Ask Warren

JONBUR Research · Initiation

The E&M · 089230 · Internet

THE E&M: Shares Surge While Revenue Shrinks and Losses Persist

Why this report

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

THE E&M's share price has risen 147.6% over one year to ₩2,840, even as filed results show five straight years of falling revenue and continued net losses. The company also has frequent convertible bond activity and recent shareholder meeting filings.

Written Oct 22, 2026 · Data as of Oct 21, 2026 · 0 views

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

XfWATGr/in@

Thesis

The data shows a sharp gap between market performance and reported fundamentals. The shares gained 32.4% in one month, 117.8% in three months and 147.6% in one year, and sit well above the 52-week low of ₩860 but below the high of ₩4,500. Over the same period, filings show revenue falling every year since 2022 and operating losses in each of the last four years. Nothing in the data explains the price rise, and no news headlines are available. Recent flows are small: retail investors were net buyers of about ₩247M over 20 days while foreign investors were net sellers of about ₩138M. Foreign ownership fell from 1.6% to 0.5% in 60 days. The short balance is 1.9%. The data supports the view that the rally is not backed by improving results so far, but it cannot tell us what is driving it.

Business overview

THE E&M is listed on KOSDAQ in the Internet sector. It was founded on 2002-07-08 and listed on 2006-10-10. It has 39,421,354 listed shares and a market capitalisation of about ₩112.0B. The CEO is listed as 신환률. Revenue has shrunk from ₩56.4B in 2021 to ₩12.3B in 2025. Detail on business lines is not available in the data.

Financial analysis

These figures come from filed financial statements. Revenue was ₩12.3B in 2025, down 44.4% from ₩22.2B in 2024, which was itself down 30.0%. Earlier declines were 32.0% in 2023 and 17.3% in 2022. Operating income was a ₩8.6B loss in 2025 (margin -69.5%), versus a ₩3.5B profit in 2021. Net losses were ₩19.9B in 2025, ₩13.2B in 2024 and ₩33.6B in 2023. For the trailing twelve months to H1 2026, revenue was ₩16.8B, operating loss ₩11.2B (margin -66.9%), net loss ₩26.8B (margin -160.0%) and ROE -91.1%. Trailing revenue is above 2025, but losses are wider. Liabilities to equity are 115.5%. Cash is ₩11.5B against borrowings of ₩41.5B. Free cash flow over the period was -₩13.7B.

Valuation

Earnings-based multiples (P/E, EV/EBITDA) cannot be worked out because of losses. The price-to-book ratio is 3.9, up from 2.1 at the end of 2025 and 1.1 at the end of 2024, and above all the listed peers shown: NAVER 0.9, Kakao 1.2, Daou Technology 0.4, NICE Information Service 2.1 and Kinx 3.1. Price-to-sales is 6.7 and enterprise value is about ₩137.1B. No dividend is paid. The valuation model estimate is not available, so no comparison with the share price can be made.

Catalysts

  • An extraordinary shareholders' meeting was held, with results filed on 2026-10-12, alongside a report on changes to independent directors.
  • A conversion price adjustment for the 24th series convertible bonds was filed on 2026-10-08, which may affect share dilution.
  • Filings on 2026-08-18 and 2026-09-30 amended a decision on the sale of the company's own convertible bonds, which may bear on funding.
  • Conversion rights on the 19th series were exercised, as filed on 2026-07-23, which can increase the share count.
  • The next filed results will show whether trailing revenue recovery in H1 2026 comes with narrower losses.

Risks

  • Revenue has declined for several consecutive years and the trailing operating margin is -66.9%.
  • Cash of ₩11.5B is well below borrowings of ₩41.5B while free cash flow is negative.
  • Repeated convertible bond conversions and price adjustments point to possible dilution for existing shareholders.
  • The 147.6% one-year price gain leaves the shares exposed to sharp reversals, with a P/B of 3.9 despite losses.
  • Foreign ownership has dropped to 0.5% and trading flows are small, so liquidity may be thin.

Closing view

The evidence shows a company with shrinking revenue, large losses and a stretched balance sheet, whose share price has risen strongly and now trades at a higher book multiple than the peers shown. The data does not explain the rally, and no model estimate is available. Investors may want to follow upcoming filings on results, convertible bonds and funding to judge whether the fundamentals are changing.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Filings and data used

Report history

  1. Oct 22, 2026InitiationStart of coverage (reader request)THE E&M: Shares Surge While Revenue Shrinks and Losses Persist

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