Coway: Steady Earnings Growth, Mid-Teens Margins and a Negative Free Cash Flow Reading

Thesis

The data supports a picture of consistent growth and stable profitability. Revenue rose every year from 2021 to 2025, and operating margins stayed in a 17.5% to 18.5% band. Trailing ROE of 19.5% is solid.

The data is less clear on cash generation and ownership. Trailing free cash flow is -₩208.6B and borrowings are ₩2.5T against cash of ₩139.5B. Investor flows, foreign ownership and short balance data are not available, so we cannot say who is buying or selling. The share price is 6.3% below its 52-week high of ₩109,200 and well above its low of ₩68,800.

Business overview

Coway is listed on KOSPI and was founded on 1989-05-02. It listed on 2001-08-07 and has 71,909,133 shares outstanding. The sector is tagged only as Other in the data, and no product detail is provided. The CEO is listed as 서장원.

Annual revenue grew from ₩3.66T in 2021 to ₩4.96T in 2025. Operating income over the same period rose from ₩640.2B to ₩878.7B. Market cap is ₩7.36T and enterprise value is ₩9.67T.

Financial analysis

Figures come from filed financial statements (DART), consolidated where available.

In 2025, revenue was ₩4.96T, up 15.2%, the fastest growth in the period shown. Operating income was ₩878.7B, an operating margin of 17.7%, and net income was ₩617.7B. ROE was 18.1%. In 2024, revenue growth was 8.7%, with a margin of 18.5% and net income of ₩565.6B. ROE has eased from 24.4% in 2021.

For the trailing twelve months to H1 2026, revenue was ₩5.30T, operating income ₩928.8B, and net income ₩683.5B. That gives an operating margin of 17.5% and a net margin of 12.9%. Liabilities to equity was 103.6%. Cash was ₩139.5B against borrowings of ₩2.45T. Free cash flow was -₩208.6B.

Valuation

The current P/E is 10.8, P/B 1.9, and P/S 1.4. The dividend yield is 2.5%. EV/EBITDA is not available.

At the end of 2025 the P/E was 10.1 and the P/B 1.7, so both multiples are somewhat higher now. Earlier year-end multiples are not available in the data.

Peer comparison is limited. Listed peers (Lotte rental, Cuckoo Homesys, Socar, AJ Networks, Q AID) are all much smaller by market cap, ranging from ₩57.3B to ₩1.86T, and no peer P/E or P/B figures are provided.

Catalysts

• A Trading Plan Report for executives and major shareholders' specific securities was filed on 2026-10-12, which may signal planned share transactions.
• A change in the largest shareholder's holdings and an insider shareholding report were filed on 2026-09-08.
• Several securities registration statement filings, a prospectus and an issuance results report appeared between 2026-09-04 and 2026-09-10, indicating a securities offering.
• A 5%+ holding report was filed on 2026-09-04, pointing to a change in a significant shareholder position.
• Investor relations events were held on 2026-09-04 and 2026-09-18.

Risks

• Trailing free cash flow is negative at -₩208.6B, and the data does not explain why.
• Borrowings of ₩2.45T are large against cash of ₩139.5B, and liabilities are 103.6% of equity.
• Operating margin has slipped from 18.5% in 2024 to 17.5% on a trailing basis, and ROE has fallen from 24.4% in 2021 to 19.5%.
• Multiples are above the end-2025 level (P/E 10.8 versus 10.1), and the price is up 11.6% in three months.
• Investor flow, foreign ownership and short interest data are unavailable, and no recent news headlines are provided, which limits visibility into sentiment.

Closing view

The filings show a company with growing revenue, steady margins near 17% to 18%, and returns on equity near 20%. Against this, cash flow is negative and debt is sizable relative to cash. Valuation is modestly higher than at the end of 2025, and peer comparison is not possible with the data provided. The recent cluster of shareholder and securities filings is worth following, but the data does not explain its purpose. This report is informational only and is not a recommendation.

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, 2026InitiationCoway: Steady Earnings Growth, Mid-Teens Margins and a Negative Free Cash Flow Reading