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The Norwegian company Zaptec is an apt example. The company develops and sells charging stations and software for charging electric vehicles. The stock was listed in the autumn of 2020, after an IPO where three of our funds participated as a cornerstone investor. Pareto Nordic Return, Pareto Investment Fund and Luxembourg-registered Pareto Nordic Equity signed up for a total of NOK 25 million at a price of 11.25, corresponding to approximately six per cent of the available shares.

Quite a few so-called green stocks have soared on the Oslo stock exchange during the past six months and Zaptec was not about to be an exception. At year-end the stock price was roughly quadrupled, with further appreciation going into the new year.

That, however, was not why the portfolio managers invested – they weren't catching a green wave.

Charging station for electric vehicles
Zaptec sells charging stations and software for charging electric vehicles. Photo: Zaptec

The portfolio managers saw that the company had already managed to combine vigorous growth with strong profitability, which again turned out to be the case when the 2020 accounts were published: revenue growth of 66 per cent and an operating margin (EBITDA) of 13.5 per cent.

They also realised that the timing was good. Revenues for the first six months of the year were somewhat sluggish because of the pandemic, while the European market looked poised for years of strong growth. Furthermore, they noted that Zaptec had a solid market position with proven technology, low production costs and a sensible distribution strategy within multi-user charging systems.

In short:

They appreciated the business model, the strategy and the market position. When, in addition to all this, the share appeared to be reasonably priced, the decision was not that hard.


The article is an excerpt from our 2020 annual report

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager's skill, the fund's risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments.