Ask Warren

TCC Steel

002710 · KOSPI · ₩002710 · TCC스틸

₩10,450▼ ₩660 (5.94%)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
−₩58B
Equity value
−₩213B
WACC
6.2%

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 ₩10,450, the model needs an operating margin of 6.4% every year (it uses 1.7%).
  • Margins ranged from −1.8% to 6.4% 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
₩4,015
−61.6%

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 (1.7%).

Revenue growth

  • -3.7%

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

    Default: the last 3 years' revenue growth (-3.7% a year, annual reports), fading to 3% by year 5.

  • -2%

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

    Default: the last 3 years' revenue growth (-3.7% 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 (-3.7% 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 (-3.7% 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 (-3.7% a year, annual reports), fading to 3% by year 5.

Business

  • 1.7%

    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.

  • 1.8%

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

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

  • 8%

    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).

  • 22.8%

    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

  • 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.

  • 0.68

    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 0.52, 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)
₩658B
Net debt (borrowings and leases − cash and deposits)
₩209B
+ Stakes and investments
₩58B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩3.8B
Shares
26,213,697
Share price
₩10,450
Market cap
₩274B

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₩624B₩582B₩612B₩633B₩621B₩619B₩627B₩646B
Growth−8.8%−6.8%5.1%−3.7%−2.0%−0.3%1.3%3.0%
EBIT₩11B₩12B−₩11B₩11B₩11B₩11B₩11B₩11B
EBIT margin1.8%2.1%−1.8%1.7%1.7%1.7%1.7%1.7%
After-tax EBIT₩8.2B₩8.9B−₩7.9B₩7.8B₩7.7B₩7.6B₩7.7B₩8B
+ Depreciation₩6.8B₩9.6B₩16B₩11B₩11B₩11B₩11B₩12B
− Capital spending₩113B₩26B₩9.4B₩51B₩50B₩50B₩50B₩52B
− Working capital₩8.6B−₩3.8B−₩26B−₩5.5B−₩2.9B−₩425M₩1.8B₩4.3B
Free cash flow−₩107B−₩3.3B₩24B−₩26B−₩28B−₩30B−₩33B−₩36B
Discount factor———0.9420.8870.8350.7870.741
Present value———−₩24B−₩25B−₩25B−₩26B−₩27B

Terminal value ₩94B, worth ₩70B today: -120% 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 ₩9,411 a share)Now 1.11×₩12,5931.34×₩19,0672.03×₩60,4846.43×

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%
5.2%—————
5.7%—————
6.2%—————
6.7%—————
7.2%—————

Now (TTM)

Market cap
₩274B
Enterprise value
₩482B
P/E
—
P/B
1.1×
P/S
0.4×
EV/EBITDA
156.6×
Dividend yield
0.7%

Over time (at each year end)

20252024202320222021
Price₩13,920₩27,200₩58,800₩9,350₩9,680
Market cap₩365B₩713B₩1.5T₩245B₩254B
P/E—35.4×—8.4×8.8×
P/B1.5×2.8×6.7×1.2×1.7×
P/S0.6×1.2×2.5×0.4×0.5×
EV/EBITDA121.7×42.6×98.6×7.8×10.2×
Dividend yield0.5%0.4%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
TCC Steel—1.1×0.4×156.6×0.7%
POSCO Holdings16.2×0.4×0.3×7.7×3.6%
Korea Zinc18.6×1.6×0.9×—2.3%
Hyundai Steel—0.2×0.2×—1.9%
Poongsan8.1×0.7×0.3×5.9×2.9%
SeAH Besteel Holdings12.2×0.5×0.3×9.5×4.0%
Sama Aluminium—4.1×3.0×—0.0%
Similar companies (median)14.2×0.6×0.3×7.7×2.6%

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

Also known as: TCC Steel / TCC스틸 / 002710 / KRX:002710

Source: KRX statistical information