SHT Smart High-Tech (FRA: 7H6) has been attracting investor attention despite a lack of profit, as the company is actively investing in its expansion. In an environment of uncertainty, where rising costs do not always come with increased revenues, the question arises: how long can the company sustain its high level of spending? At FinancialMediaGuide, we note that the situation is stable for now, but to achieve long-term growth, the company must closely monitor its cash flow dynamics.
As of June 2025, SHT Smart High-Tech has 88 million SEK in cash reserves and no debt. However, despite these reserves, the company spent 77 million SEK over the past year. This means that at the current spending rate, the company can maintain its financial stability for approximately 14 months. While these figures do not raise immediate alarm, the situation may become less stable in the future if the pace of spending is not reduced.
Particular attention should be paid to the company’s 107% increase in expenses over the past year. At FinancialMediaGuide, we believe this growth could signal significant investments in the business, which may strengthen its market position. However, this also introduces additional risks related to future financial uncertainty. Despite this, SHT Smart High-Tech has demonstrated a 57% increase in revenue, which validates the chosen strategy in the short term. Importantly, despite rising expenses, the company is still able to generate income, which provides a foundation for further investments.
Regarding the prospects of raising additional funds, SHT Smart High-Tech is unlikely to face liquidity issues. Given that its expenses represent only 1.7% of its market capitalization, the company can easily raise capital through issuing shares or debt. At FinancialMediaGuide, we predict that if necessary, SHT Smart High-Tech will be able to efficiently attract additional resources to finance its growth, ensuring its financial flexibility.
However, while the company remains in good financial condition in the short term, we at FinancialMediaGuide recognize the risks associated with its growing expenses. It is crucial that SHT Smart High-Tech continues to optimize its costs and balance them with revenue growth. Otherwise, it may need to conduct additional funding rounds under less favorable terms, which could affect the company’s capitalization and long-term stability.
In conclusion, the current performance of SHT Smart High-Tech indicates that it is in a strong position for further growth. However, to maintain its financial stability, it will need to reduce its spending rate. We at Financial Media Guide believe that if the company can effectively manage expenses and sustain revenue growth, it will be able to overcome short-term challenges. Investors should closely monitor its development and be prepared for potential changes in strategy, especially if the pace of spending is not optimized.
