DL E&C: Low Multiples and Improved Margins, Alongside a Sharp One-Month Share Price Drop

Thesis

The data supports a picture of recovering profitability at a company valued at low multiples. Trailing twelve-month operating income of ₩496.6B is above the ₩387.0B reported for 2025, and net income of ₩621.5B is well above 2025's ₩370.2B. The balance sheet shows cash of ₩1.9T against borrowings of ₩529.2B.

The data does not explain the 25.2% fall over the past month. No news headlines are available, and investor flow, foreign ownership and short balance data are not provided. Revenue has also been flat to lower, at ₩7.1T trailing versus ₩8.3T in 2024, so the profit improvement is coming from margins rather than growth. Net income exceeding operating income in the trailing period suggests non-operating items contributed, but the data does not break them down.

Business overview

DL E&C is a construction company listed on KOSPI. It was founded on 2021-01-04 and listed on 2021-01-25, with CEO 박상신 and 38,693,623 listed shares. Its market cap of about ₩2.5T is the third largest among the peers listed, behind Hyundai Engineering & Construction (₩11.2T) and Daewoo Engineering & Construction (₩6.7T).

Annual revenue has stayed in a range of roughly ₩7.4T to ₩8.3T since 2021: ₩7.6T in 2021, ₩7.5T in 2022, ₩8.0T in 2023, ₩8.3T in 2024 and ₩7.4T in 2025. The data does not describe business segments or the order backlog.

Financial analysis

All figures come from filed financial statements (DART), consolidated where available.

Revenue fell 11.0% in 2025 to ₩7.4T after growing 4.1% in 2024. Trailing revenue as of H1 2026 is ₩7.1T. Operating margin was 12.5% in 2021, 6.6% in 2022, 4.1% in 2023, 3.3% in 2024 and 5.2% in 2025, and it is 7.0% on a trailing basis. Net margin is 8.7% trailing.

Return on equity was 12.8% in 2021, fell to 4.0% in 2023, and was 7.3% in 2025. It is 12.0% trailing. Liabilities to equity is 86.4%. Trailing free cash flow is ₩422.9B. Cash of ₩1.9T exceeds borrowings of ₩529.2B. Enterprise value is about ₩1.1T.

Valuation

The stock trades at a price-to-earnings ratio of 4.0x, price-to-book of 0.5x, price-to-sales of 0.3x and a dividend yield of 1.5%. EV/EBITDA is not available. At the end of 2025 the P/E was 4.3x and P/B was 0.3x, so the current P/B is higher than that year-end level after the one-year gain. Earlier year-end multiples are not available.

Among peers, Hyundai Engineering & Construction shows a P/E of 24.9x and P/B of 1.2x, Daewoo Engineering & Construction a P/B of 1.8x, and GS Engineering & Construction a P/E of 19.7x and P/B of 0.5x. DL E&C's P/E is well below the two peers that report one. Peer multiples may reflect different earnings conditions, which the data does not detail.

Catalysts

• Filings dated 2026-09-07 and 2026-10-02 amended a major sales or supply contract, and the details in the data are limited to the titles.
• A change in the largest shareholder's holdings and a 5%+ holding report were filed on 2026-09-03, with another 5%+ holding report on 2026-10-02, which point to shifts in ownership.
• An 'Other management matters' filing is dated 2026-10-13, following one on 2026-09-29, and their content is not given in the data.
• An investor relations event was held on 2026-09-01, and the next reported results (after H1 2026) are not dated in the data.
• The 2026-09-22 filing on transactions of goods and services with affiliated companies is a recurring disclosure that bears on related-party dealings.

Risks

• A report of a serious accident at a consolidated subsidiary was filed on 2026-09-17, and its financial impact is not stated in the data.
• The share price fell 25.2% in one month and sits well below the 52-week high of ₩106,600, showing high volatility.
• Revenue declined 11.0% in 2025 and trailing revenue of ₩7.1T is below 2024's ₩8.3T, so profit gains rely on margins.
• Operating margin of 7.0% is well below the 12.5% of 2021 and has varied widely across years, so it may not be stable.
• Investor flows, foreign ownership, short balance and news data are unavailable, which limits understanding of what is driving the recent price move.

Closing view

The filed numbers show a company with improving margins and returns, net cash on the balance sheet and multiples that are low compared with its own earnings and with the two peers that report a P/E. Against that, revenue has not grown, the recent one-month price drop is unexplained by the available data, and a serious accident filing and ownership changes add uncertainty. The evidence is mixed rather than conclusive, and no recommendation is made.

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, 2026InitiationDL E&C: Low Multiples and Improved Margins, Alongside a Sharp One-Month Share Price Drop