Kumkang Kind: Model fair value estimate falls to ₩1,901 per share from ₩18,658

What happened

On 2026-10-22 the model estimate moved from ₩18,658 to ₩1,901 per share in the base case, a fall of 90%. There were no new company filings, no news and no other events behind it. The underlying financial data is unchanged: trailing figures to H1 2026 show revenue of ₩818.2B, operating income of ₩30.6B, net income of -₩17.3B and free cash flow of -₩70.8B.

The model inputs did change. The discount rate is now 4.8%, against 6.5% before. The bear case fell from ₩6,003 to ₩0, and the bull case moved from ₩42,334 to ₩42,046. The share price was ₩4,275 on 2026-10-20.

Enterprise value in the current data is ₩569.7B and EV/EBITDA is 6.2x, against ₩178.1B and 1.9x in the previous report. The previous report's figures were different, and the data does not say why. This may be linked to how borrowings or other items are counted, but that is not stated in the data.

What it changes for the thesis

The previous report described improving operations but a weak bottom line: operating margin up from 1.3% to 3.7%, net income still negative and free cash flow at -₩70.8B. None of those facts has changed, so the operating thesis is intact.

What changes is how the model reads the cash flow. The previous report noted that the very wide range showed sensitivity to cash flow assumptions given negative free cash flow. This update confirms that sensitivity: a small change in inputs moved the base case by 90%. Borrowings of ₩596.6B against cash of ₩152.3B and liabilities at 147% of equity matter more to this result than the earlier figures suggested.

What it changes for the valuation

The model estimate based on the assumptions shown is now ₩1,901 per share in the base case, ₩0 in the bear case and ₩42,046 in the bull case. The previous one was ₩18,658 base, ₩6,003 bear and ₩42,334 bull. The base case is now below the ₩4,275 share price, where before all three cases were above it.

The price has fallen 4.3% over one month and 35.7% over one year, and the stock trades at 0.3x book value and 0.2x sales. A range running from zero to ₩42,046 is too wide to give a precise reading. It is a model estimate, not a target or a signal to buy or sell.

Closing view

The evidence points to the same company as before: operating profit is recovering, but net losses, negative free cash flow and heavy borrowing remain. The fall in the model estimate reflects changed model inputs and a different enterprise value, not new company news. The earlier conclusion that the model was above the market price was fragile, and the zero bear case shows how much depends on cash flow and debt. Future filings on net income, cash flow and financing will matter most.

Model estimate of fair value

Bear

₩0

-100%

Base

₩1,901

-54%

Bull

₩42,046

+919%

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 4.8%). 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
• 5%+ holding reportAug 12, 2026
• 5%+ holding reportAug 3, 2026
• Results of Rights Offering or Issuance of Equity-Linked Bonds, etc. (Voluntary Disclosure)Jul 2, 2026
• 5%+ holding reportJun 17, 2026
• Exchangeable bond issue decisionJun 1, 2026
• Disclosure of Corporate Governance ReportMay 29, 2026
• Quarterly report (Mar 2026)May 15, 2026
• 5%+ holding reportApr 28, 2026
• Annual general meeting resultsMar 20, 2026
• Report on Appointment, Dismissal, or Mid-Term Resignation of Independent DirectorsMar 20, 2026
• Audit report submittedMar 12, 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 changeKumkang Kind: Model fair value estimate falls to ₩1,901 per share from ₩18,658
2. Oct 19, 2026InitiationStart of coverage (reader request)Kumkang Kind: Operating profit recovers in 2026 while net losses and negative free cash flow persist