Deals have been coming in lately. Is it time to start looking at the forecasts?
Ukraine’s reconstruction is an interestingly sized opportunity for a company the size of Honkarakenne (Mcap 18m€). Honkarakenne has decades of experience in exports.
“The letter of intent is valid for seven years, and its validity can be extended by mutual agreement of the parties”
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Here are Ate’s comments on Honkarakenne’s “Ukraine letter of intent”. 
EDIT:
Here are Ate’s comments also on when Honkarakenne initiates change negotiations.
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Atte has published a new company report on Honkarakenne.
Honkarakenne’s current year will be weak in terms of results due to the prevailing market situation. Nor do the near-future outlooks indicate an improvement in the situation, as a result of which we have revised our 2026 forecasts downwards. However, in our forecasts, the company’s profitability will strengthen in the coming years due to the growing share of exports and the efficiency measures being implemented. Improving earnings development will normalize the valuation to a more neutral level by 2027. We reiterate our target price of 2.7 euros and our Reduce recommendation.
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Here’s a little introduction to the Karstula factory => https://www.youtube.com/watch?v=oG5mEgd6AY0
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Here are Ate’s comments on Honkarakenne’s negative profit warning announced yesterday.
Honkarakenne issued a profit warning on Thursday and lowered its financial guidance for 2025. The reason behind the lowered guidance is the postponement of deliveries from late 2025 to 2026 due to the prolonged permit and financing conditions of customers. The new guidance falls short of our previous forecasts, which creates downward pressure on our 2025 estimates. The impact of the profit warning on our view is limited, as the current year is in any case a transitional year for Honkarakenne. The postponement of deliveries to next year also supports our expectations of improved profitability. We will update the company’s forecasts shortly.
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Here is a company report from Ate after the profit warning.
Honkarakenne lowered its 2025 guidance for revenue and operating profit last week. The reason for the decrease was timing factors, as export deliveries previously planned for December are shifting to next year due to the prolongation of customer permit and financing conditions. We have lowered our current year forecasts due to the profit warning. However, the shift of higher-margin export deliveries to next year and the company’s efficiency measures support our forecast for next year’s earnings turnaround. With our forecasts, the 2026-2027 EV/EBIT multiple settles at approximately 8x, which falls within our acceptable valuation range (7–9x). Pricing thus appears neutral, and we do not yet see the return expectation as attractive, considering the uncertainties related to the turnaround. We reiterate our target price of 2.7 euros and our “reduce” recommendation.
Expansion into the hotel business. Could Rovaniemi be next, as it struggles with accommodation issues? https://www.inderes.fi/releases/tornio-haaparanta-nousee-lapin-seuraavaksi-matkailukeskittymaksi-honkarakenne-vastaa-kasvavaan-kysyntaan-suomen-suurimmalla-hirsihotellilla
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Atte has written a new comprehensive report on Honkarakenne. As usual, this comprehensive report is available for everyone to read.
In our forecasts, Honkarakenne’s 2026 is still largely turning into a transition year as the domestic market remains challenging. We forecast the company to reach more significant earnings growth in 2027–2028, as export investments materialize more strongly into deliveries. Additionally, we expect the domestic market to recover gradually. In the current year, the modest earnings level pushes valuation multiples very high. Looking toward 2027 with our forecasts, however, the multiples neutralize roughly within an acceptable valuation range. Due particularly to uncertainties related to success in exports, the risk/reward ratio is, in our view, still unfavorable. On the other hand, the strong balance sheet continues to act as a buffer in a weaker scenario. We maintain our target price at EUR 2.7 and our recommendation at Reduce.
Quoted from the report:
Turnaround story is still seeking concrete evidence
As the current year remains largely a transition year, we emphasize our 2027 forecasts in our valuation. The stock’s valuation finds no support from our updated current-year forecasts, as earnings remain weak. In our view, Honkarakenne’s valuation level in the coming years is reasonable, considering the significant earnings improvement we forecast from the bottom of the cycle. However, the risk-adjusted expected return remains weak, given the uncertainties related to the turnaround regarding the domestic market situation, the company’s success in export trade, and the realization of targeted cost savings. Upside potential exceeding our expectations over the next year would require a stronger turnaround in both the domestic market and exports than we forecast. On the other hand, we believe the company’s strong balance sheet position continues to limit significant downside risk.
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“The positive development has continued this year: by the middle of the month, January’s sales were already 50 percent ahead of the total sales for January last year.”
A very positive-sounding comment regarding the domestic construction industry from DEN Finland:
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Atte and Iikka discussed Honkarakenne regarding the new extensive report.
Topics:
00:00 Introduction
00:12 Honkarakenne’s investment profile
02:00 Markets and business model
04:03 Competitive situation
05:40 Export trade
07:09 Large loss buffer decreased
08:04 Forecasts
09:25 Recommendation is Reduce
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" According to the Log House Markets 2022–2025 report published by Rakennustutkimus RTS Oy on January 1, 2026, the order book for industrial logs grew by as much as 46 percent in terms of euros compared to the previous year."
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The CEO is changing. I wonder if we’ll finally get an external CEO.
https://www.inderes.fi/analyst-comments/honkarakenne-toimitusjohtaja-vaihtuu
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Here are Atte’s preview comments as Honkarakenne reports its H2 results on Thursday, February 12, 2026
We expect the company to report a loss in line with the profit warning issued in December, which was weighed down by significant export deliveries deferred from the end of the year to the current year. In the report, focus will be particularly on the development of the order backlog and the outlook for 2026.
A few comments on the latest news in this thread; I have an acquaintance in the log industry from whom I always get good opinions/insights.
This seemed to be mostly a promotional release from Ollikainen. Good for Ollikainen, they seem to be doing quite well. Generally, there is definitely no boom in the industry right now. Yes, cabins are going to Lapland and single-family house construction has woken up from its worst coma, but that 46% growth isn’t enough yet when the starting point was so low. It’s also worth remembering that growth doesn’t mean much if it doesn’t generate a margin. The fact is that Kontio has a large factory being underutilized and they need to get sales for it → margins are being driven down ridiculously low. Kontio is in big trouble; there were layoffs again in the winter, and a year ago 25% of the company was sold in a share issue for 3 million euros to Asko Schrey. My understanding is that it is specifically Kontio’s situation that is keeping log prices low, so everyone has to struggle with profitability. Demand for logs is high when they are cheap; those who agree to sell cheap will certainly get the business. Why buy a wood-frame house when a log house is also reasonably priced? For homebuilders, it is absolutely a buyer’s market for log packages.
Saarelainen has been a good CEO for Honkarakenne; the company suffered more from the Russian invasion compared to its competitors. According to my acquaintance, in the log industry, the CEO should come from within the company; it’s very important that the CEO has a good feel for customers, production, the market, sales, etc. The best results in the industry are achieved by entrepreneur-led firms. A CEO coming from a different industry often has, to put it mildly, challenges staying on top of the situation. As a shareholder, I would hope that someone competent and passionate from within the company could be found to steer the ship.
I don’t know Honkarakenne’s situation particularly well right now, but I wouldn’t rush to the buy button based on seemingly good news or a competitor’s spin.
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Here’s a fresh company report on Honkarakenne from Ate regarding H2.
Honkarakenne’s second-half result was as expectedly weak and roughly in line with the profit warning the company issued in December. The guidance was largely in line with our expectations, though the profitability guidance range was still softer than our forecasts. The year 2026 was already a transitional year in our previous forecasts, and we have not made significant changes to our longer-term forecasts. We maintain our target price at 2.7 euros and our recommendation at “reduce”.
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Here are Ate’s comments on the current CEO moving to lead Honka Japan.
Honkarakenne announced on Thursday a surprising turn of events regarding CEO Marko Saarelainen’s future role and the company’s board composition. Saarelainen will not be available for the company’s board or as its chairman; instead, he will move directly from his position as the group’s CEO to become the CEO of the Japanese subsidiary, Honka Japan Inc. We find this change surprising relative to the previous nomination committee proposal, but the move is logical given Saarelainen’s strong expertise in Japan, as the company seeks growth there. In our view, however, the situation is uncertain, as no future CEO or chairman of the board has yet been appointed for the company.
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Here are Ate’s comments on Honkarakenne’s new CEO appointment.
Honkarakenne announced on Monday that it has appointed Magnus Hindström as the company’s new CEO. Hindström will start in his new role on August 3, 2026, transitioning from his leadership position in Kerto LVL sales at Metsä Wood. We consider this appointment a successful and logical step, as Hindström’s strong experience in international wood product trade supports the company’s strategy to seek growth from export markets. At the same time, the appointment alleviates the uncertainty surrounding the company’s leadership after the previous CEO, Marko Saarelainen, announced his departure from the CEO position earlier this year.
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