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JONBUR Research · Initiation

Nexen · 005720 · Rubber & plastics

Nexen: Low Multiples and Improving Earnings, With Leverage and Disclosure Flags in the Filings

Why this report

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

Nexen closed at ₩6,370 on 2026-10-16, up 14.2% over one month, with a P/E of 2.9 and P/B of 0.2. Trailing revenue reached ₩3.76T with a 5.9% operating margin, while borrowings of ₩1.32T and a past disclosure designation are points to watch.

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 company whose earnings have recovered from a 2022 operating loss and whose shares trade at very low multiples against its own book value and against listed peers. Trailing net income of ₩116.4B is above the ₩91.2B reported for 2025, and ROE has risen to 8.5% from 6.9%.

The data does not show why the multiples are so low. Net margin is thin at 3.1%, borrowings are large relative to cash, and the filings include a designation as a company for unfaithful disclosure in March 2026 and two debt guarantees to third parties tied to a subsidiary. No valuation model estimate is available, and no recent news headlines are in the data.

Business overview

Nexen is listed on KOSPI in the rubber and plastics sector. It was founded on 1968-09-10 and listed on 1987-12-19, with 52,543,977 listed shares and a market capitalization of about ₩334.7B. The filings list three CEOs: 강병중, 강호찬 and 문성희.

Revenue has grown from ₩2.40T in 2021 to ₩3.59T in 2025, and trailing revenue to H1 2026 is ₩3.76T. A July 2026 filing records the inclusion of a subsidiary into the holding company. Peer data lists Nexen Tire (code 002350) as a separate company, with a market cap of ₩570.4B.

Financial analysis

These figures come from filed financial statements. Revenue grew 11.6% in 2025 to ₩3.59T, after 5.9% in 2024 and 1.1% in 2023. Operating income was ₩204.2B in 2025 (5.7% margin), versus ₩209.7B in 2024 (6.5%) and ₩221.0B in 2023 (7.3%). In 2022 the company posted an operating loss of ₩22.5B.

Net income was ₩91.2B in 2025, up from ₩85.9B in 2024 and ₩41.6B in 2023. For the trailing twelve months to H1 2026, operating income is ₩221.8B (5.9% margin), net income ₩116.4B (3.1% margin) and ROE 8.5%.

The balance sheet shows liabilities to equity of 114.9%, cash of ₩208.9B and borrowings of ₩1.32T. Trailing free cash flow is positive at ₩234.8B. Enterprise value is about ₩1.45T.

Valuation

Nexen trades at a P/E of 2.9, P/B of 0.2, P/S of 0.1 and a dividend yield of 2.7%. EV/EBITDA is not available. Year-end P/B has stayed at 0.2 for five years, while year-end P/E ranged from 2.8 to 12.3, so the current P/E sits at the low end of its own history.

Among the listed peers, Hankook Tire & Technology has a P/E of 6.4 and P/B of 0.6, Kumho Tire 3.7 and 0.7, Pum-Tech Korea 21.7 and 2.8, Dongwon Systems 9.9 and 0.7, and Nexen Tire 3.7 and 0.3. Nexen's multiples are below all of these.

The valuation model estimate is not available for this company, so there is no per-share model estimate to compare with the ₩6,370 price. The 52-week range is ₩4,965 to ₩8,090, and the price is about 21.3% below the high.

Catalysts

  • A buyback trust contract was signed on 2026-09-30, which is a recent capital return step visible in the filings.
  • The half-year report filed on 2026-08-14 supplied the latest earnings figures, and the next periodic report will update the trend.
  • The July 2026 inclusion of a subsidiary into the holding company may change the group structure and reported results.
  • Over the past 20 days institutions were net buyers of about ₩1.8M and foreigners net buyers of about ₩0.2M, while retail investors were net sellers of about ₩1.9M.
  • The price has risen 14.2% in one month and 15.6% over one year, showing improving market interest.

Risks

  • Borrowings of ₩1.32T are about six times cash of ₩208.9B, and liabilities to equity stand at 114.9%.
  • Two filings in July and August 2026 record debt guarantees to third parties linked to a subsidiary, which could add contingent obligations.
  • The March 2026 designation as a company for unfaithful disclosure points to a governance and reporting concern.
  • Operating margin of 5.9% is below the 7.3% of 2023, and net margin is only 3.1%, leaving limited cushion if costs rise.
  • Foreign ownership is only 2.6% and slipped from 2.7% sixty days ago, which suggests thin international participation.

Closing view

The filings show a company with recovering profits, positive free cash flow and multiples well below its own history and peers. They also show heavy borrowing, thin net margins, third-party debt guarantees and a disclosure designation that may help explain the discount. Without a model estimate or news in the data, the evidence is mixed and does not settle whether the low multiples reflect risk or opportunity.

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)Nexen: Low Multiples and Improving Earnings, With Leverage and Disclosure Flags in the Filings

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