Swiss equities – between challenges and opportunities
10 NOV, 2025
By Thomas Funk, Manager of GAM Swiss Small & Mid Cap Equity at GAM
After some positive half-year results that supported rising share prices for companies such as Accelleron, Bachem and Medacta, prices have fallen again since mid-July. The 39% tariffs imposed on Swiss companies exporting to the United States have not helped market sentiment, even though we believe they will not have a significant impact on companies’ financial results.
Top-performing companies
Among the best-performing companies are:
- Accelleron has delivered particularly strong performance. Demand for its turbochargers is currently very high and all of the company’s market segments are expanding strongly.
- Sensirion reported positive figures. The Stäfa-based company invests heavily in research and development, currently more than 20% of its revenue. This has enabled it to secure excellent market positions, initially with humidity sensors – where it has a market share of over 50% – and subsequently with other sensor solutions, for example for CO₂. A classic application would be controlling indoor ventilation: as soon as the CO₂ content in the air exceeds a certain level, more fresh air is supplied. Recently, new air-conditioning systems in the United States must use a different refrigerant which, under certain circumstances, can be flammable. To avoid this problem, Sensirion developed a new sensor solution which has boosted the company’s sales since last autumn. The announcement that the innovation pipeline is well filled, but that no major project is expected to drive sales next year, was enough to trigger a significant correction in the share price. We expect the company to achieve double-digit growth in the medium term.
- The share price path of u-blox has been rather different: like Sensirion, this company also suffered from excessive inventory build-up among its customers following the coronavirus pandemic. From this year, however, sales have started to grow strongly again. The attractiveness of its positioning solutions did not go unnoticed by private equity firm Advent, which launched a takeover offer. The shares rose by 24% in response. Even though, in our view, the offer price does not fully reflect the company’s intrinsic value, this development highlights the particular dynamics of the market. In the short term, a company’s share price is driven solely by supply and demand. However, when a company changes ownership, valuation follows different rules.
The pitfalls of the strong Swiss franc
Unfortunately, the strong Swiss franc continues to weigh on companies’ results in various ways. This was particularly evident in the case of Straumann. Over the past three years, the company has struggled to increase sales in Swiss francs. One reason for this is, in fact, an extraordinary success story.
When China introduced the volume-based procurement (VBP) system for dental implants in 2023, there was considerable scepticism that Straumann would suffer significant sales losses. The pricing structure in China was attractive for Straumann and experience suggested that the public tender process would exert strong pressure on prices. A decline in sales was therefore expected, but the opposite occurred. As market leader, Straumann lowered its prices significantly and thus gained a substantial market share. Volumes grew strongly as the number of treatments increased due to lower prices, and Straumann captured share from its competitors.
Growth continues today and remains in double digits. This summer, Straumann celebrated the commissioning of its first production plant in China, which should be an important driver of future growth in the country. So far, so good, one might think – but it is often forgotten that production also has to keep pace when volumes grow so significantly.
Most of the implants sold in China were produced in Villeret, Switzerland, where Straumann has highly efficient manufacturing facilities. To meet Chinese demand and gain market share from competitors, production was expanded significantly, but capacity utilisation became so high that staff turnover at the plant increased markedly and efficiency suffered. At the same time, since the end of 2022 the Chinese renminbi has depreciated by around 17% against the Swiss franc. This led not only to lower prices due to state-organised tenders, but also to lower revenues in Swiss francs because of the currency’s depreciation.
Since production could not initially be carried out locally, there was not only a loss in profit translation; because manufacturing was done at Swiss cost levels with declining efficiency, there was also a negative impact on margins. However, this strategy enabled Straumann to secure the Chinese market, in particular against its South Korean competitor. At the same time, local production was launched as quickly as possible and is now ramping up. This means that cost structures are now Chinese and, at a later stage, Straumann’s entire production network can be optimised. In our view, the new Chinese production facility should secure the local market and pave the way for higher margins. Straumann is now facing a very interesting development: in the short term, the company sacrificed margins and profits to exploit long-term market and growth potential. It can now refocus on efficiency to optimise margins.
Positive signals on the horizon for semiconductor suppliers
In recent weeks, signals suggesting a possible acceleration in chip demand have multiplied. Several announcements indicate that a new investment cycle may be imminent. Particularly interesting were the quarterly figures from Oracle, which is seeing strong demand for artificial intelligence applications from its long-standing database clients. The pattern of incoming orders suggests that the investment wave should gradually pick up speed.
This is already evident in the demand for memory chips. The share price of SK Hynix, one of the leading South Korean producers of dynamic random-access memory (DRAM), has risen sharply in recent weeks. Meanwhile, pessimism among Swiss semiconductor suppliers peaked in September, with uncertainty around short-term orders weighing on share prices.
The impact of US tariffs on investment decisions remains unclear. However, if demand accelerates, it will sooner or later be inevitable to expand production capacity. This, in turn, should lead to new orders for Swiss suppliers.
Staying focused on the long term
Volatility in individual stocks is currently high. Equity market trends are changing rapidly and can be relentless. Rather than reacting to short-term fluctuations, we maintain a long-term investment strategy focused on excellently managed companies that are able to adapt to evolving conditions.
In our experience, companies with a strong ability to reinvent and transform themselves regularly emerge stronger from difficult market environments. These companies often see accelerated profit growth once conditions stabilise.
