KOSPI · 002220 · Steel & Materials · ₩002220

Hanil Iron & Steel한일철강

002220 · KOSPI · ₩002220 · 한일철강

₩2,680▼ ₩45 (1.65%)End-of-day · Oct 30, 2026 · End-of-day prices.

Trade

Sell Buy

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: ₩43B
Equity value: −₩14B
WACC: 5.6%

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 ₩2,680, the model needs an operating margin of 4.3% every year (it uses 1.9%).
Margins ranged from 0.3% to 11.9% 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.

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: ₩4,329; +61.5%

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

Assumptions

Cycle options

Margin path

Every year uses the cycle-average margin (1.9%).

Revenue growth

Revenue growth, year 1-8.4%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-8.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 2-5.5%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-8.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 3-2.7%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-8.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 40.2%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-8.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 53%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-8.4% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin1.9%
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.
Tax rate27.5%
Share of operating profit paid as corporate tax.
Default: Korea's top corporate tax rate (25%) plus 10% local income tax.
Depreciation & amortisation2.2%
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).
Capital spending2.7%
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).
Working capital21.8%
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

Terminal growth2%
How fast cash flows keep growing every year after year 5.
Default: about Korea's long-run inflation plus real growth.
Risk-free rate4.01%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-30.
Beta0.6
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 0.03, adjusted toward 1 and kept between 0.6 and 2.0.
Equity risk premium5.5%
The extra return investors want for owning shares instead of bonds.
Default: a typical premium for Korean shares.
Cost of debt (before tax)5.51%
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): ₩220B
Net debt (borrowings and leases − cash and deposits): ₩76B
+ Stakes and investments: ₩23B; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩4.3B
Shares: 26,697,460
Share price: ₩2,680
Market cap: ₩72B

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.

	FY2023	FY2024	FY2025	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	₩216B	₩206B	₩196B	₩202B	₩191B	₩185B	₩186B	₩191B
Growth	−15.3%	−4.8%	−4.6%	−8.4%	−5.5%	−2.7%	0.2%	3.0%
EBIT	₩4.9B	₩667M	₩3.2B	₩3.8B	₩3.6B	₩3.5B	₩3.5B	₩3.6B
EBIT margin	2.2%	0.3%	1.6%	1.9%	1.9%	1.9%	1.9%	1.9%
After-tax EBIT	₩3.5B	₩484M	₩2.3B	₩2.8B	₩2.6B	₩2.6B	₩2.6B	₩2.6B
+ Depreciation	—	—	—	₩4.4B	₩4.2B	₩4.1B	₩4.1B	₩4.2B
− Capital spending	₩5.8B	₩6.6B	₩4.4B	₩5.4B	₩5.1B	₩5B	₩5B	₩5.2B
− Working capital	−₩29B	−₩2B	₩3.3B	−₩4B	−₩2.4B	−₩1.1B	₩81M	₩1.2B
Free cash flow	—	—	—	₩5.8B	₩4.1B	₩2.7B	₩1.5B	₩464M
Discount factor	—	—	—	0.947	0.897	0.849	0.804	0.761
Present value	—	—	—	₩5.5B	₩3.7B	₩2.3B	₩1.2B	₩353M

Terminal value ₩39B, worth ₩30B today: 69% 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:

	Low	Typical	High
Price / book (book value ₩6,060 a share)Now 0.44×	₩1,9750.33×	₩2,8770.47×	₩4,3130.71×

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%
4.6%	—	—	—	₩70	₩212
5.1%	—	—	—	—	—
5.6%	—	—	—	—	—
6.1%	—	—	—	—	—
6.6%	—	—	—	—	—

Now (TTM)

Market cap: ₩72B
Enterprise value: ₩147B
P/E: —
P/B: 0.4×
P/S: 0.3×
EV/EBITDA: —
Dividend yield: 1.1%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩5,070	₩1,910	₩2,390	₩2,815	₩2,675
Market cap	₩135B	₩51B	₩64B	₩75B	₩71B
P/E	—	—	86,144.6×	—	2.8×
P/B	0.8×	0.3×	0.4×	0.4×	0.4×
P/S	0.7×	0.2×	0.3×	0.3×	0.3×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.6%	0.5%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Hanil Iron & Steel	—	0.4×	0.3×	—	1.1%
POSCO Holdings	16.1×	0.4×	0.3×	7.7×	3.7%
Korea Zinc	18.6×	1.6×	0.9×	—	2.3%
Hyundai Steel	—	0.2×	0.1×	—	1.9%
Poongsan	8.0×	0.7×	0.3×	5.9×	3.0%
SeAH Besteel Holdings	11.5×	0.5×	0.3×	9.2×	4.2%
Sama Aluminium	—	4.0×	2.9×	—	0.0%
Similar companies (median)	13.8×	0.6×	0.3×	7.7×	2.6%

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

Also known as: Hanil Iron & Steel / 한일철강 / 002220 / KRX:002220

Source: KRX statistical information