately €103 million. The current market capitalization of Advanced Blockchain AG is around €15.18 million, which represents a significant undervaluation compared to the fair value. Considering the significantly improved market situation in the crypto markets, we are gradually reducing our original 'crypto winter' discount to 35%. This leads to a fair value per share of €17.64. Given the considerable upside potential, we assign a 'BUY' rating.

You can download the research here:
http://www.more-ir.de/d/30231.pdf

Contact for questions
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
[email protected]
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http:s//www.gbc-ag.de/de/Offenlegung
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Date and time of completion of the report: 17.07.2024 (10:00) Date and time of the first distribution of the report: 17.07.2024 (12:00)

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The issuer is solely responsible for the content of this research. The result of this research does not constitute investment advice or an invitation to conclude certain stock exchange transactions.