Seraphim Space Investment Trust (LON: SSIT) has broadly maintained its NAV in the past quarter, but the share price discount to NAV has widened. By the end of the week the share price has fallen to 37.8p. The July 2021 offer price was 100p.
There are still plenty of opportunities in the space technology sector and valuations are holding up. The valuation of the portfolio fell from £181.2m to £180.8m in the quarter to March 2023. That does include £900,000 invested in an existing portfolio company, so the underlying decline in portfolio valuation was £1.3m.
There was cash of £39m at the end of March 2023 and that is 18% of NAV, which is 92p a share. Most of the investee companies have more than 12 months of cash.
Although the investee companies are still relatively immature businesses the top ten investments are growing their revenues. The follow-on investment was in QuadSat, which tests satellite antennas, and it already has customers.
The shares are trading at a 59% discount to NAV. Early-stage technology companies not making profit are out of favour with investors and that is the main reason for the large discount. There does not appear to be any specific negativity about the space sector.
A significant discount is understandable because of the investee companies are unquoted and there is no guarantee that they will be successful. Some will fail, but there are plenty of investments that could become highly valuable over the rest of the decade. Long-term buy.
