Translation: Original published in Finnish on 2/13/2026 at 8:00 am EET.

With the Indoor Group divestment, KH Group's structural transformation journey is complete and its strategy now focuses on KH-Koneet and NRG. We have increased our estimates based on the preliminary Q4 data provided by KH Group. The group's strong finish to the year reinforces the view that its earnings slump is behind it. However, the current valuation level prices in future earnings improvements a little too strongly. We raise our target price to EUR 0.60 (was EUR 0.45) and reiterate our Reduce recommendation. 

Entity was formed through Sievi Capital’s transformation toward industrial group

KH Group was formed when the old Sievi Capital transformed from an investment company to an industrial group built around its subsidiary, KH-Koneet. After divesting Logistikas, HTJ, and Indoor Group in recent years, Sievi Capital's holdings now include only KH-Koneet, which focuses on machine sales and rentals, and Nordic Rescue Group (NRG), which provides rescue vehicles. KH Group has since integrated NRG into its strategy, completing its structural transformation journey. Due to changes in business logic and new management, the old Sievi Capital's track record is not relevant to the KH Group, which, together with the management changes implemented last year, makes it difficult to assess the KH Group from a capital allocation perspective.

Machine sales and rescue vehicles

KH-Koneet has a strong track record of profitable growth in Finland, and the company has rapidly grown to become one of Sweden's largest machine dealerships. A weak operating environment has weighed on KH-Koneet's profitability in recent years. Despite this, the profitability development of the Swedish business has left something to be desired thus far. It is critical for the international growth story that the company can improve the relative profitability of its business abroad so that growing in size would create value.

With the support of its owners, NRG has made an impressive turnaround from a cash crisis in recent years, and the company's business is highly profitable in the current environment of strong demand. The company's order book is solid for the current year, and the order book for 2027 is filling up nicely. However, based on current performance, we are cautious about the company's ability to maintain its current, exceptionally high level of profitability.

In recent years, KH Group has strengthened its balance sheet through the divestment of subsidiaries, but no capital has been left over for dividend distribution. In fall 2025, the company separated from the subsequently bankrupt Indoor Group by repaying its loans for 2.0 MEUR. According to the company, the divestment will improve financing availability for ongoing operations. However, it did not directly address concerns about the group's ability to allocate capital efficiently. The recent positive profit warning sent an encouraging signal about the subsidiaries' earnings potential, which is particularly welcome for KH-Koneet given the CEO change that will happen during H1.

Discouraging valuation despite positive growth outlook

With our 2025 estimates, KH Group's EV/EBIT multiple is at a very high 18x level while, with our estimates for this year that incorporate a significant earnings improvement, the multiple is still high at 13x. However, due to KH Group's low relative profitability and significant financial leverage, earnings-based valuation is sensitive to even small forecast changes. Our DCF model, which indicates longer-term potential, implies a value of EUR 0.63 per share for the group, although the model relies on a sustainable improvement in profitability.