YB new stock pitches (Mon, Dec 29)

Vodafone Group (VOD), trading at 96p with a £30bn market cap, is a telecom company that has delivered sub-1% CAGR over 30 years and trades at sub-5x EBITDA, but the market is ignoring its potentially most valuable asset - its partnership with AST Spacemobile (ASTS). VOD owns 14.5 million ASTS shares worth approximately $1.2bn and has a European joint venture (Sat-co) with ASTS that will be the exclusive provider of ASTS' direct-to-device satellite connectivity services in Europe, delivering broadband and voice connectivity to regular mobile phones without dishes or sat-phones, with full European coverage expected by end-2026 and MNOs from 21 EU member states expressing interest. While ASTS trades at over 40x consensus 2027 EBITDA with a $30bn+ market cap and sell-side estimates ranging from $1bn to $4bn global EBITDA in 2028 with 90%+ margins, Vodafone analysts model nothing for Sat-co despite potential €1bn+ EBITDA contribution. The investment thesis centers on European S-band spectrum allocation in May 2027, where Sat-co should be a front-runner due to superior technology versus Starlink's text-only offering, EU sovereignty advantages, and growing European defense budgets, with defense contracts expected to be ASTS's biggest 2026 revenue contributor. The setup resembles tobacco stocks in early 2024 where high-growth, high-margin products drove re-ratings (British American Tobacco and Philip Morris doubled, Turning Point Brands gained 300%), and if VOD's EBITDA grows 10% over two years while re-rating to 7x EBITDA, the stock could more than double, making December 2027 calls a potential 10-bagger given the low 23% implied volatility requiring only 13% gains for breakeven.

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Victory Square Technologies (VST.CN, $VSQTF) is a venture builder trading at CAD 76 million market capitalization that finances, builds, and takes startups public in Web3, gaming, and digital health sectors, generating income through management fees and exits. The company holds a 56.6% stake in Hydreight Technologies worth approximately CAD 111 million, meaning VST is trading below its net asset value with this single holding exceeding the company's entire market cap. The bull case centers on Hydreight's aggressive expansion in digital health and successful exits driving up NAV, with a 3-year target price of CAD 2.85 representing a 274% upside. However, risks include the extremely cyclical business model's dependence on Hydreight's performance, potential value collapse during tech/crypto bear markets, and low stock liquidity.

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NEXON Co., Ltd. (3659.T) appears to have understated ARC Raiders sales performance, with management's conservative Q4 guidance of 4-5.5 million units likely missing the reality of stronger demand, as third-party Alinea Analytics tracking estimates 7.7 million copies sold through November and December data suggesting 10+ million cross-platform sales. Post-launch engagement is re-accelerating rather than declining, with weekend peak concurrency rebounding 17% to 386,000 players, YouTube search interest up 45% following the Cold Snap update, and Twitch viewership doubling from 60,000 to over 100,000 viewers, indicating renewed discovery beyond mere retention. The combination of a larger 8-10+ million installed base with improving engagement metrics materially increases cosmetic attach probability, seasonal content monetization potential, and long-tail revenue optionality, while historically correlating with higher ARPU rather than just incremental unit sales. The market currently views ARC Raiders as a front-loaded launch with limited durability, but the data suggests otherwise, with conservative guidance creating positive revision risk as Q4 closes and full sell-through becomes clearer, positioning Nexon's Western portfolio for upside relative to consensus expectations.

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