Nano: Shares Fall Sharply Over Three Months as Earnings Stay Thin and Cash Flow Turns Negative

Thesis

The data supports a picture of a small chemicals company whose operations have recovered from losses but remain low-margin. Operating margin was 5.9% over the trailing twelve months to H1 2026, and net income was ₩1.6B, below the ₩7.0B reported for 2025. The data does not explain the recent share price drop, and no news headlines are available. Filings show derivatives trading loss disclosures and amended audit reports on 2026-04-29, and a decision to increase short-term borrowings on 2026-05-27. These may matter, but the data gives no detail on their size or effect. Foreign ownership rose from 1.6% to 2.4% over 60 days, while 20-day flows show small net selling by foreigners and institutions and net buying by retail investors.

Business overview

Nano is listed on KOSDAQ in the chemicals sector. It was founded on 2013-10-18 and listed on 2014-05-08. It has 30,840,830 listed shares and a market capitalization of about ₩72.0B. Revenue grew from ₩51.3B in 2021 to ₩88.6B in 2024, then slipped 3.3% to ₩85.7B in 2025. Trailing revenue to H1 2026 was ₩93.2B. The 52-week price range runs from ₩1,700 to ₩7,560. Product and segment details are not available in the data.

Financial analysis

These figures come from filed financial statements. Trailing revenue was ₩93.2B, operating income ₩5.5B (5.9% margin) and net income ₩1.6B (1.7% margin), with ROE of 4.3%. Operating income was a loss of ₩3.5B in 2022, then positive at ₩1.6B in both 2023 and 2024 and ₩5.5B in 2025 (6.5% margin). Net income was ₩30.4B in 2024 and ₩7.0B in 2025, and the data does not say what drove those results. Net losses ran from 2021 to 2023. Liabilities to equity stood at 166.4%. Cash was ₩14.2B against borrowings of ₩40.8B. Trailing free cash flow was negative ₩20.0B.

Valuation

At the current price the trailing P/E is 45.8, P/B 1.8 and P/S 0.8. Dividend yield is 0.0%. EV/EBITDA is not available. Enterprise value is about ₩96.0B. Year-end P/E was 15.3 in 2025 and 1.0 in 2024, and year-end P/B was 2.5 in 2025, so the current P/E is above the 2025 year-end level while P/B is lower. Among listed peers, P/B was 0.5 for LG Chem, 0.7 for Hanwha Solutions, 0.4 for Hanwha, 2.0 for SKC and 0.3 for KCC. Peer P/E is mostly not available, with 6.2 for Hanwha and 0.9 for KCC. Nano's P/B is above most of these peers, though they are far larger companies. The valuation model is a 5-year discounted cash flow at a 6.5% rate, based on trailing figures to H1 2026. It gives a model estimate based on the assumptions shown of ₩400 per share in the base case, ₩0 in the bear case and ₩2,642 in the bull case. The current price of ₩2,335 is far above the base case and near the bull case. This is not a target or a reason to buy or sell, and it is sensitive to the negative free cash flow.

Catalysts

• The half-year report for June 2026 was filed on 2026-08-14, and the next periodic filing will show whether margins and cash flow improve.
• The decision to increase short-term borrowings on 2026-05-27 may affect financing costs and leverage in coming reports.
• Filings on 2026-04-29 disclosed derivatives trading losses and amended audit reports, and any follow-up disclosure could matter.
• Two 5%+ holding reports (2026-06-05 and 2026-07-01) and an insider shareholding report (2026-08-03) show ownership changes among large holders.
• Foreign ownership rose from 1.6% to 2.4% in 60 days, though 20-day foreign flows were slightly negative.

Risks

• Free cash flow was negative ₩20.0B over the trailing twelve months while borrowings of ₩40.8B exceed cash of ₩14.2B.
• Liabilities are 166.4% of equity, and borrowings have been increased.
• Net margin is only 1.7% and net income has fallen from earlier years, so earnings are sensitive to small changes in costs.
• Derivatives trading losses and amended audit reports appear in the filings, and the data gives no detail on their size.
• The share price is volatile, having fallen 23.7% in a month and sitting well below its 52-week high of ₩7,560 and far above the model's base case.

Closing view

The data shows a company that has moved from losses to modest operating profits, but with thin margins, negative free cash flow and rising borrowings. The share price has fallen sharply in recent months, yet its multiples remain above those of most listed peers shown and well above the model estimate based on the assumptions shown. Missing news and filing detail limit what can be concluded, so the evidence is mixed and unresolved rather than clearly favorable or unfavorable.

Model estimate of fair value

Bear

₩0

-100%

Base

₩400

-83%

Bull

₩2,642

+15%

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 6.5%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

• Added attachment: Half-year report (Jun 2026)Aug 14, 2026
• Insider shareholding reportAug 3, 2026
• 5%+ holding reportJul 1, 2026
• 5%+ holding reportJun 5, 2026
• Decision on Increase in Short-Term BorrowingsMay 27, 2026
• Quarterly report (Mar 2026)May 14, 2026
• Investor relations (IR) eventMay 6, 2026
• Amended: Audit report submittedApr 29, 2026
• [Amendment] Occurrence of Derivative Trading LossApr 29, 2026
• Amended: Audit report submittedApr 29, 2026
• Occurrence of Derivatives Trading LossApr 29, 2026
• Amended: Audit report submittedApr 29, 2026
• Daily prices up to 2026-10-23
• Financial statements, trailing 12 months as of H1 2026
• Our fair value model, statements as of TTM to H1 2026

Report history

1. Oct 26, 2026InitiationStart of coverage (reader request)Nano: Shares Fall Sharply Over Three Months as Earnings Stay Thin and Cash Flow Turns Negative