Žito and Tokić Avoided the Crisis, Can They Break Above the IPO Price?

The correction of global stock markets that we have witnessed in the past month due to the war in the Middle East has also affected the domestic stock market. From February 27, the day before the US-Israeli attack on Iran, until Thursday, March 26, the CROBEX index weakened by 3.8 percent. Despite this, the Zagreb Stock Exchange index is still in the positive for this year, albeit modestly, by 0.25 percent. Compared to other European markets, the Middle Eastern crisis has had a very mild impact on the Croatian stock exchange. For example, the Eurostoxx 600 index has lost more than seven percent of its value since the beginning of the war, the French CAC 9.5, and the German DAX even 10.5 percent.

However, two stocks that are the latest additions to the Zagreb Stock Exchange, Žito and Tokić, have completely avoided the correction. The agricultural-food company owned by Marko Pipunić has increased by five percent on the stock exchange since February 27, rising to 19.70 euros. On the other hand, the leading domestic distributor of automotive parts rose to 18 euros by March 18, but then followed a series of six consecutive ‘red’ trading days during which the price fell to 16.40 euros. Despite this, Tokić’s monthly decline of 0.6 percent is far less than the overall market decline indicated by the CROBEX.

Still Below the IPO Price

This can be attributed to the defensive nature of the operations of these two companies. It is known that the food sector is generally resistant to crises, and the same goes for the sale of spare parts, as few people decide to purchase a new car during times of crisis.

This has partially mitigated the losses of these two stocks since they went public in last year’s IPOs. To recall, Žito raised 130 million euros in the largest Croatian IPO, selling shares at 20.30 euros. Those who bought Žito in the IPO are currently at a loss of just under three percent. The stock began trading on July 28 last year, and in these eight months, it was above the IPO price for 37 trading days, from early August to early October.

In mid-September, the highest price in regular trading was recorded at 22.30 euros, which was 9.8 percent above the IPO price. Since the beginning of October, the Žito stock has been below the IPO price, with the lowest price achieved on March 9 at 17.55 euros. Those who bought shares in the public offering were at a loss of 13.5 percent at that moment.

Tokić’s IPO last autumn was far more modest, raising just over 23 million euros. Shares were sold at 20.20 euros, the lowest target price. Tokić was listed on November 20, so investors who participated in the public offering are down nearly 19 percent. Looking at the closing price, this stock has not managed to break above the IPO price so far. Moreover, it ended its first trading day with a loss of half a percent. The highest closing price of 20.2 euros, equal to the IPO price, was achieved on December 12, and on March 3, the lowest was 15.80 euros.

Temporary Costs

The listing experience has shown that analysts and observers who believed before the IPO that Tokić’s valuations compared to competitors (such as CIAK and Auto Hrvatske) were quite high were correct. In other words, Tokić’s stock in the IPO was relatively expensive. Moreover, despite the price drop after going public, it still has relatively high valuations.

For example, the price-to-earnings (P/E) ratio, according to data from the 2025 report and the current stock price, is 14.9. In other words, investors are currently paying almost 15 euros for one euro of Tokić’s earnings. The ratio for CIAK is at 11.8, and for Auto Hrvatske at the most favorable 9.8. Tokić’s P/E is higher because net profit was halved last year to 4.65 million euros. The decline is due to pressure from several factors.

First and foremost, the most controversial move before the IPO, the separation of real estate. Since April 1 last year, Tokić’s stores have been separated into a separate company, Nek-Tok, after which the Group uses them through leasing. It should be emphasized that the decision to separate real estate is legitimate, and there are numerous examples of companies that have opted for such a transaction before selling the business itself through an IPO. The application of accounting standards related to this lease resulted in an additional increase in depreciation and financial costs of 1.4 million euros in 2025.

Furthermore, personnel costs have increased by a fifth, to 36.9 million euros, as a result of hiring additional employees due to business expansion, as well as the continuous rise in wages in recent years. Other operating costs have risen by 12.8 percent, primarily due to higher distribution, storage, and additional logistics capacity costs. Significant investments in IT infrastructure and security have also been recorded. Finally, the decline in net profit also reflects a somewhat slower revenue growth in the first half of the year and the continuation of intensive investments in business development and infrastructure. Here, it is primarily necessary to recall the construction of a new logistics center in Sesvetski Kraljevec.

Transformation into a Regional Leader

Sales revenue increased by a solid eight percent last year, indicating that demand for auto parts and the related industry remains strong. In this context, the decline in profit should not be interpreted as a sign of weak sales, but rather as a result of increased growth and depreciation costs of new investments. The management noted in the report that these costs are temporary, suggesting that profits could return to previous levels.

The company has continuously experienced revenue growth over the past 20 years, averaging 17 percent, and has generated profits every year, even during crises. If Tokić’s profit in 2026 returns to levels from 2024 (when it was above nine million euros), based on the current stock price, the P/E ratio would drop to a very attractive 7.7.

Žito also has the potential for its stock to become significantly more attractive. The company generated 315.5 million euros last year, nine percent more. Growth was led by the industry segments (11 percent) and livestock (nine percent). Net profit from continuing operations amounted to 35.7 million euros, an impressive 43 percent increase. With several acquisitions after going public, the company has entered a phase of transformation from a national player to a regional leader through vertical integration ‘from field to table’.

Extremely Low Indebtedness

Last year, Agro-Tovarnik was acquired, bringing Žito an additional 21,300 hectares of agricultural land. Then, a strategic acquisition of Zvijezda plus from Fortenova was concluded. This has allowed Žito to enter the regional top of the oil industry. In January of this year, the acquisition of 51 percent of Mesna industrija Ravlić was concluded. In March, the company Anabbela was also acquired, increasing arable land by an additional thousand hectares.

Judging by the financial picture, Žito has plenty of ‘ammunition’ for further acquisitions and investments. What gives the company enormous room for new investments is its extremely low indebtedness. Thanks to the money from the IPO and debt repayment, the ratio of net debt to normalized EBITDA has fallen to 0.02. The current price-to-earnings (P/E) ratio of Žito is slightly above 14. However, if Žito successfully integrates the profitability of Zvijezda without a significant increase in debt, this ratio could fall significantly below 10, making the stock the most favorable in the entire sector.