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Finland stocks update: Qt Group, Harvia and Remedy Entertainment

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Here is the latest update on some of the stocks we like from our Nordic shares correspondent in Helsinki, Raine Lahtinen. These are his personal views.

Qt Group: no listing in the US, but watch out for a buy out

Qt Group is no longer expensive and I would be a buyer at these levels 105-108. I would use a stop at EUR 87. I would start a position now.

I have not seen a Finnish stock almost double in a month at this market capital size over 1 billion euros – maybe ever – and then it happened again in 2020/2021. The ATH is 180, but the P/E at 113 and the market cap now is EUR 2.7 billion.

The stock did not break under EUR 100, but it did hold the EUR 90 level easily – this company will not list in New York now after Russian attacked Ukraine. Qt Group was thinking about listing in the USA after it had established itself at $4-6 billion market cap level, which it did. It will likely be bought by USA company in the course of this year, at at least double the current price. Qt Group is easily the best Finnish growth company of the 2000 generation since Nokia. Qt Group was added to Eurostoxx 600 index and Nasdaq OMX25 Finland index in 2021.

Harvia: M&A activity and a Japan partnership

Finland and sauna are Harvia’s business, and it’s a mantra that stretches now even over 80 countries. Harvia is a market leader with a 16% market share, and yes, no Russia exposure.

With EUR 200-250 million in sales in 2022 the stock is a strong buy at these levels. Harvia’s stock closed at EUR 37.15 Euros on March 14th, 2022 with a market cap at just under EUR 700 million. Harvia’s All Time High is 64.1 (52w 28.2 – 64.1). We anticipate 2022-24 will be great for Harvia too – its profits are being driven especially by Harvia’s growing USA business and increased production facilities in the USA and Europe. I would be buying now and using a stop at EUR 30.

CEO Tapio Pajuharju hinted in a Q1/2022 Q&A session that the next M&A target for Harvia is an infrared sauna company. These saunas are highly profitable and very popular, especially in the USA and Asia; infrared saunas are much  easier to install since you do not need water professionals like plumbers, you only need electricians. Japan is also going to be a great market for Harvia going forward – the company now has an established long term Japanese marketer in the shape of Bergman.

Remedy Entertainment: still a pure play listed gaming studio

Remedy Entertainment closed at EUR 32.95 March 14th, 2022. It has a trading range of €49.9 to €28.75 over 52 weeks. I would use this weakness to start my position since Netflix bought Finnish listed mobile studio Next Games for USD 65 million two weeks ago. Remedy’s market cap is much higher at EUR 440 million, but Tencent Holdings already bought 4.8% of it last year and now with the Chinese tech stocks in trouble, I would not be surprised if EA, Take-Two, Activision or some other US gaming giant buys it.

Where does Finland stand in the current security crisis?

In the latest polls Monday 62-65% of Finns said Finland should  join NATO now even without Sweden. Today March 14th, 2022, Finland and Sweden held a joint special Helsinki sea war exercise to show Russia that we are ready. The whole Finnish eastern border with Russia is already armed with guns and trained to fight. All military reservist Finns (mostly males) between 18 to 50, numbered at close to 600,000, have received orders where to report, if an attack happens. We also ordered 64 new fighter planes from the USA last year in addition to our existing 61.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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