Czechoslovak Group - is it really so hot?

About the author

I am an investor from Central Europe, focusing on the European defense industry, defense industry parts suppliers, chemicals, energy, and construction; in short, I am interested in both horizontal and vertical sectors related to European defense and infrastructure.

Company introduction

If you scroll down the website a little, in the About the Company section, you will find a description of what the company does. Rather than copying it here, I will just add that CSG is an abbreviation of the full name Czechoslovak Group, which refers to the Czechoslovak Republic (1918-1992), now the Czech Republic. Czechoslovakia was a world leader in arms production in its day, and the Czechoslovak Group is successfully continuing this tradition. Also note that even though it is a Czech company, it has a Dutch flag on SimplyWallstreet – this is because its shares are traded on the Amsterdam Stock Exchange in euros; it is also traded on the Prague Stock Exchange in korunas (something like a dual listing), but the main market is Amsterdam. It should be added that CSG is a merger of 12 defense and technical companies.

Start of trading

Trading in the shares began on January 23, 2026, and it was one of the largest global defense IPOs in recent years. The original IPO was not scheduled to take place until mid-2026, but the company's management changed its mind in light of high demand for European defense company shares, with TKMS and Saab, for example, growing by tens of percent in January. Another factor in bringing forward the IPO was the increasingly intense peace talks in Ukraine. Funds and banks had the opportunity to buy shares before the IPO for EUR 25, and on the first day of trading, the price jumped to EUR 32. According to Bloomberg, over 600 institutional investors participated in the IPO. It was possible to see a relatively rare phenomenon – most eagerly awaited IPOs (if you remember Coinbase in 2021, for example) see the share price rise sharply for the first two days and then fall, often to the initial price or even below it. In the case of CSG, the shares have been holding steady at EUR 32 for several days, which means that no one wants to sell, and there is also a lock-up prohibiting the sale of shares by major shareholders for a period of 180-360 days. The total value of the IPO was EUR 3.8 billion, which is 15.2% of the entire company.

Why should you be interested in CSG?

CSG is often compared to Rheinmetall, the German and European leader in armaments. The latter company manufactures a wide range of military equipment for land, air, and sea, as well as defense digitization and heavy ammunition. https://www.rheinmetall.com/en/ products/overview. CSG manufactures a range of armored vehicles and location technology, but above all, it is a world leader in the production of small-caliber and heavy 155 mm ammunition for cannons https://defence.czechoslovakgroup.com/en. Ammunition is a highly valued commodity because European NATO countries already had empty warehouses before the war in Ukraine and now export a significant part of their production to Ukraine. Due to legislative restrictions and environmental regulations, it is not easy to open new production lines for gunpowder and other explosive chemicals in Europe or to increase production capacity (Rheinmetall managed to do both in 2025, but this is an exception).

Risks and opportunities

In recent years, deliveries to Ukraine have accounted for 25-40% of the group's total sales. CSG's main product is ammunition, which is not the case with Rheinmetall. If the war in Ukraine ends, arms manufacturers' shares would plummet by tens of percent, and CSG would be more affected than Rheinmetall, which supplies the German army on a large scale – this is the risk. On the other hand, the opportunity is that CSG has the ambition to become the main supplier of ammunition for the entire European NATO, and although shares would plummet in the event of peace, all analysts at major banks know that this would make it all the more necessary to fill European warehouses with equipment and ammunition, so the fall would be more of a buying opportunity. Some American analysts say that even after the already significant growth in defense company shares, we are still at the beginning of a hyper cycle of arms spending.

Ethical issue

Many investors are reluctant to trade in defense company shares. They think that when they buy shares, the company will use the money to produce ammunition that kills people somewhere in Ukraine. But that's not how it works. The company only receives money in exchange for its shares on the day of the IPO, and only the first investors give it money directly. After that, the shares are traded on the stock exchange and investors only exchange them among themselves; the company does not benefit from this. If you make really good money on shares in defense companies such as CSG, Rheinmetall, Renk, Hensold, SAAB, Kongsberg Gruppen, or TKMS, you can then send some money to Ukraine to the people who had to stay there—you will help them more than if you avoid these shares altogether.

Price estimation

My estimate is that the price will be between €50-55 at the end of 2026.