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JONBUR Research · Initiation

Aton · 158430 · Software

Aton: Steady Revenue and High Margins, but Thin Net Profit and Negative Free Cash Flow

Why this report

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

Aton, a KOSDAQ software company, has a market cap of about ₩121.3B and a share price of ₩4,955, down 31.0% over one year but up 24.8% over three months. Operating margins remain solid at 16.2%, while net income, return on equity and free cash flow are weak.

Written Oct 27, 2026 · Data as of Oct 26, 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 business that is consistently profitable at the operating level: operating margin has stayed between 15.3% and 22.1% over the last five years. Revenue has grown from ₩43.3B in 2021 to ₩67.6B in 2025, though growth slowed to 3.3% in 2025 after 18.9% and 23.0% in the two prior years.

What the data does not support is strong earnings conversion. Net income fell from ₩10.5B in 2024 to ₩1.5B in 2025, and trailing net margin is 5.6% with ROE of 3.6%. Free cash flow is negative at about -₩25.0B, and borrowings of ₩52.0B exceed cash of ₩25.3B. The reasons for the drop in net income are not available in the data. Management and ownership changes are visible in filings, but their effect is not quantified.

Business overview

Aton is listed on KOSDAQ in the software sector. It was founded on 1999-10-13 and listed on 2019-10-17, with 24,482,092 shares outstanding. Filings show a change of CEO on 2026-07-27, with 김종서 and 우길수 named as CEOs, and a change of head office location on 2026-08-28.

Revenue over the trailing twelve months to H1 2026 was ₩63.2B. The 52-week share price range is ₩3,300 to ₩11,370, so the current price sits well below the high and well above the low. Foreign ownership fell from 3.4% to 1.9% over 60 days. The short balance is 1.5%. No recent news headlines are available.

Financial analysis

These figures come from filed financial statements. Trailing revenue to H1 2026 was ₩63.2B, operating income ₩10.2B (16.2% margin) and net income ₩3.6B (5.6% margin). ROE is 3.6%.

Annually, revenue was ₩67.6B in 2025, ₩65.4B in 2024, ₩55.0B in 2023, ₩44.7B in 2022 and ₩43.3B in 2021. Operating income was ₩10.4B in 2025, down from ₩14.4B in 2024, and the operating margin fell from 22.1% to 15.3%. Net income was ₩1.5B in 2025 against ₩10.5B in 2024 and ₩17.0B in 2022. ROE was 1.7% in 2025 versus 12.8% in 2024.

Liabilities to equity are 60.2%. Cash is ₩25.3B against borrowings of ₩52.0B. Trailing free cash flow is -₩25.0B. The dividend yield is 0.0%.

Valuation

At ₩4,955 the stock trades at a P/E of 34.2, P/B of 1.1 and P/S of 1.9. Enterprise value is ₩147.5B; EV/EBITDA is not available. The P/E compares with year-end figures of 97.5 in 2025, 13.3 in 2024, 11.4 in 2023 and 6.2 in 2022. The P/B of 1.1 is below year-end levels of 1.3 to 4.2 in the past five years.

Among the listed peers, P/E ranges from 7.0 (NC, Netmarble) to 44.9 (Hyundai Autoever), and P/B from 0.5 (Netmarble) to 4.5 (Hyundai Autoever). Aton's P/E is higher than most of these peers, while its P/B is within their range. The peers are much larger companies.

The valuation model (5-year discounted cash flow, 7.5% rate, based on trailing figures to H1 2026) gives a base-case estimate of ₩7,470 per share, with a bear case of ₩4,708 and a bull case of ₩11,966. This is a model estimate based on the assumptions shown, not a target. The current price is below the base case and slightly above the bear case.

Catalysts

  • The half-year report filed on 2026-08-14 showed trailing operating income of ₩10.2B, and the next filed results will show whether margins hold.
  • The CEO change and extraordinary shareholders' meeting on 2026-07-27 may affect strategy, though the data does not say how.
  • A 5%+ holding report was filed on 2026-10-26, and earlier ones on 2026-07-27 and 2026-07-13, indicating changes in major shareholdings.
  • The amended notice of a stock purchase option grant on 2026-08-28 relates to employee or management incentives, with terms not shown in the data.
  • Over the last 20 days retail investors were net buyers of about ₩1.6B while foreigners were net sellers of about ₩1.2B, and foreign ownership has dropped to 1.9%.

Risks

  • Net income and ROE fell sharply in 2025 (₩1.5B and 1.7%), and the trailing figures remain low at ₩3.6B and 3.6%.
  • Free cash flow is negative at about -₩25.0B, and borrowings of ₩52.0B are more than double cash of ₩25.3B.
  • Revenue growth slowed to 3.3% in 2025 and the operating margin fell from 22.1% to 15.3%.
  • The share price fell 9.7% in the last month and 31.0% over one year, and it has been volatile between ₩3,300 and ₩11,370.
  • Leadership and head office changes in 2026 add uncertainty, and foreign ownership has declined from 3.4% to 1.9%.

Closing view

The data shows a software company with stable operating profitability and growing revenue over five years, but recent earnings quality, cash flow and balance sheet trends are weaker. The P/B of 1.1 is low relative to its own history, while the P/E of 34.2 is elevated because net income is depressed. The model's base case of ₩7,470 sits above the current price of ₩4,955, but the bear case of ₩4,708 is close to it, so the estimate is sensitive to its assumptions. Investors should weigh whether margins and cash flow recover, using upcoming filings as evidence, and this report offers no recommendation.

Model estimate of fair value

Bear
₩4,708
-5%
Base
₩7,470
+51%
Bull
₩11,966
+141%

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 7.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 27, 2026InitiationStart of coverage (reader request)Aton: Steady Revenue and High Margins, but Thin Net Profit and Negative Free Cash Flow

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