NI Steel: Model Fair Value Estimate Rises Sharply to ₩10,342 Base Case, Driven by a Lower Discount Rate

What happened

There was no filing, news item or price shock in this update. The only event is a change in our model output on 2026-10-22. The base estimate moved from ₩266 to ₩10,342 per share, a rise of 3,788%.

The bear case moved from ₩0 to ₩1,111 and the bull case from ₩3,006 to ₩30,899. The discount rate used in the model is now 5.1%, against 7.5% in the previous report. The earnings base is unchanged: trailing figures to H1 2026, with revenue of ₩263.9B, operating income of ₩23.8B, net income of ₩22.4B and free cash flow of ₩1.7B.

The share price was ₩3,110 on 2026-10-20, down from ₩3,185 in the previous report. Market cap is about ₩88.9B.

What it changes for the thesis

The previous report described a small, profitable steel company with low multiples, a P/B of 0.3, a dividend yield of about 3% and earnings well below the 2022-23 peak. It also said the data did not support a clear earnings recovery. Nothing in this update changes that picture.

Operating margin is still 9.0% on a trailing basis, revenue fell 9.9% in 2025 and 28.1% in 2024, and ROE is 8.4%. Free cash flow remains thin at ₩1.7B. Borrowings of ₩210.7B against cash of ₩3.0B and liabilities at 99.1% of equity are also unchanged. The model move is a change in assumptions, not in the business.

What it changes for the valuation

A model estimate based on the assumptions shown is now ₩1,111 (bear), ₩10,342 (base) and ₩30,899 (bull) per share. The previous report had ₩0, ₩266 and ₩3,006. Against a share price of ₩3,110, the base and bull cases are now above the price and the bear case is below it.

The range is extremely wide, with the bull case about 28 times the bear case. This shows how sensitive a discounted cash flow model is to the discount rate when free cash flow is small relative to earnings. The jump from a 7.5% to a 5.1% rate matters far more than any change in operations. The reason for the lower rate is not given in the data. The figures are a model estimate, not a price target or a signal to act.

Closing view

The change in the model estimate is large, but it is a change in assumptions, not new evidence about NI Steel. The business facts are the same as in the previous report: low multiples and a 3.2% dividend yield on one side; falling revenue, lower ROE, thin free cash flow and sizeable borrowings on the other. A fair value that moves from ₩266 to ₩10,342 on a rate change signals low confidence in any single point estimate. The next filings on margins, cash flow and dividends remain the most useful new information.

Model estimate of fair value

Bear

₩1,111

-63%

Base

₩10,342

+243%

Bull

₩30,899

+925%

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 5.1%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• Half-year report (Jun 2026)Aug 14, 2026
• Preliminary earningsJul 27, 2026
• Amended: Cash dividend decisionJul 20, 2026
• Cash dividend decisionJul 20, 2026
• Shareholder Register Closure for Cash/Stock Dividend (Record Date) DecisionJun 12, 2026
• Disclosure of Corporate Governance ReportJun 1, 2026
• Quarterly report (Mar 2026)May 15, 2026
• Preliminary earningsApr 27, 2026
• Annual general meeting resultsMar 20, 2026
• Audit report submittedMar 12, 2026
• Annual report (Dec 2025)Mar 12, 2026
• Insider shareholding reportMar 10, 2026
• Daily prices up to 2026-10-20
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 21, 2026Update noteModel fair value changeNI Steel: Model Fair Value Estimate Rises Sharply to ₩10,342 Base Case, Driven by a Lower Discount Rate
2. Oct 20, 2026InitiationStart of coverage (reader request)NI Steel: Earnings Below 2022-23 Peak, Shares Trade at Low Multiples and Below Book Value