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Daou Technology · 023590 · Internet

Daou Technology: Model Fair Value Estimate Cut 32% on Higher Discount Rate

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved -32% (₩3,692,087 → ₩2,502,482 per share)Oct 22, 2026

Our model estimate of fair value per share fell 32% to a base of ₩2,502,482 from ₩3,692,087, with the discount rate rising to 8.1% from 5.2%. The estimate remains far above the ₩33,600 share price, so the earlier caution about the model inputs still applies.

Written Oct 21, 2026 · Data as of Oct 20, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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What happened

On 2026-10-22 the model estimate moved. The base case went from ₩3,692,087 to ₩2,502,482 per share. The bear case rose to ₩1,916,977 from ₩2,047,580, and the bull case fell to ₩3,440,222 from ₩7,197,986. The range is now much narrower.

The model still uses the same financial base (trailing twelve months to H1 2026). The main input that changed is the discount rate: 8.1% now, against 5.2% in the previous report. No new filing excerpts were provided with this event. Filings on 2026-10-20 include a major management matter and an exchange inquiry about a news report or price move, and a news report that day says Daou Technology was picked as preferred bidder to acquire JoongAng Ilbo. The data does not give the terms or size, and we cannot link them to the model change.

What it changes for the thesis

The previous report described a large, fast-growing company with low multiples, thin margins, heavy leverage and deeply negative free cash flow. Nothing in this event changes that picture. TTM revenue is ₩34.8T, operating margin 6.4%, net margin 2.2%, liabilities-to-equity 1212.4% and free cash flow -₩12.0T, all as before.

The share price is now ₩33,600, near the low end of the 52-week range (₩32,300 to ₩62,300), and down 14.3% over one month. Current P/E is 1.9 and P/B 0.4. The dividend yield is now shown as 5.4%, against 16.1% in the previous report, so that earlier figure should be treated with more caution. Enterprise value is shown as negative and EV/EBITDA as -20.3, which looks unusual given the large borrowings and should be read carefully. The data does not explain these differences.

What it changes for the valuation

The model (5-year DCF) now gives a base estimate of ₩2,502,482 per share, with a bear case of ₩1,916,977 and a bull case of ₩3,440,222. The previous range was ₩2,047,580 / ₩3,692,087 / ₩7,197,986. The cut is mainly a result of the higher discount rate of 8.1%.

Even after the cut, the base case is about 74 times the share price of ₩33,600. A gap this large suggests the cash flow base or share count treatment may not be reliable, and the figure should be treated with great caution. This is a model estimate based on the assumptions shown, not a target or a signal to buy or sell.

Closing view

The event is a change in model assumptions, not a new company fact. It lowers and narrows the model estimate, but the gap to the market price remains so wide that it says more about the limits of the inputs than about value. The leverage, negative free cash flow, merger-related scope change and the pending JoongAng Ilbo bid, whose terms are not available, remain unresolved. The evidence is mixed and does not support a firm conclusion in either direction.

Model estimate of fair value

Bear
₩1,916,977
+5648%
Base
₩2,502,482
+7404%
Bull
₩3,440,222
+10216%

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 8.1%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 21, 2026Update noteModel fair value changeDaou Technology: Model Fair Value Estimate Cut 32% on Higher Discount Rate
  2. Oct 13, 2026InitiationStart of coverage (300 largest)Daou Technology: Low Multiples and High Dividend Yield Alongside Heavy Leverage and Negative Free Cash Flow

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information