Analyst Comment

North Media: NVIDIA all time highs drive securities portfolio higher

By Philip CoombesEquity Research Analyst

Nvidia shares surge up over 4% at the US open after the U.S. government approved the sale of its H20 AI chips to China, easing earlier export restrictions, lifting North Media shares given NVIDIA’s heavy weighting in its securities portfolio. The H20 chip, designed to comply with U.S. regulations, is already seeing strong demand from major Chinese tech firms like Alibaba and Tencent.

This move restores access to a key market that historically contributed about 13% of Nvidia’s revenue, potentially reversing up to $15 billion in lost sales, according to Reuters. Analysts expect this to boost Nvidia’s earnings and stabilize its China business, with broader optimism for the chip sector driving gains in AMD, TSMC, and others. The approval also marks a significant softening of U.S.-China tech tensions following trade negotiations between the world's largest economies last month.

But what does this mean for North Media? North Media is a Danish-based media and distribution company focused on the distribution of newspapers and printed advertising in Denmark and Sweden, and the development of Digital Services, operating BoligPortal, Denmark’s largest marketplace for rental housing, Bekey, a digital access solutions company, and MineTilbud, an online coupon and discount portal. However, importantly, North Media also has a large securities portfolio relative to its market capitalization, and NVIDIA is its largest position at around 40%.

As of the market close on 15 July 2025, North Media’s market capitalization is around DKK 815 million, while its securities portfolio is estimated at around DKK 780 million, or 96% of the market capitalization! (assuming no share acquisitions or sales since the latest portfolio update from 30 April 2025). Following Nvidia’s +4% gains at today’s US open, we estimate Nvidia is over 40% of the total portfolio value, followed by Novo Nordisk (around 17%) and Microsoft (around 14%). The three top securities currently reflect around 70-75% of the total securities portfolio.

While North Media has some debt of around DKK 160 million relating to mortgage and leasing liabilities, the securities portfolio makes up the lion's share of the company’s value. As a result of NVIDIA’s heavy share in the portfolio, its share price (measured in DKK) has been a very good proxy for North Media’s share price YTD, as seen by the chart below. However, since May, this relationship has somewhat disconnected, with NVIDIA outperforming North Media.

North Media’s share price has begun to close this gap but continues to trail NVIDIA [by around 20%]. However, the slower recovery in North Media can be explained when considering North Media’s portfolio, which we estimate at YTD -9%, assuming constant shareholdings since 30/04/2025, vs NVIDIA, which opened the US session at +13%, measured in DKK (+26% in USD).

The securities portfolio is clearly in the driving seat for North Media’s share price, as the market continues to attribute little value to the underlying business despite revenues of DKK 1,301 million in 2024. In 2024, the company delivered revenue of DKK 1,301m, EBITDA of DKK 153m, but with a negative EBIT of DKK -75m driven by write-down of DKK 129m relating to the acquisition of SDR Svensk Direktreklam.

Latest guidance for 2025E suggests flat revenue of DKK 1,280–1,337m, EBITDA of DKK 80–115m, and EBIT of DKK 25–60m, including negative EBIT of DKK -55 to -40 million relating to SDR. The mid-point EBIT guidance suggests an estimated EV/EBIT valuation, which adjusts for the estimated securities portfolio value, of around 2.6x, low on an absolute level. The market has penalized North Media for its recent acquisition of SDR Svensk Direktreklam (end 2023), which led to the previously stated write-down in 2024, and ongoing investments in the digital access solutions company Bekey, which continues to burn cash. The valuation penalty may also be attributed to a highly concentrated portfolio, as most investors prefer to control their own investments, and with uncertainty regarding the management's potential plans to use the securities portfolio to make additional acquisitions.

For now, it seems North Media’s short-term share performance will continue to be driven by the share prices of NVIDIA, Novo Nordisk, and Microsoft. Longer-term, the question remains whether the company will unlock greater value from its underlying earnings and cash flow. The ongoing integration of SDR Svensk Direktreklam and its impact on cash flow will likely be key to improving investor confidence and expanding multiples.

North Media Nvidia Ath Graph

Disclaimer: HC Andersen Capital receives payment from North Media for a DigitalIR/Corporate Visibility subscription agreement. Share prices used include North Media closing price DKK 45.30, and NVIDIA DKK 1100 (USD 171.10). This is not a recommendation to buy shares, sell shares, or not to buy shares. / Philip Coombes 15 July 2025 18:02

North Media A/S develops and operates platforms for transactions that bring businesses and consumers together. The platforms help customers find the right products, whether they are looking for groceries, rental housing or digital access management solutions. North Media is a market leader and has been listed on OMX Nasdaq Copenhagen since 1996. North Media’s focus is long-term value creation and stable return on capital and has a policy to pay out dividend based on the financial performance. North Media is organised into two business areas: 1) Last Mile comprises FK Distribution and SDR Svensk Direktreklam and both companies are among the leading distributors of leaflets and local newspapers in Denmark and Sweden, respectively. Last Mile is a mature business area with solid earnings and cash flows. 2) Digital Services consists of BoligPortal, Dayli and Bekey, all with the potential for growth, rising profitability, and scalability. BoligPortal is Denmark’s leading home rental platform, offering services to both landlords and tenants. Dayli (MineTilbud) is a leading digital offer platform. Bekey provides digital access solutions for secured stairwells and private homes for the use of homecare services and companies delivering parcels, groceries, meal services, etc. North Media has a strong focus on sustainability and ESG reporting, including the group’s impact, risks and opportunities within climate, environment, social matters and governance. North Media is committed to the Science Based Target initiative with the aim to reduce total CO2 emissions by 50% nominally by 2030 compared to 2018, and to achieve net-zero emissions by 2050.