Asset Manager Investing in Global Technology Sector

We're an asset management firm allocating our capital into asset classes benefiting from technological innovation and applications globally. We serve as a family office of a tech professional who has spent over a decade as an entrepreneur, operator, and venture investor across Asia and the US.

Our small team is made up of diverse investment professionals who research, identify, and execute relevant opportunities. We occasionally share some of our investment memos, insights, and analysis here.

Friday, June 5, 2020

Q2.2020 - Gravity: Consistency Is The Next Test

  • Having achieved exponential growth over the last three years due to the major success with RMEL, the stock will now be priced based on its consistency in sustaining growth.
  • Anticipating the second wave of success through the launch of strategic RMEL updates in Taiwan and Southeast Asia/SEA in June, we upgrade our neutral rating to buy.
  • Taiwan and SEA are Gravity's largest markets. Both made up almost half of the business in 2019.

We had been cautious about Gravity (GRVY), the developer of the famous Ragnarok game franchise. Back when we covered the stock last October, the stock was trading at ~0.7x P/S despite the business being on track to generate its highest ever annual revenue. Since last October, the share price has jumped by ~55%, while revenue has been in a solid upward trend over the last few years, driven by the success of the RMEL (Ragnarok M: Eternal Love) game. Given the consistency in business performance as of Q1 and the potential catalysts going into the second half, we will upgrade our neutral rating to buy.

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