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Kempower Oyj: why we’re excited about this Finnish EV charging tech play


Kempower Oyj went public last December 14th, 2021 on the Nasdaq Helsinki First North market. The IPO price was €5.74 and on April 21st, 2022 the stock closed near all time highs at €12.814 with a market cap of €712 million. But this tightly held gem has further to go – its future is electrifying. Why? The success of its strong industrial parent Kemppi Group.

Kempower Oyj is the leading rapid EV charging technology provider. Kempower designs and manufactures DC fast charging solutions for electric vehicles and machines.

Kempower’s turnover in 2021 was €27.4 million. But its target is a €200 million turnover p.a. in four to six years (modest Finns). My personal forecast is closer to four years than six. Kempower’s orders inventory is now €37.4 million and its gross margin is 46%. Its IPO delivered more operating cash to the tune of around €100 million.

Major player already in Nordic region

Large orders have been received already in Nordic countries from Finland (S-Group), Sweden, Norway and Denmark. It also has subsidiaries already in Germany, the Netherlands, the UK, Norway, France and Spain. In 2022 Kempower will also open in Sweden and Italy.

Kempower has a scalable and flexible business model with limited capital expenditure needs. ChargEye – the SAAS service it is rolling out in 2021/22 – was a highly successful launch. It recyclability rate is over 99% with an eNPS score of 83. The company is expecting to access the US market in 2025 at the latest. In conclusion Kempower is a major player in the Nordic market and acquiring market share in continental Europe and the UK.

Kempower share price chart
Kempower’s turnover rose 741%, which is “very rare in industrial production”, according to CEO Tomi Ristimäki (an industry veteran in EV charging). Kempower sells directly to B2B customers like charge point operators and retail chains like S-Group (a large deal), Recharge Infra, Osprey Charging, Vattenfall (large deal) and Power Dot. It is also active with bus and truck operators like Nobina, VY buss, Koiviston Auto and Keolis. Original equipment manufacturers customers include Volvo, Scania, Normet, Epiroc and Gilbardo Veeder-Root. In the distribution and installation space it works with the likes of Omexom, Vital EV Solutions, Wennstrom and European Electrical Bus Company Gmbh.

The initial offering was priced at €5.74 – it was heavily oversubscribed. The stock price has already more doubled from the IPO. It has been trading between €7.5 and €13.1 recently. As I was writing this article on April 21st, 2022 the stock closed near all time highs at €12.814 with a market cap of €712 million. The Kemppi Group and other institutions have hardly sold any of their stock since the IPO with only one seller and buyer in the top 20 stockholders. They control 83.3% of the stock. It is really no surprise that individual investors and other interested parties have bid up the stock.

Still early days for Kempower

There is only one analyst following the company, which happens to be the company who took Kempower public, namely Carnegie Investment Bank AB, which is one of the leading investment banks in Nordic region with a history of over 200 years in the market. They have a target price of €9, which I think they will be raising soon. Kempower’s next report date is May 18th, 2022 for Q1/2022 results. I would start a new position even now using €9 euros as a stop. I would add to the Kempower position when the market bounces around during interest rate hikes.

Kemppi Group Oyj is the parent company of Kemppi Oyj and Kempower Oyj. The whole group had total revenue of €142 million in 2021. Kemppi Oyj is the design leader of the arc welding industry. Kemppi says it is committed to boosting the quality and productivity of welding by continuous development of the welding arc. The Italian welding torch manufacturer Trafimet Group SpA is part of Kemppi Oyj.

The main shareholder in Kempower is still the private industrial group Kemppi Group (founded 1949 and now run by the third generation of the Kemppi family) with 68% share of the stock. Both Finnish pension giants have small stakes – Varma with 3.14% and Ilmarinen with 1.93%. Individual investors in Finland had sour grapes about the listing, because they only received roughly €200 euros each worth of stock allocation at the IPO.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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