Gemfields Group - A Valentine's Day gift for the AIM market

Fittingly for a coloured gemstone company, Gemfields began trading on London's AIM market on 14 February. We continue to see significant value in this stock, which was previously under the radar, and our updated sum-of-the-parts valuation is US$522m (previously US$449m). The removal of the 15% export duty on Zambian emeralds has a significant positive impact on Kagem, which we now value at US$246m (previously US$153m). We expect Gemfields to generate US$75m in EBITDA in 2020 (previously US$59m), putting it on a 2020e EV/EBITDA of just 1.8x.

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