KINNEVIK

Kinnevik occupies approximately 20% of my total portfolio value. This is not a fluke! The reason why Kinnevik is my most significant asset is that I believe the company is exceptionally well managed and has an excellent long-term strategy which has revealed itself to be beneficial for their shareholders including myself.

Kinnevik most substantial assets comprise of Millicom and Zalando which together constitute almost half of their NAV. Two companies which have during 2017 seen a positive overall growth rate even though Millicom didn't have it easy.

Millicom

Millicom International Cellular SA for people who don't know is an international telecommunications and media company. They are engaged in providing digital lifestyle services in various markets, through mobile and fixed telephony, cable, broadband, and television. Its segments include Latin America and Africa and operates its mobile businesses in Central America and Africa.

If we look at Millicom's market performance during 2017, we can see that EBITDA in Africa declined with 15.9% year-on-year, due to the decline in revenue whereas growth of 3.1% was achieved in Latin America. This led the company to take a strategical decision to reallocate capital from Africa into Latin America, where they can generate attractive returns on capital.

Going forward, Millicom expects 2018 service revenue in Latin America to grow by between 2 and 4% while EBITDA growth is projected to be between 3% and 6% year-on-year in constant currency which should provide some security for Kinnevik and their shareholders.

I believe that the company will continue to progress in Latin America while decreasing their market exposure in Africa which consequently should result in a positive outcome ahead.

Zalando

Zalando operates as an online fashion retailer in Europe and offers a range of products, including clothes, shoes, and accessories for women, men, and children.

For the 2017 fiscal years, Zalando pulled off a strong finish generating revenues of EUR 4.48-4.5 bln, up by 23.1-23.7%. Its adjusted EBIT for the same period is expected to come in at a margin of 4.7-4.9% or EUR 209-222 mln.

I hold Zalando in high regard. I like their business model, platform and the service they offer their clients. It is a breath of fresh air compared to how slow-moving retail companies in Sweden has been in adopting a complete e-commerce solution and what it entails. Zalando does not only offer a stellar service but also has a significant market position in the online segment in Europe which will help them fend off the fierce competition from, e.g., Amazon.
Another reason why I believe the company is doing something right is that they are financing their expansion as well as having a 5% margin which signifies that they are still cash flow positive and an overall healthy company.

MTG

Well, I couldn't stop there as there is another company which I am very excited about; Modern Times Group. For MTG, this has been a pretty eventful week. It began with an announcement from TDC stating that are looking to buy MTG's TV business in $2.5 billion Nordic media deal. A couple of days later TDC confirmed that it received an indicative proposal from a consortium involving a contemplated change of control of the company which could jeopardize the whole MTG deal. As it stands today, we cannot know for sure that the agreement between MTG and TDC will go through, but the chances seem to remain high.

If MTG does sell their TV business, only MTGx will remain with a focus on e-sports and gaming. I believe this would be one of the most significant achievements of 2018 as MTGx is the business that has the highest growth potential in a market which is valued at nearly 696 million U.S. dollars in 2017. According to research, the global eSports market revenue will reach 1.5 billion U.S. dollars in 2020. The eSports industry is expected to proliferate in the coming years. Not only is the market huge, but investors who are looking for a stable company with cash to spend within the e-sport segment would now see MTGx as excellent investment potential.

I believe in the e-sport segment has a bright future and can only observe how the younger generation is entirely obsessed with watching gaming tournament on YouTube or Twitch.

I own both Kinnevik and MTG. My post is not a recommendation to buy or sell, but only my thoughts regarding the companies stated in the article.