Asset Manager Investing in Global Technology Sector

We're an asset manager allocating 100% of our capital into public companies and cryptocurrency assets driving disruptive innovation globally. We serve as a family office of an Asia-based HNW family whose key members have made their fortune in the technology industry and are believers in technology as the key enabler of disruptive innovation. We seek to continue the family's legacy in creating and preserving wealth through technology investing.

Our small investment team is made up of diverse professionals who researches, identifies, and executes relevant opportunities. While we are not accepting outside clients and investors at the moment, we occasionally share some of our internal investment memos, market commentaries, and analysis here.

Friday, June 26, 2020

Q2.2020 - Cerence: Secular Growth Opportunity In Automotive AI Market

  • With AI-based virtual assistants becoming more mainstream, Cerence will continue to benefit from the secular demand from the automakers across all tiers.
  • The company has a deep moat and leadership in the automotive AI industry, having spent 20+ years building relationships with major automakers. BMW, Audi, and Ford are all customers.
  • Its fundamentals are rock-solid. Revenue grew 23% YoY in Q2, with operating and EBITDA margins at ~30%.

We believe that Cerence (CRNC), the market-leading provider of automotive AI technology, will continue benefiting from the secular growth of automotive AI-based virtual assistants and maintain its leading position for the foreseeable future. Despite being founded in 2019 as a result of a spin-off from Nuance (NUAN), the conversational AI company we have also rated highly, Cerence has spent over 20 years in the automotive industry as a combined entity, perfecting its technology solutions and developing relationships with the major automakers. At present, we see two medium-term key catalysts in the business as we initiate our coverage with an Overweight rating.

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