There has been very little discussion about Kemira on this forum, so I’m venturing to start a dedicated thread for it by asking: on what basis did you choose Kemira for your investment portfolio? Personally, I thought that products and solutions related to clean drinking water and wastewater treatment could also be a profitable investment in the long term.
The earnings release date is in five days. Hardly any major surprises expected?
To that list, I’d also add a decent dividend and technically a good upward trend IMO. If I remember correctly, efficiency measures have also been taken.
Kemira’s 2019 likely went pretty well and the traditional dividend is secure, but there are challenges for 2020. The pulp and paper industry strikes in Finland will have a weakening effect on Q1, and it’s unlikely to be recovered even later in the year. In Finland, municipalities are in a tight spot as tax revenues aren’t enough for growing expenses, so price increases in the water sector are likely difficult. Kemira also operates in China, where the coronavirus is now causing a small setback. Past was okay, future outlook?
I recall that when I was considering investing in Kemira, Kemira announced an investment in a water treatment plant in the UK. People cannot really be left without clean drinking water, no matter the cost.
As I remember and understand it, Kemira’s debts and income are suitably balanced.
I think it was very good for Kemira that the state significantly lightened its Kemira stake in the fall.
I see good growth potential for decades in Kemira’s Industry & Water segment, driven by the scarcity of clean water on Earth and increasing shale oil production. I personally bought Kemira at the end of December 2019 purely based on technical analysis. There would have been good buying opportunities throughout 2019. Only the drop at the beginning of December to the level of 13.20 brought Kemira under my radar. The stock is moving tightly at the lower end of an uptrend. I expect a strong 17% Q4 EBITDA.
I became interested in Kemira when there was an article about water investments in the May 2019 issue of Arvopaperi magazine. It mentioned drivers such as “Water scarcity is predicted to become commonplace” and “Clean water is not enough for everyone.” Water investments can also be made through funds. I have a small stake in Kemira, and I believe the trends support it, and I also consider it reasonably defensive. They seem to have brought profitability to a new level, which is also indicated by the rise in the stock from its years-long level of 9-12 euros. There is also a spread article about Kemira in the August 2019 issue of Arvopaperi magazine. And hey, don’t forget the potential Kemira 100th-anniversary dividend, which several celebrity investors have speculated about 
Inderes has published a new analyst comment regarding Kemira. Thanks @Petri_Gostowski!
The target price in the previous report was €14.50 and has now been raised to €15.
It will be interesting to see if this leads to an Inderes bounce. It didn’t happen after the previous analysis comment. I remember this quite well because I bought Kemira twice after the previous analyst’s comment was published. I assumed at the time that the drop in share price was due to the state’s sale of Kemira shares.
You’re welcome! Just a quick correction: the target price didn’t change in today’s earnings preview. The target price already rose to 15 euros in connection with the December update
Thanks for the correction @Petri_Gostowski. Memory isn’t always reliable 
Familiar feeling 
Larger companies in the same sector as Kemira are usually valued around PE 13-15, and these could be considered for a portfolio when the stock drops to around PE 10-11. In Kemira’s case, when looking at long-term operating profits and EBIT%, the company could be interesting at a price of 9-10 euros. So, some air has gotten into the company, which suffered in Q4 like all other companies from the US shale oil shutdowns, which will continue at least throughout H1 2020.
I’ll have to look into those comparables as well. I watched yesterday’s webcast, and perhaps it’s part of the CEO’s (and others’) professionalism that they can present a positive image of the company.
I bought an additional batch of Kemira during this morning’s dip, and if the price drops enough to my mental anchor price, I’ll buy more. For me, the dividend yield alone is enough at the moment. Somehow, I trust that now that it has been raised, it will become the new dividend level in the future 
Based on a couple of months of following it, Kemira feels like a steadily boring company for a long-term dividend portfolio in terms of price fluctuations, even though there was a bigger drop yesterday.
The movements are still quite wild on the second day. My buy order at 13.24 was triggered, which I had already forgotten as the price immediately started to climb. Yesterday was a bleak day because I took an overnight loan for Kemira on Monday. I sold them in the pre-market this morning and bought them back at double the amount at 12.93, but then I had to sell those before the pre-market because I had unexpected buys in less lendable stocks. But now I got my original batch back and we’ll see if I hold these longer. My overall impression of the earnings report was positive, and based on that, I might consider it a good, relatively safe long-term buy.
I updated my Kemira calculations yesterday morning: my view on the share’s value is 13.97–15.31 euros, so adding at ~12.8 euros felt safe.
Today, Inderes gave a sell recommendation and a target price of 14.0 euros, while Nordea gave a buy and 15.0 euros. For 2020–2022, Inderes forecasts an operating profit (EBIT) of 8.1%, Nordea approximately one percentage point more. Nordea’s forecast for return on equity (ROE) (12.2%) is also a notch higher than Inderes’ forecast (11%). Nordea predicts the dividend to grow by a couple of euro cents annually, while Inderes forecasts a steady 0.56 euro dividend.
Handelsbanken lowered the target price to 12 euros and a sell rating (previously hold at 14). They don’t believe this year’s targets will be met, citing production start-up costs, the paper industry strike, and the coronavirus as threats. Q1 is still expected to be okay due to positive price and raw material momentum. They don’t expect earnings to recover before 2022.
Addition: So, recommendations are all over the place, as usual
These recommendation posts were a good addition to this thread. I missed Inderes’s reduce recommendation as it was still “add” yesterday?
Kemira will publish its Q1 report next Tuesday at approximately 8:30 a.m. Consensus expects the company’s revenue to have decreased and profitability to have weakened compared to the comparison period. Kemira belongs to a small group that has kept its guidance for the current year unchanged, while consensus expectations have fallen below the level indicated by the guidance. In connection with the earnings release, our attention will focus on comments regarding the outlook, and especially on the outlook for the Oil & Gas business after the collapse in oil prices.
We expect Kemira’s Q1 revenue to have decreased by 3% from the comparison period to EUR 628 million, while the corresponding consensus forecast is EUR 639 million. We expect revenue to have decreased slightly in both segments, as Pulp & Paper volumes have suffered from the impact of strikes in Finland in the early part of the year. Similarly, we expect the growth of the Industry & Water segment to have been weighed down by the challenging market situation in the oil and gas business, which has been reflected in declining volumes and price pressure. However, the business is relatively small in the segment’s size, and thus, in our assessment, the stable performance of other businesses will curb the segment’s revenue decline.
Our Q1 operating EBITDA forecast is EUR 82 million, which is below the consensus forecast of EUR 92.4 million. We expect increased costs (e.g., logistics costs) together with the decrease in revenue to have pulled the earnings level down compared to the comparison period. On the lower lines, we do not expect any surprises in financial expenses or taxes, and thus our earnings per share forecast of EUR 0.12 reflects the operational earnings development. The corresponding consensus forecast is EUR 0.17.
Kemira has guided that its 2020 operating EBITDA will grow from the previous year (2019: adj. EBITDA EUR 410 million). The consensus forecast before the Q1 report for the current year’s operating EBITDA has fallen to EUR 371 million, so a change in guidance is already in the consensus forecasts. However, we would not be surprised if Kemira reiterated the guidance at this stage and re-evaluated it if necessary as the year progresses. In connection with the earnings release, our attention will focus on management’s market comments, especially regarding the shale oil and gas market, which, in our estimation, clearly suffers from the decline in oil prices. In addition, as usual, we will closely monitor the relative development of sales prices and raw material costs.
Kemira withdrew its full-year guidance already tonight, hmm:
Kemira and UPM-Kymmene Oyj have signed a long-term extension agreement for bleaching chemicals in Uruguay
