HD Construction Equipment: Sharp Price Drop Alongside Stronger Trailing Earnings and Low Multiples

Thesis

The data supports an improvement in earnings. Trailing operating income of ₩528.8B compares with ₩170.9B for full-year 2025, and the trailing operating margin is 8.0% versus 4.5%. The share price has moved the other way, with returns of -27.9% over 1 month and -19.1% over 3 months, though the 1-year return is still +6.4%. The data does not explain the fall. No news headlines, investor flow data, foreign ownership or short balance figures are available. A rights offering decision filed on 2026-08-31 is one visible item that may be relevant, but the data does not say how it relates to the price. Low multiples can reflect market doubts about whether the recent earnings level lasts, and the data cannot settle that.

Business overview

The company is a KOSPI-listed machinery company founded on 2017-04-03 and listed on 2017-05-10, with 17,661,789 listed shares. The CEO is listed as 문재영. Market capitalization is about ₩1.8T and enterprise value about ₩1.0T. Annual revenue has ranged between ₩3.3T and ₩3.8T over 2021-2025: ₩3.3T in 2021, ₩3.5T in 2022, ₩3.8T in 2023, ₩3.4T in 2024 and ₩3.8T in 2025. Trailing revenue to H1 2026 is ₩6.6T, well above any full year in the data. The data does not describe products or regions.

Financial analysis

All figures come from filed financial statements (DART). Revenue grew 9.8% in 2025 to ₩3.8T after a 10.1% fall in 2024. Operating income was ₩170.9B in 2025 (4.5% margin), ₩190.4B in 2024 (5.5%), ₩257.2B in 2023 (6.7%) and ₩170.6B in 2022 (4.9%). Net income was ₩99.4B in 2025 and ₩139.4B in 2023. Trailing figures to H1 2026 show revenue of ₩6.6T, operating income of ₩528.8B, net income of ₩420.5B, an operating margin of 8.0% and a net margin of 6.3%. Trailing ROE is 12.8%, versus 5.7% in 2025 and 9.2% in 2023. Liabilities to equity is 91.0%. Cash is ₩767.9B and trailing free cash flow is ₩536.1B. Borrowings are not available in the data.

Valuation

The stock trades at a P/E of 4.3x, P/B of 0.4x and P/S of 0.3x, with a dividend yield of 1.5%. At the end of 2025 the P/E was 17.5x and the P/B was 1.0x, so current multiples are well below that level. Earlier year-end multiples are not available. The listed peers (Doosan Enerbility, Hanmi Semiconductor, Jusung Engineering, Rainbow Robotics and Wonik IPS) show P/Es from 37.1x to 4,456.7x and P/Bs from 5.6x to 57.1x. They are much larger or in different businesses, so the comparison is of limited use. EV/EBITDA is not available.

Catalysts

• A major sales or supply contract was filed on 2026-10-07, though the data gives no size or terms.
• A rights offering (paid-in capital increase) decision was filed on 2026-08-31, which could change the share count and capital structure.
• Preliminary consolidated earnings (2026-07-29) and the half-year report (2026-08-14) are the latest earnings disclosures.
• Filings in July and August cover a share cancellation decision (amended) and the termination of a treasury share trust contract, which relate to capital return.
• An investor relations event on 2026-09-30 and an insider shareholding report on 2026-10-06 are recent disclosures.

Risks

• The share price fell 27.9% in one month, and the data does not give the cause.
• Trailing earnings are far above recent annual levels, and the data does not show whether this margin of 8.0% is sustained.
• Revenue fell 10.1% in 2024, showing that sales can be volatile.
• The rights offering could dilute existing shareholders, and its terms are not in the data.
• Investor flow, foreign ownership, short balance and news data are unavailable, which limits the view of market sentiment.

Closing view

The filed numbers show a clear step up in trailing profit, margins, ROE and free cash flow compared with 2025, and the balance sheet shows liabilities of 91.0% of equity with ₩767.9B in cash. At the same time, the share price has dropped sharply and multiples are far below the end-2025 level, which suggests the market is either skeptical about the durability of earnings or reacting to events not captured here, such as the rights offering. Without flow data, news or details on the contract and capital raise, the picture is incomplete, and the evidence points in both directions.

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).

Report history

1. Oct 13, 2026InitiationHD Construction Equipment: Sharp Price Drop Alongside Stronger Trailing Earnings and Low Multiples