CSG’s Chemical Bet Fails to Shield Shares From a 60% Wipeout
12.06.2026 - 18:52:42 | boerse-global.de
The Czechoslovak Group (CSG) is executing a two-pronged strategy – expanding its footprint in specialty chemicals while parading its latest armour at Europe’s biggest defence fair – yet investors remain firmly on the sidelines. The Czech industrial conglomerate has lifted its stake in German chemicals firm Alzchem Group to 20%, a move designed to diversify beyond its core defence and engineering businesses. On the same day the market absorbed that news, CSG shares slid another 2.33% to €14.48, leaving the stock roughly 60% below the €36.05 record set during its January 2026 initial public offering.
A Record Backlog That Markets Choose to Ignore
Despite the bearish price action, the group’s order book tells a different story. At the end of the first quarter, CSG held a €17 billion backlog, fuelled by strong demand from NATO allies. Chief executive Michal Strnad has pushed the narrative that Europe remains the company’s home market and that CSG is a dependable supplier to the alliance. Yet the equity market has not bought it. The stock now trades 22% below its 50-day moving average, and its relative strength index of 32 points to deeply oversold territory.
The disconnect between operational strength and market sentiment has a concrete trigger. A recent investigation by the network “Follow the Money” raised questions about CSG’s Spanish subsidiary, Fabrica de Municiones de Granada, alleging irregularities in its dealings with NATO procurement agencies. Management has strongly denied the claims and insists all financial reporting is fully transparent.
Should investors sell immediately? Or is it worth buying CSG?
Paris Showcase Puts New Hardware on Display
Starting 15 June, CSG will occupy one of the largest exhibition spaces at the Eurosatory defence fair in Paris, hoping to refocus attention on its pipeline of new products. The centrepiece is a jointly developed battle tank, the Karpat (also designated CFL-120), produced with Turkish partner FNSS. The tracked vehicle features a Leonardo turret armed with a 120mm gun and is built at CSG’s Slovak subsidiary MSM Land Systems.
Alongside the tank, the group is unveiling the Tadeas armoured vehicle from Tatra Defence and showcasing its artillery systems, including the NATO-compliant DITA and MORANA howitzers in 155mm calibre. Eldis Pardubice will demonstrate new software-controlled airport radars, such as the 3D RL-3000 system, while ammunition brands Fiocchi and Federal highlight the group’s vertical integration from radar to large-calibre munitions.
Diversification as a Hedge
The Alzchem stake increase signals that CSG is also looking beyond the defence cycle. The specialty chemicals unit provides a non-cyclical earnings stream and geographic spread across European markets. But for now, the market remains fixated on the controversies and the stock’s technical deterioration.
The next hard test comes on 7 August, when CSG publishes its half-year results. By then, the company will need to convince shareholders that the €17 billion order book can translate into the profit margins the IPO prospectus promised – and that the allegations are nothing more than noise. Until that data lands, the shares are likely to keep trading as if no order book exists.
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