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JONBUR Research · Initiation

Aluko · 001780 · Steel & Materials

Aluko: Low Price-to-Book Multiples, Thin Margins and Negative Free Cash Flow

Why this report

Start of coverage: written when a reader opened this company and there was no report yet.

Aluko shares rose 15.8% over the past month to ₩1,799 but are still down 12.9% over one year and well below the 52-week high of ₩3,495. Filed financials show modest profitability, a trailing P/E of 9.0, a P/B of 0.5 and sharply negative free cash flow in the latest period.

Written Oct 19, 2026 · Data as of Oct 16, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a picture of a low-valued, low-margin company. P/B of 0.5 is below the 0.6 to 1.4 year-end range of the past five years, and P/E of 9.0 is below the year-end 13.3 for 2025. Against that, ROE is only 5.9% and free cash flow over the trailing twelve months is negative ₩142.2B, so the low multiples may reflect weak returns and cash burn rather than a clear mispricing. The company pays no dividend per the data, so shareholder returns depend on the share price alone. Recent filings include several debt guarantee decisions for third parties, which the data does not explain further. Foreign ownership slipped from 4.1% to 3.7% over 60 days, while the 1-month price gain shows recent momentum that the data does not attribute to any specific cause.

Business overview

Aluko is listed on KOSPI in the Steel & Materials sector. It was founded in 1956 and listed in 2007. Market capitalization is about ₩174.2B across 96,830,132 listed shares, which is small next to peers such as POSCO Holdings (₩23.5T) and Korea Zinc (₩19.7T), and closer in size to Poongsan (₩1.7T) only at the lower end of the peer set. Revenue has ranged between ₩505.6B in 2021 and ₩645.4B in 2022, and was ₩575.7B in 2025. No news headlines are available in the data.

Financial analysis

These figures come from filed financial statements. For 2025, revenue was ₩575.7B, down 7.6%, with operating income of ₩34.9B (6.1% margin) and net income of ₩15.5B. Revenue fell 8.4% in 2023, rose 5.4% in 2024 to ₩622.9B and fell again in 2025. Operating margin has held between 5.4% and 6.4% since 2022, after 3.3% in 2021. ROE was 4.9% in 2025 versus 7.2% in 2023. For the twelve months to H1 2026, revenue was ₩526.0B, operating income ₩22.9B (4.3% margin) and net income ₩19.4B (3.7% margin), with ROE of 5.9%. Liabilities to equity were 150.9%. Cash was ₩43.8B against borrowings of ₩24.0B. Free cash flow was negative ₩142.2B, a large outflow relative to net income; the data does not give the cause.

Valuation

Current multiples are P/E 9.0, P/B 0.5 and P/S 0.3, with enterprise value of about ₩154.4B. EV/EBITDA is not available. Year-end P/B was 0.6 in 2024 and 2025 and 1.1 in 2022 and 2023, so the current level is at the low end of its own history. Year-end P/E was 10.7 in 2024 and 13.3 in 2025. Peers show P/E of 8.6 (Poongsan), 14.3 (SeAH Besteel Holdings), 17.4 (POSCO Holdings) and 20.1 (Korea Zinc), and P/B between 0.2 and 1.7. Aluko's P/E is near the lower end of this group, and its P/B sits within the peer range. The valuation model estimate is not available for this company, so no comparison with the share price can be made. The dividend yield is 0.0%.

Catalysts

  • Filings on August 27, 2026 show decisions on debt guarantees for third parties, which follow similar filings on June 30 and July 6 and may draw attention to the company's exposures.
  • The half-year report filed on August 14, 2026 provides the latest earnings baseline; the next periodic report would update the trend.
  • A 5%+ holding report was filed on October 2, 2026, following one on April 9, indicating ongoing changes in significant shareholdings.
  • Share price has risen 15.8% in one month, and 20-day flows show retail net buying of about ₩579M against foreign net selling of about ₩618M.

Risks

  • Free cash flow was negative ₩142.2B over the trailing twelve months, which could pressure the balance sheet if it persists.
  • Revenue declined in 2023 and 2025, and operating margin slipped to 4.3% in the trailing period from 6.1% in 2025.
  • ROE of 5.9% is modest and liabilities to equity stand at 150.9%.
  • Repeated debt guarantees for other parties could add contingent liabilities, though the amounts are not in the data.
  • Foreign ownership is low at 3.7% and falling, and the stock is still 12.9% lower over one year, which points to uncertain investor sentiment.

Closing view

The evidence is mixed. Low P/B and P/E relative to the company's own history point to modest market expectations, but returns on equity are low, margins have narrowed, and free cash flow is heavily negative. The absence of a valuation model estimate and of news coverage limits what can be concluded. Investors would want to understand the cash outflow and the guarantee commitments in more detail before drawing any conclusion.

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).

Filings and data used

Report history

  1. Oct 19, 2026InitiationStart of coverage (reader request)Aluko: Low Price-to-Book Multiples, Thin Margins and Negative Free Cash Flow

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information