Dohwa Engineering: Model Fair Value Estimate Lowered by 22%

What happened

Our model's fair value estimate moved from ₩16,805 to ₩13,051 per share, a change of -22%, dated 2026-10-22. No new company filings were attached to this event, and no smaller recent events are listed as background.

The data pack now shows a base case of ₩13,448, a bear case of ₩2,518 and a bull case of ₩35,046, all from the same 5-year discounted cash flow method at a 6.0% rate, based on trailing figures to H1 2026. The ₩13,051 figure in the event does not match the ₩13,448 base case in the current data, and the data does not explain the difference. The previous report showed ₩16,805 base, ₩4,146 bear and ₩41,717 bull. The share price closed at ₩5,330 on 2026-10-26, versus ₩5,530 in the previous report.

What it changes for the thesis

The previous report described a business that has regained profitability but earns low returns: trailing operating margin of 3.4%, net margin of 1.3%, ROE of 3.5%, negative free cash flow of -₩47.4B and high leverage. None of those reported figures have changed in the data, and there is no new filing in this event. The lower model value does not alter the thesis, but it is consistent with the caution already raised about thin margins and negative cash generation.

The filings on guarantees, share sales and a serious accident, mentioned in the previous report, remain unquantified in the data.

What it changes for the valuation

The model estimate based on the assumptions shown is now ₩13,448 in the base case, with a bear case of ₩2,518 and a bull case of ₩35,046, against ₩16,805, ₩4,146 and ₩41,717 before. The event itself cites ₩13,051, which differs slightly from the current base case; the data does not say why. Either way, the base case is still well above the ₩5,330 close, while the bear case is below it. The range is very wide, which shows how sensitive the result is to assumptions.

Market multiples have eased with the lower price: P/E is 20.5, P/B 0.7, EV/EBITDA 8.3 and dividend yield 5.6%. This is a model estimate, not a target or a signal.

Closing view

The evidence is mixed and little has changed in substance. The model estimate fell by roughly a fifth, yet it still sits above the share price in the base case. Low returns, high leverage, negative free cash flow and a bear case well under the current price keep the range of outcomes wide. The revision is best read as a reminder of how assumption-dependent the estimate is, not as new information about the business.

Model estimate of fair value

Bear

₩2,518

-53%

Base

₩13,448

+150%

Bull

₩35,046

+553%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 6%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• [Amendment] Decision on Debt Guarantee to Third PartyOct 8, 2026
• [Amendment] Decision on Debt Guarantee to Third PartySep 30, 2026
• Amended: Sale of shares in another companySep 30, 2026
• Amended: Major sales or supply contractSep 18, 2026
• Occurrence of Serious AccidentSep 8, 2026
• Half-year report (Jun 2026)Aug 13, 2026
• Sale of shares in another companyAug 11, 2026
• Sale of shares in another companyAug 11, 2026
• Insider shareholding reportJul 29, 2026
• Amended: Major sales or supply contractJun 30, 2026
• Change in largest shareholder's holdingsJun 8, 2026
• Insider shareholding reportJun 8, 2026
• Daily prices up to 2026-10-26
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 28, 2026Update noteModel fair value changeDohwa Engineering: Model Fair Value Estimate Lowered by 22%
2. Oct 20, 2026InitiationStart of coverage (reader request)Dohwa Engineering: Revenue Recovery, Thin Margins and a Wide Model Range