I am not convinced that Panostaja is capable of creating value for investors. CoreHW is the only one that can almost save the situation, but it’s also possible that it will become just another underperformer. In the 2020s, Panostaja has been abysmal. Net profit over five years has been a total of -8.6M€. Quite a destruction of value, and a loss is predicted for this year too. No wonder the share price is low. Even if value can be seen in the sum of its parts, ultimately if no money comes to the bottom line, companies are more or less worthless. Even a small positive net profit is not enough when aiming for at least a 7% annual return. Panostaja should pay out more dividends. I argue that almost every one of us could make that money yield better returns than Panostaja itself.
Group expenses could also be cut. If the expenses in the ‘Other’ category are 1.6M€ over 9 months, this is significant. This amount corresponds to the combined operating profit of Grano, Hygga, CoreHW, and Lenio for the same period. Are there overly expensive offices in good locations and all sorts of nice benefits, or what is the reason for this? Costs should be reduced.
CoreHW is the only reason why this is still somewhat interesting. If they succeed better there in the future, then perhaps it is worth owning Panostaja. It’s not convincing yet.
@Blackparta Do you define “destruction of shareholder value” based on the net profit resulting from accounting tricks? Or would a potentially better way to define it be to look at the company’s operating cash flow or perhaps free cash flow? Those figures for the last, for example, 5 years are excellent and, for me as an investor, much more important than net profit or EPS. Since 2018, Panostaja has generated excellent free cash flow every year, which seems to be forgotten by many investors who only stare at the bottom line produced by accounting tricks. And yes, minorities certainly affect the figures, and cash flow/free cash flow cannot be looked at directly as such.
Maybe you are right, but in my opinion, not much value has been created here, as on 31.10.2019, the equity was €79.552M, and it is now €48.544M on 30.4.2025. Shareholder value has been cleverly manipulated through accounting. Of course, some dividends have also been received along the way. It would have gone much better if one had invested in OMXH25. It might be that Panostaja will beat the index in the next 5 years, but one must still be a bit skeptical.
Juha and Tomi chatted about Panostaja for over 40 minutes.
Topics:
00:00 Introduction
00:36 Value creation as an active owner and developer
02:52 Capital returns have remained meager and far from targets
05:35 Should have divested from Grano 5 years ago
10:33 Grano generates strong cash flow
12:23 Oscar Software a potential value driver for Panostaja
15:17 CoreHW’s breakthrough could be a game-changer
21:58 Lenio, the portfolio’s newest growth prospect
27:28 Hygga, the problem child, has zero value
30:36 Gugguu’s good development was interrupted by the corona years
33:11 Cash needs to be put to work
36:24 The stock is cheap even with conservative expectations
39:50 Positive scenario
Let’s talk about some minor matters from Panostaja’s perspective. Papu Design, Gugguu’s domestic competitor, which is minority-owned by Panostaja (43% ownership stake), filed for bankruptcy. It makes one wonder if Panostaja will have to write down its ownership in Gugguu at some point, as Gugguu has also been struggling in this demand situation for a long time.
In the latest analysis, Kinnunen states that Inderes has not performed a valuation for Gugguu, but that minority stake has been taken into account in Inderes’s valuation according to Panost
Gugguu probably isn’t in quite the same situation, having made roughly zero profit. It’s likely that expenses must be kept strictly in check here too, given the current economic climate. This year is even weaker than the last, sales are behind, and the loss is in the same ballpark as the previous year.
Of course, if losses can be kept to a minimum, this has been a struggle for survival for many smaller companies like this. On the other hand, bankruptcies do occur, and then sales may shift from them to competitors.
The general economic sentiment in Finland is anemic, and it reflects in many sectors as people aren’t spending. It’s a bit of a vicious cycle when people fear inflation, job security, energy prices, gas prices, etc., and save for a rainy day. At the same time, they’re digging their own grave because if no one spends here, many jobs will end up disappearing because consumers save too much, and more and more companies go bust or enter co-determination negotiations. Revenue and operating profit were still relatively well under control in 2016-2021. Operating profit was at its best around one million. We’ll see when trade picks up and how the numbers develop in the future.
Corehw’s locators seem to have gone on sale (Digi-Key). Stock is still at zero, however, but the ramp-up should start soon. I don’t know if these have now started to be put into production, now that certifications have been obtained and testing is underway. Time will tell..
Here are Kinnunen’s comments regarding the sale of Hygga’s clinic business.
Panostaja announced yesterday that it is selling its subsidiary Hygga’s clinic business to PlusTerveys Hammasklinikat Oy. The transaction price of the business, EUR 2.8 million, is, in our opinion, good given the circumstances, but Hygga has significantly more interest-bearing debt. The Hygga Flow software business will remain with Panostaja for now, but it is also likely to be sold. We had previously valued Panostaja’s entire Hygga ownership at zero, and the transaction does not give reason to change that assessment as the value is expected to remain below net debt. We see it as positive that detaching from Hygga clarifies Panostaja’s focus and stops losses in a failed investment.
Perhaps this will take off, and hopefully big: below are a couple of highlights..
I still believe that if and hopefully when these start scaling, Panostaja’s current value will be just a memory.
“The certification of our Tags and Locator validates years of R&D and comprehensive testing,” said Mika Jäsberg, VP of RTLS and Devices Business at CoreHW. “We’re thrilled that several customers are now entering production with these solutions – demonstrating that the technology is not only proven but ready for real-world, large-scale deployment.”
With the certification now in place, CoreHW has begun fulfilling commercial orders for Tag and Locator units. Early customers – including partners in industrial automation, logistics, and healthcare – are now launching production systems that rely on CoreHW’s high-accuracy Bluetooth AoA technology platform.
Grano has sold one of its business operations. Grano’s subsidiary, Grano Diesel, has been sold to the subsidiary’s CEO. The purchase price is not mentioned, and this was apparently not significant enough for Panostaja to warrant a press release. Customer data reveals that Diesel has been one of Grano’s most profitable parts: its revenue was on an upward trend, and its operating profit development, especially in 2024, was exceptionally good.
As a result, Grano’s revenue is likely to drop by 8-10%, and the relative profitability of the remaining Grano might also decrease slightly? On the other hand, the sale of the marketing communications business gives some hope that the remaining Grano is now a more focused (and smaller) package for someone to acquire. Perhaps this will also help reduce Grano’s net debt faster?
Although this is likely a post-reporting period event, @Juha_Kinnunen, it would be nice to get a few comments from the CEO about this in the December interview.
Edit: I would also note that after the sales of Hygga’s clinic and Grano’s marketing communications, Panostaja has shrunk even further, which the acquisition of Lenio does not compensate for. These two sales resulted in a loss of approximately 12 MEUR in revenue and several hundred thousand euros in positive operating profit. At least in the short term, the development is still going in the wrong direction, and the relative share of Panostaja’s fixed costs in the overall structure seems to have increased even further.
It’s now @Olli_Vilppo at the helm of Panostaja, so let’s include him here. I have probably moved aside after a 15-year journey with Panostaja, and Olli gets to look at the company with fresh eyes
Panostaja’s performance has indeed been weak after the Kotisun cash pot. Hardly any sensible use for the money is found. At the same time, Relais Group makes 5 acquisitions a year and grows. Roininen’s Investors House has raked in millions even though the housing market is terrible. Even Arvo osuuskunta has made money with exits and has promising holdings like a piece of Lapwall. Competence is needed.
Then, secondly, too large a part of the ownership is in a bad industry. Panostaja has somewhat become a prisoner of Grano. When you are on a train going in the wrong direction, even with good performance, it’s difficult to get good results.
Technology companies with their own products are often valued very highly. For example, Optomed and Nexstim are around 100 Million, even though they are barely keeping their heads above water. Even at that price, Panostaja’s ownership was worth 50me. When the entire Panostaja P is only 25me + debts, that would be a tectonic shift. Now Optomed’s revenue is 15me and Nexstim’s is 9me. Corehw prototypes are 1me, and in the Inderes podcast, initial revenue for commercial operations was estimated at 3me.
I personally believe that those three pilots involve a turnover starting from ten million upwards. How that scaling is done and whether it’s spread over how many years, whether a single deal goes through or perhaps several.
I personally believe that if those 3 pilots materialize, we are talking about tens of millions, instead of millions.
These products are not made for SMEs, but likely for giant companies that seek efficiency and traceability in their operations.
I believe that the 5-year revenue potential is in the 10-70M estimate. Depending on how large players this US healthcare client and Japanese logistics/industrial clients are.
Indeed, the scaling from pilots to full production must be 10x upwards.
CorewHW has a few significant advantages compared to typical startups:
Established profitable revenue, rolling 12-month revenue over 10 M€ and EBIT 1.6. This enables growth without share dilution through share issues.
Investments in the product largely made, meaning growth is practically replication.
CoreHW is fabless, meaning it doesn’t own a factory and thus avoids capital-intensive growth.
Everything, of course, depends on the desirability of the product, which is difficult for someone unfamiliar with the industry to assess. But if it’s top of the industry, as claimed, then all the pieces are in place for a groundbreaking success story from Panostaja’s perspective.
Nothing is certain, of course, but I have a good feeling about this, especially since this lottery ticket comes practically free with Panostaja.
Good three points. Unfortunately, the potential is not reflected in the stock price, because CoreHW is under Panostaja. Few know anything about CoreHW, and the name Panostaja, due to its 15-year track record, scares away potential investors. I hope this would change with the sales of Grano and Gugguu and a change in management.
Nvidia, on the other hand, pleasantly surprised the markets last night. One would think that Finland’s only company designing and productizing wireless technology microchips and antennas on the stock exchange would gain interest and momentum at this time, but no.
However, the positive thing is that on 12.12.2025 we will hear the “interim result” of an extended quarter (up to 30.10.2025) and in March 2026, the full 14-month result. Interesting times IF a groundbreaking success story emerges here.
It doesn’t bother me at all if no one knows anything about corehw. At least I have time to load up on the stock.
It’s always possible that the pilot projects don’t materialize, but I’m willing to take that risk🙂
