LBW — Lubawa S.A.

Deep-value analysis: LUBAWA S.A. (LBW.WA, GPW) — September 13, 2026

Reference price: … (09/13/2026, tracker) · Market cap: … · Shares: 150.27 mil Reporting currency = trading currency = PLN (no conversion risk in the bridge; fx = 1) Last complete financial report: Q1 2026 (QSr 1/2026, published 05/29/2026) · H1 2026: only ESPI 17/2026 estimates from 09/01/2026, the full report comes on 09/30/2026 Primary sources used: SSF skonsolidowane 2025 (XHTML iXBRL, signed 04/28/2026), Sprawozdanie Zarządu 2025, QSr 1/2026 (PDF), rapoarty bieżące 08–17/2026. No EDGAR — a Polish issuer, does not file with the SEC.

Executive summary (1 page: thesis, estimated value, verdict)

Lubawa is a Polish industrial group with three legs — special defense equipment (the GRYF bulletproof vest, tents, mine-clearance/reconnaissance sets), technical and camouflage fabrics (Miranda: Berberys nets, multispectral anti-drone ponchos) and advertising materials (Litex Promo) — that went, between 2022 and 2025, through a genuine profitability transformation: revenue rose from 332.0 to … (…), operating margin from 8.5% to 23.7%, and net profit from 20.6 to … (×6.1). The engine isn’t financial engineering but a geopolitical demand shock: Polish defense spending reached ~4.7% of GDP, and the fabrics segment — essentially Miranda — jumped from 122.0 to … of external revenue and from 56.9 to … of segment result, alone producing 57% of the group’s operating result on 15% of fixed assets. The balance sheet is exceptionally clean: total debt … (almost exclusively leasing), cash plus Santander obligations with maturity under 6 months of …, i.e. a net cash position of …, ROIC 42.7% and ROE 24.0%.

My thesis isn’t that the business is weak — it’s that the price has already bought the transformation, and the transformation has started to deflate. Three facts the market treats as noise and I treat as signal. First: consolidated H1 2026 (ESPI estimate from 09/01/2026) shows revenue of …, … YoY, and net profit of …, …; since Q1 2026 was growing (… revenue, … profit), this means Q2 2026 had revenue of …, … YoY, and net profit of …, …. Second: on a TTM basis (through 06/30/2026) net profit falls to …, so EPS … and P/E 15.6× — not the 12.4× yfinance shows on the old TTM, stuck at Q1. Third: historical multiples. Current P/B 2.81× versus a 2021–2025 range of 0.55–2.05×; P/E 15.6× versus a median of 8.1×; EV/EBITDA 10.6× versus a median of 5.5×. The stock hasn’t only risen because profit rose — it has also re-rated from 0.55× to 2.81× book value.

The fourth fact, the one that changes the arithmetic: half of “net cash” isn’t the shareholder’s. At 12/31/2025 the group had … of active guarantees received, of which … are bank guarantees for the return of advances (PKO BP 73.7 + 11.0 mil, mBank 23.9 + 11.1 mil), secured by mortgage, pledge and surety. In other words, almost 120 of the … is customer money, collected as advances (zaliczki) on defense contracts, which either gets “consumed” through delivery or is returned. Add to that that the group has paid no dividend since 2008 and has bought back no shares, that of the … cumulative net profit 2022–2025 exactly … has returned to the minority shareholder, and that Stanisław Litwin controls 51.22% (47.65% through Silver Hexarion Holdings Ltd., Larnaca, … directly) — and the question “does that money ever reach the minority?” gets an honest answer: partly, and late. I ran Monte Carlo with λ = 0.25 (median) on net cash, calibrated to the two pieces of evidence documented above.

Estimated value. Five triangulated models give a range from … (bear DCF) to … (bull DCF), with the median across models at … and the Monte Carlo median (20,000 scenarios over the base DCF) at …, with only a …% probability the stock is undervalued. Median intrinsic value from the simulation: … versus an … price. The divergence between the cross-model median and the Monte Carlo median is explained in the valuation chapter and isn’t a contradiction: three of the five models (bear, EPV, historical multiples) assume zero growth or look backward, while Monte Carlo only randomizes around the base scenario, which credits 8% growth over five years.

Verdict: AVOID at …. Not because the business is bad — it’s a good business, with ROIC of 42.7%, no debt, a contracted portfolio of ~… (Wisła II 586 mil net, GRYF option ~115 mil gross, Berberys >79 mil gross, mine-clearance/reconnaissance up to 50.8 mil net) and a real option on NAREW (>…, uncontracted). But because at 15.6× TTM profit and 2.81× book value, with quarterly profit already down 61% YoY and with half the cash tied up in guaranteed advances, there is no margin of safety. The point at which it’s worth re-evaluating: below ~… (P/E ~11× on TTM, P/B ~2.0×, i.e. the upper end of the historical valuation range) or after the complete semi-annual report on 09/30/2026 shows that Q2 was a delivery lag, not a loss of demand.