Korea Zinc: Profits Recovering, Shares Down 14.4% in a Month Amid Rights Offering Filings

Thesis

The data supports an earnings recovery. Operating margin rose from 6.0% in 2024 to 7.4% in 2025 and 9.5% on a trailing basis, and ROE moved from 3.7% to 10.7%. The trailing P/E of 20.5 is lower than the 34 recorded at the end of 2025.

The data does not show why the shares fell, and it gives no investor flow, foreign ownership or short balance figures. The share price sits well below the 52-week high of ₩2,188,000 and not far above the low of ₩877,000. Filings show a paid-in capital increase (rights offering) decision, amended on 2026-09-22, followed by registration statements, terms-setting filings, a prospectus and an issuance results report. The size and purpose of the offering are not in the data. A filing dated 2026-09-17 is titled with a Korean term for a serious accident (중대재해발생), but details are not available.

Business overview

Korea Zinc is listed on KOSPI in the Steel & Materials sector. It was founded on 1974-08-01 and listed on 1990-07-28. It has 20,023,273 listed shares and a market capitalisation of about ₩20.2T. Enterprise value is about ₩20.5T. The CEO is listed as 박기덕. Annual revenue grew from ₩10.0T in 2021 to ₩16.6T in 2025, with declines in 2023 (-13.5%) and gains of 24.2% in 2024 and 37.6% in 2025. The data does not describe products or segments.

Financial analysis

Figures come from filed financial statements (DART). Trailing revenue as of H1 2026 was ₩21.4T, operating income ₩2.0T (9.5% margin) and net income ₩984.6B (4.6% margin). For 2025, revenue was ₩16.6T, operating income ₩1.2T and net income ₩775.0B. Operating income in 2021 was ₩1.1T on revenue of ₩10.0T, an 11.0% margin, so the margin is still below that level. Net income in 2021 was ₩811.1B.

The balance sheet shows liabilities to equity of 96.0%, cash of ₩905.2B and borrowings of ₩1.18T. Trailing free cash flow was negative at about ₩93.2B. ROE was 10.7%, matching 2021.

Valuation

The current P/E is 20.5, P/B 1.8 and P/S 0.9. The dividend yield is 2.5%. At the end of 2025, P/E was 34 and P/B 2.5, so both multiples are lower now. Earlier year-end multiples are not available, and EV/EBITDA is not available.

Among peers, only POSCO Holdings has multiples in the data, at a P/E of 18 and P/B of 0.4, with a market cap of ₩24.2T. Korea Zinc's P/B is higher. Other peers (Hyundai Steel, Poongsan, SeAH Besteel Holdings, Sama Aluminium) lack multiples, so a broader comparison is not possible.

Catalysts

• The rights offering filings, including the 2026-10-13 prospectus and issuance results report, indicate the capital raise is progressing and its completion may change the share count and balance sheet.
• Trailing operating income of ₩2.0T versus ₩1.2T for 2025 shows earnings momentum that later filings could confirm or reverse.
• A 5%+ holding report filed on 2026-09-17 and an insider shareholding report on 2026-10-08 point to changes in ownership that may matter to investors.
• The next financial statements will show whether the 9.5% trailing operating margin holds.

Risks

• A rights offering may dilute existing shareholders, and the data does not give its size or pricing.
• The shares fell 14.4% over one month and sit about 53.9% below the 52-week high, indicating high volatility.
• Trailing free cash flow was negative at about ₩93.2B, while borrowings of ₩1.18T exceed cash of ₩905.2B.
• The 2026-09-17 serious accident filing could carry operational or regulatory consequences, but the data gives no detail.
• Investor flow, foreign ownership and short interest data are unavailable, which limits visibility into market positioning.

Closing view

The filed numbers show a company with recovering profitability, lower multiples than at the end of 2025 and a sharp recent share price decline. Against this, negative free cash flow, a pending equity raise, a serious accident filing and missing flow data leave important questions open. The evidence is mixed and incomplete, and it supports watching how the capital increase and upcoming results develop rather than drawing a firm conclusion.

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).

Report history

1. Oct 13, 2026InitiationKorea Zinc: Profits Recovering, Shares Down 14.4% in a Month Amid Rights Offering Filings