Except for maybe Evercare, Reddington, and a very few others, it is very difficult to point at private hospitals who have more than 100-bed capacity. What we see is a plethora of small, privately owned hospitals.

How then do you convince investors to put money in this sector? Also, without scale, how can doctors and other medical professionals ever get paid well?

To be clear, healthcare is essential (because the demand is inelastic), however the business in Nigeria suffers from a "missing middle". There are two extreme ends. You can be profitable as a small, one-man clinic (low overhead) or as a premium boutique (high margins). But scaling to a 150+ bed general hospital puts you in a "death zone" of high costs and low revenue capture.

First, the energy costs (a 150-bed hospital can not rely on the national grid. It must run industrial generators 24/7 to power MRIs, ventilators, and surgical theatres. Energy costs alone can consume 40% of a hospital's opex.

Then there is the idle capacity problem. A large hospital has high fixed costs regardless of occupancy. If you build 150 beds but only have 40% occupancy (a common reality due to affordability issues), your "cost per occupied bed" will be high. In effect, you are burning diesel to cool empty rooms.

Vitafoam is one of the few companies quietly doing its thing, and they are doing incredibly well. It may surprise many people to learn that Vitafoam is among the top three most profitable companies on the NGX. It may even shock people more to know that Vitafoam is more profitable than Dangote Cement and MTN Nigeria (the coy performance benchmark on the NGX).

Just to be clear, in terms of margins, the benchmark two are higher, but that reflects business model superiority – it does not necessarily make it more profitable. A profitable business is different from a profitable business model.

There is a relationship, sure, but other factors are considered (working capital requirements, capex requirements, financial leverage/risk, etc.).

You can measure a profitable business model using margins, but a profitable business is measured by capital allocation metrics such as return on assets and return on equity.

To see this a bit more, you can have a trading business with smaller margins but a super high turnover (i.e., the rate at which you sell). In a trading business, you do not necessarily have to worry about tying down capital in any capex or working capital.

However, in a manufacturing business, where you operate from end to end (i.e., transforming raw materials into finished products), the capex and working capital requirements are typically significant. However, it also means that way higher margins (relative to a trading business). Hence, there is a tradeoff.

In the case of Dangote Cement, MTNN, and Vitafoam, they are all manufacturing businesses. The business model differences, therefore, are in the type of market they operate in.

The former two are in industries where higher margins are persistent and barriers to entry are significant. The reality does not apply to Vitafoam. But as things stand, Vitafoam is more profitable—2x as profitable as the big two guys.

That’s by the way. I digressed. Back to Vitafoam’s performance.

https://x.com/Rufyb/status/1983981340551770356

I have been following for a while now (the days when the stock price was still around ₦4 per share in 2019 thereabout. The current stock price is ₦94 per share – a 23x return).

Revenue grew by 35% in its most recent fiscal year, on top of the 56% y/y growth they did in the previous year. Between FY 2016 and FY 2025 (a period characterised by the most severe economic challenges), they consistently delivered double-digit revenue growth, except in FY 2020 during the COVID pandemic. I see a very resilient business.

EBITDA margin has consistently improved, from 2% in FY 2016 to 23% in FY 2025. Cash generation significantly improved, and in FY 2025, they hit ₦16bn in operating cash flows – 5x the previous year’s number.

The buster is how they consistently grow (revenue-wise, margin-wise, cash flow-wise) whilst investing relatively little in capex (just about 1% of revenue). This right here is the sort of business you want to own. This is the kind of stuff that tends to attract higher multiples for tech-related firms.

The benchmark for all investment returns in any economy is the Treasury Bill yield.

When T-bill rates rise, other instruments (like CPs, fixed deposits, and private notes) must also offer higher returns. On the flip side, when T-bill yields fall, everything else follows.

Money market mutual funds, for instance, invest mostly in T-bills. So once T-bill yields drop, the yields on those funds drop too.

I was in some really good mood late last night, so I decided to look into my spreadsheet for potential openings. I was able to see a few things.

Please note, I'm simply freestyling here. Whatever you choose to do with this information is entirely your responsibility.

I have an existing (significant) stake in the majority of these names. Always do your own due diligence.

Again, I'm just freestyling. Mo ke to o. Toor, so this was my reasoning:

I looked for companies with double-digit earnings yields. The formula for that is profit after tax divided by market value.

You can think of it like this: if a company is valued at ₦5 per share and it makes a profit (called earnings per share) of ₦1 in a year, you’re walking home with a 20% earnings yield. The inverse of the earnings yield is the P/E, so a 20% earnings yield is a P/E of 5x.

Stock investing is not meant for everyone. The risk and return profile of stocks makes it suitable for only a select group of people. If you want to know whether you are suited for stock investing, note the following: 1. You are not relying on the returns for your day-to-day spending activities. Just let them be but keep an eye out for news and policies that may impact the value of your investments.

There are only two (broad) asset classes: equities and fixed-income. Every other thing is a variation of the two.

For example... ▪︎ Convertible bonds are bonds that give holders the option to convert them into a predetermined number of shares of the issuing company.

Celsius has done incredibly well over the past year, effectively doubling its share price.

The coy was on an initial rollercoaster, rising to as high as $90 in May 2024. The spike was due to Celsius signing a partnership with PepsiCo., which will utilise its extensive distribution network to market Celsius' products.

The market liked the growth potential that would follow such an arrangement and priced Celsius' stock to the heavens. Subsequently, PepsiCo. started to falter. PepsiCo. had inventory issues (oversupply problems), and that affected Celsius because the oversupply needed to be corrected. By implication, Celsius' stock price tanked, declining to as low as $30. That was when I spotted it.

I had always wondered what was driving Champion Breweries’ stock price. It has done over 4x so far this year, and the valuation multiples are incredibly high – especially when viewed in the context of other brewers.

So what has happened here?... Champion Breweries has agreed to acquire the Bullet brand assets (both alcoholic and energy beverages) from Sun Mark International Limited (a British FMCG coy).

Omatake is a case study of how a business should not be overly reliant on its founder.

Florence Seriki, founder of Omatek Ventures, died in 2017, and the business died with her... And then you ask, 'what then is the point of being a publicly-listed company?'

Is it ‘form over substance’ instead of ‘substance over form’?

I see that pension fund guys are loading up Okomu in a pair trade kinda form. In their heads, 'Presco is ₦1k+, Okomu should also follow suit'.

Lol, I sense an 'anchor bias' here, because Okomu is now very pricy and significantly above historical multiples... A quick detour:

Business model overview
Presco
Presco is an integrated palm oil coy (the 'integrated' is not mere grammar). Its operations cover:

▪︎ oil palm cultivation
▪︎ palm oil milling
▪︎ refining of palm oil
▪︎ packaging and distribution of refined products

I smell an arbitrage opportunity.

UACN PLC has about seven (7) portfolio companies:

☞ Grand Cereals LTD
☞ Livestock Feeds PLC
☞ UAC Foods LTD
☞ CAP PLC
☞ MDS Logistics LTD
☞ UPDC PLC
☞ UAC Restaurants LTD Grand Cereals LTD and Livestock Feeds PLC are in the Animal Feeds and Edible Oil category.

UACN holds 71.4% stake in Grand Cereals, and a 72.3% stake in Livestock Feeds.

This segment accounts for half of UACN's revenue.

I don't know of 'most undervalued', but I currently know of one very undervalued company - Nigerian Breweries PLC.

If my numbers add up, I expect the coy's stock price to nearly double from ₦63 (₦2trn) to ₦100 (₦3trn) levels..

🧵🧵🧵

https://twitter.com/ngnstx/status/1942648937149575439

Overview
Nigerian Breweries PLC (NB), established in 1946, is Nigeria’s oldest and largest brewing company. With 10 breweries nationwide and iconic brands like Star, Gulder, Maltina, Heineken, and Fayrouz, NB has a deep market reach that spans both urban and rural Nigeria.

Based on data, yes, Nigeria has a revenue problem. However, the substance is that a spending problem appears to be significantly more prevalent.

Although public finance accounting is a little different, I like to break down government accounting using the business lens...

https://twitter.com/Bond_not_james/status/1941854268694098107

Balance Sheet (Assets and Liabilities)

▪︎ Assets: Infrastructure, government buildings, natural resources, foreign reserves, and tax receivables

▪︎ Liabilities: Public debt, pension obligations, payables, etc

▪︎ Net assets: The difference between assets and liabilities

The last time the exchange rate stabilised was in 2017 with the creation of the I&E (Investor & Exporter) window. Following its introduction, inflows surged, liquidity improved, and the FX market became stable after years of instability. However, that stability was bound to be temporary. The FX rate was poised to climb again simply because long-term stability is impossible when the inflation rates for the Naira (NGN) and the US Dollar (USD) are different.

Let us have a small gist.

How do the poor feel the impact? My sense is that it occurs when their income levels rise and when prices of goods and services are lower/stable.

Before those two things can happen, businesses need to be prosperous...

https://twitter.com/EdiomoJose/status/1938520818667208875

By prosperity, we mean that coys have to be profitable (via sustainable sources) so that they decide to expand capacity. There must also be signs of corporate profitability so that new businesses are encouraged to enter the market.

Africa needs it.

If lenders have control over borrowers' cash flows, they will be willing to do more. Currently, that control is difficult to achieve, which is why banks only offer salary loans.

It is also why Credit Direct has been relatively successful...

https://twitter.com/Babajiide/status/1937925630462726211

Their business model allows them to maintain asset quality because they have control over the cash flows of their type of client: Civil servants.

Asset quality is great, but the downside is that, in my opinion, there is a cap on how they can scale.

I think it may be time for me to take NGX seriously. Temi Popoola, CFA, the new Group CEO, has been doing quite a lot of work there (an excellent individual, by the way), and the operating environment has been quite friendly, too... On a YTD basis, total transactions are up by 60% from ₦2 trillion last year to ₦4 trillion this year -really strong. On a FY basis, the NGX facilitated ₦6 trillion worth of transactions (about 2% of GDP) and earned ₦8 billion in fee income.

These days, especially in Lagos, owning a car is no longer considered a luxury. It has now become a necessity, given all the hustle and bustle of Lagos.

@cowrywise has released another fantastic report: The Economics of Car Ownership, aimed at providing key information... ... to young professionals about the cost dynamics associated with owning a car, and the benefits of owning a car relative to alternative means of transport.

The reactions to this post have been very interesting. Thanks everyone. The common questions or comments I’ve been seeing from folks are:

☞ Why are PE funds not raising funds locally
☞ What is the solution?

I wish I had the answers, but sadly, I do not. But...

https://twitter.com/Rufyb/status/1936082059526574364

... we may need to understand a couple of things:

The underlying problem is the required return. For businesses operating in Africa, or, let’s say, Nigeria, the expected growth rate is high, and that's because of the risks or perceived risks.

Converting your Naira to buy USD and simply keeping it under your pillow should naturally deliver an average annual return of 12%–14%, thanks to consistent currency depreciation.

Now, if you invest that USD in the S&P 500, which has historically returned 11%–12% annually... ... your required return totals about 26% per year.

Over a 10-year period, this investment should yield 3x returns in USD. When you convert that back to Naira after 10 years, you’re looking at a 10x return in Naira.

Capital. A lot of it.

And they got lucky (but it was luck that they created or were prepared for).

Opay raised $500mm+ (or ₦200bn+) thus far to invest in their payments infrastructure. All the payment speed and functionalities we see today, owo lo pa.

https://twitter.com/Oludeewon/status/1935061677252178310

All the marketing done in prior years (which includes all the parallel trial and error businesses including oRide and the likes) were possible because of the significant capital they put behind it.