Ann: 2021 Half Year Results Presentation, page-40

"The "problem" here is that the various portals that FDR owns happen to be in countries of the world which are different to the country in which the stock is listed. "


I don't dispute that is an obviously important issue that we're all aware of.

But what I highlighted with my example with NZM is that it is not the only issue and that there is a reluctance from investors at the moment to place higher valuations on these kinds of businesses, not just those in emerging/frontier markets.

By way of comparison, NZM operates in a developed market. NZM established their OneRoof classifieds portal for real estate only three years ago in 2018. This has grown from zero to become the #2 player in NZ. Digital revenue from OneRoof was up 145%, with total revenue from OneRoof up 30% to $10.5m.

Yet, despite this huge growth from nothing to becoming the #2 player - the market places such a low valuation on the whole business which generated 20%+ free cashflow, while significantly reducing its debt in the middle of a pandemic (it is on track to be debt free very soon).

What I see in NZM is that you get the radio and print businesses at a very attractive price and a wide moat (product and brand leadership in radio and print) - and a free option with NZM to become either the Realestate.com.au for NZ or possibly the Domain of NZ - either scenario would result in OneRoof being valued at multiples of the other media assets.

So back to my point - you have a very strong media business with synergies that are able to drive massive traffic to OneRoof - it operates in a developed market... but the stock market is placing almost no value on the growth trajectory of OneRoof to become a Realestate.com.au or Domain for NZ.

The main point I make is that FDV operating in frontier markets is one factor for the low price, but it is not the only factor.