CSG’s AviaNera Engine Deal with Ukrainian Armor: New Frontline Tech, Same Old Stock Woes

Czech group CSG signs engine supply deal with Ukraine for drones and missiles, shifting from artillery shells, but shares near all-time low, down 12-14% in 30 days.

The Czechoslovak Group (CSG) deepened its military-industrial footprint in Ukraine on Monday, signing a far-reaching engine supply agreement on the floor of the Eurosatory defence exhibition in Paris. The pact, struck between CSG subsidiary AviaNera Technologies and Ukrainian Armor LLC, targets the development of new propulsion systems for Ukrainian missiles and drones — a pivot from the pair’s earlier focus on co-producing Western artillery rounds under licence.

AviaNera chief Pavel ?echal has already sketched out the next phase: joint ventures and expanded manufacturing capacity, with the technology itself to be based inside Ukraine. The deal builds on an existing cooperation and signals a strategic shift from ammunition to higher-margin powerplants for precision weapons.

Investors, however, remain unmoved. CSG shares closed Monday at €14.31, clocking a modest gain of just under 2% on the day. That gain masks a grim broader picture: the stock is trading within a whisker of its all-time low of €14.07, touched earlier this month, and has lost roughly 12-14% over the past 30 days. The 52-week high of €36.05, set in January shortly after the company’s Euronext Amsterdam debut, now looks like a distant memory. The relative strength index sits at 30.3, firmly in oversold territory, while the annualised volatility of over 62% underscores how jittery the market remains about CSG’s valuation.

The contrast between CSG’s operational ambition and its stock performance could hardly be starker. At Eurosatory — the world’s largest defence trade show — the Czech industrial group mounted one of the most extensive displays of any exhibitor. Tatra Defence unveiled the world premiere of the Tadeas 4x4 in a command variant, adding to the existing 6x6 version. Tatra Export brought heavy logistics vehicles, including a Tatra Force 8x8 with an armoured cabin. Eldis Pardubice demonstrated the new RL-3000 primary radar and a precision approach radar. AviaNera itself showcased compact turbojet engines for cruise missiles. The ammunition divisions presented NATO-standard calibres from 105 mm to 155 mm, and brands such as Fiocchi Munizioni, Federal and Speer covered small-calibre and shotgun rounds. Topping it off was the new CFL-120 Karpat medium tank, developed jointly with Turkish partner FNSS.

Yet the market has punished CSG ever since its IPO on 23 January, when shares were offered at €25 each in what was then the world’s largest defence listing. The stock has since lost more than half its value, shrugging off the tailwinds of rising European defence budgets and a burgeoning order book. It now sits more than 23% below its 50-day moving average of €18.38, and just 3% above the 52-week low set on 4 May.

Analysts are watching for the next quarterly report to see whether the Eurosatory deal flow — and especially any tangible revenue from the new drone and missile engines — can provide fundamental reasons for a re-rating. Until then, the disconnect between the show of force in Paris and the gravity of the share price in Amsterdam shows no signs of narrowing.