An analyst has fewer natural questions when things go mostly as expected. But we had a chat with the CEO anyway.
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Thanks @Juha_Kinnunen for the nice chat!
And hello Inderes forum folks. I’m happy to chat with you as well and answer any questions you may have.
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A slightly provocative question:
Inderes provides a ready-made API for AI to its entire database. This way, the customer benefits by being able to directly train their own AI with Inderes’s data and can perform searches and analyses that were previously impossible or for which they would have had to pay Inderes.
Why don’t law firms do the same? And if an innovative law firm were to do this (I wonder who?), could the client’s own legal department manage with very little hourly billing? Or is it that a law firm’s own data is not comparable to Inderes’s, and what is actually needed is an API for the district courts or arbitration courts?
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Even now, people can read laws, case law, and legislative history for free on Finlex, or ask AIs about them, and the result—at least from the perspective of an active Twitter user—is absolutely terrible.
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Here is a new company report on Fondia from Juha. 
Fondia’s Q1 result was slightly better than we anticipated and confirmed that the company is progressing on the path we expected. The company’s strategy seems to be working, and better performance is also expected in the problematic Swedish operations. We made only positive adjustments to our forecasts and revised our target price to EUR 6.0 (prev. EUR 5.8). The stock’s valuation remains very moderate (2026e EV/EBITA 9x), and there is still significant potential if Fondia stabilizes its position as a company of profitable growth. However, we do not want to rely on valuation expansion, so we are lowering our recommendation to the Accumulate level (prev. Buy).
Quoted from the report:
The market situation is not easy, but no excuses are made
The concise Q1 review did not include comments on the development of the market situation, and the company’s management commented on it quite extensively during the investor call. Based on the core message, we interpret that while the market is not easy, it is also not a factor limiting Fondia’s positive development. In the current market situation, it is therefore possible to grow profitably if and when internal operations develop. In our view, new geopolitical tensions (such as the war in Iran) have not had significant effects on the rather defensive market.
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That was a great “confession” from Fondia’s CEO regarding the four mistakes made during their expansion into Sweden.
With these lessons, other Finnish companies’ losses from Swedish expansions would likely be smaller. Timo Lappi recently published a book titled “Osakeyhtiön johtoketju: Omistajat, johto, hallitus” (The Corporate Chain of Command: Owners, Management, Board).
That book was truly excellent for those of us who want to leave no stone unturned in our investing.
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Good opening, but according to that exact story, nothing has changed to this day. Losses are still mounting, the major owners haven’t moved to Stockholm to lead the local organization, and the company clearly still doesn’t know if the hobby segment will yield any customer synergies.
I have to take my hat off to Timppa, though, for how positively he presents himself in various media and the kind of turnaround he is achieving in the company according to the figures. Hopefully, in the next article, when discussing Sweden, he can also share how the local subsidiary is turning a profit and that operations are sustainable.
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I would have liked to see a bit more meat on the bones at the end. In other words, besides just trust, I wanted to see actions that will make the Swedish operations profitable for Fondia, and what steps have already been taken toward that goal.
It is good to admit mistakes. But one should also learn from them.
Unfortunately, Fondia’s impressive new premises in Finland, mentioned in the article, didn’t come at a good time. They were opened unluckily just before the COVID crisis, and growth stalled at the same time, partly due to disputes between the founding partners.
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