KR1 Plc, a digital asset investment company, trades in the blockchain technology sector. It supports early stage decentralized and open source blockchain projects. The company was formerly known as Kryptonite 1 plc and changed its name to KR1 Plc in February 2018. KR1 Plc was incorporated in 2006 and is based in Douglas, Isle of Man.

Isle of Man

KR1 Plc

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

KROEF reported revenue of GBP 17mn in the last 12 months, down 24% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 100% from FY23 to GBP 1.06.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 36ppts and its growth accelerated by 1ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 32.5 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are moderate. In combination with weak business standards, only average protection of shareholder rights is ensured.

KROEF has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is very high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, excessive margin volatility, poor working capital management, and poor cash flow generation.

In highly turbulent market conditions, KROEF is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, KROEF is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. In particular, the stock is underpriced on P/E, 'expensive' on EV/EBITD. 

KR1 Plc

$ 0.45

3

KR1 Plc

$ 0.45

3

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.45

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