Translation: Original published in Finnish on 11/4/2026 at 10:17 pm EET.

Market demand has weakened significantly as charge point operators seek to strengthen the profitability of their operations rather than make new investments. On the other hand, Kempower has continued its upward trajectory in market share development, which supports long-term value creation opportunities. However, a turnaround in demand is not yet in sight, and at the same time, a significant oversupply of chargers is putting pressure on margins, hindering the profitability turnaround the company is seeking to achieve through significant cost-saving measures. The company's balance sheet cannot sustain loss-making operations indefinitely, though the situation remains stable in the short term due to strong liquidity. We reiterate our Reduce recommendation and lower our target price to EUR 6 (previously EUR 9) in light of significant downward revisions to our forecasts.

Market demand was disappointing, balance sheet has also weakened

The Q3 report was clearly weaker than expected in terms of both orders and the main lines of the income statement. Order intake decreased by 19% year-on-year (we estimated -10%) as charge point operators restricted investments and focused on increasing the utilization of existing charging stations. However, in our view, Kempower's market share has at least remained unchanged, if not strengthened. Weak demand was also reflected in revenue (-10% y/y, we estimated it to be flat) and adjusted EBIT (-1.7 MEUR, Q3'25: 0.2 MEUR, we estimated 0.0 MEUR). One positive takeaway from the report is the growth in service sales (83%), which increased the service revenue proportion to 8%. Although gross margin remained stable at 45.9%, in line with our estimate, we believe it has not yet fully reflected the impact of the current weak market environment. The ballooning of net working capital has led to an increase in net gearing to 19% (covenant limit 100%), but the company has total liquidity of 91 MEUR (of which financial assets are 27 MEUR), so the financial position is unlikely to cause issues yet in the short term. 

No turnaround in sight yet, despite strong EV sales in Europe

Kempower lowered its guidance for the current year, based on which Q4 is expected to be weak (revenue will decrease by ~13% and earnings will clearly deteriorate, partly due to temporary reasons). The company raised the target of its fixed cost savings program to 15 MEUR (previously 5 MEUR), which, in our view, will support profitability in 2027 by around 10 MEUR (savings in full effect starting from Q3'27). The company expects weak demand to persist in the near term. We expect market demand to turn around by mid-2027, supported by factors such as robust EV sales figures in Europe (+42% YTD). We forecast a 7% revenue increase in 2027, which, together with savings, could push earnings into slightly positive territory despite our forecast of a decreasing gross profit margin. We expect growth to accelerate to 16–20% per year in 2028–2029, which would drive profitability more clearly into positive territory.

Valuation not attractive enough relative to risks

Despite the market's long-term growth outlook and Kempower's upward trajectory in market share, it is clear that the current weak charge point operator demand makes it harder for Kempower to achieve its revenue growth target (15-25%/year) for the 2026-30 strategy period. The oversupply of chargers is also weighing on margins and making the profitability turnaround more difficult. If the turnaround is delayed, the balance sheet situation could even necessitate a share issue, though we do not foresee this as a concern over the next 12 months yet. The earnings-based valuation of the share only turns favorable based on estimates for 2029–2030 (EV/EBIT of 12x and 9x), for which visibility is currently weak. If significant players (though weaker than Kempower) were to drop out of the market, it could ease price pressure and improve the outlook for profitability. However, this may still take several years.