Original-Research: Advanced Blockchain AG (von GBC AG): Buy
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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: Management interview
Recommendation: Buy
Target price: 11.00 EUR
Target price on sight of: 31.12.2024
Last rating change:
Analyst: Matthias Greiffenberger, Julien Desrosiers
'Our top 10 investments alone amassed a value of 57.5 million euros by the
end of 2023 - notably exceeding our market capitalization.'
In this interview, GBC speaks with Simon Telian, the CEO of Advanced
Blockchain AG. Since our last GBC interview in September 2023, the market
capitalization has more than doubled. Based on our last valuation, we
remain optimistic that there is further potential for growth. We expect to
adjust our valuation with the publication of the 2023 annual report.
GBC AG: Can you briefly introduce Advanced Blockchain AG?
Simon Telian: Advanced Blockchain AG is the first and only publicly traded
company on the German stock market specializing in decentralized blockchain
technologies. We are a key player in the blockchain industry, focusing on
research, incubation, and investments - both equity and tokens - in
disruptive technologies in the blockchain sector. Our current portfolio
includes more than 30 blockchain companies or projects. Alone, our top 10
investments had a value of 57.5 million euros by the end of 2023 -
significantly more than our market capitalization. Our primary focus is on
incubating and investing in promising projects in the decentralized finance
sector, also known as 'DeFi,' which is currently the fastest-growing area
in the blockchain world. This enables users to access financial products
frictionlessly, without the intermediation of centralized institutions such
as traditional banks. Other key focus areas include applications and
companies in the Economy of Things, where connected devices not only
communicate with each other but also create economic value for the user.
The portfolio is rounded out by investments in companies that enable
frictionless communication between different blockchain technology
protocols, also known as Cross-Chain Interoperability. Additionally,
Advanced Blockchain is not only an early-stage investor but also a leading
venture builder, supporting its investments with an extensive network of
software developers and a strong focus on research. In historical context,
Advanced Blockchain has been informing major German companies about the
various applications of blockchain technology since 2018, thus building a
broad network even in the traditional corporate environment. Since 2020,
Advanced Blockchain has been intensively involved in incubation,
investments, and building technical expertise in research to create an
extremely successful and valuable portfolio.
GBC AG: How does your company identify and evaluate potential investments,
and what criteria are decisive?
Simon Telian: The basis of the investment process is always a comprehensive
analysis of the application and implementation potential of the
investments. In addition, the quality of the founding team and the economic
and financial potential are crucial for creating value for the company. Our
extensive and long-standing experience in blockchain technology
significantly supports the decision-making process. Through ABX Analytics,
we will increasingly automate this process and offer it to external
customers or investors. Our broad network is certainly the decisive factor
in identifying interesting investment opportunities early on; numerous
opportunities have been identified in the past in this way. We rely on the
generated value from synergies with other investors in our network.
Co-investments with our partners are common, both in the pure equity
investment area and in our incubation projects.
GBC AG: What specific strategies have led to the 45% increase in the ten
largest portfolio values?
Simon Telian: The fundamental principles of our investment strategy remain
unchanged. However, the outstanding increase is due to several factors
affecting both our portfolio companies and the overall market. The central
factor is certainly the increasing acceptance of cryptocurrencies and
blockchain technology in society. The acceptance of blockchain ETF funds by
the U.S. Securities and Exchange Commission (SEC) has made investing in
cryptocurrencies increasingly socially acceptable. Particularly noteworthy
is the remarkable increase in inflows into BlackRock's iShares Bitcoin
Trust (IBIT), which recorded a new daily record of $2.2 billion last month.
In addition, the price of Bitcoin reached its all-time high, surpassing the
$69,000 mark, which brings Bitcoin into the price discovery phase. All
these developments show how the market has evolved positively in recent
months. This environment leads to growing interest in many of our key
portfolio companies, such as Composable. The company develops bridge
solutions targeting various ecosystems such as Ethereum, Cosmos, and
Polkadot, as well as future blockchain networks. The interest in this
drives the increase in value significantly. It is important to highlight
the central problem of current blockchain technology, namely the lack of
interoperability, which makes the transfer of digital assets between
different ecosystems impossible. Composable has taken on the challenge of
developing innovations to overcome this challenge and has made considerable
progress. This is just one example; each of our portfolio companies is
driving innovations in a key area of the industry, such as peaq in the
Economy of Things sector, and Polymer in the development of modular
blockchains.
GBC AG: How has the currently positive momentum in the crypto market
influenced the valuation of your portfolio?
Simon Telian: Of course, the positive market momentum has played an
important role in the appreciation of our portfolio. For example, the
Bitcoin price was slightly above $27,100 at the time of the initial
valuation in late May 2023, and at the end of December 2023, it was at
$42,500. However, the change in market dynamics alone is not sufficient. If
these portfolio companies were not innovative and did not develop core
technologies that are perceived as remarkable by the market, we would not
have seen such a strong increase. Nevertheless, these two aspects are
interconnected.
GBC AG: Can you explain the significance of the upcoming Bitcoin halving
for the overall market sentiment?
Simon Telian: Bitcoin halving involves reducing the rate at which new
bitcoins are created. With a finite number of bitcoins to be created at
most, Bitcoin halving reduces the supply. With demand levels remaining
constant, this can lead to a price increase. Many investors and speculators
view halving as a key catalyst for positive price movements. Positive price
developments often manifest early, as investors position themselves ahead
of time. Media also play an important role in attracting attention,
especially now with the interest of renowned asset managers like BlackRock
and Fidelity in the crypto industry. Overall, I expect halving to
contribute positively to market sentiment, along with the upcoming Ethereum
spot ETF. It is expected that both events will lead to further significant
inflows into the digital asset market.
GBC AG: What is Advanced Blockchain AG's vision for the future of Web 3.0?
Simon Telian: Our vision is to become an increasingly global player in the
blockchain field. By investing in and incubating innovative companies and
providing young entrepreneurs with the opportunity to create technology for
the decentralized web (Web 3.0). This also includes increased involvement
in software development. We have demonstrated our competencies through our
previous incubation projects, using this key expertise as a significant
value driver for the next phase of the company's development.
GBC AG: Where do you see Advanced Blockchain AG in the next five years, and
what strategic goals are you setting?
Simon Telian: In the coming years, Advanced Blockchain will continue to
focus on early-stage startup investments with a sharpened and successfully
proven investment strategy. As mentioned earlier, our goal is to become a
leading global player with a presence in emerging blockchain markets to
access promising new investment opportunities. Our incubation business will
increasingly focus on building innovative software companies with a
recurring revenue model to further diversify our business. Additionally, we
see great value in collaborating with other venture builders to establish
joint ventures in emerging blockchain markets.
GBC AG: Thank you for the interview.
You can download the research here:
http://www.more-ir.de/d/29147.pdf
Contact for questions
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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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://www.gbc-ag.de/de/Offenlegung
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Completion Date (Time): 13.03.2024. 16:00
First Distribution Date (Time): 14.03.2024. 09:00
-------------------transmitted by EQS Group AG.-------------------
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.
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