HS Visio had a story this week (for subscribers) about the defense industry boom on the Helsinki Stock Exchange. It was a bit of a superficial overview.
Mentioned listed companies: Bittium, Nokia, Componenta, Aspocomp, and Incap. “With a wider lens, the following can also be included”: Wärtsilä, Vaisala, Scanfil, Kreate Group, GRK Infra, and even YIT.
In addition, companies in the process of listing or planning to do so were mentioned: Savox Communications, Reaktor, Sensofusion, and Varjo Technologies.
A few quotes:
The only company that can truly be classified as a defense company is Bittium, as the majority of its revenue and earnings come from the defense sector and it has a clear product offering aimed at the defense industry.
Savox Communications, which is currently attempting to list, is also a true defense industry company, as the defense sector accounted for slightly more than half of its revenue last year.
“Companies benefiting from the defense industry are interesting because they are among the few companies in Finland capable of showing growth,” assesses Juha Varis, portfolio manager of S-Bank’s Fenno fund.
Bittium’s wild rise is attracting new IPOs to the stock exchange that are getting a boost from the defense industry, he says.
According to Inderes analyst Juha Kinnunen, returns have now weakened at least temporarily, as the enthusiasm was occasionally even excessive. According to him, the outlook in Europe remains excellent.
Kinnunen hopes that the weakening of the biggest boom would mean that investors focus more on company-specific factors rather than blindly buying the entire industry and everything related to it.
“In the medium term, the wheat will be separated from the chaff,” Kinnunen tells HS Visio.
One of these other defense companies on the exchange is Nokia. The defense industry is currently one of its strategic focus areas, but its share of revenue is still small.
Other companies benefiting from the defense industry include at least the foundry company Componenta, the circuit board manufacturer Aspocomp, and the electronics component manufacturer Incap.
With a wider lens, Wärtsilä and Vaisala can also be included with their dual-use products.
Scanfil, on the other hand, manufactures components and electronics for defense systems.
Infrastructure construction companies Kreate Group, GRK Infra, and even YIT can also claim to be part of the defense industry as they build and repair bridges and railways that are part of national defense capabilities.