Daou Data: Low Multiples, Heavy Leverage and a Pending Merger Visible in the Data

Thesis

The data supports a picture of a company whose reported earnings are large relative to its market value. Trailing ROE is 21.1% and P/E is 1.9, against a P/B of 0.3. Year-end P/E has been between 2.4 and 8.3 over the last five years, so a low multiple is not new.

The data does not support a clean read of quality. Net margin is only 0.9% and operating margin is 6.5%. Liabilities to equity is 1,186.2%, borrowings are ₩45.5T against cash of ₩3.2T, and trailing free cash flow is negative at ₩12.1T. The negative enterprise value (-₩47.8T) and EV/EBITDA of -20.8 reflect the balance sheet structure and are not easy to interpret on their own.

The merger decision and change-of-largest-shareholder filings suggest corporate structure may be changing, but the data gives no terms or detail, so their effect cannot be assessed here.

Business overview

Daou Data is listed on KOSDAQ and classified in Retail & Trade. It was founded on 1992-06-10 and listed on 1999-12-21, with 38.3M listed shares. Market capitalization is ₩633.1B.

The revenue base is far larger than the market value: trailing revenue is ₩35.5T. Annual revenue grew from ₩6.6T in 2021 to ₩18.1T in 2025. Growth was 48.1% in 2022, 6.0% in 2023, 17.4% in 2024 and 48.7% in 2025. No description of products or segments is available in the data.

Financial analysis

These figures come from filed financial statements. Trailing revenue to H1 2026 is ₩35.5T, operating income ₩2.3T and net income ₩335.7B. Operating margin is 6.5% and net margin 0.9%.

For 2025, revenue was ₩18.1T, operating income ₩1.6T (8.9% margin) and net income ₩218.8B. In 2024 these were ₩12.1T, ₩1.2T (9.9%) and ₩164.3B. In 2021 operating margin was 20.0% on ₩6.6T of revenue, so margins have fallen as revenue scaled up. ROE was 14.8% in 2025, 13.0% in 2024, 5.5% in 2023, 19.8% in 2022 and 16.0% in 2021.

The balance sheet is highly leveraged: borrowings of ₩45.5T, cash of ₩3.2T and liabilities to equity of 1,186.2%. Trailing free cash flow is -₩12.1T. The dividend yield is 3.3%.

Valuation

The current P/E is 1.9 and P/B is 0.3. Year-end P/E was 3.2 in 2025, 2.4 in 2024, 8.3 in 2023, 5.8 in 2022 and 3.9 in 2021. Year-end P/B ranged from 0.3 to 1.0. The current multiples are therefore at the low end of the company's own history.

Peers in the data show P/E from 5.1 (Youngone) to 41.4 (ISC) and P/B from 0.5 (Samsung C&T) to 5.5 (ISC). Daou Data's multiples are below all five listed peers.

The valuation model (5-year discounted cash flow, 7.9% rate, based on TTM to H1 2026) gives a base estimate of ₩2,808,097 per share, with bear ₩2,122,475 and bull ₩3,917,418. This is a model estimate based on the assumptions shown, and it is many times the ₩16,530 share price. A gap that large suggests the model inputs, such as the cash flows or the leverage treatment, deserve scrutiny and it should not be read as a target or a reason to buy or sell.

Catalysts

• A merger decision was filed on 2026-06-02 and amended on 2026-08-11, so further details or completion steps could matter.
• Change of largest shareholder filings on 2026-05-26 and 2026-05-27, along with a 5%+ holding report on 2026-09-09, point to ownership changes.
• The half-year report filed on 2026-08-14 provided the latest trailing figures, and the next quarterly report will update them.
• Foreign ownership rose to 14.0% from 13.3% sixty days ago, while institutions were net sellers of ₩554.8M over 20 days.
• No recent news headlines are available in the data.

Risks

• Liabilities to equity of 1,186.2% and borrowings of ₩45.5T leave the company sensitive to financing conditions.
• Trailing free cash flow is negative at ₩12.1T, which may need to be funded by further borrowing.
• Net margin of 0.9% is thin, so small changes in costs could affect profit materially.
• The share price fell 16.6% in one month and sits near the 52-week low of ₩15,940, compared with a high of ₩31,450.
• Merger terms and their effect on per-share value are not available in the data, leaving uncertainty.

Closing view

The data shows a company with very low multiples, a 3.3% dividend yield and strong reported ROE, alongside high leverage, negative free cash flow and thin net margins. The model's per-share estimate is far above the market price, which more likely signals uncertainty about the inputs than a clear conclusion. With a merger and shareholder changes in the filings but no terms available, the evidence is mixed and incomplete.

Model estimate of fair value

Bear

₩2,122,475

+12740%

Base

₩2,808,097

+16888%

Bull

₩3,917,418

+23599%

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 7.9%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• 5%+ holding reportSep 9, 2026
• Disclosure on Large Business Group Status [Quarterly Disclosure (For Individual Company)]Aug 31, 2026
• Half-year report (Jun 2026)Aug 14, 2026
• Amended: Merger decisionAug 11, 2026
• Matters Concerning Payment Amounts by Payment Method and Payment Period, and Dispute Mediation BodiesAug 10, 2026
• Merger decisionJun 2, 2026
• Disclosure of Large Business Group Status [Annual Disclosure (For Controlling Person)]Jun 1, 2026
• Disclosure of Large Business Group Status [Annual Disclosure and Q1 Use (Individual Companies)]Jun 1, 2026
• Amended: Change of largest shareholderMay 27, 2026
• 5%+ holding reportMay 27, 2026
• Amended: Change of largest shareholderMay 26, 2026
• Quarterly report (Mar 2026)May 15, 2026
• Daily prices up to 2026-10-27
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 28, 2026InitiationStart of coverage (reader request)Daou Data: Low Multiples, Heavy Leverage and a Pending Merger Visible in the Data