Renk's Record Orders and US Pivot Can’t Hold Back Short Sellers as KNDS Weighs Stake Sale

Renk Group posts record orders, shifts tank gear production to US to bypass export curbs, but shares halve amid short sellers and KNDS stake sale.

Renk Group is living a tale of two stories. On one side, the Augsburg-based transmission specialist posted its strongest-ever quarterly order intake and is shifting production to the US to sidestep export restrictions. On the other, its shares have halved from a year-high, short sellers are piling in, and a major shareholder is considering an exit ahead of its own initial public offering.

The German government’s curbs on arms exports to Israel have put up to €100 million of Renk’s revenue at risk this year — a low single-digit slice of the total, but a potent political headache for investors. The affected business involves gear systems for the Merkava and Namer tanks. Renk is moving that production line to Muskegon, Michigan, with $150 million of investment earmarked by 2030. Future orders could flow through the US Foreign Military Sales programme, bypassing German export controls entirely.

That operational response has done little to deter short sellers. Marshall Wace LLP held a net short position of 0.92% as of May 20, while PDT Partners and Citadel Advisors reported positions of 0.84% and 0.50% respectively. The combined short interest stands at 4.32% and is edging higher. On the long side, BlackRock has increased its voting rights to 4.44%, with a direct stake of 2.95% and the remainder held via financial instruments.

The shareholder picture grew more complex this week after KNDS, the tank maker that holds a stake in Renk, signalled it may sell its block ahead of its own market debut in summer 2026. The German government is taking a 40% interest in KNDS as part of a reorganisation of the country’s defence industry, eventually scaling that back to 30% to match France’s holding. News of the potential disposal lifted Renk’s shares by just over 2% on Thursday to €48.85, recovering from a year low of roughly €44 hit in mid-May. The stock remains 46% below its 52-week peak of €88.73 from October 2025, with a year-to-date decline of more than 13%. The relative strength index at 79 now signals short-term overbought conditions after the bounce.

Operationally, Renk’s first quarter was robust. Order intake hit a record €582.3 million, up 6.1% from a year earlier, and more than 90% of the planned full-year revenue of over €1.5 billion is already covered by orders and framework agreements. Revenue rose 4% to around €284 million, while earnings per share jumped to €0.15 from just €0.01 in the same period last year. Analysts on average forecast full-year EPS of €1.73.

Shareholders have a dividend hike in sight. The management board has proposed a payout of €0.58 per share for fiscal 2025, an increase of 38% on the prior year, and analysts are already pencilling in €0.72 for 2026. Both proposals will be put to the annual general meeting on June 10, where Dr Klaus Richter is slated to take the chair of the supervisory board, replacing Claus von Hermann who is stepping down at his own request.

With KNDS weighing a block trade, short sellers circling, and a record backlog still failing to lift the share price, all eyes are on the AGM — and the next quarterly results due on August 6. Until then, the tug-of-war between Renk’s operational strength and the political and structural risks around its ownership looks set to continue.