skip to Main Content
enquiries@thearmchairtrader.com

Sign up for our Free Daily Digest newsletter: Actionable insight every morning, designed for the self-directed investor. Find out more

Global Sauna and Spa company, Harvia is a prime example of a business benefiting in this new era of pandemic investing.

It’s a pandemic beneficiary that has seen a strong Q2 and H1 improve on the same period in 2019 on the back of increased new home improvement and repair projects in addition to sales in key global sauna and spa markets. Its long-term growth expectations are very promising with the prospect of increased operational and production capabilities.

Harvia Financial Highlights

Q2: Revenue +50%, Operating result +91%
H1: Revenue +26%, Operating result +18%

The share price is up 46.41% in 2020.

The Armchair Trader watched the H1 results and webcast call on August 13th, having followed Harvia since November 2019 when the share price was at 11 Euros and had a Market Cap of 180 million. The share price is currently trading at an all time high of 15.3 Euro with a 286 million Market Cap.

The business has been a total success since it was listed in March 2018 at around 5 Euros a share.

Experienced Management Team

The company has very experienced management team led by CEO Tapio Pajuharju and CFO Ari Vesterinen, which knows it’s way around international distribution and sales channels. The business does not rely on organic growth alone, which is the hardest part to grow. Their M&A activity has seen excellent results over the last two years.

The addition of EOS CEO, Mr. Rainer Kunz, to the board brings Harvia the experience of the Beyond Average Saunas & Spas which has opened up access to the luxury and premium markets in Germany, Switzerland, Austria and Russia. A move that should drive the average purchase price per customer higher.

More to come for Harvia?

We believe that these results will keep on coming. Almost Heaven Saunas in the USA opened up a strategic sales channel through Home Depot. The health trend is growing and people are spending on their main and holiday homes.


Hotels and Spas will come back too – business with healthy balance sheets are utilising the pandemic downtime to upgrade their facilities.

With greater equity coverage, this hidden gem has exceeded conservative Finnish analysts’ share price target of 13 Euro and has now been upgraded to 16 Euro, with USA equity analyst house Raymond James now following them.

The Sauna & Spa market is proving very popular, seeing growth worldwide. Harvia is a global leader within the industry with 70 years experience, +14% market share and sales in over 80 countries. The most recognized international sauna brand among Finnish, Swedish, German, Russian and American consumers is getting some overdue share price recognition.

Harvia Share Price Target

With consensus share price targets raised to 16 Euro levels, here at The Armchair Trader, we feel this is still too conservative for a business that sees 5%pa sales growth, 20% adjusted operating profits, and over 60% dividend payout ratio. Our target is 20 Euros per share in 2020.

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Raine Lahtinen

Raine Lahtinen

Raine Lahtinen has spent over 25 years in wealth management and trading. His active investment days started when he attended University of Miami 1987-1991 majoring in International Finance and Marketing. He has experienced the highs and lows of the stock markets since the 1987 crash, Dot.com bubble 2001-2002, the 2008 financial crisis and the current record breaking rally.

Since 1995, Raine has been based in Brussels, Belgium in Continental Europe as an international financial advisor and director of investments in various UK IFA firms. He has written many popular columns about markets and investments during his professional life. His passion is finding undervalued listed stocks. As a Finnish native he specializes on Nordic and US stocks.

Comments

Back To Top