Sung Kwang Bend: Model Fair Value Estimate Rises 66% to ₩19,600 Per Share

What happened

On 2026-10-22 the model estimate of fair value moved from ₩11,801 to ₩19,600 per share in the base case. The bear case is now ₩13,730 (previously ₩7,542) and the bull case is ₩29,442 (previously ₩18,993).

The method is unchanged: a 5-year discounted cash flow at a 7.5% rate, based on trailing figures to H1 2026. No new filings or news accompany this change, and the data pack gives no reason for it, so we cannot say which input drove the revision. The trailing figures in the data are revenue of ₩247.1B, operating income of ₩37.0B and free cash flow of ₩42.8B.

The share price closed at ₩26,800 on 2026-10-20, down 16.5% over one month.

What it changes for the thesis

The previous report described a profitable, low-debt company whose shares traded well above a model estimate. The business facts are unchanged: operating margin is 15.0%, borrowings are ₩2.0B against ₩65.8B in cash, and ROE is 6.8%.

What changes is the size of the valuation gap, not the quality of the business. The earlier view that the price reflects optimistic assumptions is softened, because the model now gives a notably higher range. Foreign ownership has slipped to 33.6% from 36.1% sixty days ago, and that remains an unresolved uncertainty.

What it changes for the valuation

The model estimate, based on the assumptions shown, is now ₩13,730 (bear), ₩19,600 (base) and ₩29,442 (bull) per share. The previous range was ₩7,542, ₩11,801 and ₩18,993.

At ₩26,800 the price is about 36.7% above the new base case and 9.0% below the new bull case. Previously the price was above even the bull case, so it now sits inside the model's range, near the top. Current multiples are a P/E of 19.3 and a P/B of 1.3, with a dividend yield of 0.7%.

A 66% revision from unchanged trailing data shows how sensitive this model is to its assumptions. It is a model estimate, not a price target or a signal to buy or sell.

Closing view

The business evidence is the same as at initiation: solid margins, very little debt and healthy cash generation. The model now gives a much higher estimate, which makes the share price look less stretched against it than before, though still above the base case. Because the filings do not explain the revision and the estimate swings widely with its assumptions, it should be read with caution. This is a reading of the data, not a recommendation.

Model estimate of fair value

Bear

₩13,730

-48%

Base

₩19,600

-26%

Bull

₩29,442

+12%

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 7.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• Buyback trust contract signedOct 1, 2026
• 5%+ holding reportSep 23, 2026
• Amended: Major sales or supply contractAug 24, 2026
• Major sales or supply contractAug 21, 2026
• Investor relations (IR) eventAug 14, 2026
• Investor relations (IR) eventAug 14, 2026
• Half-year report (Jun 2026)Aug 14, 2026
• Preliminary earnings (consolidated)Aug 10, 2026
• 5%+ holding reportJul 28, 2026
• 5%+ holding reportJul 22, 2026
• Insider shareholding reportJul 20, 2026
• 5%+ holding reportJul 20, 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 changeSung Kwang Bend: Model Fair Value Estimate Rises 66% to ₩19,600 Per Share
2. Oct 18, 2026InitiationStart of coverage (reader request)Sung Kwang Bend: Solid Margins and Low Debt, but Shares Trade Well Above a Model Estimate