Ask Warren

Rifa

000760 · KOSPI · ₩000760 · 이화산업

₩12,040▼ ₩610 (4.82%)End-of-day · Oct 29, 2026 · End-of-day prices.
Trade
Alert me
SellBuy

Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

With these assumptions the model gives no positive value.

Enterprise value
−₩8.6B
Equity value
−₩77B
WACC
7.4%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model gives no positive value at these assumptions. What we can see:

  • To match today's price of ₩12,040, the model needs an operating margin of 20.0% every year (it uses −1.3%).
  • Margins ranged from −8.6% to 1.6% over the last 5 years, so this is a cyclical business. The model uses the average; the price may be set by where the cycle is now. Try the margin fade option.
  • In the projection, spending on equipment, software and working capital takes most or all of the after-tax operating profit, so free cash flow is thin. Companies that invest heavily often look like this until spending slows.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear
—
Base
—
Bull
—

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Sign in to change the assumptions and see the results update. Sign in

Cycle options

Margin path

Every year uses the cycle-average margin (−1.3%).

Revenue growth

  • -7.6%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-7.6% a year, annual reports), fading to 3% by year 5.

  • -5%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-7.6% a year, annual reports), fading to 3% by year 5.

  • -2.3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-7.6% a year, annual reports), fading to 3% by year 5.

  • 0.3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-7.6% a year, annual reports), fading to 3% by year 5.

  • 3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-7.6% a year, annual reports), fading to 3% by year 5.

Business

  • -1.3%

    Operating profit as a share of revenue.

    Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.

  • 27.5%

    Share of operating profit paid as corporate tax.

    Default: Korea's top corporate tax rate (25%) plus 10% local income tax.

  • 0.7%

    The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).

    Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).

  • 0.9%

    Money spent on factories, equipment, software and other long-term assets (% of revenue).

    Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).

  • 19.1%

    Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.

    Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

  • 2%

    How fast cash flows keep growing every year after year 5.

    Default: about Korea's long-run inflation plus real growth.

  • 4.08%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-29.

  • 0.6

    How much the share moves when the market moves: 1 means just like the market.

    Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.19, adjusted toward 1 and kept between 0.6 and 2.0.

  • 5.5%

    The extra return investors want for owning shares instead of bonds.

    Default: a typical premium for Korean shares.

  • 5.58%

    The interest rate the company would pay to borrow.

    Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026)
₩47B
Net debt (borrowings and leases − cash and deposits)
−₩1.1B
+ Stakes and investments
₩2.1B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩71B
Shares
2,800,000
Share price
₩12,040
Market cap
₩34B

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

FY2023FY2024FY2025Year 1Year 2Year 3Year 4Year 5
Revenue₩47B₩49B₩46B₩43B₩41B₩40B₩40B₩41B
Growth−19.5%4.9%−6.5%−7.6%−5.0%−2.3%0.3%3.0%
EBIT−₩1.8B₩772M−₩164M−₩561M−₩533M−₩521M−₩522M−₩538M
EBIT margin−3.8%1.6%−0.4%−1.3%−1.3%−1.3%−1.3%−1.3%
After-tax EBIT−₩1.3B₩560M−₩119M−₩407M−₩386M−₩378M−₩379M−₩390M
+ Depreciation———₩302M₩287M₩280M₩281M₩290M
− Capital spending₩762M₩159M₩314M₩388M₩369M₩361M₩362M₩373M
− Working capital−₩17B−₩2.8B−₩1.8B−₩678M−₩412M−₩180M₩23M₩230M
Free cash flow———₩185M−₩56M−₩278M−₩482M−₩703M
Discount factor———0.9310.8670.8080.7520.700
Present value———₩172M−₩49M−₩224M−₩363M−₩492M

Terminal value −₩11B, worth −₩7.7B today: 89% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

LowTypicalHigh
Price / book (book value ₩48,261 a share)Now 0.25×₩11,2030.23×₩13,9460.29×₩16,8760.35×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →1.0%1.5%2.0%2.5%3.0%
6.4%—————
6.9%—————
7.4%—————
7.9%—————
8.4%—————

Now (TTM)

Market cap
₩34B
Enterprise value
₩33B
P/E
—
P/B
0.2×
P/S
0.7×
EV/EBITDA
—
Dividend yield
0.0%

Over time (at each year end)

20252024202320222021
Price₩14,220₩10,250₩15,140₩15,750₩15,550
Market cap₩40B₩29B₩42B₩44B₩44B
P/E———57.6×0.9×
P/B0.3×0.2×0.3×0.3×0.3×
P/S0.9×0.6×0.9×0.8×0.8×
EV/EBITDA—————
Dividend yield0.0%————

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Rifa—0.2×0.7×—0.0%
Samsung C&T18.8×0.5×1.2×—0.9%
POSCO International10.5×1.2×0.3×—3.8%
ISC45.4×6.1×12.7×—0.5%
Youngone5.1×0.7×0.7×—3.1%
Dong SUH Companies19.2×1.6×5.1×—4.1%
Shinsegae13.9×0.4×0.3×—2.1%
Similar companies (median)16.3×1.0×1.0×—2.6%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: Rifa / 이화산업 / 000760 / KRX:000760

Source: KRX statistical information