Lifco just released its second quarter 2026 results. The numbers are solid, margins are expanding, cash flow is following through. On paper, it looks like a flawless quarter. But when the market is pricing an industrial conglomerate at nearly SEK 147 billion, no matter how high the quality, every nuance matters.

Today I am offering a comprehensive, no-nonsense analysis of this Q2: what is going well, what is worrying, what the CEO is really saying between the lines, and above all, whether the current share price is still justified.

The Quarter at a Glance

Lifco’s Q2 2026 represents a clear acceleration after a sluggish Q1. Here are the key figures for the quarter.

• Revenue: SEK 7,695m (+10.8%), broken down into +4.7% organic growth, +6.6% from acquisitions, and a slight negative currency impact of -0.4%.

• EBITA: SEK 1,776m (+13.7%). The margin climbed to 23.1%, up from 22.5% a year ago.

• Net profit: SEK 1,035m (+17.7%).

• Earnings per share: SEK 2.25 (+17.8%).

• Operating cash flow: SEK 1,104m (+13.7%).

For the full first half, revenue growth reached +7.2%, EBITA rose +10.1%, and EPS climbed +12.8%. The H1 EBITA margin came in at 22.6%, up 60 basis points year-on-year.

It is clean. Not spectacular, but remarkably consistent for a group of this size.

Organic Growth: Decent, But Do Not Get Carried Away

You have to honestly decompose that +10.8% headline growth in Q2. Nearly two-thirds came from acquisitions. The 4.7% organic growth is decent, better than the 2.9% for the half-year, but it is not extraordinary.

Per Waldemarson, the CEO, is himself very measured on the earnings call:

“After a little bit weaker start to the year, we grow in the first six months now with a stronger second quarter.”

He also contextualises part of this growth with a favourable base effect: 2025 was a tough year for the group’s industrial operations.

“2025 was probably the most difficult year for the industrial side of Lifco, at least since the IPO in 2014. This first half year has been a little bit of a comeback situation, more to normality, in 2026.”

In other words, a portion of the 2026 organic growth is a rebound, not a structural acceleration. Keep this in mind when you see Transportation Products up +22% or Environmental Technology up +10.3% in Q2. Those numbers are coming off a depressed base.

Lifco’s real growth engine remains acquisitions. It has always been this way, and it is by design. But it means that without deals, organic growth alone does not justify the current valuation.

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Segment by Segment: Where Value Is Created (and Destroyed)

Starting this quarter, Lifco reports five segments instead of three. Environmental Technology and Transportation Products, previously buried within Systems Solutions, are now standalone business areas. This is excellent news for shareholders: more transparency, less information asymmetry.

Dental: The Strategic Shift That Is Paying Off

H1 revenue: SEK 3,324m (+2.5%) | EBITA margin: 22.8% (+1.7 pts)

Top-line growth is modest (+2.5%), driven mainly by acquisitions (Ethoss Regeneration in the UK, Karl Kaps in Germany). But the margin tells the real story: +1.7 percentage points in a single half-year is massive.

The explanation comes down to one word: mix. Lifco is progressively transforming its Dental business from a pure distribution model into a high-margin proprietary products model. Per Waldemarson spells it out clearly:

“Going back 15 years ago, we were only a distribution business. We still have those companies in the group, but we have gradually, slowly over the last 15 years, step by step, went more into own proprietary products.”

A distributor typically captures 5 to 15% gross margin. A specialised niche manufacturer can reach 40-60%. This structural shift is fundamentally value-creative, and it is not finished.

Recent acquisitions (bone graft materials, dental microscopes) fit perfectly into this logic: ultra-specialised niche products with strong intellectual property that pull the margin upward.

Demolition & Tools: The Weak Spot This Half-Year

H1 revenue: SEK 3,387m (-0.8%) | EBITA margin: 23.9% (-1.3 pts)

This is the only segment in decline, on both revenue and margin. The demolition robot market remains weak, particularly in construction-related applications.

The CEO does not attempt to sugarcoat it:

“We’re quite far away from a good momentum, especially when it comes to more construction-related use of the machinery. If you compare it to how things were three years ago, we’re quite far off from that level.”

And when asked about a timeline for recovery:

“That doesn’t mean that we think that will come in next quarter, or even the next six months. We take, as always, a very conservative approach on the future.”

The good news: Q2 stabilised (+1.8% revenue, margin nearly flat at 25.3%). The worst appears to be behind us, as it was Q1 that proved particularly difficult. The bad news: this segment accounts for 24% of the group’s total EBITA. If it does not return to its 2023 levels (when margins exceeded 25%), it remains a meaningful drag on consolidated profitability.

Product mix is currently working against the segment: attachments (tools for excavators and cranes, 59% of sales) are holding up better than demolition machines (24% of sales), but the latter carry structurally higher margins. When machine sales suffer, the mix deteriorates mechanically.

Environmental Technology: The Hidden Gem of the Group

H1 revenue: SEK 1,745m (+6.3%) | EBITA margin: 26.4% (+1.4 pts)

This is the highest margin among all five segments, by a wide margin. Powered by purely organic growth, with no acquisitions in this perimeter during H1, Environmental Technology demonstrates a classic but powerful operating leverage effect.

The CEO explains the mechanism simply:

“When you get organic decline, it’s very difficult to protect margins, and vice versa, when you get some positive organic development, it’s quite easy to have an operational leverage normally. We have organizations with product developers and sales force. We have better leverage on those organizations. We tend to get better margins.”

The segment also benefits from the recurring nature of the marine aftermarket (52% of segment sales). These are not large-ticket cyclical equipment sales, but a steady stream of spare parts and services.

The EBITA CAGR since 2015 reaches 26.4% for this segment. It is the highest growth rate across the entire group. The fact that it is now reported separately finally allows investors to appreciate its true value.

Transportation Products: The Spectacular Rebound

H1 revenue: SEK 2,205m (+24.5%) | EBITA margin: 23.4% (+1.0 pt)

By far the strongest growth in the group. But you have to read it with context: this segment was the hardest hit in 2025, and the rebound is partly mechanical.

The CEO is transparent about this:

“Last year, I had a general comment that 2025 was the most difficult year in more than a decade for our industrial companies, including Transportation Products. This year, we felt that the markets were a little bit more, I wouldn’t say maybe fully back to normal, but at least more friendly to us.”

Growth is a blend of acquisitions and organic recovery. The EBITA CAGR since 2015 stands at 35.2%, the highest across all segments. This reflects a segment that started from a very low base (SEK 660m in revenue in 2015) and has been built almost entirely through successive acquisitions: Brian James Trailers, Next Hydraulics, Cramaro, CFR, MaxiMover, and others.

Systems Solutions: The Residual Core, Still Growing

H1 revenue: SEK 4,221m (+10.9%) | EBITA margin: 22.0% (+1.0 pt)

After the separation of Environmental Technology and Transportation Products, Systems Solutions now comprises three divisions: Contract Manufacturing, Infrastructure Products, and Special Products.

The key takeaway from the call relates to Contract Manufacturing. After exceptional growth driven by several large contracts over 2024-2025, Per Waldemarson signals a stabilisation:

“The areas that had strong growth since now almost two years, that was more of a normal quarter. Other areas had quite good growth in this quarter.”

The segment integrated Metalltech (architectural expanded metal, Italy) and Glass Umbrella (secondary glazing, UK) during the half-year. Infrastructure Products posted +33.8% growth in H1, the bulk of it coming from these acquisitions.

Cash Flow: The Ultimate Judge

Lifco is not a conventional growth story. It is a cash compounding story. And it is on this metric that performance should be judged.

Free cash flow per share since the IPO: from SEK 1.1 in 2014 to SEK 10.1 in 2026 LTM. That is a CAGR of approximately 20% over 12 years. The dividend has grown from roughly SEK 0.50 to SEK 2.70 over the same period.

H1 2026 operating cash flow reached SEK 1,851m (+6.2%). CapEx remains minimal at SEK 169m, or approximately 1.1% of revenue. This is the heart of Lifco’s asset-light model: outsource production, focus on R&D, sales and assembly, and convert as much profit as possible into cash.

“We try to outsource as much as we possibly can, which leads to an asset-light business group. Most of the companies we acquire, they’re already outsourced from day one.”

One area to watch, however: working capital consumed SEK 810m in H1 (SEK 243m in inventories + SEK 567m in receivables). This is typical during growth periods, but if organic growth decelerates without working capital normalising, cash conversion could come under pressure. Worth monitoring in H2.

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The Balance Sheet: A Fortress With Dry Powder

Lifco’s financial strength is one of its most underappreciated assets.

Interest-bearing net debt / EBITDA: 1.2x. The group’s maximum target is 3x. The gap between the two represents several billion SEK of deployment capacity for future acquisitions.

Total net debt (including put/call options on minorities and leases) / EBITDA: 1.8x. Down from 1.9x a year ago.

The CEO makes no secret of his ambition:

“This also leads to plenty of room for further acquisitions, and we are, as always, continuing to increase our capacity, our way of finding great companies in many different geographies and different subsectors.”

A topic many retail shareholders underestimate: the put/call options. These are contractual commitments under which Lifco agrees to purchase the remaining minority stakes in its subsidiaries. As of 30 June 2026, these options represent SEK 2,787m, spread across 53 contracts, with contractual multiples ranging from 4x to 8.25x EBITA/EBIT.

This amount is a real liability, even though it does not appear in conventional financial debt. You must integrate it into your reading of effective leverage. But it also provides a valuable piece of information: Lifco’s acquisition multiples fall within a 4x to 8.25x EBITA range. For profitable industrial niches, that is reasonable.

Acquisitions: Less Volume, Just as Much Discipline

Four acquisitions were consolidated in H1 2026, with combined annual revenue of approximately SEK 500m. That is a slower pace than prior years (2023: approximately SEK 2.2bn, 2024: approximately SEK 2.0bn).

The four targets for the half-year are typically “Lifco”:

Karl Kaps (Germany, EUR 10.1m): manufacturer of medical and dental microscopes. Ultra-niche.

Ethoss Regeneration (UK, GBP 5.4m): bone graft materials for dental surgery. Strong intellectual property, small scale.

Metalltech (Italy, EUR 15.8m): expanded metal for architectural applications. Product niche.

Glass Umbrella (UK, GBP 11m): secondary glazing. Niche.

After the half-year close, Boscaro (Italy, EUR 9.5m, construction equipment and crane attachments) was consolidated in July.

The CEO is remarkably disciplined in discussing the pipeline:

“We are very quality oriented, and we try to stay very disciplined. Sometimes you get a release and everything comes into play and maybe you make five deals in one month, then suddenly you make only four or five deals in six months.”

And crucially:

“We should always be willing to walk away if we don’t feel comfortable, fully confident, because when we buy a company, we’re going to keep it forever, and it’s a big obligation from our side.”

That is exactly what you want to hear as a shareholder of a serial acquirer. The number one risk with this type of business model is overpaying under deployment pressure. Lifco appears to resist that temptation. For now.

What the CEO Is Really Saying: Reading Between the Lines

A few elements from the call that you will not find in the written report, and that deserve your attention.

Intra-quarter volatility is unprecedented. Per Waldemarson describes monthly swings he has never seen in his 20-year career:

“The difference between months has been the biggest that I’ve ever seen in the last 20 years. And I cannot really make a good conclusion of that.”

“For example, this quarter, April was okay, May was very weak, and June was good.”

He himself admits he cannot determine whether it is linked to geopolitics, holiday shifts in Central Europe, or something else entirely. This is a macroeconomic signal that goes beyond Lifco, but it makes any quarterly forecast highly uncertain.

On pricing, no “extraordinary” increases linked to tariffs or geopolitical tensions. The pricing work is incremental, embedded in the culture of each subsidiary:

“In general, every year, no matter how the market condition is, we are inspiring and we are ensuring that our companies are gradually adapting their pricing and developing better products with higher value for customers, step by step. It’s a constant work in Lifco.”

This is healthy. It means the margin is not being artificially boosted by one-off pricing effects that could reverse.

On component shortages (a question from a Nordea analyst about contract manufacturing and EMS), the CEO confirms difficulties but puts them in perspective at the group level:

“Yes, I think there is component difficulties. We’re quite used to that now. In the recent history, we had a situation like this coming quite frequently. Overall, it’s not a major problem on the Lifco group level. In specific situations, yes, that can be a problem.”

The Lifco Culture: The Real Moat

Beyond the numbers, there is an intangible asset that appears on no balance sheet: Lifco’s decentralised culture. It is what allows the group to acquire family-owned businesses that would refuse to sell to a conventional private equity fund.

The CEO devotes a significant portion of the call to it, and his words are revealing:

“In a decentralized model like Lifco, an industrial conglomerate like us, it’s very important that we focus on areas where we can make a huge difference, not go into segments where volume is the only way to make margin.”

“The people who are doing this job should be the shining stars in our model and not have a brokers level in between.”

“Even though we focus very much on the profits every month, we also invest time step by step in activities to create long-term growth in all our companies.”

It is a model built on trust and autonomy given to local managers. Lifco forces no synergies, relocates no business, imposes no integration. This is what preserves the entrepreneurial DNA of subsidiaries after acquisition.

Slide 12 of the presentation summarises it perfectly: “Lifco basically never sells a company”, “All decisions taken at local management level”, “No forced synergies or integration”, “Lifco has never moved a business”.

Now, the Uncomfortable Question: Valuation

Let us get to the central issue. At SEK 323.60 per share as of 13 July 2026, is Lifco too expensive?

Here is what the FastGraphs chart tells us.

• Market cap: SEK 146.98bn. A heavyweight on the Swedish exchange.

• Blended P/OCF (Price / Operating Cash Flow): 28.18x. This is the multiple at which the market currently values Lifco’s operating cash flow.

• Normal historical P/OCF: 24.54x. The average multiple at which Lifco has traded historically is significantly below the current level.

• FastGraphs Fair Value Ratio: 17.68x. The platform’s calculated “fair value” ratio. We are far above it.

• OCF growth rate: 17.68%. The annualised growth rate of operating cash flow, which is remarkably high.

• OCF Yield: 3.55%. Compare this to the dividend yield of just 0.83%.

• LT Debt/Capital: 18.01%. Confirms a very healthy balance sheet.

What all of this means in practice: the current price sits significantly above the fair value ratio (28.18x vs 17.68x) and even above the normal historical multiple (28.18x vs 24.54x). The market is today paying 15% more than its historical average for Lifco in P/OCF terms.

The chart also visually shows that the share price (the black line) has been trading above the fair value line for several quarters. This is not new for Lifco, which has almost always traded at a premium, but the current gap is at the upper end of its historical range.

So, Buy, Sell, or Wait?

Let us be perfectly candid.

The fundamentals are intact. The Lifco machine is working exactly as intended. Margins are expanding, cash is compounding, the balance sheet is strong, acquisition discipline is maintained, and the decentralised culture is delivering results. Four segments out of five are improving their profitability. The CEO is transparent and conservative in his communication. This is a very high quality investment case.

But quality has a price, and that price is steep. At 28x OCF, you are paying a substantial premium relative to fair value and even relative to Lifco’s own historical average. This means that the slightest disappointment would be severely punished by the market.

For an investment at this valuation level to prove rewarding over the medium term, several conditions must be met simultaneously:

• First, the pace of acquisitions must continue, at reasonable multiples (4-8x EBITA), in an increasingly competitive M&A environment.

• Second, Demolition & Tools must find a favourable cycle again, which is neither predictable nor guaranteed in the short term.

• Third, organic growth must hold or accelerate beyond the current 2.9%, which depends on the macro backdrop.

• Fourth, currency effects must not turn further against the group.

If you are already a shareholder, the good news is that nothing in this Q2 undermines the investment thesis. The fundamentals are solid. The question is whether to add at the current price. On that point, the margin of safety is thin.

If you are not yet a shareholder and wish to initiate a position, discipline would suggest waiting for a pullback toward levels closer to the normal historical P/OCF (around 24-25x), which would correspond to a share price of approximately SEK 275-290, roughly 10 to 15% below the current level. That said, companies of this quality rarely offer “comfortable” entry points. Lifco has traded at a premium since its IPO, and that premium is partly justified.

Consensus estimates (visible on the chart) project OCF per share of SEK 13.23 in 2027 and SEK 14.14 in 2028, implying growth of approximately 13% and 7% respectively. If these projections materialise and the multiple normalises toward 24-25x, this would imply a target price at 18 months of approximately SEK 330-350, meaning limited upside potential of 2-8% from the current level, excluding dividends.

That is not a compelling risk-reward at this valuation.

4 Things to Watch for Q3

1. The pace of acquisitions in H2. If Lifco finishes the year with only 5-6 deals instead of 10-15, it could signal a tougher M&A market. The pipeline is “the most active ever” according to the CEO, but execution is another matter entirely.

2. The trajectory of Demolition & Tools. Stabilisation confirmed, or a renewed downturn? This is the segment with the greatest leverage potential, on both the upside and the downside. The demolition robot market question is central.

3. Working capital normalisation. The SEK 810m consumed in H1 through inventories and receivables must reverse in H2 for cash conversion to remain at the expected level. If it does not, the market will take notice.

4. ROCE. The gently declining trend (129% vs 132% at year-end 2025 excluding goodwill, 20.4% vs 20.5% including goodwill) warrants attention. If it continues, it would raise the question of diminishing marginal returns from recent acquisitions.

Conclusion

Lifco remains one of the finest industrial compounders listed in Europe. This Q2 confirms it. The machine is well-oiled, the culture is robust, the discipline is holding. Per Waldemarson and his team continue to do exactly what they have promised since the IPO: acquire remarkable niche businesses, grant them autonomy, and let time and cash flow do their work.

The issue is not the company. The issue is the entry price. At 28x OCF and a SEK 147 billion market cap, Lifco leaves virtually no margin for error. It is an investment that relies entirely on management’s ability to sustain a near-perfect track record for many more years.

If you believe in that track record (and there are strong reasons to do so), Lifco deserves a place in a high-conviction portfolio. But honesty demands acknowledging that the risk-reward ratio is less favourable today than it has been at other points in the stock’s history.

The next appointment is 23 October 2026 for Q3.

This article does not constitute investment advice. The author may hold positions in the security mentioned. Please conduct your own research before making any investment decision.

The numbers tell a different story. Here’s what you need to know.

Valuation: let’s talk about it honestly

Before diving into the results, a word about what matters most to any investor: the price you pay.

At the current price of 232 SEK, Vitec trades at a P/OCF (Price to Operating Cash Flow) of 7.92x. For a company with a historical growth rate of 19.8% per year, an OCF yield of 12.6%, and an estimated fair value ratio of 19.8x according to FastGraphs, the picture is straightforward: the stock is trading today at less than half its normal valuation.

The historical chart is striking. The price line has fallen well below the fair value zone, something that had virtually never happened over the past 20 years. The market is pricing Vitec as if growth were about to collapse. Yet this quarter’s fundamentals say exactly the opposite.

Operating cash flow per share went from 0.53 SEK in 2006 to an estimated 30.75 SEK in 2026. That’s a 58x multiplier in twenty years. The dividend followed the same trajectory, from 0.09 SEK to an estimated 4.27 SEK. This is a compounder of the finest kind, and it is trading today at a multiple not seen in years.

Does this mean you should rush in? No. But it means that the market is offering you a historically rare entry point on this quality of business model.

What’s going well, and it’s what matters most

Revenue is up 15% to 935 MSEK, including 4% organic growth. The Cash EBIT margin, Vitec’s true cash profitability indicator, rises to 25%, one full percentage point higher than a year ago, with an 18% increase in absolute terms. CEO Olle Backman doesn’t mince words:

“It’s really one of our absolutely best quarters in terms of Cash EBIT performance.”

86% of revenue is recurring. Subscription revenue grew 11%, transaction-based revenue 21%. That last figure is particularly telling: it reflects a real pickup in customer activity, especially in Norwegian real estate where broker Vitec Megler posted over 30% transaction revenue growth.

Operating cash flow for the first half reaches 876 MSEK vs. 843 a year earlier. A quick reminder of how the Vitec model works: nearly all of the year’s cash flow is collected in Q1 thanks to upfront billing of subscriptions. The rest of the year is steady and predictable. This is a model that funds its own acquisitions.

Concrete signs of a recovery

This might be the most important takeaway from the quarter, and you won’t find it in the numbers. You’ll find it in the conference call. Olle Backman was unusually explicit about the improving business climate:

“When you contact a customer, you can get a meeting within a week or two rather than, okay, don’t call me. I will call you in three months’ time.”

Three sectors are driving this recovery: PropTech / property management, healthcare and welfare, and real estate agents (Sweden and Norway). The order book is filling up, sales cycles are shortening, pilots are multiplying.

But Backman warns: none of this will show up in revenue for several months, because the systems Vitec sells are complex and take time to implement.

“If we’re signing orders today, there is an implementation. That’s the beauty of it. We are delivering mission-critical, quite complex systems. It shouldn’t be easy either to just put them in or to take them out.”

It is precisely this complexity that protects Vitec. What takes a long time to sell also takes a long time to lose.

AI: what you need to understand once and for all

The market is treating Vitec as if ChatGPT were about to replace a Finnish power grid management ERP or a Danish pharmacy software. This is a fundamental misunderstanding of what Vitec does.

Backman was very clear on this during the call:

“We haven’t really seen any customer churn just on the basis of AI yet. You don’t rewrite an entire ERP system that easily, and for sure you don’t exchange it. These are very slow-moving things, and they should be. That’s why they are mission critical.”

The reality is the opposite. AI is becoming a growth lever for Vitec, not a threat. Several concrete examples were shared during the conference call:

Vitec Fastighet (property management in Sweden) has spent the past two years building an ecosystem of AI agents integrated into its software. The system is evolving from a simple “system of records” into an intelligent platform with automated customer support, text generation, and multilingual assistance.

Vitec Acute (healthcare in Finland) is automating clinical documentation through AI, while respecting the regulatory and security constraints specific to the hospital sector.

Vitec Tietomitta (waste management in Finland) has fast-tracked the development of a brand-new version of its software using internal AI tools.

Vitec Energy is using AI to improve the quality and diversity of energy forecasting models delivered to its clients.

The crucial point: customers are starting to ask for these features. Backman notes a shift in tone compared to the previous quarter, when customers were still cautious.

“For sure, there’s more interest, more openness, and willingness to try as well. They usually do pilots and things like that. We have lots of that ongoing at the moment.”

And most importantly, this added value can be monetized:

“If you can prove to your customer that by using this, for instance, some agentic function, their processes become more easy, they can save money on it. You have a possibility to have a dialogue around, okay, what is the customer value and what part of that should we be rewarded for?”

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What deserves your vigilance

A good analyst doesn’t only look at what shines. Here are the points to watch.

Debt has risen sharply. Net interest-bearing debt goes from 2,105 MSEK to 3,013 MSEK in one year, a 43% increase. Add in acquisition earn-out commitments (627 MSEK) and you reach 3,639 MSEK in total adjusted debt. Vitec issued 700 MSEK in bonds in February and drew 1.3 billion from its credit facility during the half. Net financial expenses rose 20% to 63.5 MSEK for the semester. The equity-to-assets ratio dropped from 48% to 44%.

This is not alarming given the predictability of cash flow, but the trajectory is expansionary and deserves to be monitored quarter after quarter.

Organic growth remains modest. 4.4% on subscription recurring revenue in Q2. Backman was transparent during the call: roughly 2 to 2.5% comes from price increases (CPI-indexed, declining vs. last year) and the rest from new volumes. He expects pro forma organic recurring revenue growth of around 5 to 6% on a normalized basis, perhaps one point less as the inflationary tailwind fades.

“The pricing component will go down a bit. That leaves it at the number of roughly 5%-6%, where we have seen over the years that that has been a fairly normal number for us.”

The tax rate is structurally higher. 26% in both Q1 and Q2, above historical levels. The reason is simple and lasting: Vitec is generating more and more profits outside Sweden (Netherlands, Belgium, Poland, Finland), in jurisdictions with higher corporate tax rates. Backman confirmed that the current level is the right proxy going forward.

No acquisitions in Q2. Vitec signed nothing this quarter. Two deals were closed in Q1 (Autonet and Infometric, combining roughly 190 MSEK in revenue). The M&A pipeline is active, but Backman is emphatic about valuation discipline:

“We are really not driving the prices upwards anyway, we are still losing more than we’re winning because we really firmly believe that we will put a fair value on this asset.”

This is reassuring for long-term shareholders. Vitec does not overpay to grow.

The accounting change: what you need to remember

Starting this quarter, Vitec reports revenue from two subsidiaries (Enova and BidTheatre) on a net rather than gross basis (so-called “agent accounting”). In practice, Enova which previously showed roughly 300 MSEK in revenue now appears at roughly 100 MSEK, and BidTheatre goes from roughly 150 MSEK to roughly 36 MSEK.

Net income, cash flow, EPS and financial position are completely unchanged. Only reported revenue drops by approximately 8% and margins mechanically rise by 2 percentage points. All historical figures have been restated going back to Q1 2023 to ensure comparability.

This is a technical adjustment in line with ESMA guidelines, intellectually more honest, but it complicates comparisons with older reports or articles.

My overall take

Vitec delivered a solid quarter, fully in line with its model. The company is doing exactly what you own it for: generating recurring cash, acquiring with discipline, gently pushing prices higher in captive niches, and starting to turn AI into an organic growth lever rather than a threat.

The market is currently pricing a disruption scenario that does not match the operational reality of 49 business units deeply embedded in their customers’ workflows. When your software manages the clinical documentation of a Finnish hospital or the energy balance of a district heating network, nobody replaces you with a prompt.

At 7.9x operating cash flow, versus a historical average of nearly 20x, the market is offering you an entry point that long-term shareholders have almost never seen. This guarantees nothing in the short term. But for those who understand this business model and are willing to be patient, the risk-reward is currently tilted in the buyer’s favor.

The real risks lie elsewhere: rising debt, structurally single-digit organic growth, and an acquisition market that could become more expensive if AI makes small vertical software companies more profitable and therefore pricier.

But for a patient shareholder, the fundamentals of this quarter are reassuring.

As always, this is not investment advice. Do your own research, read the full report, and never make a decision based on a single source.

As always, this is not investment advice. Do your own research, read the full report, and never make a decision based on a single source.

Vitec Software Q2 2026

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“I am prepared to hold a position for several years if necessary. The market always recognises value, but it does so on its own schedule, not mine.”

Pierre Winter, My Investment Strategy

This approach demands patience and a conviction rooted in rigorous analytical work. I wait for significant corrections, ideally 30 to 40% or more from all-time highs, before building a position. On Equities 123, every company is the subject of a 30 to 80 page analysis, backed by hard numbers, with no complacency.

Today, I am offering you an overview of ten companies analysed in recent weeks. Five high-conviction names (Part 1), followed by five under-the-radar ideas that are equally compelling (Part 2). For each, a few lines of context, the key figures, and a link to the full deep-dive.

PART 1: Five High-Conviction Holdings

1. Alibaba Group (BABA / 9988.HK): The Chinese Titan in the Age of AI

Alibaba operates the world’s largest e-commerce ecosystem by transaction volume, owns China’s leading cloud computing platform, and develops artificial intelligence models used by hundreds of millions of people. The company has a market capitalisation of $266 billion, employs 131,462 people, and recently announced an investment plan of RMB 380 billion ($55 billion) over three years in full-stack AI infrastructure.

The paradox is striking. The fiscal year ended 31 March 2026 shows an adjusted EBITA down 56% (RMB 76.4 billion versus 173 billion the prior year) and a free cash flow turned negative for the first time in recent history: an outflow of RMB 46.6 billion, representing a swing of RMB 120 billion in twelve months. And yet, CEO Eddie Wu speaks of a “historic inflection” and “full-stack AI leadership.”

“I read all 250 pages of the financial filings. I dissected the earnings call transcript word by word. I confronted management’s enthusiastic narrative with the cold, hard numbers on the balance sheet.”

Full Analysis: Alibaba,

Key metrics: P/OCF blended 18.21×, OCF growth 13.54%, gross margins 39.48%, operating margin 5.82%, net margin 10.35%. CFO Toby Xu compares the period to “building two factories: an AI training factory and an inference factory” and promises a return on investment that will be “extremely clear within 3 to 5 years.”

2. ANTA Sports (2020.HK): The “LVMH of Sportswear”

In 1987, a 17-year-old kid who had just dropped out of school borrowed 10,000 yuan from his father, a cobbler in Fujian province, to buy 600 pairs of sneakers. Today, Ding Shizhong is worth $8 billion according to Forbes, and his company ANTA Sports is the 3rd largest sportswear group in the world behind Nike and Adidas.

ANTA is not a sports brand. It is a multi-brand empire:

• ANTA, FILA (exclusive rights across Greater China),

• DESCENTE,

• KOLON SPORT,

• JACK WOLFSKIN,

• MAIA ACTIVE, and above all a ~52% stake in Amer Sports (Arc’teryx, Salomon, Wilson). Since January 2026, the group is set to become PUMA’s largest shareholder with 29% of its capital for $1.8 billion.

“Great acquisition. Great management. Great operation.” This is the phrase Ding Shizhong repeats at every investor presentation. It sums up the entire doctrine.

Full Analysis: ANTA Sports,

Key metrics: P/OCF 8.97×, OCF CAGR 18.28% over 14 years, gross margins 61.78%, operating margin 20.06%, ROIC 16.86%. FILA, acquired for $80 million in 2009 when the brand was losing money in China, now generates RMB 7.4 billion in operating profit per year: a 100× multiple on the initial capital deployed.

3. Constellation Software (CSU.TO) and Its Spin-Offs: Topicus (TOI) / Lumine

Constellation Software is the world’s benchmark serial acquirer. Since its IPO, the company has completed more than 800 acquisitions of vertical-market software businesses, growing its OCF per share from CAD 9.63 (2013) to CAD 170.91 (2025), a CAGR of 28.48%. Yet the stock has fallen more than 50% from its highs, dragged down by fears of AI disruption in vertical software.

I published a full analysis of Constellation Software on Bourse 123, which I invite you to read (or re-read) to understand the model, the governance, and the group’s key metrics in depth.

Bourse 123

Constellation Software (CSU) : Analyse Complète du Serial Acquirer N°1 Mondial

1. Quand le marché panique, les chiffres parlent…

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4 months ago · 6 likes · 6 comments · Pierre Winter

Its European spin-off, Topicus.com, perfectly illustrates the dynamic. FCFA2S (Free Cash Flow Available to Shareholders) jumped +23% to €218.7 million in 2025, revenue crossed €1.55 billion (+20%), and the acquisition engine is running at full speed with €336.6 million deployed in M&A. Yet the stock has fallen 51% from its all-time high.

“While the business is accelerating, the stock is collapsing. The market is treating Topicus as if it had the plague. Why? One word: Artificial Intelligence.”

Full Analysis: Topicus,

Key metrics (Topicus): diluted P/FCFA2S ~23.4×, organic growth 4%, total growth 20%, recurring revenue 70.7% of sales. A point the market ignores entirely: the 23% stake in Asseco Poland carries an unrealised gain of ~€515 million, nearly equivalent to the current incremental market capitalisation.

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My Quality Contrarian strategy does not consist of buying any beaten-down stock in hopes of a mechanical bounce. It is the exact opposite of a speculative bet. The goal is to identify companies of exceptional operational quality wide moats, recurring cash flows, aligned management that happen to be going through a phase of excessive market pessimism.

The kind of moment when everyone is looking the other way, when the financial press is running catastrophe headlines, and when valuation multiples compress far beyond what fundamentals justify.

It is uncomfortable by nature. But historically, it is precisely in these zones of discomfort that the most compelling asymmetric returns are found.

This month, five European stocks eligible for the PEA catch my attention. Five countries, five angles, five degrees of conviction.

N°1: Prosus (PRX)

The treasure chest trading at a 35% discount that the market refuses to open.

The Story

In 2001, an obscure South African media conglomerate named Naspersfounded in 1915 as an Afrikaans-language newspaper publisher wrote a check for $32 million to acquire 46.5% of a young Chinese startup that nobody in the West had ever heard of: Tencent.

Twenty-five years later, that stake is worth approximately $135 billion.

That is a return of over 4,000x. Probably the single greatest investment in the history of finance. Not a hedge fund. Not a sovereign wealth fund. An Afrikaans newspaper publisher.

The man behind this stroke of genius? Koos Bekker, who had studied media in the United States and understood the potential of digital in Asia. The entire world had passed. Bekker saw what no one else could see.

In September 2019, Naspers created Prosus by housing its Tencent stake and its international e-commerce portfolio inside it, then listed the entity on Euronext Amsterdam. The objective: to offer international investors simplified access to these assets, and to reduce the structural discount that weighed on Naspers in Johannesburg.

Key Facts & Recent Developments

Today, Prosus represents: ~€95 billion in market capitalization, a NAV of $171.6 billion, and therefore a discount of approximately 35%. Put differently: by purchasing one share of Prosus, you are getting €1 of assets for roughly 65 cents.

The Tencent stake (22.8% of capital, ~$134.7 billion) alone accounts for 76% of gross asset value. When Tencent rises 1%, Prosus’s NAV increases by approximately $1.35 billion.

But Prosus is not just Tencent. It is also:

• iFood in Brazil: the undisputed leader in food delivery, $1.3 billion in revenue, 17% margin growing at a blistering pace, 70 million customers, and a restaurant core business already posting a 28% margin.

• OLX Global Classifieds: $788 million in revenue, 35% margin, with organic growth of 18%.

• Just Eat Takeaway, acquired for €4.1 billion and delisted in November 2025, Bloisi’s bet on the consolidation of European food delivery.

• Despegar, the leading travel agency in Latin America, acquired in May 2025 for $1.7 billion.

The new CEO is Fabricio Bloisi, founder of Movile and former head of iFood, appointed in July 2024. His compensation package is almost entirely variable: 97% in long-term incentives. And he has a “moonshot” bonus of $100 million that will ONLY be paid if the combined market cap doubles AND the TSR exceeds the median of a peer group that includes Alphabet, Amazon, Meta, Mercado Libre, and Booking.

During the H2 FY2025 earnings call on June 23, 2025, Bloisi declared:

“I had promised 400 million, I delivered 443. That’s a good start. But in my opinion, these are still small numbers. They are going to grow a lot.”

“443 million is small. It’s going to get much bigger because I now have 30,000 people who believe we are going to do much better next year, and we will.”

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The Smart Angle

What very few people mention: the massive share buyback program launched since June 2022 has already returned ~$42 billion to shareholders, repurchased ~30% of the free float, and generated an accretion of +18% on NAV per share. In other words, every single day that the discount persists, the buyback mechanically creates value for remaining shareholders. It is a machine that reduces the share count on an asset whose intrinsic value keeps growing. The LTV stands at only 3%, an ultra-conservative level, and the credit rating is investment grade (BBB at S&P, Baa2 at Moody’s).

The market continues to treat Prosus as a simple passive vehicle on Tencent. But under Bloisi, the food + travel + fintech + classifieds ecosystem in Latin America is taking shape. And if iFood alone is worth $7.6 billion (consensus of 12 analysts), the entire non-Tencent portfolio approaches $42 billion, a value that the market is effectively giving you for free at the current price.

Golden opportunity or value trap? For me, the answer is clear. Prosus is my strongest conviction to date.

Full deep dive :

N°2: Vitec Software Group

The Swedish serial acquirer down 57% that the market threw out with the AI bathwater.

The Story

1985, Umeå, Sweden. Two engineers, Lars Stenlund and Olov Sandberg, create an energy management software for Nordic utilities. The company remains a conventional software publisher for about a dozen years. Then comes the epiphany: 70 to 80% of the operational challenges facing vertical software companies are identical. Only 20–30% relate to specific domain knowledge.

Vitec could therefore acquire and operate software publishers across very different niches. The serial acquirer model was born.

Today, Vitec is: 49 business units, 22 verticals (energy, real estate, healthcare, finance, automotive, religious associations…), 13 countries, 26,500 B2B customers, 1,770 employees, and revenue of 3,633 MSEK. Churn is below 1% per year, an exceptional level that confirms the mission-critical nature of the software. Recurring revenues represent 88% of total sales.

As CEO Olle Backman stated during the earnings call:

“We can count on these cash flows. We can make a fair assumption of the predictions. The risks or the fears that are out there, we can’t really see them yet.”

Key Facts & Recent Developments

The stock has lost ~57% from its highs. The share price went from 590 SEK to approximately 234 SEK. The “SaaS + AI” sector panic hit full force: the market fears that AI agents (Claude Code, Cursor, etc.) will render niche vertical software obsolete. Forbes estimates that global SaaS stocks have lost more than $1 trillion in 2025–2026.

Yet the fundamentals tell a different story. Operating cash flow grew +17% to reach 1,110 MSEK. TTM FCF exceeds 970 MSEK. Dilution has stopped dead: for the first time in ten years, the share count remained perfectly stable. And the 200 MSEK in earnouts clawed back on 5 acquisitions prove the pricing model works: when sellers don’t deliver, Vitec doesn’t pay.

Backman was transparent:

“I’m really pleased with the growth. But we have a tradition to grow our profits faster than our topline. And that has not been the case for 2025. So in terms of efficiency, there’s more to do for sure.”

A CEO who publicly acknowledges he hasn’t met his own target that is a good sign of corporate culture.

The Smart Angle

At ~234 SEK, the market is valuing Vitec at ~9.5x FCF, its absolute lowest, 75% below its historical median of 37.8x. That is a multiple lower than many utilities or regional banks, applied to a vertical software publisher with 88% recurring revenues and near-zero churn.

What the market is not pricing in: mission-critical vertical software is precisely the last category to be disrupted by generalist AI. The software for industrial laundry management, building energy metering, Danish pharmacy management no LLM is replacing that tomorrow. As Backman put it: customers want to benefit from AI, but “please don’t change anything” is often the sentence that immediately follows their enthusiasm.

Founder Lars Stenlund remains on the Board of Directors with voting control for 40 years. Management refused to overpay for acquisitions in 2025, completing only 2 (versus 7 in 2024), because prices were too high. That is exactly what you want to hear from a disciplined serial acquirer.

“We have looked at just as many companies (~300), but we have just lost more because we are still quite prudent when it comes to pricing.”

N°3: Novo Nordisk

The dethroned king of GLP-1 at 10x earnings, when the market buries a century-old company.

The Story

1922. August Krogh, Nobel Prize laureate in Medicine, is on a lecture tour in the United States. His wife Marie, herself a physician and, crucially, a diabetic, convinces him to make a detour to Toronto, where Banting and Best have just isolated insulin. Krogh obtains the manufacturing license for the Nordic countries. On March 13, 1923, the first Danish patient is treated. Novo Nordisk was born from an act of conjugal love.

A century later, it is the world’s largest manufacturer of insulin and GLP-1 treatments. Ozempic, Wegovy, Rybelsus these names have become global cultural phenomena. The company treats more than 45 million patients worldwide, produces half of the world’s insulin from its factory in Kalundborg, and generates tens of billions of DKK in profit every quarter.

Key Facts & Recent Developments

Novo Nordisk has lost more than $300 billion in market capitalization in 18 months. The stock went from DKK 1,050 at its September 2024 peak to DKK 220 in March 2026, a destruction of value of nearly 80%. Eli Lilly launched Zepbound with superior clinical results (~22% weight loss versus ~15% for semaglutide). CagriSema, which was supposed to be the response, missed its primary endpoint. The historic CEO departed. The Trump administration’s MFN agreement imposes reduced prices on GLP-1s in the United States.

Then came the turnaround. The Wegovy pill, launched January 5, 2026, shattered all records: more than 2 million prescriptions in 16 weeks, more than 1 million patients treated. Wegovy HD (7.2 mg, 20.7% weight loss) is approved. The stock rebounds to ~289 DKK.

The CFO during the Q1 earnings call:

“We believe that we are hypercompetitive in terms of unit cost in producing sema and hypercompetitive in terms of scale.”

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The Smart Angle

What almost nobody mentions: Novo has built a direct-to-patient distribution network through partnerships with Hims & Hers, Ro, LifeMD, WeightWatchers, Sesame, and its own NovoCare Pharmacy. On March 31, 2026, the company launched the first multi-month subscription program for an FDA-approved anti-obesity treatment, a model borrowed from tech SaaS, applied for the first time to a chronic medication. From $329/month on a 3-month plan to $249/month on a 12-month plan.

“Around 20% of the growth sales is coming from telehealth channels” in the largest markets outside the US, confirmed Emil Kongshøj Larsen.

This is not the first time Novo has bounced back. In 2016–2017, the insulin pricing war had already sent the stock down 40%. The response was the pivot to Ozempic and Wegovy. The stock subsequently multiplied by 8. Novo’s ability to rebound through innovation after pricing crises is a documented historical pattern.

At the current price, the stock trades at approximately 10–11x earnings, a P/E ratio not seen in a decade, and offers a dividend yield of ~4%, historically high for Novo (typically 1.5–2%).

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A frank and uncompromising deep dive.

📖 To read my full and in-depth analysis of Prosus (investment thesis, company history, detailed valuation), click here on my Substack

1. Key Figures : What You Need to Know

Let’s start with the raw facts, fiscal year ended March 31, 2026 vs March 31, 2025:

• Consolidated revenue (ecosystem): US$9.7 billion, up 57% on a headline basis (+12% organic, excluding acquisitions and FX). Headline growth is largely fueled by the acquisitions of Just Eat Takeaway (JET) and Despegar.

  

• Ecosystem aEBITDA: US$1.3 billion, +84% (+44% organic). All regional ecosystems are now profitable.

• Ecosystem aEBIT: US$913 million, +87% (+56% organic).

• Core Headline Earnings (after-tax operating profit): US$8.3 billion, +13%. This figure includes the massive contribution from Tencent.

  

• Total Free Cash Flow: US$1.5 billion (vs US$1.0 billion in FY25), or +48%. Excluding the Tencent dividend, FCF goes from US$18m to US$275m — a major qualitative leap.

  

• NAV (Net Asset Value): US$146.3 billion, or €60.5 per share.

  

• NAV discount: ~37%.

• Central cash: US$9.5 billion.

• Central debt: US$15.9 billion.

• Net debt: US$6.6 billion.

• Cumulative buyback: US$46 billion returned to shareholders since June 2022, reducing the free float by 32% and generating 16% NAV per share accretion.

• Dividend: 28 euro cents per share, up 40%.

2. What’s Going Well

The profitability engine is accelerating

Prosus’ central narrative over the past two years “we will become profitable” is now a done deal.
Ecosystem aEBITDA has tripled in three years (from ~US$430m to US$1.3 billion). Free cash flow excluding Tencent went from -US$600m to +US$275m in three years. This is no longer a promise it’s a trajectory.

OLX, the hidden gem

OLX is the operational jewel of the group: US$992m in revenue (+28%), US$481m aEBITDA (+53%), 48% margin. The Motors segment boasts an EBITDA margin of 59%. It’s a cash machine comparable to the world’s best classifieds businesses (Scout24, REA Group). OLX’s implied valuation in the NAV (US$8.8 billion) still looks conservative.

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iFood remains a resilient leader

Despite “aggressive” competition (management’s own words), iFood holds course: +40% revenue, US$400m aEBITDA, 28% margin. The iFood ecosystem (fintech, Clube loyalty, grocery, pharmacy) is diversifying seriously: pure food delivery now accounts for only 67% of revenue (vs 83% a year earlier).

PayU finally reaches profitability

After years of losses, PayU India posts a positive aEBITDA of US$18m. The credit segment swings from -US$28m to +US$6m. It’s modest, but the signal is clear.

The buyback keeps creating value

US$5 billion planned for FY27. At a 37% NAV discount, every buyback destroys discount and enriches remaining shareholders. Since 2022, the programme has generated US$35 billion in value creation according to management. The free float has been cut by a third.

Despegar: the ecosystem made real

21% of Despegar’s B2C revenues in Brazil already come from iFood customers. Gross bookings at US$5.9 billion, +29%. The ecosystem synergy is no longer a PowerPoint it’s a P&L.

🎬 Watch my complementary video analyses on YouTube

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3. What’s Concerning ⚠️

JET: the $4.9 billion bet that remains unproven

Prosus acquired Just Eat Takeaway for approximately US$4.9 billion (€4.2 billion). In six months of integration: US$1.9 billion in revenue, but only US$83m aEBITDA and US$8m aEBIT. Orders are down 7% year-on-year. Management acknowledges that “performance remains uneven outside focus cities” and that “order decline continues at prior rates” in non-priority markets.

Management guides for +US$3.6 billion in revenue and +US$100m aEBITDA in FY27. In other words: after a full year, JET should be a glorified breakeven on an asset bought for $5 billion. The 25% growth in “select cities” is encouraging, but extrapolating a local pilot to a pan-European platform is a perilous exercise.

JET is today the group’s single largest execution risk. The history of European food delivery is littered with players that never found sustainable profitability.

iFood FY27: management warns of a sharp pullback

The most important passage in the report, which the market may underestimate: “Investment will reduce iFood’s FY27 aEBITDA to between US$100m and US$150m” (vs US$400m in FY26). That’s a 60 to 75% drop in profitability for the group’s top operational asset. The reason: massive investment to fend off aggressive competition (likely Mercado Libre and quick-commerce players).

This is not trivial. Management is betting these investments will preserve long-term leadership, but in the short term, this will mechanically compress FCF ex-Tencent and make the “rising profitability” narrative far more nuanced in FY27.

Impairments: Stack Overflow and GoodHabitz struggling

The group booked US$482m in write-downs, primarily on Stack Overflow and GoodHabitz, acquired a few years ago. The report is explicit: “These businesses are not performing in line with expectations at the time of acquisition following disruption caused by generative AI.” When your own AI strategy destroys the value of an asset you bought, it’s a welcome sign of humility but also a reminder that Prosus’ M&A track record remains imperfect.

eMAG: flat in a world that moves

The Romanian e-tail giant reports revenue flat at US$2.5 billion with US$100m aEBITDA. In a competitive environment (Temu, Shein, Amazon), stagnation is not a success. The group doesn’t hide the “macroeconomic pressures and increasing competition.”

The IFRS operating result is negative

Behind the adjusted metrics (aEBITDA, aEBIT), the IFRS reality is less flattering: IFRS operating loss of -US$173m (vs +US$173m the previous year), driven by intangible amortisation from acquisitions and impairments. This doesn’t undermine the operational trajectory, but it’s a reminder that the “adjusted” figures management uses are chosen to tell the best possible story.

4. The Tencent Stake : The Elephant in the Room

The facts

Prosus holds 22.66% of Tencent as of March 31, 2026. At Tencent’s current price (HKD 423), this stake is worth US$110.9 billion — or 76% of Prosus’ total NAV.

Tencent delivered in 2025: revenue of RMB 751.8 billion (+14%), non-IFRS profit of RMB 259.6 billion (+17%), and massive shareholder returns (HKD 41 billion in dividends + HKD 80 billion in share buybacks).

Dividend received by Prosus: US$1.2 billion in FY26, plus an additional US$1.4 billion in June 2026.

The monetisation strategy

Prosus sells a small slice of Tencent each year to fund its buyback (stake down from 23.5% to 22.66% over the fiscal year, realising a US$4.7 billion gain). Management states that “the significant stake in Tencent will be maintained for the foreseeable future.”

The structural problem

With Tencent at 76% of NAV and the proprietary ecosystem (LatAm + Europe + India) at roughly US$35 billion, Prosus remains fundamentally a vehicle for accessing Tencent with ancillary operations. The “Prosus Plus” ratio touted by management (6.5x the Tencent dividend in ecosystem value) is a marketing construct.
The reality: if Tencent drops 20%, Prosus’ NAV collapses by 15%, regardless of what iFood or OLX do.

Diversification is real on an operational level (US$9.7 billion in proprietary revenues), but it remains marginal in valuation terms. Buying Prosus means first and foremost buying Tencent at a discount — and incidentally a collection of operational assets in the midst of a turnaround.

As Charlie Munger said: “All intelligent investing is value investing — acquiring more than you are paying for.” The question is: are you paying for Tencent at a bargain price, or are you funding management’s operational ventures with your discount?

5. My Verdict : What I Tell My Subscribers

The analysis in one sentence

Prosus is today a structurally undervalued vehicle that executes better than three years ago, but whose risk/reward profile depends almost entirely on your conviction on Tencent and your patience with the holding discount.

The bull case

At €38.5, you’re buying roughly €60.8 in NAV (discount 37%). Even applying a “legitimate” discount of 20-25% (complexity, governance, holding structure), the stock is undervalued by 15 to 20%. The buyback at these levels is massively accretive. Free cash flow ex-Tencent is finally positive. The operational ecosystem is gaining credibility.

What keeps me from getting euphoric

The iFood FY27 warning (aEBITDA dropping from $400m to $100-150m) will weigh on sentiment. JET is a $5 billion bet with uncertain ROI. Management has historically overpaid for certain acquisitions (OLX Autos, Stack Overflow). The discount could remain persistent if the market doesn’t buy into the transformation.

Conviction level: MODERATE TO HIGH

The investment case rests on three pillars:

• Tencent as a world-class asset bought at a discount

• A value-accretive buyback that mechanically shrinks the discount

• An operational ecosystem progressing toward self-sufficiency

Two of these three pillars are clearly working. The third (the ecosystem) is moving forward, but FY27 will be a serious test.

What would change my mind

Three red flags that would make me exit:

• A significant halt or slowdown in the buyback

• A lasting deterioration of iFood’s position against competitors (market share loss >5pp)

• A Tencent correction of more than 30% with no response from management

Conclusion : The Line That Stays

“Price is what you pay, value is what you get.” Warren Buffett

Prosus offers you today €60.8 in assets for €38.5, a management team that executes better than before, a buyback that works for you, and first-rate exposure to the emerging digital economy.

But make no mistake: you’re buying Tencent first, an operational turnaround second, and a promise that the discount will narrow third. If you’re patient and believe in all three components, Prosus is one of the most asymmetric opportunities in the market. If you want 12-month visibility, move along — FY27 will be turbulent.

Patience is the ultimate compounding return. But it only pays off if management deserves your trust. On that point, the jury is still out.

📖 This article is a summary of my conclusions. To read my full analysis on Prosus — company history, detailed investment thesis, segment-by-segment valuation, and exit scenarios — find the complete article here on my Substack

Sources: Prosus FY2026 Media Release, Summary Financial Information Booklet, FY2026 Results Video Transcript, NAV Consensus (June 29, 2026). PRX.AS price as of 06/29/2026.

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