This blog post is the result of our recent trip to Hungary, which amazed us with its rich historical heritage, cleanliness, and excellent transport infrastructure.

Like Poland, the modern Hungarian state emerged after World War I, following more than 370 years of foreign rule — primarily under the Ottoman and Habsburg empires. During most of World War II, Hungary collaborated with Nazi Germany, in contrast to Poland, whose underground army bravely resisted the occupiers. After 1945, both Poland and Hungary became communist countries and members of the Warsaw Pact. However, Hungary followed a more liberal path: its Communist Party allowed, for example, small private businesses, limited company-level decision-making on production and pricing, and travel to the West. As a result, by 1990, when the Soviet bloc collapsed, Hungary’s GDP per capita was more than 100% higher than Poland’s (USD 3,312 vs. USD 1,629).

However, over the last 35 years, Poland has developed more successfully than Hungary, largely due to the bold economic reforms implemented by Finance Minister Leszek Balcerowicz in the early 1990s. In contrast, especially since 2010, when Viktor Orbán’s Fidesz party first gained an absolute parliamentary majority, Hungary’s macroeconomy has developed weaker and the country-which like Poland joined the EU in 2004-has faced significant international criticism—not only from the EU but also from global investors. The reasons include controversial reforms such as the nationalization of private pension assets, the alleged weakening of courts, the centralisation of media ownership close to the ruling party, and the rejection of several important EU initiatives e.g. on sanctions against Russia.

Poland vs. Hungary:  Average GDP growth and nominal salary growth, current inflation rate, government deficit, public debt as % of GDP and unemployment

Sources: Polish Statistical Office, tradingeconomics.com, East Value Research GmbH

The Hungarian capital market vs. other CEE countries

With 40 listed companies and an annual turnover of c. EUR 9bn, the Hungarian stock exchange is the 2^nd most liquid one in CEE – with >2x higher annual turnover than the Czech and >3x the Romanian one – but is far behind the Warsaw Stock Exchange (760 listed companies, c. EUR 175bn yearly turnover). The trading activity in Budapest concentrates on just four names: OTP (Bank), MOL (oil & gas), Richter Gedeon (Pharma) and Magyar Telecom (Telco). Despite a weaker economic performance and less solid public finances, the main Hungarian equity index BUX has outperformed the Polish WIG (both exclude dividends, which in both countries are significant) by a wide margin over the last 10 years (367.5% vs. 109.5%).

What are currently the most interesting stocks in Hungary?

In our opinion, only a handful of stocks on the Budapest Stock Exchange are actually tradeable for international investors.

While bank stocks—especially OTP—are fundamentally strong, we believe their valuations are currently at a peak and are likely to decline as central banks cut interest rates. However, several other companies appear undervalued, offer attractive dividends, and are expected to continue performing well.

The first of our top picks is Richter Gedeon, a vertically integrated specialty pharmaceutical company with global sales, >11,600 employees and a yearly R&D budget that corresponds to 10% of its annual sales. The company’s pipeline of projects includes several dozen projects in the areas of Neuropsychiatry, Biosimilars, Women’s Healthcare and Blood & Metabolism/Cardiology/Pain & Neurology, most of which have already completed or are currently undergoing clinical studies. Richter Gedeon has been paying attractive dividends (current DYield equals 4.8%) each year since 1995 and is currently trading at PEG ratios of just 0.65-0.70 based on analyst’ EPS estimates for 2025E-2026E.

Another company, which we like now, is Magyar Telecom, the largest Telco operator in Hungary and Northern Macedonia that is owned by Deutsche Telekom. Out of 9.6m Hungarians and 1.8m North Macedonians, Magyar Telecom has 6.6m mobile clients, 1.6m broadband, 1.4m Pay TV and 1.2m fixed voice customers. The company, which due to its stable cash flows has been able to pay dividends and conduct buybacks each year since 2020, is currently trading at an EV/EBITDA 2025E of 4.9x (Orange Polska: 5.3x, Hrvatski Telekom: 7x) and a DYield of 4%. Its net gearing equals 47.4% and is thus at a reasonable level. 

Finally, our third pick is MOL, which is the Top 3 integrated oil and gas company in all countries of the fast-growing CEE/SEE region. In addition, it has upstream operations in the CIS region incl. Russia (which we consider the main risk), Iraq, Pakistan and Egypt. According to its latest investor presentation, with currently >25,000 employees it explores and produces oil (c. 94,000 of oil equivalents per day), has a capacity of 380,000 barrels per day in currently 3 refineries, operates 2 petrochemical facilities, >2,300 service stations and a 6,000 km natural gas pipeline in Hungary. Its current reserves equal 332,000,000 barrels of oil equivalent. Latest net gearing equals 17.4%, the current EV/EBITDA 2025E is historically low (2.6x vs. a 5-year average of 3x) and the DYield of 9.5% very attractive. In 2025E-2030E, MOL plans to spend 30-40% of its c. USD 1.9bn CAPEX on low-carbon circular projects in the areas of waste management, biogas production, green hydrogen and solar, among others.

Source: CapitalIQ, East Value Research GmbH

History & current business

Toya, which is based in Wroclaw/Poland, has been present on the market since 1990, when its predecessor Toya Import-Eksport S.C. was founded. In 2001, Toya was transformed into a joint-stock company and opened a distribution & logistics center in Wroclaw (Southern Poland). In 2003, it introduced the own brands YATO (hand & pneumatic construction, workshop and garden tools), STHOR (electrotools for construction and renovation work), VOREL (hand and pneumatic tools designed for electricians, locksmiths, service technicians, welders, plumbers and DIY enthusiasts), POWER UP/FALA/FLO (tools and devices for various applications) and started its international expansion: first to Romania – where today it has an office and warehouse with c. 7,000 sqm – and in 2008 to China (currently 29,250 sqm in the Zhejiang province). In Poland, Toya opened another warehouse in 2007 in Nadarzyn (24 km from Warsaw), which today has 26,370 sqm. Since its IPO in 2011, the company, which sells to >100 countries worldwide, has increased its revenues and EBIT at a CAGR of 11% to PLN 821m in 2024 and 7.2% to PLN 87.4m respectively. In 2024, 43.7% of its revenues stemmed from the Wholesale channel (sales from Poland, Romania and China), 11.8% from Retail chains (Poland & Romania) and 10.4% from Online (the company’s own web shops www.toya24.pl & www.toya24.ro as well as external popular online platforms, generates the highest gross margin of c. 46%). Last year, Toya’s international business accounted for 34.1% of its total revenues.

Einhell, which is based in Landau an der Isar/Germany, was founded in 1964. In 1968, it started its international expansion in Europe and Asia and in 1998 listed its shares on the Frankfurt stock exchange. Today, it has production facilities and warehouses in Germany (distribution, R&D, design and logistics center with a max. capacity of 2.3m products), in South-Western Hungary (production of battery packs and chargers incl. the Power X-Change battery platform mainly for European clients) and China (production of electro- and garden tools through external partners for international customers). Over the last 10 years, Einhell has increased its revenues at a CAGR of 10.3% to EUR 1.1bn in 2024 and its EBIT at a CAGR of 28.3% to EUR 101.2m. Last year, 61% of the company’s revenues stemmed from clients that are based in Western Europe incl. DACH, 12% from Eastern Europe and 27% from other parts of the world. While Einhell does not publish a detailed split of the share of distribution channels, it has made public in the past that most of its revenues are generated in stores for DIY enthusiasts and professional users. Proprietary products that are based on the Power X-Change platform account for >50% of Einhell’s annual revenues.

Profitability and Cash Flow

Over the past five years, both Toya and Einhell have consistently generated gross margins above 30% and delivered double-digit ROCE. While Einhell’s slightly higher gross margins suggest a more favorable product mix, including a greater share of own brands, its Polish peer has reported consistently higher EBIT margins—likely due to its main operations being located in countries with significantly lower wage costs than Germany.

Toya vs. Einhell:  Gross margin, EBIT margin and ROCE 2020-2024

Sources:  Company information, East Value Research GmbH

As the tables below show, in 2020-2024 Einhell has shown a stronger cash flow generation than Toya. In addition, due to a lower share of working capital in total sales it seems to better manage its working capital than its Polish peer.

Toya:  Cash flow and working capital 2020-2024

Sources:  Company information, East Value Research GmbH

Einhell:  Cash flow and working capital 2020-2024

Sources:  Company information, East Value Research GmbH

At the end of Q1/25 – the latest quarterly numbers that are available for both companies – Toya had a net gearing of 4.1% and Einhell 22.3%. 72.1% of the Polish company’s interest-bearing debt of PLN 61.5m was short term. In case of Einhell, its interest-bearing debt equalled EUR 134.3m (thereof 21% short-term).

Current valuation & conclusion

So far in 2025, Toya and Einhell generated a YTD return of 39.1% and 13.3% respectively. 

Currently, the Polish company is valued at a P/E 2025E of 9.2x, which corresponds to a PEG ratio of 0.77 based on analyst’ consensus estimates. Its German counterpart is valued at a P/E 2025E of 11.3x (PEG = 0.92), which seems to be justified by its superior gross margins and cash flow generation. However, in terms of the PEG ratio the Polish company appears to be more attractively valued at present. An additional factor, which supports our bull case for Toya, is the announced share buyback of max. 12.5m shares at PLN 6-18 per share by 31/12/2027 (16.7% of total shares outstanding).

We expect that in the coming years, both companies will benefit particularly from the Do-It-Yourself (DIY) trend — driven by a growing number of people who believe they can complete home improvement projects more cheaply, more personally, and more sustainably themselves than by hiring contractors — as well as from a recovering construction sector, supported by declining interest rates.

 

This blog post is the latest chapter in our ongoing series analyzing Polish companies alongside their listed German counterparts. Today, we take a closer look at two leading e-commerce players specializing in the distribution of bicycles and related accessories.

History & current business

Dadelo was established in 2016 and became part of the Oponeo.pl S.A. Group in 2017, before being spun off and listed on the Warsaw Stock Exchange in 2020. The company remains closely linked to its parent, sharing key management — including Oponeo co-founder Ryszard Zawieruszy?ski — and is headquartered in Bydgoszcz, Poland. Since its public debut, Dadelo has grown to become one of the leading online retailers in the Polish bicycle market. With 17,500 m² of warehouse space, the company offers 85,000 selected products across 520 brands and employs over 200 people. Dadelo conducts its e-commerce operations through its own website, CentrumRowerowe.pl, and maintains four physical stores in major Polish cities. Currently, the company operates exclusively within its domestic market.

Dadelo’s growth strategy includes opening new physical stores in all Polish cities with populations over 200,000, aiming to create a nationwide network where the distance between any two stores does not exceed 200 km. According to the CEO, this expansion is expected to be completed within three years. While brick-and-mortar stores currently account for only a small share of total revenue — and at lower margins — they are the main sales channel for bicycles, which now represent nearly 50% of total revenue. For many customers, purchasing a bicycle is a significant investment, and the ability to see and test-ride the product in person remains a key factor in the buying decision.

Bike24 was founded in 2002 in Dresden, Germany, by Andrés Martin-Birner, Falk Herrmann, and Lars Witt. The company has grown into one of continental Europe’s leading e-commerce platforms for bicycles, with a strong presence in the DACH region (Germany, Austria, Switzerland). After a period under private equity ownership, Bike24 went public via an IPO on the Frankfurt Stock Exchange in 2021. In contrast to Dadelo’s focused domestic approach, Bike24 has pursued broad international expansion and now serves customers in over 70 countries through its main platform and 10 localized websites in key markets such as Spain, France, and Italy. The company employs over 500 people.

To support its extensive operations, Bike24 operates a primary logistics centre near Dresden and a second logistics hub in Barcelona, Spain (10,000 m²), aimed at improving service in Southern European markets. Its product offering includes over 70,000 carefully selected items from more than 800 brands.

The strategy of the German counterpart focuses on expanding into continental European markets through organic growth, although management does not rule out opportunistic acquisitions. This approach emphasizes localization by providing websites in national languages, integrating local and customary payment systems, and offering region-specific customer service.

In contrast to Dadelo, Bike24 operates without a physical retail network—aside from a single store in Dresden and a service point in Berlin — and is fully focused on e-commerce. Bike24 formally entered into direct competition with Dadelo’s online business in 2025 when it launched its Polish website. However, the platform currently accepts only euro payments and does not support BLIK, Poland’s most popular online payment method — factors that may discourage local consumers and limit market adoption.

Historical & current financials

Dadelo has demonstrated an impressive growth trajectory, increasing its revenues from PLN 64.5m in 2020 to PLN 280.5m in 2024, representing a CAGR of 44.4%. This growth has been driven by strong sales of both traditional and electric bikes, with the company offering popular third-party brands alongside its own in-house brands (Oxfeld and Unity), through both online and offline channels.

The share of bicycle sales has grown significantly — from 23.1% of total revenue in 2020 to 41.3% in 2024. Physical stores now account for 20–25% of total revenues, while e-commerce contributes the remaining 75–80%. Since its public listing, Dadelo’s EBITDA margin has ranged between 1.9% and 10.8%, while Return on Capital Employed (ROCE) has fluctuated between 0.2% and 22.5%. In 2024, the company fulfilled 648,200 orders, resulting in an estimated average order value of PLN 433 (approximately EUR 101.80).

Dadelo S.A.:  Gross & EBITDA margins and ROCE in 2020-2024

Source: East Value Research GmbH, Dadelo S.A.

Dadelo S.A.: Cash Conversion Cycle, Operating and Free Cash Flow in 2020-2024

Source: East Value Research GmbH, Dadelo S.A., MarketScreener (for Cash Conversion Cycle)

During the same period, Bike24’s revenue CAGR was just 3.2%. Sales in 2024 reached EUR 226.3m, remaining nearly unchanged compared to 2023. Similar to the Polish company, the share of bicycle sales increased but still represents a relatively small portion of total revenue—rising from 9.3% in 2020 to 19.2% in 2024.
High inflation in 2022 and 2023 significantly weakened consumer purchasing power, leading to a downturn in both the bicycle market and the broader e-commerce sector in Germany. As a result, the company faced overcapacity issues, which contributed to higher-than-expected inventory write-downs. During the review period, Bike24’s EBITDA margin declined from 12% in 2020 to -30% in 2023, before rebounding in 2024. The sharp drop in profitability in 2023 was largely due to a goodwill impairment of EUR 56.7m. ROCE has remained negative since 2022.
In 2024, the company had 916,900 active customers who placed 1.567m orders (a 4% y-o-y decline), with an average order value of EUR 144 (up 5% y-o-y).

Bike24 Holding AG:  Gross & EBITDA margins and ROCE in 2020-2024

Source: East Value Research GmbH, Bike24 Holding AG

Bike24 Holding AG: Cash Conversion Cycle, Operating and Free Cash Flow in 2020-2024

Source: East Value Research GmbH, Bike24 Holding AG, MarketScreener (for Cash Conversion Cycle)

Over the past three years, Dadelo’s average inventory turnover ratio was 1.38x, compared to 2.49x for Bike24. As a result, Dadelo’s cash conversion cycle is approximately twice as long. While the Polish company’s inventory levels appear reasonable given rising costs and strong growth prospects, maintaining higher inventory levels also increases the risk of obsolescence and potential write-downs— particularly if the market experiences a downturn.

In contrast, its German counterpart maintained relatively lower inventory levels, reducing them by EUR 10.3m in 2024, which contributed to a positive operating cash flow of EUR 7.4m. Despite reporting net income of PLN 11.5m in 2024, Dadelo posted negative operating cash flow of PLN -13.3m, primarily due to a PLN 70m increase in inventories.

As for financial projections, Dadelo’s CEO recently stated in an interview that the company expects to exceed PLN 400m in revenue in 2025E and aims to sustain a robust annual growth rate of 30% over the next five years. Dadelo’s strategic goal is to capture 35–40% of the Polish bicycle and accessories market, which is estimated to be worth PLN 4.5–5bn.

Meanwhile, Bike24 — supported by strong H1 2025 sales — is forecasting up to 15.3% y-o-y revenue growth for 2025E.

Current valuation & conclusion

Both stocks have experienced a remarkable run in 2025, with Dadelo up 162.5% YTD and Bike24 up 168.5% YTD. As a result, both companies are currently trading above their 3-year average EV/Sales multiples.

In the table below, we present market estimates of EV/Sales for Bike24, alongside our own calculated EV/Sales for Dadelo. Our calculation is based on the CEO’s projection of 30% annual growth over the next five years, which would result in estimated revenues of PLN 1.5bn by 2030E.

Source: East Value Research GmbH (Dadelo 2025E-2030E estimates), CapitalIQ, MarketScreener

While Dadelo’s valuation may appear high compared to its peer Bike24, it is justified by our estimated CAGR of 32.7% for 2024–2030E, versus 7.8% for Bike24. This level of growth, while ambitious, is still below Dadelo’s historical CAGR for 2020–2024. Moreover, we believe the estimates are attainable, given Dadelo’s superior business model and strong management track record.

If Dadelo successfully achieves its domestic targets, the company views expansion into comparable foreign markets—such as the Czech Republic or Hungary—as feasible within a few years. Considering that bike sales are strongly supported by physical retail locations, and with multiple new stores planned over the next three years, along with potential international expansion, we believe the stock could reasonably trade at 2.0x EV/Sales for 2025E. This would imply a share price of over PLN 60.

In the case of Bike24, its lower valuation metrics reflect the company’s underwhelming performance, with revenues showing minimal growth since 2020. Despite a strong share price rally in 2025, the stock continues to trade well below its IPO price from 2021. Additionally, Bike24 still generates a significant portion of its revenue from bike parts, accessories, and clothing—a segment facing intense competition as consumers increasingly turn to lower-cost alternatives, particularly from China.

With both companies reporting strong results for H1 2025, we expect this positive momentum to continue throughout the remainder of the year. However, in the long term, bicycle sales growth rates in both countries are projected to decline. The German market is showing signs of saturation, while in Poland, growth is slowing as pandemic-era demand normalizes.

In an industry where both companies operate, sustaining growth will depend not only on operational excellence and capitalizing on transformative trends — such as the rise of e-bikes — but also on strengthening customer retention in an increasingly competitive market.

Author: Mateusz Pudlo