CSG’s Polish Powder Plant Delivers, but the Share Price Has Yet to Catch Up

CSG shares remain 61% below January peak despite start of 155mm propellant production at Mesko's Pionki plant. Stock faces short-seller damage, technical weakness, and awaits half-year results.

The start of series production at Mesko’s Pionki facility should be a clear win for Czechoslovak Group — a concrete sign that long-gestating defence contracts are finally moving into high-volume output. Yet the stock, battered by a short-seller attack and still nursing losses of more than 60% from its January peak, has barely flinched. Since plumbing a 52-week low of €12.20 on June 26, CSG shares have recovered about 14% to trade in the €13.90 area, but that recovery leaves the company capitalised at just €13.9 billion — barely half the valuation it commanded on listing day.

CSG made headlines in January with the world’s largest pure-play defence IPO, a €3.8 billion deal that valued the group at €25 billion. The stock hit an all-time high of €36.05 on January 26 before the wheels came off. A short-seller report in May triggered a 28% plunge in a matter of days, and by late June the shares had surrendered more than 60% of their value. The broader European defence sector, by contrast, has held up well: the Stoxx Europe Aerospace & Defense Index has added 12% year-to-date, underpinned by NATO’s commitment to a 5%-of-GDP defence target by 2035 and the EU’s SAFE programme, which favours European suppliers.

Technical indicators reflect a stock still trying to find its footing. The 14-day relative strength index sits at 45.5, squarely in neutral territory — neither oversold nor overbought. The share price is 9.4% below its 50-day moving average of €15.37 and a yawning 31% beneath the 100-day average of €20.40. Annualised volatility remains elevated at 51.7%, underscoring how sensitive defence names remain to every shift in geopolitical sentiment.

Against that backdrop, the production milestone at Mesko — a subsidiary of Poland’s PGZ group — offers a tangible counterweight. The facility in Pionki is now manufacturing propellant powder for 155-mm artillery shells, a technology transfer that CSG first contracted in December 2023. Successful live-fire tests with KRAB howitzers cleared the way for series production. For an industry plagued by long lead times, turning that contract into operational output within 30 months is no small feat.

Still, the stock’s trajectory suggests investors are waiting for more than isolated operational wins. The short-seller attack eroded confidence, and the sheer scale of the post-IPO decline — 61% from peak to trough — will take time to repair. Even after the recent bounce, the share price remains 61% below the January high. The market wants to see consistent execution, especially in margin-critical technologies such as propellant manufacturing.

All eyes now turn to August 7, when CSG publishes its half-year results. Analysts will scrutinise the order backlog and the pace of technology transfers — the very operational metrics that the Mesko ramp-up is meant to validate. Until then, the stock is likely to trade in a tight range, groping for a durable support level above the June lows. The powder plant in Pionki is a start, but it will take a broader production cadence to convince the market that the recovery is more than a dead-cat bounce.