Latest / The Dutch Investors / #35 | Polish companies, strategies and future | Interview w/ Kamil the head of IR at Budimex

Transcript

#35 | Polish companies, strategies and future | Interview w/ Kamil the head of IR at Budimex · The Dutch Investors

• 0:00
  SPEAKER_01: In this episode, we sit down with Camille, the head of investor relations at BuddyMax, Poland's largest construction and infrastructure company.
• 0:10
  SPEAKER_01: But he's not here to just talk about Buddy Max, quite the opposite.
• 0:14
  SPEAKER_01: He's also a passionate investor, someone with unique insights into Poland.
• 0:19
  SPEAKER_01: We also dive deep into the Polish market of what he looked for in companies, and he shared several great Polish companies, such as TV Project, the maker of the Witcher games, supermarket chain Dino Polska, Auto Partner, and quite a few others.
• 0:36
  SPEAKER_01: It was a great pleasure having him on.
• 0:38
  SPEAKER_01: Talk with us and share his view and insights.
• 0:41
  SPEAKER_01: Enjoy today's conversation with Camille.
• 0:53
  SPEAKER_04: Could anyone do the same thing you did start to go?
• 0:58
  SPEAKER_02: Are you born with it?
• 0:59
  SPEAKER_02: Is it DNA?
• 1:00
  SPEAKER_02: Is it some early childhood exposure?
• 1:04
  SPEAKER_04: The first rule on investment is don't lose.
• 1:07
  SPEAKER_04: And the second rule on investment is don't forget the first rule, and that's all the rules there are.
• 1:11
  SPEAKER_04: To give up what you're doing well because of guesses about what's going to happen just doesn't make any sense to it.
• 1:17
  SPEAKER_04: Mommy, we are going to be buyers of things over time.
• 1:20
  SPEAKER_04: What I needed to get ahead was the Greek comedian's idiots.
• 1:24
  SPEAKER_04: And luckily there's a large supply.
• 1:44
  SPEAKER_01: And I'm sure we'll cover a lot of ground today, but I'm just but I just wanted to say that we really appreciate you taking the time to talk to us.
• 1:51
  SPEAKER_00: Yeah, hello Steam.
• 1:52
  SPEAKER_00: Thank you for the invitation and hello to everybody listening to the podcast.
• 1:57
  SPEAKER_01: If I did my homework correctly, you're the head of investor relations at Budimax, the largest construction and infrastructure company in Poland, but you're also a diehard investor, am I correct?
• 2:10
  SPEAKER_00: Yeah, this is correct because I'm uh connecting, let's say, the investor relations part and strategy in Budimax.
• 2:17
  SPEAKER_00: It gives me a lot of the background for the market, not only from the perspective of the local investors, but also from the foreign professional investors.
• 2:25
  SPEAKER_00: And secondly, I'm very actively investing since 2015.
• 2:29
  SPEAKER_00: I had a very good mentor on my university, and since then I started investing.
• 2:33
  SPEAKER_00: So this is let's say my second way to earn and compound the money for myself.
• 2:40
  SPEAKER_01: Uh, do I pronounce your name Camille?
• 2:42
  SPEAKER_00: Yeah, this is correct.
• 2:44
  SPEAKER_01: Alright.
• 2:44
  SPEAKER_01: Well, Camille, to kick things off, could you share a bit of your background and what sparked your passion for investing?
• 2:52
  SPEAKER_01: What led you to this journey?
• 2:53
  SPEAKER_01: And is there anything else about your story that is worth sharing?
• 2:57
  SPEAKER_00: I mean, I believe that sometimes very small factors, sometimes one sentence, sometimes one person can change our imagination about investing and about the financial world.
• 3:07
  SPEAKER_00: So basically, I have met my mentor on university in Wroclav that was very active in terms of the fundamental investing in Wroc.
• 3:17
  SPEAKER_00: So basically, he inspired me to go deeper than the technical analysis, than looking for the simple indicators, and also convinced me that investing for the long term, for the companies, for the leaders, may provide for the investor much much value in the long term.
• 3:35
  SPEAKER_00: So I was trying to go deeper.
• 3:37
  SPEAKER_00: Sometimes he he motivated me.
• 3:39
  SPEAKER_00: Maybe somebody won't like to look at him.
• 3:42
  SPEAKER_00: He's called Marek Pauka, P A U K R.
• 3:47
  SPEAKER_00: He is not maybe active in terms of being on the YouTube or some interviews, but the knowledge is fantastic from him.
• 3:55
  SPEAKER_00: I I basically remember that sometimes I found the card from the university in 2015.
• 4:02
  SPEAKER_00: He wrote, for example, Live Chat, Ambra, Kente, the companies 11B Studio, the companies that at that point was going to develop and go from the let's say next step in terms of their business.
• 4:16
  SPEAKER_00: I have checked those cards in 2021.
• 4:19
  SPEAKER_00: Most of them was multiplied in the stock exchange in the long term.
• 4:24
  SPEAKER_00: So basically, he inspired me.
• 4:26
  SPEAKER_00: Um I started reading a lot in terms of the basic background that everybody is reading.
• 4:33
  SPEAKER_00: So Warren Buffett, uh, intelligent investor, etc.
• 4:37
  SPEAKER_00: But I also started investing on my own in the local market.
• 4:41
  SPEAKER_00: So sometimes it was difficult.
• 4:42
  SPEAKER_00: I also even participated in Dino IPO, but it was let's say the the first mistakes that I have made.
• 4:49
  SPEAKER_00: Having, let's say, big profit, I was too early cashing out the money.
• 4:55
  SPEAKER_00: But getting more experience, diving deeper into the markets, it became my passion also.
• 5:01
  SPEAKER_00: Not only to be, let's say, investor who is looking for my asset, but also to dive deeper and learn about the companies because I believe that this is helping a lot, not from the perspective of the investor, but for the experience of the person who is active on the market.
• 5:17
  SPEAKER_01: I hope we can talk a little bit more about those companies later.
• 5:21
  SPEAKER_01: Very interesting.
• 5:23
  SPEAKER_01: So, what is it you do for uh Budimax?
• 5:26
  SPEAKER_01: Can you briefly tell us what the company does?
• 5:29
  SPEAKER_00: Yeah, if I'm going to describe the Budimax, uh Budimex is basically the leader for the construction business in Poland.
• 5:36
  SPEAKER_00: The most diversified company that the works are coming not only for the road or railway, but coming deeper into the hydrotechnical works, military, sometimes some asset-based projects.
• 5:48
  SPEAKER_00: But the very interesting fact for the listeners is that the Budimex is basically the project management company because companies having more white collar than the blue-collar employees.
• 6:01
  SPEAKER_00: Um, secondly, we are also part of the Ferroville group.
• 6:04
  SPEAKER_00: The Ferroval group may be more familiar for everybody because they are listed not only in the Netherlands Stock Exchange, but also they are listed in the Nasdaq.
• 6:14
  SPEAKER_00: So we are trying to somehow follow their path to be company based on the project management, but also to become more and more asset-based company.
• 6:24
  SPEAKER_00: I mean, for the BootyMex, we can discuss it, I mean, at least for one hour.
• 6:29
  SPEAKER_00: But like you mentioned before, uh, I'm investor relations and strategy manager.
• 6:33
  SPEAKER_00: So my role is also to meet together with the all of the groups of the investors, the individual investors, the fans in Poland, the foreign investors to explain the market story of the Boudimex and also, let's say, to have some feedback from them, uh, what they are expecting, what they are looking for in the market.
• 6:53
  SPEAKER_00: So the role is very interesting for me because I am not only very close to the management board in the Boudimex, but also I am meeting very experienced investors throughout the throughout the world.
• 7:04
  SPEAKER_01: Yeah, I can imagine it's uh it's a fun job.
• 7:09
  SPEAKER_01: So, is there anything uh I think Boudimex is publicly listed as well, right?
• 7:14
  SPEAKER_00: Yeah, Budimex publicly listed.
• 7:16
  SPEAKER_00: It is, let's say, one of the oldest companies in the stock exchange in Poland because listed since 1995.
• 7:24
  SPEAKER_00: The the stocks was based in Poland in 1991, and also Boudimex after 20 years came back to the blue chips in Poland.
• 7:33
  SPEAKER_00: So the visibility right now it is much much higher, and even somebody may look up the capitalization, it has grew a lot in the last three, four years because of those small effects, and also the strategy that I am going to implement in the company.
• 7:49
  SPEAKER_00: But like I said, the visibility is much much higher right now of the company than it was in the past.
• 7:54
  SPEAKER_01: So I would love to talk more about investing in Poland, Polish companies.
• 7:59
  SPEAKER_01: I think that's uh that's a good way of heading.
• 8:02
  SPEAKER_01: So let's shift gears a bit.
• 8:04
  SPEAKER_01: As you know, investing is as much an art as it is in science.
• 8:08
  SPEAKER_01: Each investor has their own approach.
• 8:11
  SPEAKER_01: So, what is your approach to investing?
• 8:13
  SPEAKER_01: Could you expand a bit on your investing philosophy, maybe?
• 8:16
  SPEAKER_00: I mean, my philosophy is evolving a lot because I also believe that markets is changing a lot throughout the time.
• 8:22
  SPEAKER_00: So I'm not going to be stubborn.
• 8:24
  SPEAKER_00: I'm sometimes trying to find some new small ideas that I'm going to implement.
• 8:29
  SPEAKER_00: Um but definitely I'm very based in the local market because I believe that the local markets, what provides me, the local markets, is definitely the knowledge of the companies, knowledge of the legal framework, knowledge about the people staying behind the company, and also I'm not losing those small effects in the market.
• 8:49
  SPEAKER_00: Um I also believe, and I'm always trying to find some ideas for the re-rating coming from the two ways.
• 8:58
  SPEAKER_00: The re-rating may come from, let's say, for the financing for the company, the new market, the MAs.
• 9:03
  SPEAKER_00: This is let's say the positive way.
• 9:05
  SPEAKER_00: Sometimes the company is going to a little bit change, shift the business for the new ideas.
• 9:11
  SPEAKER_00: So, for example, we have the company called in in Poland the Benefit System.
• 9:16
  SPEAKER_00: They are nowadays expanding into the Turkish market because it is much, much deeper in terms of let's say the addressable market than in Poland.
• 9:26
  SPEAKER_00: So it may be somehow addressive for me to believe and also to find the idea that also the market is going to follow in the long term.
• 9:37
  SPEAKER_00: I have the background.
• 9:38
  SPEAKER_00: This is, let's say, pretty simple background.
• 9:40
  SPEAKER_00: So I am looking mostly about the fundamentals.
• 9:43
  SPEAKER_00: I'm always looking for the companies that are going to improve the financials within, let's say, mid and long term.
• 9:49
  SPEAKER_00: I always believe that the balance sheet and cash flow is giving more answers than it's giving the financial statement, cash flow especially.
• 9:58
  SPEAKER_00: Because if company is somehow losing the money, there may be many many factors, and let's say even IFRS and accounting systems may provide, let's say, for the company, the the road to provide financial statement and positive, let's say, bottom line, financial result, but in the cash flow, everybody will see the answer, what is happening in the company.
• 10:22
  SPEAKER_00: Um last but not least, I always try to track the people behind the company, the management board, how long they are in the company, uh, what is the experience, what is the edge of the company.
• 10:35
  SPEAKER_00: Uh the same situation may happen in the US, in the different markets, but also I think that the leaders of the markets they are having the best capacities to even improve in the long term.
• 10:47
  SPEAKER_00: Because, of course, we can say that the leaders in the market in the past already grew.
• 10:51
  SPEAKER_00: The capitalization grew sometimes multiple times, but still they're having the best, let's say, people in the market, they're having the best capacities, experience.
• 10:59
  SPEAKER_00: So, I'm also the believer that in the long term, not the second tier, the third-tier companies, but the leaders they are going to expand even faster than those smaller companies.
• 11:09
  SPEAKER_00: Um, what is important also in Poland is that the financial market is not that deep and effective like the other markets, maybe even in the Europe, uh Western Europe, or especially in the US.
• 11:26
  SPEAKER_00: So sometimes discounting some news may take more time, and sometimes even one big investor may have huge impact on the company in terms of the capitalization.
• 11:37
  SPEAKER_00: So sometimes even I need to check what is the free flow of the company and if somebody is buying or selling the shares, because I can have very good idea and research made, but if some fund is going to sell and sell the deposition until the zero, there is no point from my perspective to fight with them.
• 11:56
  SPEAKER_00: Because at the end of the day, uh the individual investor, I believe, it is somehow at the end of the let's say cycle, the chain of the knowledge of the company.
• 12:06
  SPEAKER_00: So even the best research, it is not going to provide me any advantage versus the funds in Poland.
• 12:15
  SPEAKER_00: So investing philosophy, like I said, many ideas, but basically the companies that they have best quality, improving the financials, they are going to let's say very good also the story for the investors.
• 12:29
  SPEAKER_00: So somehow I'm often investing in the same companies that I am meeting together with the Boudimex in some conferences in the London, Prague, etc.
• 12:39
  SPEAKER_00: Because if I see even some interest from the investors in that point for those companies, I also believe that I am going to be also the part of this flow coming for the for the stock.
• 12:51
  SPEAKER_01: So when you're looking for these companies, right?
• 12:54
  SPEAKER_01: You said good financials, leaders, management, uh with another experience.
• 13:00
  SPEAKER_01: Do you focus mostly on Polish companies because you feel like you can gain an edge there, or do you look outside of Poland as well?
• 13:07
  SPEAKER_00: Outside of Poland as well.
• 13:09
  SPEAKER_00: But I would say that my average position outside of Poland is concentrated mostly in the US and it is not above 20% of my portfolio.
• 13:23
  SPEAKER_00: Majority of the stock is Polish based.
• 13:26
  SPEAKER_00: I can also say that despite those factors in the recent years, the COVID situation, the war that impacted a lot the Polish market, I'm always wrong.
• 13:36
  SPEAKER_00: Approximately 90%, 100% is in the stock in the long term, and I'm not suffering a lot because of that.
• 13:43
  SPEAKER_00: Because sometimes I need to check, let's say, if the market is going to change a lot for a particular company.
• 13:49
  SPEAKER_00: But despite this fact, like I said, like you said, the edge is very positive from being the local investor from my perspective.
• 13:57
  SPEAKER_00: The Polish market, we can go a little bit deeper into that in the later conversation, is giving a lot of opportunities for the investors because you can go for, let's say, each particular idea or market or even thesis coming from the financing and find company who is reader in Poland.
• 14:15
  SPEAKER_00: And like I said, the market efficiency is somehow disturbing but somehow positive.
• 14:22
  SPEAKER_00: So I can give you even an example that uh in this month it was an information about the Pepcon, the company that is also having, let's say, some storages in Spain, in the UK.
• 14:34
  SPEAKER_00: So they are going to divest some of the subsidiaries.
• 14:37
  SPEAKER_00: The market in Poland was not responding within two days about this information.
• 14:43
  SPEAKER_00: But it what may happen after this information, the company is going to have much more cash if they are going to divest the non-positive business, and also they are going to focus more on the most positive business in their portfolio.
• 14:59
  SPEAKER_00: Second factor is that they are very fragile in terms of the financials and the cost of the capital.
• 15:04
  SPEAKER_00: So this is also giving them extra cash.
• 15:06
  SPEAKER_00: So it took two days in Poland to discount this news.
• 15:10
  SPEAKER_00: This is, let's say, for me, a very positive edge because I'm always trying to prepare each morning, not only from the perspective of the Budimex, my company, but also from the market, what is changing.
• 15:20
  SPEAKER_00: And if somebody is reading the press, yes, you probably you are doing the dots, they are connected very quickly in the market.
• 15:27
  SPEAKER_00: And what may be, let's say, the response of the market.
• 15:30
  SPEAKER_01: So would you say the low-floating companies and perhaps the speed of information in Poland and perhaps neighboring countries even?
• 15:41
  SPEAKER_01: Uh, is that a double-edged sort almost where it is an advantage if you live there, but also perhaps a risk?
• 15:48
  SPEAKER_00: Yeah.
• 15:49
  SPEAKER_00: Yeah, it may be the risk, definitely.
• 15:51
  SPEAKER_00: But the the risk is coming from that somebody is going to have one state and one thesis and not double checking what is happening inside the company, inside the reporting, um, inside the people in the company.
• 16:04
  SPEAKER_00: There may be some be some mistake coming from that.
• 16:07
  SPEAKER_00: I there is no no simple route, I believe, and path in the investing, especially in those local, not effective markets.
• 16:15
  SPEAKER_00: So somebody is going to go, let's say, short, having let's say abbreviation, one idea in the mind, but I also believe that there is no one simple rule and indication in those local markets.
• 16:27
  SPEAKER_00: Because somebody needs to check not only the information but what is happening behind that.
• 16:32
  SPEAKER_00: But like you said, the edge may be very positive, especially if the market, because we are saying that right now Poland is having, let's say, one of the best markets in 2025.
• 16:42
  SPEAKER_00: But since I'm investing, it is my 10 year of in being active investor, the market was always behind different European or emerging markets.
• 16:52
  SPEAKER_00: We were having the discount versus let's say emerging market a couple times in terms of the P2E or EVA bidda.
• 17:02
  SPEAKER_00: It was behind that the market was not believing in the stock exchange in Poland.
• 17:07
  SPEAKER_00: We are having in Poland one of the smallest parts of people in Poland, local people, investing in the stock market.
• 17:14
  SPEAKER_00: The people are not believing in the market.
• 17:16
  SPEAKER_00: So this is the reason why the market sometimes was difficult.
• 17:20
  SPEAKER_00: Nowadays, the situation is a little bit changing because the market is believing that coming from the financing from the EU, having let's say a little bit different government than it was in the past, and last but not least, the political tension surrounding the Ukraine may help to boost the market, but still we are far behind the Greece market, the France market, the Italian market in terms of the valuations.
• 17:46
  SPEAKER_00: So this is what may be positive for newcomers to go.
• 17:50
  SPEAKER_00: I even experienced this fact because working with Boudimex is giving me the visibility how many investors is asking the Boudimex or the company for a meeting.
• 18:02
  SPEAKER_00: So I can say that before 2022-2023, we had a couple of the meetings per month.
• 18:07
  SPEAKER_00: Nowadays I am having multiple meetings within one week, and always somebody new is asking to come to check the company.
• 18:16
  SPEAKER_00: So it gives me the answer that the flow is coming into the Polish market.
• 18:21
  SPEAKER_00: Definitely, I must say that those markets that they are not effective, if the the foreign capital is coming into the stock, it is boosting a lot of the market.
• 18:32
  SPEAKER_00: Because, like I said, the Polish market it is not concentrated on the individual investors because we are having fewer than less than 5% of people investing in Poland.
• 18:43
  SPEAKER_00: The local funds they are having, let's say, their capacities and they are also trying to more and more invest in bonds rather than in the stock.
• 18:50
  SPEAKER_00: But the foreign investors are providing this positive flow.
• 18:54
  SPEAKER_01: Is that changing where the younger generation in Poland is investing more in equities, or is that the same as say 10 years ago?
• 19:05
  SPEAKER_00: I believe this is the same because, on the one hand, the people are more active, but they are also finding that, for example, the cryptocurrencies to invest.
• 19:13
  SPEAKER_00: In Poland, we have also very strong belief in terms of the real estate.
• 19:19
  SPEAKER_00: It is, let's say, maybe not the best way to think about the market about 20 years plus because the demography is going to change, but people believe into, let's say, the stable assets from the real estate.
• 19:32
  SPEAKER_00: And thirdly, the financial market requires time to be in the market, to check the information, to make a research.
• 19:39
  SPEAKER_00: I believe that sometimes people are not going to willingly invest their time to be in the market.
• 19:46
  SPEAKER_00: More and more interesting for the people is becoming the investing, the passive investing for the ETFs, for the US stock rather than for the local market in Poland.
• 19:56
  SPEAKER_00: Because from the other perspective, not from the perspective of the valuation, but from the perspective of the historical performance, the Polish stock was not providing in terms of the indexes a very big advantage versus inflation versus let's say bond, real estate.
• 20:12
  SPEAKER_00: We have few stocks, outstanding stocks that performed very well, but they were focused by the foreign investors, not by the local people.
• 20:22
  SPEAKER_00: So my belief is coming not from the demography new generation coming into the market because if you check the statistics, individual investors in Poland they attribute approximately 10% of the whole stock flow.
• 20:38
  SPEAKER_00: 20-25%, sometimes up to 50 30%, is coming from the local funds.
• 20:43
  SPEAKER_00: But they are not rotating a lot in the portfolio.
• 20:46
  SPEAKER_00: Majority of the flow, the changing of the capital is coming from the foreign investors.
• 20:53
  SPEAKER_00: And the foreign investors for that market that is not providing more than 1 billion turnover per day may change a lot.
• 21:01
  SPEAKER_00: So if somebody wants to check the CD projekt, Dino, Auto Partner, these are the also the Boudimex in the last three years.
• 21:09
  SPEAKER_00: These are the companies that may focus foreign investors to believe in the long term.
• 21:15
  SPEAKER_01: Do you think, or perhaps rather, do you worry about the aging population, perhaps slowing economic growth in the future?
• 21:23
  SPEAKER_01: Since Poland is the fastest growing European economy right now, they're doing exceptionally well.
• 21:30
  SPEAKER_01: They're investing a lot in their infrastructure.
• 21:32
  SPEAKER_01: When you look at the statistics though, there is an aging population.
• 21:37
  SPEAKER_01: Is that something you think about when you're investing?
• 21:40
  SPEAKER_00: Yeah, I need to have it in mind.
• 21:42
  SPEAKER_00: Uh of course, I can also find the answer for this aging population because, for example, I can look up the companies coming from the biotech like Diagnostica.
• 21:50
  SPEAKER_00: It is a company that is providing the medical treatment for the people.
• 21:54
  SPEAKER_00: So I also can have the answer coming from those aging populations.
• 21:58
  SPEAKER_00: But like you said, this is the Negative factor.
• 22:01
  SPEAKER_00: I remember that I have met the investor one year ago that he gave me very simple instruction regarding the countries in the Europe that I need to check in the long-term three factors.
• 22:13
  SPEAKER_00: The first one is demography.
• 22:14
  SPEAKER_00: Demography in the past was in the in Poland especially positive because we had many people from the 70s, 80s coming into the market, very productive, they had much drive to become more rich because the company the Polish state was before a communist state because of the Soviet Union, so everybody was hungry to provide more and more for themselves and for the children.
• 22:39
  SPEAKER_00: So the drive is very high in Poland and productivity of the people.
• 22:44
  SPEAKER_00: Secondly, we had pretty good immigrants coming to Poland.
• 22:48
  SPEAKER_00: So the situation, if somebody is coming to Poland from Ukraine, from the Belarus, the culture is very similar.
• 22:53
  SPEAKER_00: They assimilate pretty quickly and they can go into the market.
• 22:57
  SPEAKER_00: So it was the positive effect.
• 23:00
  SPEAKER_00: Secondly, we are much much beneficial from the EU financing.
• 23:05
  SPEAKER_00: So the Polish state is sometimes supportive in terms of giving some money for the infrastructure, but majority of the changes came after 2004, after the uh entering the EU.
• 23:17
  SPEAKER_00: It was a game changer in terms of the terms of the state that was at very early stage of the development.
• 23:25
  SPEAKER_00: And thirdly, the investor said to me that I need to check deeply into the energy cost and transportation in each country.
• 23:35
  SPEAKER_00: So the transportation is the answer coming from the financing from the EU.
• 23:40
  SPEAKER_00: We invested a lot for the buildings, a lot for the roads.
• 23:43
  SPEAKER_00: I believe that we are having one of the best road networks right now in the Europe, the modern one.
• 23:52
  SPEAKER_00: Nowadays we're trying to invest a lot into the railways and the different parts, but on the other hand, the energy in Poland is very bad.
• 23:59
  SPEAKER_00: We are having one of the highest costs in the Europe in terms of the energy.
• 24:04
  SPEAKER_00: So it might very big trouble for us in the long term.
• 24:09
  SPEAKER_00: It may shift somehow, also coming from the new wave of the EU financing.
• 24:13
  SPEAKER_00: So I would say that at the end of the day, we are having the positive effect from transportation in Poland and geography, because we are having not only um surrounding area coming from the Germany, Czech, but also the seaside.
• 24:28
  SPEAKER_00: So it may be the positive effect.
• 24:30
  SPEAKER_00: Demography is going to change from the plus into the minus in the long term.
• 24:33
  SPEAKER_00: There is hypothesis if the people that moved to Poland since the breakout of the war they are going to stay in Poland or they are going to come back to the Ukraine because they may be a new booming market for them.
• 24:46
  SPEAKER_00: So it's somehow maybe also the negative effect for the Polish demography.
• 24:51
  SPEAKER_00: Because it definitely injected a lot of the human capital and financing since 2022.
• 24:57
  SPEAKER_00: It came approximately 2 million of the people, new newcomers for the market, majority of them very productive.
• 25:02
  SPEAKER_00: And thirdly, very negative effect coming from the energy.
• 25:06
  SPEAKER_00: The investments may change this effect, but nowadays we can say that this is one of the worst markets in Europe in terms of the cost of the energy.
• 25:14
  SPEAKER_01: So when we talk about all these things, what do you think are potentially interesting sectors or industries or even regions in Poland that show a lot of promise?
• 25:27
  SPEAKER_00: Regions definitely the north region of Poland is going to have a lot of investment coming from the new ports, coming from the concentration of the offshore, also the new infra projects.
• 25:40
  SPEAKER_00: So this is definitely the answer for the people.
• 25:42
  SPEAKER_00: If even somebody is going to move to Degdańsk and check how the city is going to change, it will be one of the most booming markets.
• 25:51
  SPEAKER_00: In Poland, there is also the hypothesis that the cities they are going to concentrate more and more people coming from the villages.
• 25:58
  SPEAKER_00: So it may be the effect that in the long term the top five cities they are going to concentrate more and more investments in comparison to the smallest cities.
• 26:08
  SPEAKER_00: For the particular areas that you are asking in terms of the investing perspective, we are having pretty decent financial companies, pretty decent consumer companies, pretty decent companies concentrated on the food, for example.
• 26:23
  SPEAKER_00: So nowadays, and I also believe that in the midterm they are going to still be very strong.
• 26:28
  SPEAKER_00: But for the long term, to grow the business, they need to go to the foreign countries, to the neighboring countries.
• 26:34
  SPEAKER_00: We can see even this effect starting in 2025, because a lot of companies, the big companies, the blue chips, they are providing strategy to concentrate not only on the Polish market, because at some point there may be the saturation of the market or in terms of the development, and they are going to check the Czech market, Slovakia and the Baltic, the Turkish market to expand even further.
• 26:58
  SPEAKER_00: But definitely what we can say is that the Polish market is somehow pretty well developed in terms of the technology.
• 27:06
  SPEAKER_00: So if somebody is going to check the banking system in Poland versus, for example, German in Austria, the Polish market is fantastic in terms of the solutions for the people.
• 27:17
  SPEAKER_00: The same situation is applying for the ideas coming from the, for example, the consumer companies, like the benefits, LPPs, etc.
• 27:27
  SPEAKER_00: They are having.
• 27:28
  SPEAKER_00: I believe that if somebody is going to travel throughout Europe, one of the best solutions for the people.
• 27:33
  SPEAKER_00: So the expansions may be effective for them, but for the expansion, there is always the entry cost to enter, and also what will be the idea going organically or the flu MAs.
• 27:46
  SPEAKER_00: So there are many many ideas, but I believe that in the long term, the Polish leaders they need to go abroad to still grow.
• 27:53
  SPEAKER_00: Because, like you said, the market, and especially in Europe, what we can see, the demography is not going to be positive.
• 28:00
  SPEAKER_00: Somehow, maybe the companies like the biotech, the technology companies may have a little bit different story behind to go more into let's say developing solutions to concentrate maybe the financial stock.
• 28:14
  SPEAKER_00: But there is always the question what technology, what biotech company will be successful.
• 28:21
  SPEAKER_00: Because the the share of those companies will be probably 10-15%.
• 28:26
  SPEAKER_00: Many of them will not still be in the market in the long term.
• 28:32
  SPEAKER_00: Interesting.
• 28:43
  SPEAKER_01: You have a better view on the Polish landscape and businesses than most of us.
• 28:47
  SPEAKER_01: So let's start with a few Polish companies we have analyzed ourselves, which are Dino Polska, Text, and Autopartner.
• 28:58
  SPEAKER_01: Especially Dino Polska seems to be very hot in the investing community.
• 29:03
  SPEAKER_01: Do you have any insights or opinions on these three companies?
• 29:07
  SPEAKER_00: Yeah, definitely.
• 29:08
  SPEAKER_00: I can start with Dino Polska because I sometimes put my my thoughts on X on my profile.
• 29:14
  SPEAKER_00: I I have put it in early 2024 that Dino is going to suffer a lot in 2024.
• 29:20
  SPEAKER_00: Because what has happened in the market, it was the deflation of the food indices in Poland.
• 29:26
  SPEAKER_00: It was very high cost of the capital that Dino also suffered.
• 29:30
  SPEAKER_00: And also huge competition coming from the Biedronka, this is a company from the General Nimo Martins in Poland, also from the Lidl.
• 29:39
  SPEAKER_00: They are this price fight in the market.
• 29:42
  SPEAKER_00: Of course, the little bit story behind Dino is a little bit different, but they also are going to suffer at some point and also suffer from the consumer point of view.
• 29:52
  SPEAKER_00: So my statement was that the growth, LFL, like for like growth, it is not going to be that rapid that it was in the past, and the investors they are not going to like in 2024 the one-digit growth.
• 30:05
  SPEAKER_00: Also, what the market has had experienced was that the opening of the new storages of the dino was not that rapid that the market believed.
• 30:16
  SPEAKER_00: But it was in the past, 2024.
• 30:18
  SPEAKER_00: In December 2024, I put the statement that the brokerage houses in Poland are not believing the dino because only one of the 10 brokerage houses in Poland puts dino in terms of the top peaks in the market.
• 30:31
  SPEAKER_00: I put the statement that it will be the completely different story.
• 30:34
  SPEAKER_00: I believe that dino is going to be top three peak in the Polish big companies in 2025.
• 30:40
  SPEAKER_00: What is the reason behind that?
• 30:42
  SPEAKER_00: They are going to expand more and more for the new storages in 2025, and we can see even this factor in the first quarter.
• 30:51
  SPEAKER_00: Secondly, there is going to start the inflation of the food of the cost.
• 30:56
  SPEAKER_00: They are going to have the little bit better consumer environment because we believe that in 2025 the rates in Poland are going to decrease for the at least 100 bips in Poland.
• 31:12
  SPEAKER_00: And fourthly, what is very interesting from my perspective that Dino at some point in 2025 maybe the cash-positive company is going to expand the business, and at some point, I also believe that maybe 2026 more than this year, they are going to talk about dividend policy.
• 31:28
  SPEAKER_00: If the market, the foreign investor, they're going to see the fast-growing company delivering not only the growth but also the dividend policy, it may have a very positive effect for the company.
• 31:39
  SPEAKER_00: So I can say that I was very pessimistic for the 2024.
• 31:44
  SPEAKER_00: In 2025, I was very optimistic, and also I believe that my story, hypothesis, is also visible for the market in this year up to this point that we are discussing in early May.
• 31:56
  SPEAKER_00: There may be some sometimes turmoils in the market because the little Geronimo Martins are going to report sometimes even before Dino's reporting.
• 32:05
  SPEAKER_00: So at some point there may be some decreases of the capitalization because the dino is very sometimes sensitive in terms of the competitors in the market.
• 32:14
  SPEAKER_00: If you invest into the dino, sometimes you probably saw the minus 10, minus 15, plus 10 in terms of the capitalization, but it is one or two days' effect.
• 32:25
  SPEAKER_00: In the long term, the company is defending a lot.
• 32:28
  SPEAKER_00: So I believe that the story for 2025 is positive, and 2026, I have the hopes that company is going to be cash positive and talk more and more, not only about the growth of the business, but also about the dividend.
• 32:41
  SPEAKER_01: I wouldn't mind if they kept reinvesting into the business.
• 32:45
  SPEAKER_01: I mean, if they can reinvest at high rates of return, that would be my preferred investment.
• 33:00
  SPEAKER_01: We argued that Dino Polska would win here since they're the most capital efficient with the highest margin, which means they could suffer the longest and win the pricing war in the long run, we argued.
• 33:14
  SPEAKER_01: And the standardization model is also a huge benefit.
• 33:17
  SPEAKER_01: It removes all the complexity and keeps operations simple, right?
• 33:21
  SPEAKER_01: Do you own Dino Polska yourself?
• 33:23
  SPEAKER_00: Yeah, I own Dino Polska since 2024.
• 33:26
  SPEAKER_00: Like I said, I have mentioned this statement.
• 33:28
  SPEAKER_00: So I bought the stock in the late December 2024.
• 33:32
  SPEAKER_00: Before that, I was sometimes owning, sometimes even playing short because I was aware of those deflation coming from the market in 2024.
• 33:41
  SPEAKER_00: Like you said, the the most market should focus on, let's say, becoming leader in Poland and keeping the profitability because they are very effective in those terms.
• 33:54
  SPEAKER_00: What the market is sometimes even demissing is that they are having pretty high assets on the balance sheet.
• 33:59
  SPEAKER_00: So this is also the positive effect if somebody is going to put the enterprise value coming not from the statement end of year, but sometimes even think about it in the long term that they are having the assets in the majority of the west of the Poland.
• 34:16
  SPEAKER_00: So this is let's say also very supportive from them because it's not based on the franchise, not based on the leasing, but based on the owning an asset.
• 34:24
  SPEAKER_00: This is a little bit different story.
• 34:27
  SPEAKER_00: I believe that also the dino is very effective because they are not fighting in the big cities together with the little and the bedronka.
• 34:34
  SPEAKER_00: There may be a hypothesis that even those players that are going to enter those smaller cities to fight with Dino, but Dino is having a little bit different story, I believe.
• 34:42
  SPEAKER_00: They are focusing on the people, let's say the basket for the people that they are utilizing a lot.
• 34:49
  SPEAKER_00: Sometimes you can find in the little in the Bidronka, for example, the the clothes to acquire.
• 34:56
  SPEAKER_00: Sometimes let's say even the some machinery for the garden.
• 35:00
  SPEAKER_00: In the dino, you'll find the perfect basket for the people to utilize in the let's say the current situation.
• 35:10
  SPEAKER_00: In the closest way.
• 35:11
  SPEAKER_00: So I believe this is let's say the very good strategy.
• 35:15
  SPEAKER_00: At some point in the long term, I believe this is my statement, my private one, they should go a little bit deeper into the east of the Poland.
• 35:23
  SPEAKER_00: The east of the Poland should be also investing a lot, not only from the military point of view and infrastructure, but also for the people.
• 35:34
  SPEAKER_00: So there is, I believe, much space for them.
• 35:37
  SPEAKER_00: And at some point, maybe some neighboring countries, because if you check the companies like the Studenak, this is the company I believe from Croatia or Slovenia, they are having very similar case like it's having the Dino.
• 35:52
  SPEAKER_00: So the storages in the smaller cities and they are also expanding a lot.
• 35:57
  SPEAKER_00: There was even an idea for the Studenak to make IPO in Poland, but it was not successful in the November, I believe, of 2024.
• 36:06
  SPEAKER_00: But the business case is very similar.
• 36:08
  SPEAKER_00: So it is giving the answer that if Ivendino is going to go abroad, the market is responding positively for this type of the business.
• 36:15
  SPEAKER_01: You said that it might be possible for more and more people to move from rural areas where Dino Polska has focused to cities in the long term.
• 36:26
  SPEAKER_01: Since Dino Polska focuses mostly on smaller towns outside of these big cities, do you think this will be a risk for Dino long term?
• 36:34
  SPEAKER_01: You also said they need to go abroad.
• 36:37
  SPEAKER_01: Do you think Dino Polska can manage?
• 36:39
  SPEAKER_00: I think that it may be the risk in the long term.
• 36:42
  SPEAKER_00: Uh definitely, because the the market the labor market is concentrating in the big cities, and also the new population is coming more and more into the cities.
• 36:52
  SPEAKER_00: Otherwise, some people may argue that if somebody is going to be in the labor market, they are going to come back to the villages.
• 36:57
  SPEAKER_00: But let's say the very long rotation of those people moving back.
• 37:02
  SPEAKER_00: So, yes, I believe that somehow they need to figure out not only the one wave of expanding, but even the second scenario, like coming abroad.
• 37:11
  SPEAKER_00: Because, like I said, if a similar company like Studenak that is not having that much human capital experience, expanding a lot in the Croatian, Slovenia, there may be, let's say, a very similar approach of the customers for those ideas to go even deeper.
• 37:27
  SPEAKER_00: I also, if somebody is going to travel from Poland, nearby to the Czech, to the Slovakia, you will find a space there for the Dino, definitely.
• 37:37
  SPEAKER_00: Because you are not having those storages like in Poland.
• 37:41
  SPEAKER_00: They are concentrating mostly like the companies like Kaufland or Lidl.
• 37:45
  SPEAKER_00: But this is a little bit different story than in Poland.
• 37:48
  SPEAKER_00: But like you said, like I said to you before, I believe that in the 5-10 year span, the Polish leaders need to go abroad.
• 37:55
  SPEAKER_00: Because at some point, demographing really not that positive, and also market at some point will have saturation of the growth for those companies.
• 38:08
  SPEAKER_01: And do you have any opinion on autopartner or text?
• 38:12
  SPEAKER_00: I will start maybe without autopartner because I also own the stock.
• 38:15
  SPEAKER_00: I even acquired the stock in recent months.
• 38:19
  SPEAKER_00: Because the story for following not only the Dino but autopartner is very similar.
• 38:24
  SPEAKER_00: Because you will have the answer coming from the statistical office in Poland each month and also from the company.
• 38:30
  SPEAKER_00: What is the situation?
• 38:31
  SPEAKER_00: If the there is inflation, if there is the deflation of the of the of the stocks of the of the consumer, secondly, if the market is there going to improve from the consumer point of view.
• 38:43
  SPEAKER_00: So the dots they are pretty easy to connect.
• 38:46
  SPEAKER_00: Of course, out of partner, they are having, let's say, the big brother in the in the market called interpartners.
• 38:53
  SPEAKER_00: They are also having the sensitivity in terms of the exchange rates in Poland.
• 38:57
  SPEAKER_00: So basically, if the PLN, the Polish exchange rate, was pretty strong in the recent months, they may somehow suffer at some point in terms of that.
• 39:06
  SPEAKER_00: But of course, the market is always going to discount the future.
• 39:11
  SPEAKER_00: So I believe in the recent month that the market is going to a little bit change because in the first quarter there was a very negative effect of the calendar for those businesses because there was minus two days in comparison year on year.
• 39:28
  SPEAKER_00: Because there is a positive effect of the calendar.
• 39:31
  SPEAKER_00: The people they are going to have two times the holidays to invest even a lot.
• 39:36
  SPEAKER_00: Even my survey, I'm going to today go to my city to a little bit change the car mechanics and situation.
• 39:43
  SPEAKER_00: And thirdly, if the cost of the capital is going to drop in the May, because this is say the consensus in Poland that the rates are going to a little bit drop, it should boost the situation from the consumer perspective and especially in the mechanics ways.
• 40:00
  SPEAKER_00: The people should be aware that the Polish, I believe that the other one is similar.
• 40:04
  SPEAKER_00: I also uh like where the comparison coming from the Martin in terms of the Formula One from the investing point of view, but Polish people love cars, they are investing in the if you go travel into the smaller cities, everybody is having the workshop, everybody is having two plus cars because they are fascinated by the cars.
• 40:23
  SPEAKER_00: This is the same situation coming from let's say our origins, that people before 1991 they couldn't own any car outside of the EU.
• 40:32
  SPEAKER_00: But right now they are having let's say deep passion for the cars and deep passion for having better and better cars.
• 40:38
  SPEAKER_00: So this is the reason why they are they are winning in Poland, autopartner and intercars, they are consolidating the market, but even you can see it in the market that they are going at some point even abroad.
• 40:49
  SPEAKER_00: So I believe right now for the three effects for the auto partner inflation coming from those costs, they are having a very good uh right now situation in terms of the storages.
• 41:00
  SPEAKER_00: I believe they are going to rotate in the better way.
• 41:03
  SPEAKER_00: The currencies should not suffer right now.
• 41:07
  SPEAKER_00: I believe that it happened in the past, and the positive effect coming from the calendar, and positive effect coming from the better consumer.
• 41:16
  SPEAKER_00: Of course, my thesis is based mostly on the mid and long term, so it's approximately 9-12 months.
• 41:23
  SPEAKER_00: I will see what market will give me the answer in the future, because on the other hand, I was not um responding very well for the ABB coming from the uh 2023, I believe, from the owners, because they sold big package on the market, and it was for me not a positive effect for 2024, because at some point they believe that they are going to sell some shares to the fans other than keep uh keep it on their own.
• 41:51
  SPEAKER_00: But I I believe that for the future it should be should be better.
• 41:55
  SPEAKER_00: If you have some questions more about the uh autopartner, you can go deeper, or I can move for the for the text.
• 42:02
  SPEAKER_01: Uh no, I think that'll be alright.
• 42:03
  SPEAKER_01: I just uh just to uh expand, just a follow-up question.
• 42:07
  SPEAKER_01: If you talk about investing and buying companies, what do you typically what is your typical holding period?
• 42:14
  SPEAKER_01: Is it more like a few a few quarters?
• 42:17
  SPEAKER_01: Is it a year?
• 42:18
  SPEAKER_01: Is it 10 years?
• 42:19
  SPEAKER_00: I have few companies that I own for two or three years plus, but like I said, the market sometimes is evolving a lot, especially these times because of the COVID, because of the war, sometimes I need to respond as well on the market.
• 42:33
  SPEAKER_00: So I have few companies that I own two or three years plus in my portfolio.
• 42:39
  SPEAKER_00: On the other hand, you can see even this example coming from Dino or auto partner.
• 42:44
  SPEAKER_00: If I see the triggers in the midterm, I sometimes try to respond for those triggers.
• 42:50
  SPEAKER_00: But this is for me not the answer to hold the position forever.
• 42:54
  SPEAKER_00: Because sometimes if I see that in the market, there is going to be deflation for the dino, I'm going to find even the better idea in the market other than to keep it on my portfolio.
• 43:04
  SPEAKER_00: Because, like I said, being the local investor, I have very good visibility in terms of the macro situation, in terms from the feedback coming from the conference that I am participating in as well.
• 43:15
  SPEAKER_00: So sometimes I'm going to rotate a little bit the portfolio.
• 43:19
  SPEAKER_00: So at those, let's say, situations, my my portfolio may change within 6 to 12 months, sometimes it's a bit longer.
• 43:27
  SPEAKER_00: My my my job is to each month and especially each quarter check the situation for the biggest companies in the market.
• 43:36
  SPEAKER_01: That makes sense.
• 43:36
  SPEAKER_01: You're a bit more on the ball and um able to make quicker and better decisions based on that.
• 43:42
  SPEAKER_01: Yeah, you can expand a bit on text.
• 43:44
  SPEAKER_01: What is your opinion on the deck company?
• 43:46
  SPEAKER_00: I mean, for the text, the situation is a little bit tricky, I believe.
• 43:51
  SPEAKER_00: And of course, the same situation in terms of the market.
• 43:54
  SPEAKER_00: I I can say that I am a big fan of the company, even it was called before the live chat.
• 44:00
  SPEAKER_00: The fantastic growth story and fantastic people behind the company.
• 44:05
  SPEAKER_00: But the the question is what the market is believing right now and for the future.
• 44:10
  SPEAKER_00: Because the market is having a lot of concerns coming from the AI, a lot of concerns coming that the company is not going to be growth company, but even the cash cow providing the dividend for the long term.
• 44:23
  SPEAKER_00: And the idea from my perspective is right now tricky because at some point they are losing the clients in their leadership project, the live chat, but for the chat bot they are receiving more and more customers.
• 44:36
  SPEAKER_00: So from my perspective, the the company needs to deliver at least one quarter, one month, the strategy to consolidate, let's say the products or maybe the clients to believe in the long term because it is definitely a challenging time.
• 44:51
  SPEAKER_00: However, like I said, the companies with the experience, human capital, um the very good execution of the strategy in the past, they are going to somehow answer the market in the long term.
• 45:03
  SPEAKER_00: But from my perspective, the situation is right now that if the company is going to defend, they are going to multiply the valuation in the long term.
• 45:10
  SPEAKER_00: This is my answer.
• 45:11
  SPEAKER_00: But if they are going to lose at some point the market, maybe the space for the downgrade is not that much because the capitalization a little bit decreased in the recent months.
• 45:22
  SPEAKER_00: But still, the question is if the market is going to lose more and more and coming from the new wave of the companies, or they are going to at some point have turnover story and even once again become the growth company.
• 45:39
  SPEAKER_00: So this is a little bit tricky.
• 45:40
  SPEAKER_00: I believe that at the first wave of the AI, the market believed a lot that the company is going to be beneficial.
• 45:48
  SPEAKER_00: Even the brokerage houses in Poland wrote the statements that they are going to be the best beneficiary company in Poland.
• 45:54
  SPEAKER_00: So the company grew rapidly in 2023-2024.
• 45:58
  SPEAKER_00: But after that, the negative effect, the currency exchange effects, the competition, the pricing, a little bit worse.
• 46:05
  SPEAKER_00: It's a little bit more and more difficult to put higher prices on the customer right now, I believe.
• 46:11
  SPEAKER_00: So this is many hypotheses to cover in terms of the text.
• 46:15
  SPEAKER_00: It may be the winner in the long term, but it may also suffer for some midterm, I believe.
• 46:22
  SPEAKER_00: But definitely, because I also would like to come back a little bit from our question about my financing, let's say, strategy in the market.
• 46:32
  SPEAKER_00: I also believe that winners in the long term provide the best returns.
• 46:38
  SPEAKER_00: This is the same situation like in the tennis.
• 46:40
  SPEAKER_00: If somebody is going to put the winner, they are going to win the match.
• 46:43
  SPEAKER_00: So for me, in the long term, when I'm earning the most, it is for the winners, the companies that are going to multiply the valuation.
• 46:50
  SPEAKER_00: It may be the story behind the text right now, but like I said, it is the question regarding that going to answer for the market and to growth once again.
• 47:01
  SPEAKER_00: That makes sense, yes.
• 47:03
  SPEAKER_01: So let's talk about some other companies perhaps we don't know yet.
• 47:07
  SPEAKER_01: So are there any Polish companies that you think deserve more attention?
• 47:12
  SPEAKER_00: I mean, the attention may be from two sides.
• 47:14
  SPEAKER_00: The attention may be from guys like you, from the foreign investors, or secondly, we can even go a little bit deeper for the mid-sized companies that they are not having even attention from the local funds.
• 47:25
  SPEAKER_00: But definitely what we can say is that those companies that you mentioned, Dino, AutoPartner, Texts, they are pretty well covered by the foreign investors, not only from the funds, but also from the individual investors.
• 47:37
  SPEAKER_00: Because the charts, the communication is fantastic from them to deliver for those foreign investors.
• 47:44
  SPEAKER_00: But I believe that the market at some point should also be aware that the private-owned companies that having the same management board for the 10 years plus they are also having the idea for the long term to rapidly grow in this market, even in the demographic changes.
• 48:00
  SPEAKER_00: So, like I said, the benefit system is one of the consumer ideas.
• 48:05
  SPEAKER_00: The idea a little bit deeper than the benefit coming from the customer is the company called Decora.
• 48:12
  SPEAKER_00: This is the company that is preparing the facilities for the for the flats, for the refurbishments.
• 48:21
  SPEAKER_00: The company invested a lot for the CapEx in 2023-2024.
• 48:25
  SPEAKER_00: They are having a little bit portfolio concentrated on the foreign markets like the Germany.
• 48:31
  SPEAKER_00: But if the hypothesis is positive that the market is going to have better consumer visibility, they are going to pretty quickly have the positive effect coming from those extra factories.
• 48:42
  SPEAKER_00: So this is the idea coming from the customer point of view.
• 48:47
  SPEAKER_00: Secondly, we are having the companies that they are very positive from the financing point of view.
• 48:53
  SPEAKER_00: I had in 2023 pretty strong hypothesis on the company called Nevac.
• 48:59
  SPEAKER_00: The company Nevac is concentrating on the producing machinery for the rail.
• 49:05
  SPEAKER_00: In Poland, we are having basically duopoly for this market.
• 49:09
  SPEAKER_00: So if the money is flowing from the EU for the green energy, if the money is supporting investment for the rail, they rapidly multiply their backlog.
• 49:19
  SPEAKER_00: But in 2024 results, you saw only the first wave of the backlog.
• 49:24
  SPEAKER_00: Even the stock is those those capitalization of the NEVAC multiplied three times in these times, and I also believe that in the long term it may be even not enough in terms of those capitalizations.
• 49:37
  SPEAKER_00: So there are some ideas coming from the infrastructure and even from the production point of view investments.
• 49:43
  SPEAKER_00: There is even a company called MFO, which is also producing, let's say, the steel and also the window facilities.
• 49:52
  SPEAKER_00: The company may be beneficiary not only from the Polish but also from the Ukrainian market at some point.
• 50:01
  SPEAKER_00: I would definitely have the screening from the investor point of view for the private companies, like the county.
• 50:06
  SPEAKER_00: This is the different company, also from the producing point of view.
• 50:11
  SPEAKER_00: Some investors may also find the company called Synectic.
• 50:15
  SPEAKER_00: This is the company that is, let's say, distributing the Da Vinci infrastructure for the hospitals, but also the financing is very positive in Poland.
• 50:24
  SPEAKER_00: The company grew fantastic in the past, but they are having also the capacity to grow even faster in Poland.
• 50:31
  SPEAKER_00: I am also the big fan of the CD project, the company, it's the leader.
• 50:38
  SPEAKER_00: I know that the press maybe not the positive in terms of the foreign investors because of the history.
• 50:44
  SPEAKER_00: But if somebody is going to check point by point what has happening, what happened in the past, they delivered each time until cyberpunk.
• 50:53
  SPEAKER_00: It was, let's say, a mistake from them, but after that they made very good DLC.
• 50:58
  SPEAKER_00: And they are having a very strong pipeline coming in the upcoming years.
• 51:03
  SPEAKER_01: That's the company that made the Witcher series, right?
• 51:08
  SPEAKER_00: Yeah.
• 51:08
  SPEAKER_00: Very strong people because I believe that from the technology, game dev, biotech, the story is not only behind the ideas, but definitely coming from the people.
• 51:19
  SPEAKER_00: So we are having more and more people working on those projects.
• 51:23
  SPEAKER_00: They are going to have very strong names because, like you said, you named the Witcher, everybody knows the Witcher if somebody is playing the games.
• 51:31
  SPEAKER_00: The same situation is even after DLC in terms of the cyberpunk.
• 51:36
  SPEAKER_00: Everybody knows the name.
• 51:37
  SPEAKER_00: And I believe also that the people playing games they are going to concentrate more and more on the familiar names, like the contest tribe, like the Get a Ground Traff Auto, like The Witcher, not on new games, new titles coming from the market.
• 51:53
  SPEAKER_00: So I also believe that for the long term is also a very good answer for the investors.
• 51:58
  SPEAKER_01: Yeah, it's a company that gets covered more than the ones you already mentioned, I think.
• 52:05
  SPEAKER_01: The only thing I don't like about gaming companies are that they are highly competitive and they're very volatile, where the game is either a big hit or just a big miss, you know.
• 52:21
  SPEAKER_01: And um but it is a very interesting company with good financials.
• 52:25
  SPEAKER_01: It's actually a company that's on my um to analyze watch list.
• 52:30
  SPEAKER_00: Yeah, definitely.
• 52:31
  SPEAKER_00: Because like you said, the financials are very important because even if the company is not going to provide the best quality product, even if they are having the balance sheet positive, they're going to defend in the long term.
• 52:42
  SPEAKER_00: It happened for the City Play because the valuation decreased 70% after the cyberpunk, but still they had pretty positive balance sheet.
• 52:52
  SPEAKER_00: So they defended, they produced DLC for the let's say next project and delivered pretty well on the market.
• 52:59
  SPEAKER_00: But the statement from you is very very good because I believe that diversification is very important because somebody may have the companies with the very high beta on the market, very volatile, but they can deliver and can be the winner.
• 53:13
  SPEAKER_00: But sometimes the company the investor may go deeper for the more defensive stocks, like the auto partner.
• 53:19
  SPEAKER_00: This is not a company that's going to grow within two years, two times in terms of the revenues, but they are going to be the answer for those uh aggressive stocks in somebody's portfolio.
• 53:31
  SPEAKER_01: So let me ask you this: if we dive a bit deeper into the companies you mentioned, I think you mentioned uh CD project, uh you also shared some others with me, uh, benefit systems, I believe you mentioned uh decora, the home and decor furnishing company, uh Aseco that just got acquired by Topicus.
• 53:52
  SPEAKER_01: If you have to choose three of those names, which three of those would you pick?
• 53:57
  SPEAKER_01: And perhaps uh a quick pitch on why they're interesting for the investors listening to this?
• 54:03
  SPEAKER_00: I believe Aseco is a very good answer.
• 54:05
  SPEAKER_00: I even had an interview one year ago that I mentioned Aseco that is going to have probably the positive effect coming from the re-rating.
• 54:12
  SPEAKER_00: The story was that in 2024, Aseco was a very conservative company with a little bit of story behind the ownership.
• 54:22
  SPEAKER_00: So some of the portion of the ownership was held by the company called Serrove Polsat and also Barde own shares.
• 54:30
  SPEAKER_00: But if the strategic investor, like the Topicus, is entering the company, they are going in the long term change the organization a lot, but they are having much experience in that field.
• 54:42
  SPEAKER_00: For example, if in the early 2000s Ferroival came to the Budimex, you can see the change of the financial and the culture of the company in the long term.
• 54:50
  SPEAKER_00: It is the game changer for the company.
• 54:53
  SPEAKER_00: So, what is happening in terms of the Aseco?
• 54:55
  SPEAKER_00: Because Aseco is definitely one of my top picks if you are asking me about those companies.
• 55:00
  SPEAKER_00: ASECO is having very positive effects for the 2025, 26 and 7 coming from the recovery fund for Poland.
• 55:08
  SPEAKER_00: The recovery government that is going to cover the IT investments in Poland.
• 55:12
  SPEAKER_00: Aseco is one of the leaders, like I said to you before, and they are having the private own ownership of very experienced people.
• 55:19
  SPEAKER_00: But what Topicus may change in the market, and even the market is believing a lot because the capitalization grew 50% after the investments of the Topicus.
• 55:29
  SPEAKER_00: They also invested in the past in the Polish company called Signity.
• 55:35
  SPEAKER_00: You can check the financial results, improvement of the cash flow and FCFF yield after three years of the investments.
• 55:44
  SPEAKER_00: It is way, way above the imagination of the investors at those points.
• 55:48
  SPEAKER_00: So I believe that Aseco is not going to only grow because of the financing and the let's say top line backlog and revenues, but definitely in terms of the effectiveness of the company and profitability.
• 56:02
  SPEAKER_00: And everybody needs to remember that Aseco Poland is also owning the companies in the Southeastern Europe.
• 56:10
  SPEAKER_00: So they are also covering the different markets.
• 56:12
  SPEAKER_00: So somebody, if somebody is checking the Aseco, but and somebody may even find the subsidiary company also listed that did not grow that much, that's the Aseco in the past.
• 56:25
  SPEAKER_00: Maybe the volatility may be a little bit higher and sensitivity, but still they are having the coverage and experience in the Central East Europe a lot.
• 56:33
  SPEAKER_00: So basically, if the company is going to be the winner, I believe that Topicus is looking to have the company in that point of the Europe to become the leader.
• 56:42
  SPEAKER_00: This is my thesis in the long term.
• 56:44
  SPEAKER_00: And the company is going to defend because right now what we see that the people for the IT they are not the problem anymore.
• 56:53
  SPEAKER_00: Because what happened between 2021 and 2023, the market was fighting for the people for IT, for the labor.
• 57:01
  SPEAKER_00: But right now the situation is completely different.
• 57:04
  SPEAKER_00: The people are fighting to join the company, so they don't need to fight for the people.
• 57:09
  SPEAKER_00: So I believe that from cost effectiveness and also for the effectiveness from the top line, they are going to be the winner in the market, definitely.
• 57:19
  SPEAKER_00: Secondly, I would pick the CD project that I mentioned because I believe that the market is going to believe once again for the company.
• 57:30
  SPEAKER_00: Of course, there is the question if somebody is going to hold the company after the release of the new pipeline or not.
• 57:38
  SPEAKER_00: But I'm going to believe because the the company is the leader in Poland right now, and they are going to concentrate all the attention for the big players from the foreign investors and the local investors.
• 57:51
  SPEAKER_00: They're having the biggest pipeline.
• 57:53
  SPEAKER_00: In the midterm, they are going to release the cyberpunk for the Nintendo release, and also they believe that the Witcher.
• 58:02
  SPEAKER_00: So it should also a little bit boost the situation and sentiment surrounding the CD project.
• 58:07
  SPEAKER_00: But for the long term, everybody is going to expect the Witcher.
• 58:11
  SPEAKER_00: I believe that if they are going to provide the quality and learn from the mistakes from the past, they are going to have fantastic product in the long term.
• 58:19
  SPEAKER_00: And franchise also, because what we are discussing is also not only the one of production, but the franchise from the long term.
• 58:28
  SPEAKER_00: And last but not least, I would pick the Dicora company because of the fact they prepared a lot for the improvement of the situation not only in Poland but also in the Europe, in the Germany, and the neighboring countries.
• 58:44
  SPEAKER_00: They are having the well-prepared portfolio and production based.
• 58:49
  SPEAKER_00: Nowadays they are not utilizing even 70% of the capacities.
• 58:55
  SPEAKER_00: So there is a lot of space to improve.
• 58:57
  SPEAKER_00: But if you check the market situation in 2024, 2023, they produce very decent in Biblia in those worst conditions.
• 59:06
  SPEAKER_00: So my question is what may happen if the conditions in the market will be a little bit better?
• 59:11
  SPEAKER_00: So if the hypothesis coming from the market will be better, the cora should improve a lot, the top line and the situation.
• 59:19
  SPEAKER_00: And of what is also important there, the free flow it is not that uh big.
• 59:25
  SPEAKER_00: So the free flow is approximately 10 to 15%.
• 59:28
  SPEAKER_00: Uh so if the flow of the market is going to improve, I believe that the wind is going to support them coming from this not big free float.
• 59:38
  SPEAKER_00: So this is not much required investment from the foreign investors to provide increase of the capitalization.
• 59:46
  SPEAKER_01: Before we work towards the end of today's conversation, is there anything else you would like to share on these companies or any other Polish company?
• 59:54
  SPEAKER_00: I also believe that the screening should go even deeper in Poland than the simple multiplies and the history behind the company because the new companies are also appearing in the market.
• 1:00:07
  SPEAKER_00: So even myself, I was not even checking the companies like the BioCeltics, this is the company that is in the biotech but concentrated on the animals.
• 1:00:15
  SPEAKER_00: So it is much quicker, let's say, path to have, let's say, the commercialization of the projects.
• 1:00:22
  SPEAKER_00: The companies like the Criotech, the company concentrated a lot in terms of the space investment.
• 1:00:29
  SPEAKER_00: But what is important, the Cryotech is already having the backlog.
• 1:00:32
  SPEAKER_00: They are going to recognize the positive financials in 2026 and 7 at least, because the backlog is pretty high.
• 1:00:41
  SPEAKER_00: And thirdly, the the newcomers coming from the market, like the Diagnostica company that is going to concentrate the medical treatment in Poland.
• 1:00:50
  SPEAKER_00: They are investing a lot for the MAs.
• 1:00:53
  SPEAKER_00: So this is let's say a little bit similar to the story that it was in the Dino in 2015.
• 1:00:57
  SPEAKER_00: The company made IPO, the funds divested, the local funds invested a lot for the company, and they are going to have expansion based on the new places for the people, new storages to consolidate the market.
• 1:01:11
  SPEAKER_00: So the companies like the Diagnostic also may be very optimistic portfolio for the long term, I believe.
• 1:01:20
  SPEAKER_00: Many investors in Poland like the companies like the, for example, XTB, XTB.
• 1:01:25
  SPEAKER_00: This is the company for the platform for the investing.
• 1:01:28
  SPEAKER_00: But I also believe that at some point the the platforms like the XTB, the plus 500, they are a little bit different for the investing part for the long term because they always the situation may have coming from the financial for the markets.
• 1:01:43
  SPEAKER_00: If the market is volatile, they are going to have better results.
• 1:01:47
  SPEAKER_00: But if the market is stable, the market is not going to believe in the long term that the situation may be for them better and better.
• 1:01:54
  SPEAKER_00: So, like I said, I believe that in Poland everybody is going to find some of the markets, some of the ideas, because we are covering all of the markets, like I said, from the agriculture, from the customer, financial, from for the big tech ending, and also from the infrastructure like the like the Budimex.
• 1:02:14
  SPEAKER_01: Very interesting.
• 1:02:15
  SPEAKER_01: I will make sure to add all these company names and tickers in the podcast description so everyone can check them out themselves.
• 1:02:22
  SPEAKER_01: And I will write an article on these companies and ask your view and thesis on the companies you mentioned.
• 1:02:28
  SPEAKER_01: So the people that didn't listen, uh, we have a lot of readers.
• 1:02:33
  SPEAKER_01: So um they can find these companies as well.
• 1:02:37
  SPEAKER_01: Especially the bio, what's it called again?
• 1:02:39
  SPEAKER_01: Bio Celtic is one that uh really does uh uh sound interesting.
• 1:02:44
  SPEAKER_01: And uh the more you talked about CD project, the more I want to uh dive deeper into the company.
• 1:02:50
  SPEAKER_01: So uh thank you for mentioning those again.
• 1:02:52
  SPEAKER_01: Uh as we near the end of today's discussion, let's turn our focus to the future.
• 1:02:57
  SPEAKER_01: Looking ahead, who or what are the biggest trends or opportunities that investors should be aware of in the Polish market?
• 1:03:07
  SPEAKER_01: And what is something investors should be watching for in Poland over the next three, five years?
• 1:03:14
  SPEAKER_00: Firstly, investors should be aware that the cost of capital is going to drop, like I said, mentioned before a couple of the times.
• 1:03:21
  SPEAKER_00: So basically, those companies who suffered from the financial point of view, from the balance sheet, they are going to have more space in the future, even from the from the investing point of view.
• 1:03:32
  SPEAKER_00: And the cost capital is going to also affect the MAs and the consolidation.
• 1:03:39
  SPEAKER_00: So, for example, you are also having the companies that are investing a lot in that field, like the Cyber Folks uh group coming from the shopper, the Vercom.
• 1:03:48
  SPEAKER_00: You're going to have a little bit better environment for investing point of view, because the IRS for the future projects may be easier to defend for the companies.
• 1:03:59
  SPEAKER_00: So definitely the cost of the capital is going to change.
• 1:04:02
  SPEAKER_00: The cost of the capital is going to also impact the consumer environment, and also at some point, investors should be aware that the recession in the Germany, recession also in Poland and Czech and Slovakia a little bit change into the positive effect in the long term because the situation was pretty bad in the recent two, three years, but still, the markets they are going to invest in the new areas.
• 1:04:29
  SPEAKER_00: We also see the statement from the fiscal point of view in Germany that they are going to supplement and inject a lot of the money into the markets.
• 1:04:37
  SPEAKER_00: So at some point, that those markets, not only in Poland, they are going to fight to a little bit provide better environment, but also to, I believe, to little bit fight with the non-EU competitors flowing into the market.
• 1:04:53
  SPEAKER_00: Secondly, what should be investors aware that the Central European company states like Poland and Czechoslovakia are going to invest a lot into the military field.
• 1:05:05
  SPEAKER_00: The military field may be covered by the many, many different ideas from the market.
• 1:05:10
  SPEAKER_00: Somebody may check the infrastructure companies, but somebody can check the companies that they're going to deliver, for example, steel, they are going to deliver some machinery like the NEVAC, they are going to also deliver the facilities and even the people for the market.
• 1:05:26
  SPEAKER_00: So the investments will be done in upcoming years.
• 1:05:32
  SPEAKER_00: I also believe that at some point the market is a little bit going to change in Poland because at some point the level of the EU money is not going to be that big as it was in the past.
• 1:05:44
  SPEAKER_00: So we are having very good visibility for the financing up to 2027 2030, but after that, the market should little bit change more into the German or Austrian or even Czech at some point model.
• 1:06:00
  SPEAKER_00: So more concessions, more asset-based leaders, they're going to concentrate the market a lot.
• 1:06:06
  SPEAKER_00: So, for example, if somebody is asking the construction company in Europe, everybody's having Strauback in mind or poor because they consolidated in the past.
• 1:06:14
  SPEAKER_00: And the same situation is going to happen in the whole type of the business in Poland.
• 1:06:18
  SPEAKER_00: The leaders are going to concentrate the market a lot.
• 1:06:22
  SPEAKER_00: And it will be more and more difficult for the mid-sized small companies to grow in the market.
• 1:06:29
  SPEAKER_00: And definitely diversification.
• 1:06:32
  SPEAKER_00: I believe that non-companies should be focused on the one product or one idea.
• 1:06:37
  SPEAKER_00: Because if the situation is that dynamic, like it's right now in the market, the company needs to have the solutions for different scenarios in the market.
• 1:06:48
  SPEAKER_00: So, for example, Boudimex is having, let's say, cover the whole construction areas, but also thinking about the asset-based and neighboring countries.
• 1:06:57
  SPEAKER_00: The different companies, like you mentioned, even the text, they need to think about the different products and even the consolidation of the products for their clients, different strategy for the pricing.
• 1:07:07
  SPEAKER_00: Because one strategy in the long term, they are not going to provide, from my perspective, the winners.
• 1:07:14
  SPEAKER_00: They need to think a little bit different in the long term.
• 1:07:17
  SPEAKER_00: I think that what is supportive for the investors right now, that this visibility of the Polish market is providing better coverage coming from you guys by analyzing the market, coming from the different foreign investors that also covering the market, but also from the strategies of the companies.
• 1:07:34
  SPEAKER_00: Because many of the companies released or they are going to release the strategy in 2025 for the long term.
• 1:07:42
  SPEAKER_00: I also believe that investors will find a very good reference for the Polish market because I also spoke with the investors in London in March.
• 1:07:51
  SPEAKER_00: Everybody's using the reference from the Greece market.
• 1:07:55
  SPEAKER_00: The Greece market, I believe that they rapidly grew between 2021 and 2024, the stock is changed, the whole stock is changed.
• 1:08:04
  SPEAKER_00: It was the re-rating of the whole stock coming from those new strategies of the companies, the belief from the foreign investors, and little bit shift in the energy.
• 1:08:13
  SPEAKER_00: The same situation may happen in Poland: that this flow is going to sustain in the long term and even convince the local people.
• 1:08:22
  SPEAKER_00: Because, like I said at some point, few people in Poland investing in the stock market.
• 1:08:27
  SPEAKER_00: It may change in the in the future and a little bit support the stock exchange in Poland.
• 1:08:34
  SPEAKER_01: So I always aim to wrap things up on a positive note, ensuring that everyone leaves with a practical tip they can put into action.
• 1:08:43
  SPEAKER_01: What's the best piece of advice you would give to someone looking to become a more successful, informed, happy investor?
• 1:08:51
  SPEAKER_00: I mean, interesting fact is that I wrote 16 points in the recent uh month on my X because our uh stock indice reached the level of the 100,000, the VIC index.
• 1:09:03
  SPEAKER_00: So I wrote those pieces.
• 1:09:05
  SPEAKER_00: They are pretty simple statements from my perspective.
• 1:09:07
  SPEAKER_00: So basically, by the companies, they are going to improve the financials.
• 1:09:11
  SPEAKER_00: Trend is zero friend always, because if the company is decreasing the capitalization, they may be the reason that nobody is aware of that.
• 1:09:21
  SPEAKER_00: The leaders are going to be still the winners in the market, and exchanging the opinions with the people is the best way to improve somebody's skills because it is impossible to cover all of the sectors in the market.
• 1:09:36
  SPEAKER_00: It is impossible to be expert in each field, but exchanging opinions, reading a lot, improves a lot the skills of the investor.
• 1:09:46
  SPEAKER_00: Management board, the free float, and the ownership structure is very important.
• 1:09:51
  SPEAKER_00: It is not discussed that much, that is the valuation, but I believe that those factors sometimes may be more important in the long term rather than simple indicators in the market.
• 1:10:04
  SPEAKER_00: Everybody also I believe that should treat the brokerage houses, the target prices in the market, not like the let's say the point to reach in terms of the valuation, but for the interpretation of the market.
• 1:10:20
  SPEAKER_00: Because target price coming from the valuation may be speculative sometimes.
• 1:10:26
  SPEAKER_00: If we change a little bit, one small factor, like the cost of the capital, somebody is going to reach the target price.
• 1:10:32
  SPEAKER_00: But the most important factor from the analysis point of view is the interpretation.
• 1:10:37
  SPEAKER_00: What is happening, what are the risk factors, what is the opportunities of the company, and what market is believing, not the target price.
• 1:10:43
  SPEAKER_00: Target price is just the background, the story for this is the product for the brokerage houses for the investors, not let's say the one story.
• 1:10:52
  SPEAKER_00: And last but not least, I believe there is no one rule in the markets.
• 1:10:56
  SPEAKER_00: I read a lot also, but I also believe that even if somebody is going to make a pizza to prepare the dough, there are many many ways to prepare the dough and pizza.
• 1:11:06
  SPEAKER_00: The same situation is from the investing point of view.
• 1:11:08
  SPEAKER_00: There is no one rule.
• 1:11:10
  SPEAKER_00: Somebody is sometimes arguing that fundamentals, technical analysis, chart is the better way.
• 1:11:16
  SPEAKER_00: No, everybody needs to apply their strategy that is going to cover their risk in the wrong risk tolerance in the long term and match the best way, possible time, available time on the market to have their strategy.
• 1:11:30
  SPEAKER_00: There is no one simple answer in the market.
• 1:11:33
  SPEAKER_00: And last but not least, compounding effect is everywhere, not only in the financials, but also in the knowledge in the market.
• 1:11:40
  SPEAKER_00: So small factors they are having huge impact in the long term for the investors.
• 1:11:46
  SPEAKER_01: I love that.
• 1:11:46
  SPEAKER_01: That's useful, Camille.
• 1:11:48
  SPEAKER_01: Where can people find you if they want to know more on you or Polish companies?
• 1:11:53
  SPEAKER_00: Firstly, they can always try to communicate with me if they are going to find the booty max, the company.
• 1:11:58
  SPEAKER_00: Coming from the investor relations and coming from the strategy of the company, they can look up the booty max and investor relations and find me.
• 1:12:06
  SPEAKER_00: This is let's say the first way.
• 1:12:08
  SPEAKER_00: The second way, more private way, is not only on the X but also on the LinkedIn.
• 1:12:13
  SPEAKER_00: But also, I need to highlight that I am not always communicating with the stock physics directly because I also own the licenses from the our authority, the stock brokerage license and also the investment advisory license.
• 1:12:28
  SPEAKER_00: So my statements they are not always putting by company X or by Company Y, but sometimes they are going to cover the story behind, not directly giving the opinions.
• 1:12:40
  SPEAKER_00: So if somebody's going to find me, I have also the profile on X.
• 1:12:45
  SPEAKER_00: I'm sometimes putting some comments for the companies like the Aseco, the Cora, way Nevac, way before the companies grew in the market because I find something interesting.
• 1:12:56
  SPEAKER_00: And also I'm very active in the foreign conferences in the foreign markets.
• 1:13:02
  SPEAKER_00: So if somebody is going to be in the Prague, in the London, in the Frankfurt, I am very often there.
• 1:13:08
  SPEAKER_01: Awesome.
• 1:13:09
  SPEAKER_01: I'll make sure to put your links in the description and uh people can find you.
• 1:13:15
  SPEAKER_01: Thank you so much for joining us, Camille.
• 1:13:17
  SPEAKER_01: I really enjoyed our conversation and walked away with some fresh insights and ideas.
• 1:13:23
  SPEAKER_01: I appreciate you sharing your knowledge and expertise with us.
• 1:13:26
  SPEAKER_01: And I'm looking forward to having you back on the show in the future.
• 1:13:30
  SPEAKER_00: Yeah, thank you for the invitation.
• 1:13:31
  SPEAKER_00: The questions were very, very deep and interesting.
• 1:13:34
  SPEAKER_00: I also believe that discussing about the Polish market may sometimes take not one hour, but even a whole week if somebody's going to go even deeper.
• 1:13:43
  SPEAKER_01: Yeah.
• 1:13:44
  SPEAKER_01: We'll have to do it again sometime and take another hour, right?
• 1:13:46
  SPEAKER_01: Yeah, exactly.
• 1:13:48
  SPEAKER_01: Definitely.
• 1:13:49
  SPEAKER_01: Thanks again, Camille, and take care.
• 1:13:50
  SPEAKER_01: Goodbye.
• 1:13:51
  SPEAKER_01: Thank you, goodbye.