Translation: Original published in Finnish on 10/1/2026 at 8:44 pm EEST.

We estimate that the demand-side challenges that began in Q2 will continue in H2, driven by factors such as the tightening financing environment. A slowdown in order intake may mean that near-term earnings growth will be more moderate and depend more on cost savings than strong scaling. We believe the situation could improve, if major loss-making competitors would withdraw from the market, though this may take a few years. We reiterate our Reduce recommendation and lower our target price to EUR 9 (previously EUR 11) in light of the changes to our forecasts.

Weaker financing conditions weigh on end of year

Kempower already stated in connection with the Q2 report that it had observed slower demand among charge point operators (CPOs). CPOs have started paying even more attention to improving utilization rates and profitability instead of expanding the network. The consolidation seen among CPOs also appears to temporarily slow down investments. We estimate that tightened financing conditions have played a role in the slowdown of growth investments among charge point operators, as these operators depend partly on debt and private credit, among other things, the supply of which has recently slowed down.

The recent sharp rise in interest rates has likely further weakened the attractiveness of growth investments, which is why we have decreased Kempower's growth estimates. We estimate H2 order growth to remain moderately negative, similar to Q2 (forecasts expect order intake to decrease by 8-9% in Q3–Q4). The decline in order intake is reflected in the order book and growth outlook for 2027. We project revenue growth of only 2% in 2027, an 11% decrease from our previous estimates. We expect the slowing growth will also strongly weaken profitability in the coming years (EBIT estimates for 2027–2028 decreased by 49% and 29%). However, the 2030 EBIT estimate decreased by only 2%.

Electric vehicle registrations on the rise

Although charge point operators have shown less willingness to invest, we believe this will be temporary. Electric vehicle registrations have seen strong growth in the EU this year (+44% y/y). In the US, electric vehicle sales have declined following the elimination of purchase incentives, but we also expect this market to resume its growth trajectory at some point. The electrification of heavy-duty transport and ports, for example, also supports the demand for charging equipment.

Strong investments in cost competitiveness

As market growth slows, price competition intensifies and room to maneuver shrinks. We believe that Kempower is well-positioned to survive the market's "survival of the fittest," as the company is on the verge of a turnaround, while many of its competitors are suffering heavy losses. Kempower is currently focusing heavily on streamlining its cost structure (with savings targets of over 10 MEUR in unit costs and over 5 MEUR in fixed costs), which will gradually improve profitability during 2026–27.

Challenging outlook for the coming years weighs on the recommendation

Despite the market's long-term growth outlook, it is clear that the current weak CPO demand makes it harder for Kempower to achieve its revenue growth target (15-25%/year) for the 2026-30 strategy period. Earnings are on the verge of becoming profitable, aided by savings, but the outlook for strong, growth-driven earnings scaling, as priced into the share price, has weakened. The stock trades at a rather high EV/EBIT multiple of 19x for 2028e. In the 2029–30 forecasts, the valuation is already turning quite attractive (9–12x), but the high level of uncertainty in the coming years weighs on the risk/reward ratio. 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 will likely take several years.