Pangrim: Thin Operating Profit, Net Income Lifted by Non-Operating Items, Shares Near 52-Week Highs

Thesis

The data supports a recovery story at the top line: revenue grew 10.8% in 2025 after two years of declines, and operating income turned positive again at ₩1.1B. The share price has risen 6.8% in one month and 11.9% in three months and sits near the 52-week high of ₩6,280.

What the data does not support is a strong earnings base. Trailing operating income is just ₩649M on ₩126.3B of revenue, yet net income is ₩6.8B, meaning net income is much larger than operating income. The data does not explain the source of the difference. Free cash flow is negative at ₩13.7B. Recent filings show a share buyback decision, share cancellation decisions, a disposal of tangible assets and a lawsuit, but no details on size or outcome are available.

Business overview

Pangrim is a KOSPI-listed company in the Textiles & Apparel sector, founded in 1962 and listed in 1989. It has 32,110,778 listed shares and a market capitalization of ₩187.8B. Revenue has moved between ₩110.6B (2024) and ₩155.8B (2022) over the last five years. The data gives no breakdown by product or segment, so the business mix is not available here. No recent news headlines are in the data.

Financial analysis

These figures come from filed financial statements. Trailing revenue to H1 2026 is ₩126.3B, with operating income of ₩649M (0.5% margin) and net income of ₩6.8B (5.4% margin). Return on equity is 3.7%.

Annual history: revenue was ₩131.0B in 2021, ₩155.8B in 2022 (+18.9%), ₩131.9B in 2023 (-15.3%), ₩110.6B in 2024 (-16.2%) and ₩122.5B in 2025 (+10.8%). Operating income was ₩6.4B in 2021, ₩2.1B in 2022, losses of ₩4.1B in 2023 and ₩3.3B in 2024, then ₩1.1B in 2025. Net income was ₩6.7B in 2025 versus ₩774M in 2024 and a ₩4.1B loss in 2023.

The balance sheet looks moderate: liabilities to equity is 38.7%, cash is ₩25.1B and borrowings are ₩16.1B. Free cash flow on a trailing basis is -₩13.7B.

Valuation

The stock trades at a P/E of 27.7, P/B of 1.0, P/S of 1.5 and a dividend yield of 1.2%. Enterprise value is ₩153.0B; EV/EBITDA is not available. Year-end P/B was 0.4 to 1.0 over 2021-2025, so the current 1.0 is at the top of its own range. Year-end P/E ranged from 11.4 in 2021 to 177.1 in 2024, reflecting very small profits.

Peers show P/E of 4.0 to 7.1 for F&F, LF, Handsome and JS, with Chokwang Leather at 44.9. Peer P/B ranges from 0.3 to 1.2. Pangrim's P/E is high against most peers, though its earnings are small and volatile.

The valuation model (5-year discounted cash flow, 7.3% rate) gives a model estimate based on the assumptions shown of ₩841 per share in the base case, ₩476 bear and ₩1,703 bull, versus a share price of ₩5,850. The model reflects thin operating cash generation; it is not a target or a reason to buy or sell.

Catalysts

• A share buyback decision was filed on 2026-10-30, and share cancellation decisions were filed on 2026-03-25 and 2026-05-06, which bear on the share count.
• A major matters report on the disposal of tangible assets was amended on 2026-09-17, which could affect the balance sheet and cash.
• A lawsuit filing or ruling was disclosed on 2026-10-13, and the outcome could matter, though details are not in the data.
• The next periodic report will show whether the 0.5% operating margin improves from the 2025 level of 0.9% or the trailing level.
• Over the last 20 days, institutions (+₩144M) and retail (+₩257M) were net buyers while foreigners were net sellers (-₩509M), small amounts in each case.

Risks

• Operating margin of 0.5% leaves little cushion, and the company posted operating losses in both 2023 and 2024.
• Net income of ₩6.8B far exceeds operating income of ₩649M, so reported profit may not reflect recurring operations.
• Trailing free cash flow is -₩13.7B, which could erode the ₩25.1B cash balance.
• The P/E of 27.7 is above most listed peers shown, and the model estimate is well below the market price.
• Revenue has been volatile, with swings of -16.2% to +18.9% in recent years, and an unresolved lawsuit adds uncertainty.

Closing view

The data shows a company recovering from two loss-making years, with revenue growth, a solid balance sheet and a rising share price. Against that, operating profit is minimal, cash flow is negative, net income appears to rely on items outside operations, and the share price is far above the model estimate of ₩841. Share buybacks and cancellations are positives for per-share measures, but the data does not show their size. Overall the evidence is mixed and hinges on whether operating profitability improves in coming filings.

Model estimate of fair value

Bear

₩476

-92%

Base

₩841

-86%

Bull

₩1,703

-71%

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 7.3%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• Share buyback decisionOct 30, 2026
• Lawsuit filed or ruledOct 13, 2026
• [Amendment] Disclosure of Corporate Governance ReportSep 23, 2026
• [Amended Filing] Major Matters Report (Decision on Disposal of Tangible Assets)Sep 17, 2026
• Determination of Shareholder Register Closure Period or Record DateSep 14, 2026
• Quarterly report (Jun 2026)Aug 14, 2026
• Disclosure of Corporate Governance ReportMay 29, 2026
• Half-year report (Mar 2026)May 15, 2026
• Trading haltMay 6, 2026
• Share cancellation decisionMay 6, 2026
• Matters Related to Timely Disclosure Obligations (Fair Disclosure)May 6, 2026
• Share cancellation decisionMar 25, 2026
• Daily prices up to 2026-10-30
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 31, 2026InitiationStart of coverage (reader request)Pangrim: Thin Operating Profit, Net Income Lifted by Non-Operating Items, Shares Near 52-Week Highs