Industry & Market
East Asia: The World’s Next Economic Power


What has East Asia achieved since the 1950s?
- Poverty reduction: East Asia has transformed spectacularly from a state of severe poverty before the 1950s. By 2015, the region had reduced its poverty rate to around four percent. China alone has lifted 850 million people out of poverty since the 1970s (World Bank, 2022).


When the United States is compared to East Asia
- East Asia already has a cumulatively larger GDP: In 2021, the combined GDP of East Asia was $23.9 trillion, compared to $23.3 trillion in the United States (World Bank, 2022). - China grows far more quickly: Over the past ten years, the United States' share of global GDP growth was 9.7% compared to an impressive 31.7% from China. If current growth continues, the GDP of China will be more than double that of the United States by 2030 (World Economics, 2023).

East Asia has been here before
What is today China, Mongolia and South Korea were thriving economic strongholds until 1700. Powerful empires like the Tang Dynasty (618-906), the Song Dynasty (960-1279) and the Mongol Empire (1206-1398) were once the largest economies in the world (Baum, 2021).

Work ethic and a culture of efficiency
East Asia is not only resilient as a region: it is home to some of the hardest workers in the world. China’s work ethic is based on a Confucian principle calling for status hierarchy, collectivism and consistent hard work to achieve perfection in outcomes (Kan, Matusik & Barclay, 2017). Its ‘996’ technological business culture prescribes work from 9 a.m. - 9 p.m., six days a week (Schwartz, 2021). Japan and South Korea have very similar requirements for perfection and overtime (Samson, 2017).
What East Asia could mean for Investors
There are ways to share in the fast-paced growth of East Asia. Currently, companies like Tencent and Alibaba, the Whatsapp and Amazon equivalents of China, trade much more cheaply than their Western counterparts. These companies are effective monopolies in the world’s most populated region – a region which may soon be the next global economic powerhouse.
Update: Heritage Insurance

What does the future look like for Heritage Insurance Holdings?
From FIU News "Florida’s insurance rates have almost doubled in the past five years, yet insurance companies are still losing money for three main reasons. One is the rising hurricane risk. Hurricanes Matthew (2016), Irma (2017) and Michael (2018) were all destructive. But a lot of Florida’s hurricane damage is from water, which is covered by the National Flood Insurance Program, rather than by private property insurance. Another reason is that reinsurance pricing is going up – that’s insurance for insurance companies to help when claims spike. But the biggest single reason is the “assignment of benefits” problem, involving contractors after a storm. It’s partly fraud and partly taking advantage of loose regulation and court decisions that have affected insurance companies. It generally looks like this: Contractors will knock on doors and say they can get the homeowner a new roof. The cost of a new roof is maybe $20,000-$30,000. So, the contractor inspects the roof. Often, there isn’t really that much damage. The contractor promises to take care of everything if the homeowner assigns over their insurance benefit. The contractors can then claim whatever they want from the insurance company without needing the homeowner’s consent. If the insurance company determines the damage wasn’t actually covered, the contractor sues. So insurance companies are stuck either fighting the lawsuit or settling. Either way, it’s costly. Other lawsuits may involve homeowners who don’t have flood insurance. Only about 14% of Florida homeowners pay for flood insurance, which is mostly available through the federal National Flood Insurance Program. Some without flood insurance will file damage claims with their property insurance company, arguing that wind caused the problem. "Florida Insurance Risks
The first reason is just a risk shareholders must be comfortable accepting, because that is where the earnings come from. Premiums should naturally risk in tandem with risks. The Second reason is the private-reinsurance market. Increased prices making it more and more expensive for insurance companies to reinsure massive losses was eating into margins, and forcing insurance companies out of business. The new re-insurance fund will help Heritage, but not by much as reported in their latest quarterly earnings call transcript.

Jackson Financial
Variable Annuities
The variable annuity business comes with a lot of jargon. So I will keep this simple. A client buying a variable annuity will put down a lump sum with Jackson Financial. This lump sum is invested into funds of the clients choosing (Jackson offers the widest flexibility in its industry), and at some specified time in the future, the client can begin withdrawing from it. When the client starts withdrawing, they do so at a fixed percentage (let’s call it 5%) of the value of the account at the time of withdrawal. Jackson guarantees this 5% until they die. Jackson makes most of its money on the fees charged on the account value which can rise with the market, and the fee is based on the account value so as the market rises so do the fees. Jackson does not compete on price, they compete on having a wide and flexible range of offerings. Below is an example of what the cash flows look like for an annuity assuming 0% market returns. Jackson will make fixed fees on the value presented in the maroon bar below, as well as income on their investment portfolio. Their risks here, amongst others, are that actuarial assumptions regarding mortality rates are wrong. As the market rises, Jackson is able to pay out over a longer period of time (the coverage can extend past year 20). “Higher levels of equity market return can reduce or eliminate Jackson’s payments.”
History & Industry
Jackson Financial is the largest seller of variable annuities in the United States, recently spun off from Prudential Financial. Yet the company is valued lower than all its competitors on almost every multiple, a phenomenon quite common amongst spinoffs. It survived the global financial crisis in 2008 without any assistance from Prudential (its Parent at the time), or the government and even gave cash back to Prudential the year after. The market is struggling to understand Jackson. The future of its business distribution in variable annuities looks bleak and how the company hedges its variable annuities is confusing because Jackson Financial says they use futures, options, and other derivative contracts custom-designed with big banks like JP Morgan Chase. When you delve into the world of derivatives, especially on such a large scale things can get very messy. In order to fully understand Jackson Financials’ hedging strategy you would need to work in the company and be involved in the modelling of their book, and the structuring of their derivative contracts.Distribution (sales channels)

Hedging
Jackson has the widest range of variable annuity products. Clients can choose from an expansive range of underlying funds when they pick their variable annuity. What this means is that Jackson needs to hedge the underlying funds to protect the guaranteed minimum withdrawal. When you have a book (an investment portfolio) with so many different funds that need to be hedged it can get tricky because not every fund has the same characteristics. Jackson seems to have a replication strategy whereby they create a synthetic hedge on the underlying instrument using a combination of custom-made options. They have the blessing of being big enough to be able to get the best deals on their hedging, and they state that before they offer a specific fund on their variable annuity they will first make sure it's economical from a hedging perspective. Remember, Jackson does not lead on price they lead on their product range. Also, if an underlying’s characteristics begin to perform in such a way that they cannot hedge it economically, Jackson reserves the right to remove the underlying. The guarantee will still be there. Also, funds that begin to change to become uneconomical will most likely be the more exotic types- which will have the benefit of being a smaller part of Jacksons' overall book.Jackson Valuation

Adjusted earnings
We normally like to tease management who use “adjusted” earnings because they add back all sorts of things to paint a prettier picture of the company, but in Jackson’s case (due to their hedging swings) their adjusted operating earnings is the number we can use to best understand their performance. Their “Adjusted Operating Earnings” which is an after-tax measure has been hanging around $2BN per year for the last 8 years. This is significant on their $3.8Bn market cap.


Conclusion
Jackson is a very unique company. It is difficult to understand but has a compelling history. The variable annuity industry is going through changes and Jackson will have to adapt but revenue has not dropped off significantly except in the most recent quarter. Higher interest rates may help their business as people search for a more secure retirement income stream. The company is cheap on every multiple and compared to its peers. Its capital structure also offers a margin of safety from business risk. We are comfortable enough with the hedging risk due to the fact that the company has survived many adverse business conditions without requiring additional funding. And finally, we believe the company is undervalued.Inflation in the 1970s




Why then, the second peak?
The second peak followed (shockingly?) another round of price disruptions. Between 1977 and 1979 food prices rose by 22%. Political unrest in Iran had the consequence of yet another oil shock. The average cost per barrel of imported oil rose from $15 to $33 between December 1978 and March 1980. A third shock was to mortgage interest rates, which rose from 9% per annum in 1977 to 10% by the end of 1978. (Blinder, 1982)



Is history repeating itself?
The accelerated rise in inflation to June 2022 and its similarly speedy drop has many drawing similarities between inflation today and the disaster of the 1970s. Will inflation shoot up again despite this recent decline?




What's next?
With a keen eye on risks to price shocks, which could come from the Ukraine-Russia war or China reopening the outlook for inflation is not as clear cut as the market seems to believe. A combination of price shocks and the easing of financial conditions that we have seen in the Financial Conditions Index could lead to inflation that persists at a higher than 2% level. As the stock market rallies and financial conditions ease, the risk that inflation troughs or remains at a higher level increases. A trough in inflation would shock the Fed into real action.Reitmans

E-Commerce
The shift to E-Commerce during COVID played a significant role. Management disclosing e-commerce sales as a % of revenue for the first time is a clear sign of this. Revenue per store increased from $1.2 million to $1.6 million when you include sales from e-commerce. My calculations indicate that revenue per store has not actually increased and that the excess revenue is coming straight from e-commerce. Selling, general, and admin expenses per store have remained the same. So the value has been unlocked here. I calculate that their e-commerce business has an operating margin of close to 30% while their retail stores are more like breakeven. In Q2 of 2022 management disclosed, for the first time, that 25% of total sales were coming through e-commerce. Q3 of 2022 (or 2023 financial year reporting) shows that total sales from e-commerce moved to 26%. The shift to e-commerce created by COVID seems sustainable. I sent the CFO a query regarding the lease agreements and was told that I was not missing anything. Which is short for “we didn’t disclose the information you actually wanted”. The information I want is: how long will these preferential lease payments last? The financial statements and the management discussions say nothing regarding how long these preferential agreements will be in place, only that they benefited the quarter's results.

Risks?
1- The share classes keep the Reitmans in control of what happens to the free cash flow. Will they be kind to shareholders? 2- The most predicted recession ever is looming. 3- Retailers have been struggling for years. 4- How long do these preferential lease payments last?On recommendation of HG-Research, Heiden Grimaud Asset Management has not yet taken a position in Reitmans and may or may not do so at anytime in the future, however;
None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy. The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Heiden Grimaud Asset Management. Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied. The authors and HG-Research are not responsible for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here
Rethink The Atom
- The fear of nuclear power. The same reaction that is currently used to generate energy in a nuclear reactor can be used to make a nuclear bomb. The majority of the public does not separate feelings about nuclear energy from the devastation of the bomb.
- The possibility of a reactor meltdown. HBO’s wildly popular series, Chernobyl (2019), is just one way in which high-profile nuclear accidents have continued to weigh on the minds of the public. This is despite the thoroughly regulated safety standards that have been introduced following tragedies such as Chernobyl in 1986.

Enter nuclear fusion
A nuclear breakthrough has the world once again engaging in the clean energy debate. It may be the key to destigmatising nuclear energy and reaping its benefits. In December 2022 a nuclear fusion reaction resulted in a net energy gain. Since the 1950s scientists have been trying to fuse atomic nuclei with a release of energy larger than the input energy requirement. This dream is now a reality.

Comparing Energy Return On Investments (we are not in Texas in 1901)
Accessing oil today is not what it was one hundred and twenty years ago. We’ve all seen the cartoons: a man in a cowboy hat steps a little too firmly in a Texan canyon and is rewarded with a towering spout of black gold. Soon there are pipes, spades and drills, with every American scrambling to get their share. Until, of course, the evil oil company steps in. Suited businessmen wearing sunglasses lead in trucks mounted with drilling rigs. The cowboys and their tools are swept away by bulldozers. Big Oil is born.





How serious are countries about green energy?
Nuclear energy is clean, environmentally friendly, and reliable. But it is also expensive. Going nuclear means a steep initial capital cost. Solar and wind energy are the cheapest sources, but they are not reliable. This leaves fossil fuel options like coal: affordable, reliable but greenhouse gas machines.



Embracing the atom
Relying on fossil fuel providers has given rise to an energy crisis in Europe. It should follow, then, that it is now an excellent time to turn to alternatives – alternatives like nuclear energy. This is not what is happening. In the midst of the European energy crisis, Belgium has decommissioned a nuclear plant in perfect working condition. This is in response to a public anti-nuclear movement insisting nuclear power is unsafe. Except, of course, the numbers say it isn’t.
South Africa turns grey as FATF threatens to put them on the naughty list


Who is the FATF, and what does it mean to be grey-listed?
The FATF is a formidable body: the international watchdog on financial crimes. When this watchdog barks, you listen. Unless you’re a money launderer, then you run. Grey-listing means singling out a country for having poor protective measures against financial crimes. The grey-listed country is put under restrictions and closely monitored. As a watchdog, the FATF has sharp teeth. A country on the grey list is labelled a risky nation: its financial institutions are not entirely trustworthy.How does this affect the average South African?
The effects will not be "felt" immediately by the average South African. There will be no FATF dog barking at your gate or gnawing at your shoe. It is more akin to a restaurant losing its food and safety rating - nobody wants to eat at a restaurant that has cockroaches in the kitchen! Grey-listing plummets South Africa's credit ratings, discourages foreign investment and ultimately stifles GDP growth. South African consumers will be directly affected by decreased employment, unfavourable exchange rates, and possibly higher inflation. In 2021 the FATF began firmly biting at the heels of the South African financial system. If appropriate rectifications are not made, South Africa will be grey-listed by February 2023. The grey list cloud began gathering over South Africa when it fell into the clutches of state capture. State capture is right up there with load-shedding as a word we wish we didn’t need to know. When not used as a curse word, it is a form of corruption in which the private interests of individuals infiltrate the government. This means bribery. It also means money laundering: concealing the origins of money generated from criminal activity. These are financial crimes (queue barking noises). In its October 2021 report, the FATF argued that South Africa is not doing enough to proactively bring the state capturers to justice.What does the FATF require?
The FATF listed 12 priority actions that were suggested to address this issue. These actions require a substantial, coordinated, and government-wide effort to implement. By October 2022, only 2 of the 12 priority actions had been satisfactorily implemented. The remaining actions are still being targeted. However, there are three other notable actions on which no notable progress has been made.The failure to fix our ‘big three’:
1. Transactions across the borders
2. The Hawks
3. The private sector
is likely to be the nail in the coffin.

Are the important "Priorities" being addressed?
The borders. The first entirely unmet priority action is the required improvement in the effective detection of illegal transactions made across South African borders. Enhanced cash declaration systems have been proposed, but cash thresholds are yet to be set. Even if they were set, the national rollout of this would take time: something we no longer have. The Hawks. Another failure is in the capability of the Hawks. The Hawks were created to deal with serious crime. They are the police of the state capturers. A natural assumption, then, if state capturers are still running around, is that the Hawks are not equipped to do their job. The Hawks have shown a failure to successfully investigate and construct financial crime cases. Building a capacity to do this and demonstrating its success to the FATF, once again, will take time. The private sector: Finally, the FATF requires the scope of supervised business to be broadened to more non-financial businesses, such as gambling institutions. These businesses will be forced to comply with South Africa’s Financial Intelligence Centre (FIC) regulations. This is another priority action on which no notable progress has been made - it is expected to take two to three years before supervision will be effective. South Africa’s fundamental problem is in the capacity and capability of its financial policing institutions. These organisations are short-staffed and overburdened. Without well-functioning institutions, it will be nearly impossible to achieve the 12 priority actions. To capacitate these institutions, we need time and resources. We currently have neither. This is why it is extremely likely that South Africa will be grey-listed in February 2023. If this news makes you want to climb into your JoJo tank and cover it with your solar panel so that you can float far, far away across the Atlantic Ocean – no judgement, we’ve all been there.
How do you prepare for this?
There is, however, a way South Africans are mitigating this, sort of like an electricity generator for grey-listing. Importantly, this alternative is not to stop investing altogether. Cashing the entirety of your wealth to store in your couch, although tempting, is not the solution. If our exchange rate decreases, imports will become more expensive and prices will rise. The money in your couch will not grow with inflation and you will be less wealthy. Instead, the smart alternative is offshoring investment: investing money outside of one’s home country. Choosing countries that do not face the same economic uncertainties significantly reduces your investment risk. South Africans can take R11 000 000 out of the country annually (by applying for a foreign investment allowance), and it is easier than ever to do so. Just like solar panels have allowed independence from the Eskom schedule and JoJo tanks from the municipality dams, investing offshore is providing independence from SABC News. Giving a serious incentive for the government to end the misuse of its funds is beneficial for us all. South Africans are, however, showing that even this challenge is not insurmountable. We face clouds every day – all while maintaining our hair, educating our students, and working five days a week.Heritage Insurance Holdings


The distance from Futura Circuits Corp (owned by Raymond) to Heritage Insurance in Florida.
The founding of Heritage Insurance Holdings
On March 14, 2010, the Florida Council of 100 published a paper titled “Into the Storm: Framing Florida’s Looming Property Insurance Crisis”. The quote below, which is found on the second page of the paper neatly summed up Florida’s property insurance problem.
An investment perspective
Heritage insurance holdings (HRTG) would be termed an “asymmetric bet” in the investment industry because its upside is far greater than its downside. The cost to play this bet is the current share price of $1.40. The maximum loss is likewise, $1.40 per share or 100%. But if the stock were to trade at its book value (which it historically has traded at) it puts the upside of the bet at more than 450%. Put down $1.40 and stand the chance to make around $6.00. But, what are the odds? What are the chances that we will make $6.00? This is what makes investing fun, at its most fundamental level, it is a game of probability. There are a few reasons we think the odds are in Heritage Insurance Holdings' favor so that the stock will realize the upside, at least in the short term. The first reason is that the Hurricane season is over.
The risks
What are the odds we realize the $1.4 loss? The probability that South Florida will be hit by a major hurricane in a single year is 6.25%. The image below shows the return periods for major hurricanes. A return period of 20 means that during the previous 100 years a major hurricane passed within 50 nautical miles of that location 5 times.
On recommendation of HG-Research, Heiden Grimaud Asset Management recently bought exposure to HRTG on the 20th October and 15th of November at $1.45 and $1.43 per share respectively. At the 15th November, the position made up 5% of the Fund’s portfolio, however;
None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy.
The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Heiden Grimaud Asset Management.
Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied.
The authors and HG-Research are not responsible for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here
Warner Brothers Discovery
A short history of content and distribution
As technology changes, so does the battlefield: historically, consumers gorged their eyeballs on cable TV. Cable companies, like AT&T or Comcast, often own their own cable TV services and bundle up different TV networks to sell to consumers. They either pay the TV networks for programming rights or they own the TV networks. TV networks (Turner, CNN, ABC, Universal Kids) generally have a mixture of their own content, and acquire rights from production companies like HBO, Disney, Fox, to use their content.
Below is the share of respondents who subscribe to a cable TV service in the United States.





Warner Brothers Discovery
Warner Media and Discovery Inc have merged to create a content behemoth; Warner Brothers Discovery. The new platform with content from Warner Media and Discovery is set to launch in 2023.


David on the left, John on the right.


The investment perspective
The plan for Warner Brother’s discovery is a simple one; one streaming platform. The road there? Laden with debt, and a messy, restructuring. We are extremely confident that the streaming platform will be a success due to the reasons we spoke of above, so that leaves us with 2 main areas we need to focus on; the debt, and the restructuring. As per its most recent filing, Discovery has $50 billion of fixed-rate debt and a negligible amount of floating-rate debt.



Heiden Grimaud Asset Management initiated exposure to WBD before the Discovery Inc. and Warner Media Merger. At the time of this writing, WBD has a 5% weighting the the Fund's portfolio.
Heiden Grimaud Asset Management holds shares in Warner Bros. Discovery, however;
None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy.
The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Heiden Grimaud Asset Management.
Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied.
The authors and HG-Research are not responsible for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here.
An opportunity made in China


Cue: Pink Floyd – Welcome to The Machine

What did you dream?
It’s alright we told you what to dream.
Welcome my son.
Welcome to the machine.
The competition does not cease after the GaoKao, the job market is equally as fierce. Young workers must stand out amongst their peers as they fight for top jobs at renowned companies. This fierce competition birthed the term Jiǔ Jiu Liù (九九六) meaning to work from 9am to 9pm, 6 days a week. The Chinese culture, its dense population, and its economy have spawned a system of ultimate efficiency. What capitalist in China wouldn’t want such devoted labor? Yet the stock market is currently priced as if China’s economy will never get over its long-covid! It is impossible to deny that China ticks the boxes in so many categories from a macroeconomic perspective.Where is the fear coming from? Why is China’s stock index trading at such a low?



The opportunity
The Hang Seng now trades around the same level it did during the global financial crisis in 2008, the 2000 dot-com era, or even during 1997 when China’s GDP was almost half what it is now.
On recommendation of HG-Research the Heiden Grimaud Group on the 27th of October, the 1st of November, and the 23rd of November Heiden Grimaud Asset Management initiated and increased exposure to the MCHI ETF, and KWEB ETF. At the last purchase, the positions accounted for 10% and 5% of the Funds portfolio respectively.
Heiden Grimaud Asset Management recently bought exposure to two different ETFs that track the Chinese stock market, however;
None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy.
The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Heiden Grimaud Asset Management.
Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied.
The authors and HG-Research are not responsible for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here.
Onesoft Solutions – A General Sherman Sapling

Onesoft Solutions
As we ventured through the forest in search of a General Sherman Sapling, we came upon Onesoft solutions - a little SaaS (software as a service) company with 0 known competitors. The company’s seed was dropped in an ideal location, and a number of fortunate events, partnerships, and an excellent management team have accelerated the company and its product, to where it stands today. Before we explain how this company is going to make tons of money and grow extraordinarily big exceptionally fast, we need to understand the company and its industry.Oil & Gas Pipeline problems
There exists 2.7 million miles of Oil & Gas pipelines in the United States. Estimates say that per mile of pipe it costs $7,700 to inspect and maintain. (Remember this $7,700 number it will be important for you later). The extensive process of maintaining and monitoring a pipeline is referred to as Integrity Management. Of the 2.7 million miles of pipe, approximately 660,000 are “Piggable”. Oil & Gas operators use things called PIGs (pipeline inspection gauges) to collect data, clean, and maintain their pipelines. In an activity called “PIGGING”, they will insert the device into the pipeline where it will move through the pipe pushed along by the product (gas/oil). Whilst the PIG is in the pipe, it will clean the pipe and collect data. There are different types of PIGs, some clean, some collect data, but most work in government. ‘Inspection’ PIGs will collect data like temperature, pressure, corrosion, metal loss, bends, and curvature.


The investment case
As much fun as it is to learn about pipelines and their internal processes, it’s a lot more fun to make money off of it. Does our little sapling have what it takes to be another General Sherman? Will there be adequate water, nutrients, space to grow, and a lack of competition? It is impossible to accurately place a value on what Onesoft should be worth currently; it is growing extremely fast, but the speed at which it grows will fluctuate wildly leaving our models inadequate. Its profit margins will also change as the company matures. We have a rough idea of what the total addressable market is from what the company gave us but it also assumes much. Let’s take a look at what we do know: 2022 Revenue should come in at $5m CAD and the company has a gross profit margin of 75%. They recently went cash flow positive and they have grown revenues at 77%+ annually since the rollout of their main product.

Heiden Grimaud Asset Management has no exposure to Onesoft Solutions. It is, however, being closely followed and a trade execution may take place at a lower price level.
Heiden Grimaud Asset Management does not own shares in Onesoft Solutions, however;
None of the information contained here constitutes an offer (or solicitation of an offer) to buy or sell any currency, product, or financial instrument, to make any investment, or to participate in any particular trading strategy.
The information and publications are not intended to be and do not constitute financial advice, investment advice, trading advice or any other advice or recommendation of any sort offered or endorsed by Heiden Grimaud Asset Management.
Any expression of opinion (which may be subject to change without notice) is personal to the author and the author makes no guarantee of any sort regarding the accuracy or completeness of any information or analysis supplied.
The authors and HG-Research are not responsible for any loss arising from any investment based on any perceived recommendation, forecast, or any other information contained here. The contents of these publications should not be construed as an express or implied promise, guarantee, or implication that readers will profit or that losses in connection therewith can or will be limited, from reliance on any information set out here.