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JONBUR Research · Initiation

DMS · 068790 · Machinery

DMS: Net profit far above operating results as the core business posts a loss, shares trade below book value

Why this report

Start of coverage: written when a reader opened this company and there was no report yet.

DMS, a KOSDAQ machinery company with a market cap of ₩163.9B, reported trailing net income of ₩142.6B on revenue of ₩145.3B, while operating income was a loss of ₩5.3B. The share price of ₩7,390 is below the model's base estimate of ₩8,821, but earnings quality is the central question.

Written Oct 18, 2026 · Data as of Oct 16, 2026 · 0 views

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

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Thesis

The data supports a low headline valuation: a P/E of 1.2, a P/B of 0.4 and a dividend yield of 3.4%. However, the trailing net margin of 98.1% is not matched by operations. Operating income fell from ₩30.6B in 2024 to ₩4.2B in 2025 and to a ₩5.3B loss over the trailing twelve months to H1 2026. The data does not say what drove the net income gain, so the low P/E should be read with caution, because it may reflect a one-off or non-operating item rather than recurring earnings. Revenue has also fallen from ₩317.0B in 2022 to ₩145.3B on a trailing basis. The share price is up 5.7% over one month but down 19.1% over one year. Recent news points to a possible earnings rebound next year tied to glass substrate cleaning equipment, but that is a broker view reported in the press and not something the filed numbers confirm.

Business overview

DMS is listed on KOSDAQ in the machinery sector. It was founded in 1999 and listed in 2004, with 22,184,124 shares outstanding. The data shows two CEOs named, and a change of CEO was filed on 2026-08-28. Revenue peaked at ₩317.0B in 2022 after growing 40.7%, then fell 48.1% in 2023 to ₩164.5B. It was ₩167.8B in 2024 and ₩155.5B in 2025. News headlines from 2026-10-14 describe a plan to expand into precision cleaning of glass substrates. The data gives no further detail on products or customers.

Financial analysis

These figures come from filed financial statements. Trailing revenue to H1 2026 was ₩145.3B, with operating income of -₩5.3B (a -3.6% margin) and net income of ₩142.6B (a 98.1% margin). In 2025, revenue was ₩155.5B (-7.3%), operating income ₩4.2B (2.7% margin) and net income ₩131.4B. Operating margins were 14.2% to 18.3% in 2021 to 2024. ROE was 38.7% on a trailing basis and 35.5% in 2025, against 4.9% to 12.5% in 2021 to 2024, which reflects the large profit jump rather than a sign of stronger operations. Liabilities to equity were 34.8%. Cash was ₩23.4B against borrowings of ₩58.1B. Free cash flow was negative at -₩2.2B.

Valuation

The current P/E is 1.2, the P/B 0.4 and the P/S 1.1, with enterprise value of ₩198.6B. EV/EBITDA is not available. In the company's own history, year-end P/E was 6.5 to 13.3 from 2021 to 2024 and 1.5 in 2025. Year-end P/B was 0.5 to 0.8 over the same period. The listed peers (Doosan Enerbility, Hanmi Semiconductor, Jusung Engineering, Rainbow Robotics, EO Technics) trade at P/E multiples of 50.9 to 4,017.9 and P/B multiples of 5.1 to 51.5, so they are far larger and valued very differently, and the comparison offers limited guidance. The valuation model (5-year discounted cash flow, 6.9% rate) gives a base estimate of ₩8,821 per share, with a bear case of ₩4,853 and a bull case of ₩15,637. This is a model estimate based on the assumptions shown, not a target. The current price of ₩7,390 is below the base case and within the bear-to-bull range. The wide range shows how sensitive the result is to assumptions.

Catalysts

  • The 2026-08-14 filing of a share cancellation decision, together with the treasury stock acquisition results filed on 2026-08-31, relates to shareholder return actions.
  • The change of CEO filed on 2026-08-28 after an extraordinary shareholders' meeting could affect strategy and management direction.
  • Press coverage on 2026-10-14 from The Financial News and Asia Economy discusses a push into glass substrate precision cleaning and an expected earnings rebound next year.
  • Several 5%+ holding and insider shareholding reports were filed in August and September 2026, which show changes in ownership.
  • The next periodic filing will show whether operating income returns to profit.

Risks

  • Operating income has turned negative, at -₩5.3B on a trailing basis, so the core business is not covering its costs.
  • Net income of ₩142.6B is far above operating income, and the data does not explain its source, so it may not repeat.
  • Revenue has fallen from ₩317.0B in 2022 to ₩145.3B on a trailing basis.
  • Free cash flow is negative at -₩2.2B and borrowings of ₩58.1B exceed cash of ₩23.4B.
  • Foreign ownership fell from 4.9% to 4.2% over 60 days, and 20-day flows were net negative across foreign, institutional and retail investors.

Closing view

The data shows a company that looks inexpensive on book value and reported earnings but whose operations have weakened. Trailing net income is large, while operating income is negative, revenue is lower than in 2022 and free cash flow is slightly negative. The model estimate of ₩8,821 per share is above the current price, but the range of ₩4,853 to ₩15,637 is wide and depends on assumptions. The reported rebound in glass substrate equipment is a press view that the filings do not yet confirm. Investors would want to understand the source of the net income and see operating results recover before drawing firm conclusions.

Model estimate of fair value

Bear
₩4,853
-35%
Base
₩8,821
+18%
Bull
₩15,637
+110%

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 6.9%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 18, 2026InitiationStart of coverage (reader request)DMS: Net profit far above operating results as the core business posts a loss, shares trade below book value

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