Hanwha: Revenue Scale Has Grown Sharply, but Net Margins Stay Thin and Leverage High

Thesis

The data supports a picture of fast revenue growth: sales rose 34.4% in 2025 and trailing revenue is now ₩89.0T, versus ₩52.8T in 2021. Operating margin has improved from 4.3% in 2024 to 6.1% on a trailing basis.

The data does not show that this growth has reached shareholders. Trailing net income is ₩797.8B, ROE is 6.6%, and liabilities to equity are 458.3%. The stock fell 20.4% in a month after a 18.4% gain over three months, so sentiment has been volatile. Investor flow, foreign ownership and short balance data are not available.

Business overview

Hanwha is a KOSPI-listed company classified in the Chemicals sector, founded in 1952 and listed in 1976. It has 74,958,735 listed shares and a market cap of about ₩8.2T. The CEOs listed are 김동관, 류두형 and 김우석.

Recent news headlines mention defense items (K9 howitzer designation, unmanned naval vessels), a semiconductor affiliate, space solar power and a KAI acquisition bid opposed by a union. The data does not give a segment breakdown, so the contribution of each business is not available.

Financial analysis

All figures come from filed financial statements (DART). Revenue was ₩52.8T in 2021, ₩62.3T in 2022, ₩53.1T in 2023, ₩55.6T in 2024 and ₩74.8T in 2025. Trailing revenue as of H1 2026 is ₩89.0T.

Operating income was ₩4.1T in 2025 (5.5% margin) and ₩5.4T on a trailing basis (6.1%). Net income was ₩372.5B in 2025, down from ₩773.0B in 2024, and ₩797.8B trailing (0.9% margin). ROE was 26.1% in 2022, 3.3% in 2025 and 6.6% trailing.

The balance sheet shows cash of ₩15.8T against borrowings of ₩23.9T. Liabilities to equity are 458.3%. Trailing free cash flow is ₩2.6T.

Valuation

The current P/E is 10.3, P/B is 0.6 and P/S is 0.1. Dividend yield is 1.2%. Enterprise value is about ₩16.3T. EV/EBITDA is not available. At year-end 2025, P/E was 16.4 and P/B was 0.5, so the P/E is lower now while P/B is slightly higher. Earlier year-end multiples are not available.

Among listed peers, LG Chem has a P/B of 0.5, Hanwha Solutions 0.6, KCC 0.4 and SKC 1.8. KCC's P/E is 1.1, while the other peers' P/E figures are not available. Hanwha's P/B is therefore in the range of its peers. The low P/B and P/S sit alongside high leverage and thin net margins.

Catalysts

• The K9 howitzer received a U.S. Army XM1776 designation, according to news on 2026-10-13.
• Headlines on 2026-10-13 describe competition over U.S. unmanned naval vessels, with Hanwha integrating weapons.
• The H1 2026 report was filed on 2026-08-14 and amended on 2026-08-31, so the latest financials are recent.
• An IR event was filed on 2026-09-10, an opportunity for management to discuss results.
• The KAI union plans a rally from the 14th against Hanwha's acquisition bid, which could affect that deal's progress.

Risks

• Net margin is only 0.9%, so small cost changes could have a large effect on profit.
• Liabilities to equity are 458.3% and borrowings are ₩23.9T, which leaves the balance sheet heavily leveraged.
• Filings on 2026-09-02 and 2026-09-09 report serious accident occurrences, including at a subsidiary, with details not available in the data.
• The share price fell 20.4% in one month and sits well below the 52-week high of ₩166,400, showing high volatility.
• Opposition to the KAI acquisition bid and a headline noting a 1% margin at a semiconductor affiliate point to execution risks in new investments.

Closing view

The data shows a much larger company than five years ago, with improving operating margins and solid free cash flow. At the same time, net profit is small relative to revenue, returns on equity are modest, and leverage is very high. Valuation multiples are low on book value and sales but the data does not settle whether that reflects opportunity or the risks above. Missing data on flows, foreign ownership and short interest limits the view of market positioning.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationHanwha: Revenue Scale Has Grown Sharply, but Net Margins Stay Thin and Leverage High