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JONBUR Research · Update note

SFA Engineering · 056190 · Machinery

SFA Engineering: Model Fair Value Estimate Falls 88% to ₩6,895 per Share

Why this report

Written after:

  • Model fair value changeModel estimate of fair value moved -88% (₩55,533 → ₩6,895 per share)Oct 22, 2026

Our model estimate of fair value for SFA Engineering fell 88%, from ₩55,533 to ₩6,895 per share, with no new company filing behind the change. It sharply weakens the valuation gap shown in the October 13 report, though the profit recovery in that report is unchanged.

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

The only material event is a change in our model output. The base case moved from ₩55,533 to ₩6,895 per share (-88%). The bear case is now ₩0 (previously ₩34,430) and the bull case ₩25,107 (previously ₩91,140). The discount rate rose from 7.4% to 8.6%. Both runs use trailing data to H1 2026.

No filing excerpts or news explain the change. One input difference is visible in the data: borrowings are now ₩165.0B, while the previous report cited ₩45.0B. Whether this or other inputs drove the revision is not something the data lets us confirm.

The share price closed at ₩27,200 on 2026-10-20, down 2.9% over one month and up 36.2% over three months, with a market cap of about ₩976.7B. As background, 디와이홀딩스 reported a 43.44% stake on 2026-10-21, down 0.01 points, which is a negligible change.

What it changes for the thesis

The previous report described a recovery in profitability: operating income moved from a ₩48.4B loss in 2024 to ₩85.9B in 2025, with trailing operating income of ₩80.1B. Those figures are unchanged, as are trailing margin of 5.2%, ROE of 6.7%, cash of ₩279.7B and free cash flow of ₩258.1B.

What changes is the weight of the cash-flow story. The previous report noted that even the bear case sat above the share price and that the result was sensitive to cash flow durability. The new model confirms that sensitivity: a modest change in assumptions has moved the output a long way. Margins remain well below the 12.1% of 2021, and revenue is still below its 2024 level. The previous report's caution about the rebound may already be reflected in the price now carries more weight.

What it changes for the valuation

The new model estimate, based on the assumptions shown, is a base of ₩6,895 per share, a bear of ₩0 and a bull of ₩25,107. The previous range was ₩34,430 / ₩55,533 / ₩91,140. At ₩27,200, the share price is now above the base case and slightly above the bull case, reversing the earlier picture where all cases were above the price.

Multiples are mildly lower than before: P/E 15.9, P/B 1.0 and P/S 0.6, with a dividend yield of 3.5%. EV/EBITDA is not available. The very wide range, including a ₩0 bear case, shows that the DCF is highly sensitive to inputs and should be read with care. It is a model estimate, not a target or a forecast.

Closing view

The reported fundamentals are the same as a week ago: a return to profit, a solid cash position and strong free cash flow, but with thin margins and lower revenue than in 2024. What has changed is our model output, which now sits far below the share price and is very wide. That shows the earlier valuation gap depended heavily on the assumptions, rather than any new company news. The evidence is mixed and the model's range is too wide to be a firm guide, so the picture remains incomplete.

Model estimate of fair value

Bear
₩0
-100%
Base
₩6,895
-72%
Bull
₩25,107
+0%

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 8.6%). 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 changeSFA Engineering: Model Fair Value Estimate Falls 88% to ₩6,895 per Share
  2. Oct 13, 2026InitiationStart of coverage (300 largest)SFA Engineering: Share Price Rebounds Sharply While Profits Recover From a 2024 Loss

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