Kumho Tire: Profits Recovered Since 2022, Shares Trade Near Book Value Well Below the Model Estimate

Thesis

The data supports a clear earnings recovery. Operating income went from a loss of ₩41.5B in 2021 to ₩575.9B in 2025, and trailing twelve months to H1 2026 show ₩583.4B. Trailing ROE is 23.0%, and free cash flow is ₩756.6B, above net income of ₩476.6B. The balance sheet looks manageable, with cash of ₩742.7B against borrowings of ₩498.9B.

What the data does not show is equally important. Revenue growth slowed from 12.1% in 2024 to 3.7% in 2025, and operating margin slipped from 13.0% in 2024 to 12.2%. Investor flows, foreign ownership, short balance, dividend yield and EV/EBITDA are not available, and there are no recent news headlines in the data. The low multiples may reflect market caution about whether recent profitability can last, but the data does not say why.

Business overview

Kumho Tire CO (code 073240) is a KOSPI-listed company in the rubber and plastics sector, founded on 2003-06-30 and listed on 2005-02-17. The CEO is listed as 정일택. It has 287,260,287 listed shares and a market capitalization of about ₩1.96T at the ₩6,810 close on 2026-10-12. Enterprise value is about ₩1.71T. Revenue grew from ₩2.60T in 2021 to ₩4.70T in 2025, and trailing revenue to H1 2026 is ₩4.77T. The data gives no product or regional breakdown.

Financial analysis

These figures come from filed financial statements (DART). Revenue was ₩2.60T in 2021, ₩3.56T in 2022 (+36.8%), ₩4.04T in 2023 (+13.5%), ₩4.53T in 2024 (+12.1%) and ₩4.70T in 2025 (+3.7%).

Operating income moved from a ₩41.5B loss in 2021 to ₩23.1B in 2022, ₩411.0B in 2023, ₩588.6B in 2024 and ₩575.9B in 2025. Operating margin was 10.2% in 2023, 13.0% in 2024 and 12.2% in 2025. Net income was a loss of ₩79.0B in 2022, then ₩157.8B in 2023, ₩324.9B in 2024 and ₩347.4B in 2025. ROE was 13.2% in 2023, 21.8% in 2024 and 18.5% in 2025.

Trailing twelve months to H1 2026: revenue ₩4.77T, operating income ₩583.4B (12.2% margin), net income ₩476.6B (10.0% margin), ROE 23.0%. Liabilities to equity is 138.8%. Cash is ₩742.7B, borrowings ₩498.9B and free cash flow ₩756.6B.

Valuation

At ₩6,810 the shares trade at a P/E of 4.1, P/B of 0.8 and P/S of 0.4. At the end of 2025 P/E was 4.8 and P/B 0.8, so the multiples are slightly lower on earnings and unchanged on book. The only peer with multiples in the data is Hankook Tire & Technology, at P/E 6.4 and P/B 0.6, so Kumho has a lower P/E but higher P/B. Other listed peers lack multiples in the data. Dividend yield is not available.

The valuation model (5-year discounted cash flow, rate 4.7%, based on TTM to H1 2026) gives a base estimate of ₩19,674 per share, with a bear case of ₩5,760 and a bull case of ₩55,352. This is a model estimate based on the assumptions shown, not a target or a reason to buy or sell. The bear case is below the current price and the bull case is far above it, so the range is very wide and highly sensitive to assumptions, particularly given that free cash flow exceeds net income.

Catalysts

• Half-year report (Jun 2026) filed on 2026-08-13 after preliminary consolidated earnings on 2026-07-30 set the latest trailing numbers.
• An extraordinary shareholders' meeting result was filed on 2026-09-03, following the notice on 2026-08-19, though the data does not give the agenda.
• Filings on 2026-08-13 for collateral provision and debt guarantees for others could matter for the balance sheet, though the data gives no amounts.
• An amended new facility investment filing on 2026-07-08 points to capital spending plans, with no details in the data.
• An investor relations event was held on 2026-07-27, and a 5%+ holding report was filed on 2026-08-13.

Risks

• Revenue growth slowed to 3.7% in 2025 and operating margin eased from 13.0% to 12.2%, so the recovery may be plateauing.
• Earnings were negative in 2021 and 2022, showing how quickly profitability has changed in this business.
• The guarantee and collateral decisions for other parties add contingent exposure that cannot be sized from the data.
• The shares fell 7.6% in one month and 4.9% in three months, and sit well below the 52-week high of ₩8,850, showing price volatility.
• The model range of ₩5,760 to ₩55,352 is extremely wide, and flows, short balance and news data are unavailable to give further context.

Closing view

The filed numbers show a company that moved from losses to double-digit margins and 23.0% trailing ROE, with solid free cash flow and moderate leverage. The market prices it at 4.1x earnings and 0.8x book, and the model's base estimate is well above the share price. However, growth and margins have eased, the model range is very wide, and key items such as investor flows, dividends and peer multiples are missing. The evidence supports a strong recovery story but leaves open how durable it is.

Model estimate of fair value

Bear

₩5,760

+12%

Base

₩19,674

+282%

Bull

₩55,352

+975%

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 4.7%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• 임시주주총회결과Sep 3, 2026
• Notice of shareholders' meetingAug 19, 2026
• 타인에대한담보제공결정Aug 13, 2026
• 타인에대한채무보증결정Aug 13, 2026
• Half-year report (Jun 2026)Aug 13, 2026
• 5%+ holding reportAug 13, 2026
• Preliminary earnings (consolidated)Jul 30, 2026
• Investor relations (IR) eventJul 27, 2026
• 결산실적공시예고(안내공시)Jul 27, 2026
• Shareholders' meeting calledJul 22, 2026
• 주주명부폐쇄기간또는기준일설정Jul 22, 2026
• [기재정정]신규시설투자등Jul 8, 2026
• Daily prices up to 2026-10-12
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 13, 2026InitiationStart of coverage (300 largest)Kumho Tire: Profits Recovered Since 2022, Shares Trade Near Book Value Well Below the Model Estimate