Hello, on headline numbers, looks like the founder's salary is EUR 1k per month, but there is a management services agreement with JTO Holdings, owned by the founder, which runs at EUR 750k per year. In addition, carpentry work for properties developed is subcontracted to another company owned by the founder, which cost Rising Stone ~2.2mm in FY25. Any thoughts on these related party transactions?
Thanks for bringing this up — I think it’s a fair point to discuss.
Regarding JTO Holdings, my understanding is that the €750k annual consulting agreement is essentially how the founder monetizes his network and sourcing capabilities. The company states that JTO Holding helps identify attractive land opportunities, negotiate with landowners, banks and local authorities, and structure projects. Considering the group’s revenue and profit profile, I don’t see this fee as particularly material. More importantly, they have already demonstrated a solid track record of sourcing premium land in highly supply-constrained Alpine resorts at attractive prices. Ideally, I would prefer a simpler structure, but given the current valuation, I think this is something I can live with.
Astarté is probably the more important related-party transaction in my view. Since it supplies bespoke luxury carpentry and interiors, it’s naturally harder for outside investors to judge whether pricing is fully at arm’s length. That said, the completed projects have so far shown good margins, which is at least somewhat reassuring. It’s definitely something that should continue to be monitored closely.
Overall, I think these related-party transactions are one of the reasons why the stock trades at such a low valuation today, so a meaningful part of this risk is already reflected in the price. Also, the founder still owns well over 50% of Rising Stone, so his incentives remain strongly aligned with shareholders, even though he owns 100% of the related entities. I don’t think he has an incentive to destroy long-term shareholder value, but I absolutely agree that these transactions deserve ongoing scrutiny.
Thanks again for pointing this out—it’s an important topic for investors to keep an eye on.
I assume most of their revenues aren’t recurring that’s why the market won’t I’ve them a high multiple. Would be better if they’d operate the resorts as well…
completely agree that the lack of recurring revenue deserves a valuation discount, and I think that’s one of the main reasons the stock trades where it does today. That said, even after applying that discount, I still believe the valuation is too low considering the company’s growth profile, margins, unique vertically integrated business model, and its position in a highly supply-constrained luxury market.
As for owning and operating resorts, I’m not convinced that would necessarily improve the business. It would require a very different skill set, significantly more capital, and would likely reduce returns on capital. I’d much rather see them stay focused on what they have already proven they do exceptionally well—sourcing scarce land, developing high-end projects, and monetizing them at attractive margins. In my view, that’s where their competitive edge lies, and I’m happy to see management sticking to that strategy rather than expanding into businesses where they don’t have the same advantage.
Interesting and well written, thanks. Their business seems to be highly concentrated at one resort, Meribel. How do you see this risk, especially since Meribel has the lowest elevation of the resorts you list, below the future snow line?
I actually see it the other way around. I think their concentration is one of their biggest competitive advantages rather than a weakness. They have spent years building local relationships and sourcing capabilities in a handful of ultra-premium Alpine resorts, and that local network is probably the main reason they’ve consistently been able to secure attractive land opportunities. Expanding too aggressively into new regions could easily dilute that edge, so as long as there is still room to grow in their core markets, I would actually prefer them to stay focused. Regarding Méribel, I don’t see the altitude as a major issue either. The village itself sits at around 1,500 meters, while much of the ski area is well above 2,000 meters and reaches close to 3,000 meters. There are many Alpine resorts at much lower elevations that would likely face climate-related challenges much sooner. In my view, this is largely immaterial to the investment thesis over the next several years—execution, land sourcing, margins, and capital allocation are far more important factors. What I also like is that they are gradually diversifying in a way that leverages their existing client relationships. They are building a premium client club and are starting to expand into luxury summer destinations, such as Portugal and the French Riviera/Provence, offering high-end developments to the same affluent customer base. I think that’s a much more natural and attractive form of diversification than moving into completely unfamiliar Alpine regions, and it will be interesting to see how well that strategy develops.
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Thank you, interesting company
Hello, on headline numbers, looks like the founder's salary is EUR 1k per month, but there is a management services agreement with JTO Holdings, owned by the founder, which runs at EUR 750k per year. In addition, carpentry work for properties developed is subcontracted to another company owned by the founder, which cost Rising Stone ~2.2mm in FY25. Any thoughts on these related party transactions?
Thanks for bringing this up — I think it’s a fair point to discuss.
Regarding JTO Holdings, my understanding is that the €750k annual consulting agreement is essentially how the founder monetizes his network and sourcing capabilities. The company states that JTO Holding helps identify attractive land opportunities, negotiate with landowners, banks and local authorities, and structure projects. Considering the group’s revenue and profit profile, I don’t see this fee as particularly material. More importantly, they have already demonstrated a solid track record of sourcing premium land in highly supply-constrained Alpine resorts at attractive prices. Ideally, I would prefer a simpler structure, but given the current valuation, I think this is something I can live with.
Astarté is probably the more important related-party transaction in my view. Since it supplies bespoke luxury carpentry and interiors, it’s naturally harder for outside investors to judge whether pricing is fully at arm’s length. That said, the completed projects have so far shown good margins, which is at least somewhat reassuring. It’s definitely something that should continue to be monitored closely.
Overall, I think these related-party transactions are one of the reasons why the stock trades at such a low valuation today, so a meaningful part of this risk is already reflected in the price. Also, the founder still owns well over 50% of Rising Stone, so his incentives remain strongly aligned with shareholders, even though he owns 100% of the related entities. I don’t think he has an incentive to destroy long-term shareholder value, but I absolutely agree that these transactions deserve ongoing scrutiny.
Thanks again for pointing this out—it’s an important topic for investors to keep an eye on.
I assume most of their revenues aren’t recurring that’s why the market won’t I’ve them a high multiple. Would be better if they’d operate the resorts as well…
completely agree that the lack of recurring revenue deserves a valuation discount, and I think that’s one of the main reasons the stock trades where it does today. That said, even after applying that discount, I still believe the valuation is too low considering the company’s growth profile, margins, unique vertically integrated business model, and its position in a highly supply-constrained luxury market.
As for owning and operating resorts, I’m not convinced that would necessarily improve the business. It would require a very different skill set, significantly more capital, and would likely reduce returns on capital. I’d much rather see them stay focused on what they have already proven they do exceptionally well—sourcing scarce land, developing high-end projects, and monetizing them at attractive margins. In my view, that’s where their competitive edge lies, and I’m happy to see management sticking to that strategy rather than expanding into businesses where they don’t have the same advantage.
Interesting and well written, thanks. Their business seems to be highly concentrated at one resort, Meribel. How do you see this risk, especially since Meribel has the lowest elevation of the resorts you list, below the future snow line?
I actually see it the other way around. I think their concentration is one of their biggest competitive advantages rather than a weakness. They have spent years building local relationships and sourcing capabilities in a handful of ultra-premium Alpine resorts, and that local network is probably the main reason they’ve consistently been able to secure attractive land opportunities. Expanding too aggressively into new regions could easily dilute that edge, so as long as there is still room to grow in their core markets, I would actually prefer them to stay focused. Regarding Méribel, I don’t see the altitude as a major issue either. The village itself sits at around 1,500 meters, while much of the ski area is well above 2,000 meters and reaches close to 3,000 meters. There are many Alpine resorts at much lower elevations that would likely face climate-related challenges much sooner. In my view, this is largely immaterial to the investment thesis over the next several years—execution, land sourcing, margins, and capital allocation are far more important factors. What I also like is that they are gradually diversifying in a way that leverages their existing client relationships. They are building a premium client club and are starting to expand into luxury summer destinations, such as Portugal and the French Riviera/Provence, offering high-end developments to the same affluent customer base. I think that’s a much more natural and attractive form of diversification than moving into completely unfamiliar Alpine regions, and it will be interesting to see how well that strategy develops.
Hi! My publication Strata publishes an investor-oriented newsletter that touches on corporate events (e.g., special situations), governmental regulations, and patent news that hopefully offers to long-term focused investors. Feel free to check it out. It is all free. want sub for sub?