As part of our global equities research, we had the opportunity to visit several listed Bulgarian companies, gaining valuable insights into their industries, growth prospects, and the broader macroeconomic environment.
Bulgaria is one of the lesser-covered markets in global equities. Despite having 130 listed companies, only four have a market capitalisation above $500 million, with the largest, Tchaikapharma, valued at $865 million. Notably, Bulgarian founders and entrepreneurs hold a significant portion of shares—many of the largest listed companies have an average float of just 18% available to external shareholders. We embrace the flexibility to invest in under-the-radar opportunities, particularly those with limited sell-side coverage.
Our trip began with a visit to Shelly Group, a leading Bulgarian smart home solutions provider, currently part of the Jenga IP portfolio. At their headquarters, we met with CEO Wolfgang Kirsch to discuss their 3rd Gen lineup of smart home products and recent improvements in distribution channels across key European markets, including Germany and the UK.
Next, we visited Smart Organic, a rapidly growing confectionery company with a diverse brand portfolio. This marked our first engagement with the management team, where we learned about their product range, private label initiatives, and company culture over lunch with employees. We also had the opportunity to explore some of their stores and sample their growing Roo’bar line of cookies, wafers and spreads, contributing to the company’s increased diversification.
Our third stop was Speedy, Bulgaria’s largest courier service provider, located at the Sofia Logistics Park. Despite being asset-heavy in the low-margin logistics sector, Speedy has sustained EBIT margins above 10% for most of the last 15 years, while achieving a 22% CAGR in net profits, primarily through organic growth. Our meeting focused on understanding the key factors behind their success, including unit economics and internal development culture. Notably, one of Speedy’s board directors started as a courier driver 20 years ago, which highlights the company’s strong internal culture.
We concluded our trip with a visit to the Bulgarian Stock Exchange, a listed company and learned about initiatives like the Beamup Lab, designed to encourage more listings. Overall, we are pleased with our Bulgarian trip and have now transitioned three of the companies we met into our core global equities watchlist.
