Hanwha Systems: Revenue Growth Continues While Margins and Cash Flow Remain Under Pressure

Thesis

The data supports a story of strong top-line growth: revenue rose from ₩2.1T in 2021 to ₩3.7T in 2025, with growth of 30.7% in 2025. What it does not support is a matching rise in profitability. Operating margin fell from 7.8% in 2024 to 3.3% in 2025, and net income fell from ₩454.3B to ₩242.2B over the same period. Trailing net income of ₩175.6B exceeds operating income of ₩166.2B, so earnings are not coming only from operations. The data does not say what drives this. The P/E of 80.8 is high against the company's own year-end 2025 figure of 42.4. Investor flows, foreign ownership, short balance and news headlines are not available, so we cannot assess market positioning or sentiment from them.

Business overview

Hanwha Systems is listed on KOSPI under code 272210 and classified in the electronic components sector. It was founded on 2000-01-11 and listed on 2019-11-13. It has 188,919,389 listed shares and a market capitalization of about ₩14.2T. The data names Yang Gi-won as CEO, although a filing on 2026-09-18 reports a change of Representative Director, so that field may be out of date. The data does not give a breakdown of business segments or products.

Financial analysis

These figures come from filed financial statements (DART). Revenue was ₩2.1T in 2021, ₩2.2T in 2022, ₩2.5T in 2023, ₩2.8T in 2024 and ₩3.7T in 2025. Trailing revenue to H1 2026 was ₩4.1T. Operating income was ₩112.0B in 2021, ₩24.0B in 2022, ₩92.9B in 2023, ₩219.3B in 2024 and ₩119.9B in 2025, and ₩166.2B on a trailing basis. Net income swung from a ₩76.6B loss in 2022 to ₩349.2B in 2023 and ₩454.3B in 2024, then fell to ₩242.2B in 2025. Trailing operating margin is 4.0%, net margin 4.3% and ROE 5.0%, down from 19.6% in 2024. Liabilities to equity is 159.1%. Cash is ₩1.6T against borrowings of ₩1.1T. Trailing free cash flow is negative at ₩154.6B.

Valuation

The current P/E is 80.8, P/B 3.2 and P/S 3.4. The dividend yield is 0.7% and enterprise value is ₩13.7T. EV/EBITDA is not available. At year-end 2025 the P/E was 42.4 and P/B 2.1, so both multiples are higher now, and the P/E has risen mainly because trailing earnings are lower. Year-end multiples for earlier years are not available. Among peers with data, Samsung Electro-Mechanics has a P/E of 110.2 and P/B of 10.9, and Doosan has a P/E of 54.9 and P/B of 7.7. Hanwha Systems has a lower P/B than both and a P/E between them. Peer multiples for LG Innotek, Isupetasys and Daeduck Electronics are not available.

Catalysts

• An investor relations event was filed on 2026-10-12 and may bring more company information.
• A major sales or supply contract was filed on 2026-09-23, though the data gives no size or terms.
• A change of Representative Director and the results of an Extraordinary Shareholders' Meeting were filed on 2026-09-18, signaling leadership and governance changes.
• Several filings on 2026-09-18 and 2026-10-02 cover a change in the largest shareholder's holdings, 5%+ holding reports and a sale of shares in another company, which point to shifts in ownership.
• Insider shareholding reports were filed on 2026-10-12, though the data does not show whether they involved buying or selling.

Risks

• Operating margin of 4.0% is well below the 7.8% of 2024, and the data shows no recovery in profitability yet.
• Free cash flow is negative at ₩154.6B on a trailing basis while borrowings stand at ₩1.1T.
• A P/E of 80.8 means the valuation depends heavily on earnings recovering, and trailing earnings have fallen.
• Net income exceeds operating income, so recent profit may depend on non-operating items that are not detailed in the data.
• A Decision on Guarantee of Debt for Another Party was filed on 2026-09-18, and the data gives no amount or counterparty, so any added exposure cannot be judged.

Closing view

The data shows a company with steadily rising revenue but uneven profits, a thin 4.0% operating margin, negative free cash flow and a high P/E of 80.8. The shares have gained 29.7% over one year yet remain far below their 52-week high. Recent filings point to leadership, shareholder and contract activity, but without details, flow data or news the data cannot show how these will affect results. Whether margins recover is the key open question for the numbers.

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, 2026InitiationHanwha Systems: Revenue Growth Continues While Margins and Cash Flow Remain Under Pressure