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HS Hwasung

002460 · KOSPI · ₩002460 · HS화성

₩10,590▲ ₩190 (1.83%)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

₩30,241

vs the current price (₩10,590)

Enterprise value
₩397B
Equity value
₩307B
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 is 186% 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 ₩10,590, the model needs an operating margin of 2.7% every year (it uses 4.5%).
  • Today's P/E is 4.3× against a typical 4.2× 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
₩5,108
−51.8%
Base
₩30,241
+185.6%
Bull
₩85,307
+705.5%

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 (4.5%).

Revenue growth

  • 0.7%

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

    Default: the last 3 years' revenue growth (0.7% a year, annual reports), fading to 3% by year 5.

  • 1.3%

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

    Default: the last 3 years' revenue growth (0.7% a year, annual reports), fading to 3% by year 5.

  • 1.9%

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

    Default: the last 3 years' revenue growth (0.7% a year, annual reports), fading to 3% by year 5.

  • 2.4%

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

    Default: the last 3 years' revenue growth (0.7% 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 (0.7% a year, annual reports), fading to 3% by year 5.

Business

  • 4.5%

    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.

  • 0.3%

    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).

  • 0.3%

    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).

  • 32.2%

    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 0.26, 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)
₩543B
Net debt (borrowings and leases − cash and deposits)
₩122B
+ Stakes and investments
₩35B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩1.9B
Shares
10,150,000
Share price
₩10,590
Market cap
₩107B

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₩908B₩613B₩659B₩547B₩554B₩564B₩578B₩595B
Growth40.6%−32.5%7.6%0.7%1.3%1.9%2.4%3.0%
EBIT₩25B₩24B₩43B₩25B₩25B₩25B₩26B₩27B
EBIT margin2.8%3.9%6.6%4.5%4.5%4.5%4.5%4.5%
After-tax EBIT₩18B₩17B₩31B₩18B₩18B₩18B₩19B₩19B
+ Depreciation———₩1.6B₩1.7B₩1.7B₩1.7B₩1.8B
− Capital spending₩1.1B₩4B₩1.1B₩1.6B₩1.7B₩1.7B₩1.7B₩1.8B
− Working capital₩95B−₩176B−₩19B₩1.2B₩2.3B₩3.4B₩4.4B₩5.6B
Free cash flow———₩17B₩16B₩15B₩14B₩14B
Discount factor———0.9470.8970.8490.8040.761
Present value———₩16B₩14B₩13B₩12B₩11B

Terminal value ₩436B, worth ₩332B today: 84% 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 ₩42,680 a share)Now 0.25×₩10,6600.25×₩11,9570.28×₩18,1240.42×
Price / earnings (last 12 months: ₩2,468 a share)Now 4.29×₩6,9252.81×₩10,3854.21×₩26,25810.6×
P/E on run-rate earnings (Q2 2026 × 4: ₩516 a share)Now 20.5×₩1,4472.81×₩2,1704.21×₩5,48810.6×

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%₩35,892₩39,792₩45,159₩53,040₩65,781
5.1%₩30,368₩33,019₩36,499₩41,287₩48,313
5.6%₩26,046₩27,897₩30,241₩33,317₩37,545
6.1%₩22,573₩23,888₩25,507₩27,556₩30,241
6.6%₩19,721₩20,666₩21,801₩23,197₩24,960

Now (TTM)

Market cap
₩107B
Enterprise value
₩230B
P/E
4.3×
P/B
0.2×
P/S
0.2×
EV/EBITDA
—
Dividend yield
7.1%

Over time (at each year end)

20252024202320222021
Price₩11,960₩9,690₩10,850₩10,500₩12,600
Market cap₩121B₩98B₩110B₩107B₩128B
P/E4.4×8.2×5.2×4.4×4.3×
P/B0.3×0.3×0.3×0.3×0.3×
P/S0.2×0.2×0.1×0.2×0.3×
EV/EBITDA—————
Dividend yield6.3%5.2%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
HS Hwasung4.3×0.2×0.2×—7.1%
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: HS Hwasung / HS화성 / 002460 / KRX:002460

Source: KRX statistical information