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Namkwang Engineering & Construction

001260 · KOSPI · ₩001260 · 남광토건

₩7,870▲ ₩170 (2.21%)End-of-day · Oct 28, 2026 · End-of-day prices.
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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

₩11,895

vs the current price (₩7,870)

Enterprise value
₩97B
Equity value
₩117B
WACC
7.3%

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 is 51% away from today's price. A gap this size usually means the market expects something the past figures don't show yet, or the model leaves something out. What we can see:

  • To match today's price of ₩7,870, the model needs an operating margin of 1.6% every year (it uses 2.6%).
  • Or revenue growth −14.6 points a year higher than assumed in each of the 5 years.
  • Today's P/E is 14.3× against a typical 6.4× over the last 10 years.

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
₩3,776
−52.0%
Base
₩11,895
+51.1%
Bull
₩26,786
+240.4%

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 (2.6%).

Revenue growth

  • -7.4%

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

    Default: the last 3 years' revenue growth (-7.4% a year, annual reports), fading to 3% by year 5.

  • -4.8%

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

    Default: the last 3 years' revenue growth (-7.4% a year, annual reports), fading to 3% by year 5.

  • -2.2%

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

    Default: the last 3 years' revenue growth (-7.4% a year, annual reports), fading to 3% by year 5.

  • 0.4%

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

    Default: the last 3 years' revenue growth (-7.4% 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 (-7.4% a year, annual reports), fading to 3% by year 5.

Business

  • 2.6%

    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.

  • 0.1%

    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).

  • 0.1%

    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).

  • 6.2%

    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 0.15, 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)
₩340B
Net debt (borrowings and leases − cash and deposits)
₩2.3B
+ Stakes and investments
₩22B
Associates, long-term financial assets and deposits (book value)
Shares
9,832,572
Share price
₩7,870
Market cap
₩77B

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₩548B₩504B₩357B₩315B₩300B₩293B₩294B₩303B
Growth21.6%−7.9%−29.1%−7.4%−4.8%−2.2%0.4%3.0%
EBIT₩4.3B₩7.3B₩11B₩8.2B₩7.8B₩7.6B₩7.7B₩7.9B
EBIT margin0.8%1.4%3.2%2.6%2.6%2.6%2.6%2.6%
After-tax EBIT₩3.2B₩5.3B₩8.3B₩5.9B₩5.7B₩5.5B₩5.5B₩5.7B
+ Depreciation———₩315M₩300M₩293M₩294M₩303M
− Capital spending₩472M₩793M₩559M₩315M₩300M₩293M₩294M₩303M
− Working capital₩41B₩14B−₩43B−₩1.6B−₩937M−₩409M₩73M₩548M
Free cash flow———₩7.5B₩6.6B₩5.9B₩5.5B₩5.2B
Discount factor———0.9320.8690.8100.7550.704
Present value———₩7B₩5.7B₩4.8B₩4.1B₩3.6B

Terminal value ₩103B, worth ₩72B today: 74% 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 ₩13,217 a share)Now 0.60×₩7,5150.57×₩9,1760.69×₩18,7001.41×
Price / earnings (last 12 months: ₩549 a share)Now 14.3×₩2,4044.37×₩3,5006.37×₩7,87014.3×
P/E on run-rate earnings (Q2 2026 × 4: ₩574 a share)Now 13.7×₩2,5094.37×₩3,6546.37×₩8,21714.3×

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%
6.3%₩12,507₩13,224₩14,107₩15,222₩16,675
6.8%₩11,625₩12,197₩12,886₩13,735₩14,806
7.3%₩10,884₩11,346₩11,895₩12,558₩13,373
7.8%₩10,251₩10,631₩11,075₩11,603₩12,239
8.3%₩9,705₩10,021₩10,385₩10,812₩11,318

Now (TTM)

Market cap
₩77B
Enterprise value
₩78B
P/E
14.3×
P/B
0.6×
P/S
0.2×
EV/EBITDA
—
Dividend yield
0.0%

Over time (at each year end)

20252024202320222021
Price₩8,290₩7,960₩7,660₩8,780₩13,900
Market cap₩82B₩78B₩75B₩86B₩137B
P/E15.4×11.8×12.5×4.5×6.4×
P/B0.7×0.7×0.7×0.8×1.6×
P/S0.2×0.2×0.1×0.2×0.4×
EV/EBITDA—————
Dividend yield0.0%————

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Namkwang Engineering & Construction14.3×0.6×0.2×—0.0%
Hyundai Engineering & Construction23.7×1.1×0.4×—0.8%
Daewoo Engineering & Construction—1.5×0.8×—0.0%
GS Engineering & Construction19.7×0.5×0.2×—1.7%
DL E&C3.6×0.4×0.3×—1.5%
KEPCO Plant Service & Engineering14.4×1.4×1.2×8.1×0.0%
Ipark Hyundai Development8.8×0.5×0.4×—2.9%
Similar companies (median)14.4×0.8×0.4×8.1×1.2%

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

Also known as: Namkwang Engineering & Construction / 남광토건 / 001260 / KRX:001260

Source: KRX statistical information