Cleanspace Holdings Ltd

The fund managers believe that Cleanspace Holdings Ltd. (CSX) has shown a strong potential for profitability, despite its past struggles following its IPO and the challenges caused by the COVID-19 pandemic. In their opinion, the company’s industrial business, which has been growing at a robust pace, is now poised to return to profitability, particularly due to its high-margin, capital-light model. While the first quarter of the financial year showed weaker-than-expected growth, the managers are optimistic about the company's prospects, especially considering the significant operating leverage it can achieve. They expect the business to reach a breakout point by FY2026, with a projected EBITDA of $2 million, which they believe will be attractive at its current market capitalization. The fund managers view the business model as scalable, with strong product differentiation and a significant competitive edge, though they acknowledge the risks related to inventory ordering patterns and market fluctuations.