This company is a phenomenon on the Polish stock exchange. It has just grown by 900%. What is behind it?

• The Polish Military Group recently announced plans to build an artillery ammunition factory together with the Niewiadów Group, for which preliminary financing has been obtained (term sheet agreement).
• Although the planned production launch date is the fourth quarter of 2026, speculators have rushed to the company's shares, as confirmed by the unusual rates of return and the accompanying turnover generated by the company.
• The stock exchange does indeed price in the future, but in the case of the Polish Military Group such large increases may raise some doubts as to their convergence with fundamentals. However, this does not change the fact that speculative capital present on the small stock exchange is once again showing its strength.

In December 2024, one share of the Polish Military Group cost less than PLN 1. On Wednesday, May 21, 2025, the same share was already worth over PLN 12. The rate of return since the beginning of the year is a staggering - even for the highly speculative NewConnect market - over 900%. Are there any fundamentals behind this?

Everything that works in the armament shop lights up green

The Polish Military Group (PGM) is clearly supported by the still very positive sentiment towards the broadly understood arms industry, which has not many representatives on the Stock Exchange . However, companies such as Lubawa and Zremb have managed to "only" double their stock market value since the beginning of the year, and for several weeks they have been recording well-deserved corrections. There is no talk of a correction in the case of PGM.

The company has already managed to generate daily increases of around 40% several times, only to correct them later by only 5-10%. This amounts to an unprecedented rate of return since the beginning of the year, around 950%.

On Tuesday, PGM shares rose by 48 percent, and on Wednesday they are going up by another 30 percent. The turnover is attracting attention, which during Wednesday's quotations exceeded PLN 17 million.

What does the Polish Military Group do? According to information from the source, i.e. from the company's website, it is a capital group of technology companies operating in the security and military sector. The company states that it is working on the development of robots for shooting training and projects of drones for monitoring . However, it is not this activity that excites stock market players so much. The biggest stimulant turns out to be the fact that the PGM business will soon consist of ammunition production.

Merger with the Niewiadów Group and construction of an artillery ammunition factory in Poland

Let us recall that a few weeks ago, the Polish Military Group joined forces with the Niewiadów Group. The new entity intends to focus, among other things, on the construction of a modern artillery ammunition factory in Niewiadów. The subject of production is to be 155 mm artillery ammunition. The start of production is planned for the fourth quarter of 2026.

As reported on Tuesday, May 20, the Polish Military Group and the Niewiadów Group signed an agreement with a fund from the Fidera Group to provide financing worth PLN 250 million for the construction of the factory .

According to the stock exchange announcement, the Fidera group will acquire 20 million PGM shares at an issue price of PLN 5 per share , which will constitute a total contribution of PLN 100 million.

In addition, the agreement assumes that Fidera will provide financing to Zakłady Sprzętu Precyzyjny Niewiadów in the form of a loan worth PLN 30 million and PLN 120 million for participation in the construction and launch of technologically advanced loading lines for a target of 180,000 pieces of 155-caliber artillery ammunition.

The stock exchange (including the NewConnect market, which is not mature in many respects) is pricing in the future. The future of PGM in the form of ammunition production seems extremely lucrative at the moment, although distant. The past, on the other hand, seems to be irrelevant...

PGM's financial results are not impressive. But does anyone even look at that?

The company's reported results are causing some cognitive dissonance in the face of the described stock rally. PGM will not present its full-year 2024 report until May 30, but the fourth-quarter report provides information on its current financial condition.

This is what revenues and costs look like on a unit basis:

What can we read from them? That at the individual level in Q4 2024, PGM's revenues amounted to PLN 271.9 thousand, and cumulatively PLN 1.4 million. Costs increased significantly, which translated into profitability, slightly positive in Q4 and negative (-PLN 849 thousand) cumulatively in 2024.

At the consolidated level it looks like this:

Quarterly revenues are significantly higher than those in the cumulative perspective (PLN 2.6 million versus PLN 868 thousand). In turn, profitability in the fourth quarter is negative, and in the whole of 2024 positive:

- Sales revenues for the fourth quarter of 2024 amounted to PLN 271,885, while sales revenues for the fourth quarter of 2023 amounted to PLN 182,149.18. At the same time, sales revenues for the entire year 2024 amounted to PLN 1,421,341.91 and were over PLN 1 million higher than revenues for 2023. In our situation, it is sales revenues and their constant growth that we pay the most attention to - we read in the PGM report.

- As regards the results of the Capital Group, consolidated sales revenues for the fourth quarter of 2024 amounted to PLN 868,516.10, while sales revenues for the fourth quarter of 2023 amounted to PLN 267,949.18. At the same time, sales revenues for the entire year 2024 amounted to PLN 2,620,687.29 and were almost PLN 2.3 million higher than revenues for 2023 - we read.

The Polish Military Group is currently valued at approximately PLN 200 million on the WSE.