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JONBUR Research · Initiation

Korea Circuit · 007810 · Electronic components

Korea Circuit: Earnings Recovery and a Sharp Price Rise Meet a Much Lower Model Estimate

Why this report

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

Korea Circuit's shares closed at ₩80,500 on 2026-10-12, up 307.4% over one year, while trailing profit has returned after two loss-making years. A DCF-based model estimate of ₩6,278 per share sits far below the market price, so the market is pricing in much more than the model assumptions.

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 real earnings turnaround. Operating income went from a loss of ₩33.2B in 2024 to ₩53.8B in 2025 and ₩95.1B on a trailing basis to H1 2026. Return on equity improved from -31.1% in 2024 to 19.5% trailing.

The data does not show that this recovery is secure. Free cash flow is negative at -₩82.9B, borrowings of ₩276.0B exceed cash of ₩92.2B, and the share price is 45.7% below its 52-week high of ₩148,300 but 358.2% above its low of ₩17,570. The stock has moved sharply in both directions. Investor flow, foreign ownership and short balance data are not available, and no news headlines were provided, so the reasons for the price move cannot be determined from this data.

Business overview

Korea Circuit is a KOSPI-listed company in the electronic components sector. It was founded on 1972-04-11 and listed on 1985-09-09. It has 23,620,751 listed shares and a market capitalization of about ₩1.9T. The CEO is listed as 장세준.

Revenue was ₩1.42T in 2021, ₩1.60T in 2022, ₩1.33T in 2023, ₩1.41T in 2024 and ₩1.51T in 2025. Trailing revenue to H1 2026 is ₩1.65T. The data gives no segment or product breakdown.

Financial analysis

These figures come from filed financial statements (DART). Revenue grew 5.6% in 2024 and 7.3% in 2025. Operating margin was 6.0% in 2021 and 6.2% in 2022, fell to -2.4% in both 2023 and 2024, recovered to 3.6% in 2025 and reached 5.8% on a trailing basis.

Net income was a loss of ₩36.6B in 2023 and a loss of ₩125.9B in 2024. It was a profit of ₩47.3B in 2025 and ₩85.0B trailing, a net margin of 5.2%.

Liabilities to equity are 81.6%. Cash is ₩92.2B against borrowings of ₩276.0B. Trailing free cash flow is negative at -₩82.9B, which suggests heavy spending or working-capital needs. The data does not explain the cause.

Valuation

The current P/E is 22.4, P/B 3.8, P/S 1.2 and EV/EBITDA 13.2, with an enterprise value of about ₩2.09T. Year-end 2025 P/E was 24.1 and P/B 2.6, so P/B has risen since then. Earlier year-end multiples are not available. No dividend yield is available.

Peers in the data show a wide range. Samsung Electro-Mechanics has a P/E of 110.2 and P/B of 10.9. Doosan has 54.9 and 7.7. Hanwha Systems has 80.8 and 3.2. LG Innotek has 17.1 and 1.8. Isupetasys has 38.0 and 8.9. Korea Circuit's P/E and P/B are below most of these peers, though the peers are much larger and not necessarily comparable.

The valuation model uses a 5-year DCF at a rate of 8.2%, based on trailing figures to H1 2026. It gives a base-case estimate of ₩6,278 per share, with a bear case of ₩0 and a bull case of ₩32,599. This is a model estimate based on the assumptions shown, not a target. All three cases are below the ₩80,500 share price. The gap is partly explained by negative free cash flow, which weighs on a DCF.

Catalysts

  • The half-year report for June 2026 was filed on 2026-08-14 and showed trailing operating income of ₩95.1B.
  • A 5%+ holding report was filed on 2026-10-02, following similar reports on 2026-07-01 and 2026-06-11, which points to changes in large shareholdings.
  • Insider shareholding reports were filed on 2026-06-23, 2026-07-02 and 2026-07-07, which show insider activity.
  • The next periodic earnings filing will show whether the margin recovery and negative free cash flow trend continue.

Risks

  • Free cash flow is negative at -₩82.9B while borrowings of ₩276.0B are about three times cash.
  • Profitability has been volatile, with operating losses in 2023 and 2024 before the recovery.
  • The share price rose 57.5% in one month and 307.4% in one year, so large swings are possible in either direction.
  • The model estimate of ₩6,278 per share, with a bull case of ₩32,599, is well below the market price, which indicates a large reliance on assumptions beyond those in the model.
  • Investor flow, foreign ownership, short interest and news data are not available, which limits visibility into who is driving the price.

Closing view

Korea Circuit shows a clear improvement in reported earnings, with margins and ROE back near or above 2021–2022 levels. At the same time, cash flow is negative, leverage is notable, and the share price has moved far above the model estimate and below its 52-week high. The data supports a recovery story but does not show what is driving the recent price surge. Readers should weigh the improved profits against the funding needs and the gap between market price and model estimate.

Model estimate of fair value

Bear
₩0
-100%
Base
₩6,278
-91%
Bull
₩32,599
-56%

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 8.2%). 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)Korea Circuit: Earnings Recovery and a Sharp Price Rise Meet a Much Lower Model Estimate

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