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HDC Labs · 039570 · Construction

HDC Labs Q3 2026 Preliminary Results: Operating Profit Nearly Doubles on Lower Revenue

Why this report

Written after:

HDC Labs reported Q3 2026 consolidated operating profit of ₩4.2B, up 89.7% from a year earlier, on revenue that fell 8.3%. The result supports the earlier view of improving but still thin margins, while net profit fell sharply from the previous quarter.

Written Oct 29, 2026 · Data as of Oct 28, 2026 · 0 views

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

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What happened

On 2026-10-29 the company filed preliminary consolidated results for July to September 2026. The figures are preliminary and may differ from final numbers.

Revenue was ₩142.4B, down 7.4% from Q2 2026 (₩153.7B) and down 8.3% from Q3 2025 (₩155.3B). Operating profit was ₩4.2B, down 27.0% from Q2 (₩5.7B) but up 89.7% from ₩2.2B a year earlier. That implies an operating margin of about 2.9% in the quarter, a figure derived from the filing's numbers.

Pre-tax profit from continuing operations was ₩3.1B, down 65.0% from Q2 and down 5.7% year on year. Net profit was ₩2.5B, down 64.0% from Q2 (₩6.9B) and down 1.4% from a year earlier. Q2 profit was lifted by items below the operating line.

For the first nine months, revenue was ₩444.3B (down 8.8%), operating profit ₩17.1B (up 93.0%), pre-tax profit ₩20.7B (up 58.8%) and net profit ₩16.2B (up 73.3%). The filing gives no figure for profit attributable to the parent company.

What it changes for the thesis

The previous report described a low-margin business with steady revenue and noted that trailing profitability was better than in 2025, while margins remained thin. This result partly confirms the margin improvement: nine-month operating profit of ₩17.1B already exceeds the full-year 2025 figure of ₩10.6B.

It also challenges the idea of steady revenue. Revenue is down 8.8% over nine months, and the previous report had already flagged weak growth. The profit gain comes from better margins rather than higher sales. The Q3 net profit drop from Q2 also fits the earlier caution that part of earnings sits below the operating line. The filing does not explain the reasons for any of these movements.

What it changes for the valuation

The model's estimate is still based on trailing figures to H1 2026, so it does not yet include these Q3 numbers. A model estimate based on the assumptions shown (5-year discounted cash flow at a 7.4% rate) gives a base case of ₩9,331 per share, a bear case of ₩3,150 and a bull case of ₩20,679. The previous report had ₩9,260, ₩3,156 and ₩20,413 at a 7.5% rate. The small shift comes from the slightly lower rate, not from the new results.

The share price was ₩7,140 on 2026-10-28, before the filing. Trailing P/E is 9.7, P/B is 0.7 and the dividend yield is 6.3%. The range between the bear and bull cases remains very wide, so the estimate is highly sensitive to its assumptions.

Closing view

The quarter shows a company earning clearly more at the operating level than a year ago despite falling sales. That supports the earlier view of better but still thin margins. Lower revenue, a quarterly decline in operating and net profit, and a Q3 net profit that is flat on the year temper the picture. The model range has barely moved and does not yet reflect Q3, so the wide spread between cases still signals high uncertainty. Investors should watch whether margin gains hold if revenue keeps shrinking, and how the final figures compare with these preliminary ones.

Model estimate of fair value

Bear
₩3,150
-56%
Base
₩9,331
+31%
Bull
₩20,679
+190%

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 7.4%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 29, 2026Update noteEarningsHDC Labs Q3 2026 Preliminary Results: Operating Profit Nearly Doubles on Lower Revenue
  2. Oct 21, 2026InitiationStart of coverage (reader request)HDC Labs: Thin Margins, Low Price-to-Book and a Wide Range of Model Estimates

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