Dohwa Engineering도화엔지니어링

Dohwa Engineering's trailing profits have recovered from the 2024 loss, but margins are thin, debt is high and free cash flow is negative.

Dohwa Engineering is an engineering services firm working across water, urban, transport and energy projects, and it also runs renewable power and energy storage assets. For the trailing twelve months to H1 2026 it reported revenue of ₩699B, operating income of ₩24B and net income of ₩8.8B, compared with a net loss in 2024. Its liabilities are about twice its equity and free cash flow was negative over the period.

What stands out

• Trailing revenue of ₩699B is roughly flat versus 2025's ₩698B, while operating income fell from ₩30B in 2025 to ₩24B on a trailing basis.
• Operating margin is 3.4% trailing and net margin 1.3%, with ROE at 3.5%, all modest for the sector.
• Borrowings of ₩212B against cash of ₩65B and liabilities at 203% of equity point to a leveraged balance sheet.
• Free cash flow was -₩47B over the trailing period, so the business is consuming cash despite reported profits.
• Recent filings include a debt guarantee to a third party, a sale of shares in another company, a serious accident notice and an amended major contract, while the share price is up 6% over one month but down 15.8% over one year.

What to watch

• Details and impact of the amended debt guarantee filings and the serious accident report, which the data does not explain.
• Next full-year or quarterly results to see whether operating income and free cash flow hold up.
• Valuation signals are mixed: a DCF base of ₩13,231 is far above the ₩5,330 close, but the bear case is ₩2,470 and the data does not explain the model's assumptions.