CSG's First Quarterly Report Since Listing Brings a Reckoning on Short-Seller Claims and Billion-Euro Backlog

Czechoslovak Group faces extreme tension ahead of maiden quarterly report as stock halves from IPO high, while analysts remain bullish and fundamentals show 71.7% revenue surge.

When Czechoslovak Group publishes its maiden quarterly report as a public company on May 20, the numbers will land in an atmosphere of extreme tension. The stock has shed more than half its value since the IPO high of €33.81, closing Tuesday at €16.04 — a 29% monthly loss — while the analyst community remains unanimously bullish, setting an average price target of €35.40. The gap between market sentiment and Street optimism has rarely been this wide.

The trigger for the sell-off was a scathing report from Hunterbrook Media released in early May. The short seller alleged that CSG is not a genuine ammunition manufacturer but merely buys old stockpiles, refurbishes them, and resells them — a model Hunterbrook argued has a natural expiration date once global inventories run dry. The stock cratered 13% in a single session and is now trading roughly 53% below its yearly high, hovering just above its 52-week trough at around €16. The annualised volatility has hit nearly 78%.

CSG rejected the allegations forcefully, insisting that its own production capacity reached around 630,000 large-calibre rounds in 2025, with roughly 80% in the critical 155mm calibre. The company plans a 20% increase in in-house output this year, partly through a new production line in Slovakia that will add 70,000 rounds. Hunterbrook counters that the actual annual throughput at the Dubnica assembly site is between 100,000 and 280,000 units, and a linked investment vehicle has disclosed a short position in the stock. CSG is reviewing legal options against the short seller.

The fundamentals, however, paint a very different picture from the share price. Revenue surged 71.7% in 2025 to €6.7 billion, while net profit rose to €872 million and adjusted EBIT came in at €1.6 billion, representing a margin of 24.1%. The order backlog stood at €15 billion, and the company’s broader order cushion — including longer-term pipeline contracts — reached €42 billion, providing visibility that few peers can match. For 2026, management has reaffirmed revenue guidance of €7.4 billion to €7.6 billion and an adjusted EBIT margin of 24% to 25%, with medium-term ambitions of 26% to 28% driven by vertical integration and scale effects.

Yet clouds linger beyond the short-seller drama. The NATO Support and Procurement Agency (NSPA) suspended CSG’s Spanish subsidiary FMG from new tenders on 31 July 2025, a ban that was extended indefinitely in March. A NATO official said the agency does not comment on procedures involving contractors under suspicion of fraud or corruption related to NATO contracts. CSG insists the matter is not material and that FMG can continue selling directly to NATO member states.

On the expansion front, CSG has been active despite the headwinds. It is acquiring a 49% stake in Austria’s Hirtenberger Defence Systems, its first foray into that country, adding mortar ammunition to the portfolio. The deal awaits regulatory clearance. In Poland, CSG signed a framework agreement with state-owned PGZ for joint development of engines for unmanned systems and rockets, as well as modern land platforms. Through its Excalibur International subsidiary, the group secured contracts worth nearly $2.5 billion for air defence systems in Southeast Asia.

Financing conditions have improved. Moody’s upgraded CSG’s secured senior debt to Baa3 in February, citing stronger governance, a simpler capital structure, and more conservative financial policies. Fitch affirmed a BBB- rating with a stable outlook. The upgrades help lower borrowing costs and make the stock investable for a broader set of institutional funds.

The Q1 report will be more revealing. It will show the impact of IPO-related costs that fell after year-end, and whether the recent string of contracts has begun flowing through the income statement. The market will also look for clear disclosures on production capacity, the FMG situation, and any further colour on the order pipeline. With nine buy ratings and zero sells, the analyst community has effectively bet the house on CSG’s story. The May 20 numbers will either validate that conviction or deepen the discount that investors have already priced in.