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JONBUR Research · Initiation

Otoki · 007310 · Food & Beverage

Otoki: Thin Margins and Low P/B, With a Wide Model Range After a 20.1% One-Year Share Price Decline

Why this report

Start of coverage: one of the 300 largest companies, written once its financial statements were in.

Otoki closed at ₩319,000 on 2026-10-12, down 20.1% over one year, with a market cap of about ₩1.3T and a P/B of 0.6. Revenue has grown every year since 2021, but operating margin has fallen from 7.4% in 2023 to 4.8% and ROE is 3.5%.

Written Oct 13, 2026 · Data as of Oct 12, 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 steadily growing food company whose profitability has weakened. Revenue rose from ₩2.74T in 2021 to ₩3.67T in 2025, while operating income fell from ₩254.9B in 2023 to ₩177.3B in 2025 and net income from ₩160.3B to ₩69.2B. The shares trade at 0.6 times book value, below Orion (1.0) and Nongshim (0.8), but ROE of 3.5% helps explain a low P/B. The P/E of 17.5 is above Orion (10.0) and Nongshim (12.4) and below Samyang Foods (18.5). The data does not show whether margins will recover. Investor flows, foreign ownership, short balance and news headlines are not available, so sentiment cannot be assessed from this data.

Business overview

Otoki is a KOSPI-listed Food & Beverage company founded on 1971-06-03 and listed on 1994-08-12, with 4,007,830 listed shares. Co-CEOs are listed as 함영준 and 황성만. Trailing revenue as of H1 2026 is ₩3.75T. Annual revenue growth was 16.2% in 2022, 8.5% in 2023, 2.4% in 2024 and 3.8% in 2025, so growth has slowed from its 2022 peak. The 52-week range is ₩290,500 to ₩414,000, and the current price is about 22.9% below the high.

Financial analysis

All figures come from filed financial statements (DART). Trailing revenue to H1 2026 is ₩3.75T, operating income ₩179.3B (4.8% margin) and net income ₩73.0B (1.9% margin). Annual operating margin was 6.1% in 2021, 5.8% in 2022, 7.4% in 2023, 6.3% in 2024 and 4.8% in 2025. ROE was 16.5% in 2022, which included net income of ₩274.5B above operating income, then 8.5%, 6.9% and 3.4% in 2023 to 2025; it is 3.5% on a trailing basis. The balance sheet shows liabilities to equity of 69.8%, cash of ₩442.5B and borrowings of ₩349.1B, so cash exceeds borrowings. Trailing free cash flow is ₩29.3B, small relative to net income.

Valuation

Current multiples are P/E 17.5, P/B 0.6, P/S 0.3 and a dividend yield of 2.5%; enterprise value is ₩1.19T and EV/EBITDA is not available. Year-end 2025 P/E was 22.3 and P/B 0.7, so P/B is slightly lower now; earlier year-end multiples are not available. Among peers, P/E is 18.5 for Samyang Foods, 10.0 for Orion and 12.4 for Nongshim, and P/B is 5.9, 1.0 and 0.8 respectively; CJ Cheiljedang has P/B 0.4, and Lotte Wellfood has no multiples. The valuation model (5-year DCF, 5.0% rate, based on TTM to H1 2026) gives a base case of ₩916,501 per share, with bear ₩281,817 and bull ₩2,408,172. This is a model estimate based on the assumptions shown, not a target. The range is extremely wide, which shows high sensitivity to assumptions when margins and free cash flow are thin. The bear case is below the ₩319,000 share price.

Catalysts

  • A filing on 2026-09-28 reported a serious accident at a consolidated subsidiary, and its financial effect is not stated in the data.
  • The half-year report filed on 2026-08-14 showed trailing operating margin of 4.8%, and the next quarterly report will show whether margins stabilize.
  • A corporate value-up plan was filed on 2026-03-27, which may relate to shareholder returns and valuation, though details are not in the data.
  • A change in the largest shareholder's holdings was filed on 2026-04-08, and details are not in the data.

Risks

  • Operating margin has declined from 7.4% in 2023 to 4.8% and net margin is 1.9%, leaving little cushion for cost pressure.
  • Trailing free cash flow of ₩29.3B is small compared with ₩349.1B of borrowings and the dividend yield of 2.5%.
  • The serious accident at a consolidated subsidiary disclosed on 2026-09-28 could carry costs or operational effects that cannot be quantified from the data.
  • The model estimate ranges from ₩281,817 to ₩2,408,172, so it offers little precision.
  • The shares fell 20.1% over one year and 4.1% over one month, and no flow, foreign ownership or short-interest data is available to explain the move.

Closing view

The data shows a larger company with growing revenue, net cash on the balance sheet and a P/B of 0.6, set against falling margins, ROE of 3.5% and weak free cash flow. The low P/B appears to reflect lower returns rather than clearly signalling mispricing, and the model range is too wide to settle the question. Whether profitability stabilizes, and what the subsidiary accident costs, are the key unknowns that the available data cannot answer.

Model estimate of fair value

Bear
₩281,817
-8%
Base
₩916,501
+198%
Bull
₩2,408,172
+683%

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 5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 13, 2026InitiationStart of coverage (300 largest)Otoki: Thin Margins and Low P/B, With a Wide Model Range After a 20.1% One-Year Share Price Decline

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