Kempower extensive report: Growth story back on track

Translation: Original published in Finnish on 1/27/2026 at 9:28 pm EET.

Kempower has returned to a strong growth trajectory towards the end of 2025, especially supported by new customer acquisition. The company's competitiveness continues to appear strong in light of market share growth and stable gross margin. We expect the company to be able to improve its profitability in the coming years through the scaling of its cost structure. However, predicting long-term competitive dynamics is not easy in a young industry, which increases the risks of the investment case along with a valuation that relies on strong earnings growth. We reiterate our Accumulate recommendation and raise our target price to EUR 17.5 (was EUR 17.0).

Global provider of fast charging solutions

Kempower is a provider of fast charging equipment and software for electric vehicles, with products suitable for both public charging points for passenger vehicles and for charging commercial and utility vehicles. The business has rapidly expanded to a global scale, and in our assessment, the company has broadly gained market share in recent years through its strong and competitive technology. Production is concentrated in two locations: Lahti, which has significantly larger volumes, and the facility in North Carolina, USA, which is still ramping up its production as sales in the US market progress. The company mainly focuses on Western markets such as Europe, North America, and Australia, but it is also exploring growth opportunities in other geographies.

Strong growth prospects support earnings scalability

The inventory cycle that impacted customer demand in 2023-24 has largely stabilized, and the demand outlook is favorable again, supported by successful new customer acquisition (2025 Q1-Q3 order growth: 38%). Our forecasts include strong order growth estimates for 2026-28e (20-25% annually), which are mainly based on an estimated market growth of around 20% and include only moderate market share growth. We estimate that the company has the potential to improve its position in North America and Central Europe, among other regions, which are relatively new markets for the company. The progress of heavy-duty vehicle investments will also accelerate the market in the medium term.

The company's current cost structure is geared towards advancing its global growth strategy, and we estimate there is significant scaling potential for profitability as growth materializes. We forecast the EBIT margin to improve to 11.6-13.5% by 2027-28, in line with the company's targets. At that point, the return on investment will also become strong, supported by an asset-light business model (ROI 2028e: 30%). The forecast assumes that the company aims for a profitability level in line with its financial targets, such that additional investments in growth are not significantly increased compared to the recent trend (opex growth 2026-28e: 6-15% p.a.).

Strong value creation profile as market dynamics persist

We believe the target market's growth trend is self-evident in the long term, despite short-term volatility. Instead, determining Kempower's competitiveness and long-term profitability are more challenging questions, as the competitive dynamics of a young market can evolve over time. To date, the company's competitiveness appears strong, evidenced by factors such as growing market share and gross margins that have remained high despite market overcapacity (2025e: 49%). The utilization rates of the company's factories are still relatively low in 2025-26, but in 2027-28, earnings-based valuation multiples (EV/EBIT) are already falling to attractive levels (17x and 11x) compared to our estimated fair value range of 15-20x. The investment's riskiness is elevated by factors such as high growth expectations, the valuation's reliance on long-term value creation, and the somewhat difficult predictability of the dynamics of a relatively new industry. Currently, however, the company appears to be on its way to becoming one of the industry's major global players.