Georgia Capital Share Discussion Threads

[chrisdgb] 14/6/2021 09:56

In for some in my pension this morning, looks an interesting situation and Numis think in a ultra bull case, the Bank could be a 100x bagger...!

[flyfisher] 04/5/2021 09:16

Georgian currency weakness has a big effect on uk valuation.

[minusbat] 15/3/2021 12:20

So, what moves the price on this then ? I did a lot of reading and finally
made an investment on Friday last week. Since I now have an interesting in
the country i then follow the news a bit over the weekend, and an earthquake
happens, and there are demonstrations against hydropower. So I went into Monday
thinking "oh dear, thats going to go down on Monday" - but up it goes!
Which makes me wonder what tends to drive this ?

[flyfisher] 05/3/2021 17:05

PJ84, Thanks for that.

[pj84] 05/3/2021 15:50

Further to the post above the following research note helps to clarify that the discount to NAV is now 55% with exposure to the following:-

"GCAP provides geared exposure to the Georgian economy at a wide discount to NAV, mostly through resilient, market-leading businesses in the healthcare services, pharmacy, insurance, water utility, renewable energy and education sectors."

and with the economy expected to rebound with forecast GDP growth of 4.3% in 2021 and 5.8% in 2022 this is as close as you can get to buying £1 coins for 50p. No share is ever risk free but with the wide spread of assets and deep discount to NAV a lot of risk is already priced in.

[epistrophy] 24/2/2021 14:38

Latest NAV north of £10/share.

[jonnybig] 16/11/2020 16:08

Out of the closet?

[robsy2] 16/11/2020 13:22

I’m out.

[jonnybig] 12/11/2020 08:30

Another solid performance but still under the radar. Only got a couple of grand worth here but happy to hold and confident it will one day come good.

[robsy2] 25/8/2020 17:11

Sorry 6.50 GBP is more like it, putting it on a 40% + discount. Cheap but there are other trusts that are cheap as well.
Bear points
Russian invasion, weak and weakening currency serving large amounts of US dollar debt, not a buyer in sight except Miton Global Oportunities( maybe that is a bull point),no track record of succesful exits but that could change.
Bull points
some tasty looking businesses that ought to do well,heavy discount after Covid revaluations,it represents a one stop investment in Georgia which is a small place but seems to be doing quite well. The integration of Georgia Healthcare is a plus.
We need a catalyst to get things moving to get people interested.
Verdict.Hold until catalysts arrive!

[robsy2] 20/8/2020 07:55

Very dense load of info. I pick out the nav per share as around 9quid, after huge write downs. Trading has bounced back. Discount remains cavernous.
Remains to be seen who will buy the shares.

[robsy2] 20/8/2020 07:54

Very dense load of info. I pick out the nav per share as around 9quid, after huge write downs. Trading has bounced back. Discount remains cavernous.
Remains to be seen who will buy the shares.

[robsy2] 24/4/2020 14:48

Me too ash. I havent really looked at it much beyond the original MW article where I concluded that it looked interesting but not in bargain territory, now it looks like it could be . I'll have a closer look now I've got a few.
The deal they are doing makes sense , they will be reporting results soon so there are potential catalysts.

[ash82] 03/3/2020 08:24

Considering discount to NAV and growth potential , I have taken small position.

[loganair] 15/9/2019 11:29

MoneyWeek - Adventurous investors should head for the frontier in Georgia by David C Stevenson 13/08/2019:


Georgia Capital, a London-listed investment fund, is trading on a big discount and looks a good bet for the brave.

One of the great virtues of the London stockmarket is that there’s a healthy number of funds to appeal to investors looking for the next frontier. One of the lower-profile examples is Georgia, a destination that probably isn’t on the radar for many people, but represents an interesting prospect for the brave investor.
Solid fundamentals

Georgia is a tiny state nestled on the western edge of the Caucasus mountain range. It has a population of just 3.7 million, yet boasts a number of advantages. Its government is trying to stay friendly with the West as well as with Russia – although every once in a while its overbearing northern neighbour throws a tantrum and threatens exports.

National markets are steadily opening up to international competition (Turkey is one key trading partner) and Georgia is keen to position itself as a transit point in trade between Central Asia and Europe. Its lack of commodity wealth is also probably something of a positive, making local businesses work harder for their profits.

The economy has been growing at a fairly steady 4% to 6% clip since 2017 with inflation on target to stay below 3%, and a rapidly improving trade deficit. National finances look stable with interest rates at 6.5% and central-bank foreign-exchange reserves steadily growing.
A promising fund

Bank of Georgia, a local bank, has been listed on the main segment of the London Stock Exchange since the spring of 2012. Back in 2018 it decided to de-merge into two separate businesses: Bank of Georgia (LSE: BGEO), the banking business; and Georgia Capital (LSE: CGEO), the investment fund business.

At the time I thought that this investment arm was interesting, but timing wasn’t ideal and the demerger took place at net asset value (NAV), which I thought might be a bit rich. Rows then developed with Russia, which helped knock sentiment and since the demerger the shares have drifted ever lower. At the current share price of around £10 a share, the discount to NAV looks to be about 30%, which strikes me as better.

In simple terms, Georgia Capital is a hybrid fund, containing of two main components. The biggest chunk (60%) consists of substantial holdings in Bank of Georgia (19.9% stake) as well as a 57% stake in Georgia Healthcare (LSE: GHG). These are both performing well. Georgia Healthcare has recently announced a dividend policy, and plans to pay out 20%-30% of annual profit. Bank of Georgia’s shares are still lowly priced, trading at 1.4 times book value, on a price-to-earnings ratio of around five and a dividend yield of over 10%.
Fast-growing private equity

The other portion of the portfolio is a fast-expanding range of private-equity holdings. Recent investments include an 80% equity interest in Green School, the leading affordable private school, and an 80% interest in Amboli, the second-largest auto-service firm. In March, Georgia Capital’s drinks operation acquired the brand name and commercial assets of Kazbegi, the country’s oldest beer brand, for $3.65m (£3m). Meanwhile, the renewable energy business has commissioned the 30MW first phase of the Mestiachala hydro power plant, with a further 20MW second phase under way.

This frenetic pace of activity shows up in the latest reported quarterly numbers which showed a 7.2% return in local currency terms for the first quarter of this year (3.5% in sterling terms) – comprised of a 12.1% total return in local currency from the listed portfolio companies and a 2.1% total return from the private portfolio companies. Overall, I think Georgia Capital now looks like a good bet as long as Georgia can keep on good terms with Russia.

[epistrophy] 13/8/2018 12:43

Well, I have bailed out. Possibly still a good investment, but worrying links with the Turkish economy.

[epistrophy] 07/8/2018 14:19

Very little interest here. I guess we need to wait for the initial results.

If my sums are right, the BGEO and GHG stakes are alone worth the current share price... so you get the other four businesses for free!

[bizochio] 06/8/2018 21:57

Bank of Georgia 1st half results due 16th August. Hopefully CGEO will release results as well around that time but no reason why they should. Currently there is very little clear information with regards their performance. The website says its targeting 10 times return in ten years. I have tried to get out of the old Bank of Georgia results some idea of what CGEO performance might be but it is quite challenging. I suspect that it might take a few cycles of results before people start to get on board. Either that or some really positive news. For what it worth analysts at time of demerger had target prices of £16-20. I continue to hold optimistically based on some good returns from BGEO days. But currently i feel i am watching this share through a thick fog of ignorance.

[pj84] 05/6/2018 18:18

Nice to see the deputy CEO buying £800k's worth of shares.

I'll hang on to mine for a bit longer to see how things go.

[pj84] 30/5/2018 18:18

In the short term the demerger doesn't appear to have created shareholder value lets hope the benefits will be realised in the medium term.

[davebowler] 29/5/2018 11:09

!FOLLOWFEED