Primoco UAV: promising tactical UAV producer (HOLD - initiation of coverage)

We initiate coverage of Primoco UAV (Primoco) with a HOLD and a 12M price target (PT) of CZK 1,099/share. Primoco manufactures the Primoco One 150, a tactical, medium-sized, fixed-wing unmanned aerial vehicle (UAV), which holds the EASA LUC SAIL III civilian operating authorisation and was awarded the NATO STANAG 4703 military airworthiness certification in March 2025. It is used for intelligence, surveillance and reconnaissance (ISR), and is not weaponised currently. The drone is manufactured in Prague, and Primoco can produce up to 50 units p.a., although the run-rate has been c.25 p.a. in 2023-25E. Since 2014, it has produced 200+ UAVs, which have been delivered to 15 countries on four continents, with >65% of deliveries going to Ukraine over the past two years. Global UAV demand is strong, and the Primoco One 150’s combat-proven use in Ukraine is a commercial advantage, in our view, despite its original civilian design. In 2025E, we estimate 18 deliveries (vs. 33 in 2023) and revenues of CZK 396m. In 2026-27E, we model 40-50 deliveries, implying a 2024-27E revenue CAGR of 41%. Our forecasts reflect rising military orders post the STANAG certification, and management’s guidance, although we caution that it has overpromised on volumes and revenues in the past. With no signed contracts for 2026E yet, our forecasts are subject to a very high degree of uncertainty.