Ask Warren

Korea Petroleum Industries

004090 · KOSPI · ₩004090 · 한국석유

₩11,180▲ ₩180 (1.64%)End-of-day · Oct 27, 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

₩3,762

vs the current price (₩11,180)

Enterprise value
₩202B
Equity value
₩48B
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 66% 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 ₩11,180, the model needs an operating margin of 3.0% every year (it uses 2.3%).
  • Or revenue growth +18.1 points a year higher than assumed in each of the 5 years.
  • Today's P/E is 9.6× against a typical 13.1× 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
—
Base
₩3,762
−66.3%
Bull
₩47,053
+320.9%

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 (2.3%).

Revenue growth

  • -2.3%

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

    Default: the last 3 years' revenue growth (-2.3% a year, annual reports), fading to 3% by year 5.

  • -1%

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

    Default: the last 3 years' revenue growth (-2.3% 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 (-2.3% a year, annual reports), fading to 3% by year 5.

  • 1.7%

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

    Default: the last 3 years' revenue growth (-2.3% 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 (-2.3% a year, annual reports), fading to 3% by year 5.

Business

  • 2.3%

    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.

  • 2.7%

    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).

  • 3.3%

    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).

  • 18%

    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.

  • 4.03%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-27.

  • 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 -0.13, 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.

  • 5.53%

    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)
₩749B
Net debt (borrowings and leases − cash and deposits)
₩152B
+ Stakes and investments
₩1.1B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩3.3B
Shares
12,694,120
Share price
₩11,180
Market cap
₩142B

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₩679B₩721B₩697B₩732B₩724B₩726B₩739B₩761B
Growth−9.2%6.2%−3.4%−2.3%−1.0%0.3%1.7%3.0%
EBIT₩15B₩14B₩12B₩17B₩17B₩17B₩17B₩18B
EBIT margin2.2%1.9%1.7%2.3%2.3%2.3%2.3%2.3%
After-tax EBIT₩11B₩10B₩8.6B₩12B₩12B₩12B₩12B₩13B
+ Depreciation———₩20B₩20B₩20B₩20B₩21B
− Capital spending₩6B₩26B₩39B₩24B₩24B₩24B₩24B₩25B
− Working capital₩9.3B₩7.6B₩9.4B−₩3.1B−₩1.3B₩391M₩2.2B₩4B
Free cash flow———₩11B₩9B₩7.4B₩5.7B₩4.1B
Discount factor———0.9470.8970.8490.8040.761
Present value———₩10B₩8.1B₩6.3B₩4.6B₩3.1B

Terminal value ₩223B, worth ₩170B 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 ₩16,993 a share)Now 0.66×₩12,8790.76×₩14,9600.88×₩21,6791.28×
Price / earnings (last 12 months: ₩1,166 a share)Now 9.59×₩11,88810.2×₩15,23413.1×₩25,17321.6×
P/E on run-rate earnings (Q2 2026 × 4: ₩3,685 a share)Now 3.03×₩37,57610.2×₩48,15113.1×₩79,56721.6×

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%₩6,743₩8,047₩9,834₩12,446₩16,649
5.1%₩4,397₩5,227₩6,310₩7,791₩9,953
5.6%₩2,562₩3,094₩3,762₩4,632₩5,819
6.1%₩1,088₩1,425₩1,835₩2,348₩3,012
6.6%—₩84₩327₩619₩982

Now (TTM)

Market cap
₩142B
Enterprise value
₩293B
P/E
9.6×
P/B
0.7×
P/S
0.2×
EV/EBITDA
—
Dividend yield
1.1%

Over time (at each year end)

20252024202320222021
Price₩13,940₩13,230₩11,290₩10,300₩11,300
Market cap₩177B₩168B₩143B₩131B₩143B
P/E33.9×12.9×9.7×11.7×12.6×
P/B0.9×0.8×0.8×0.8×0.9×
P/S0.3×0.2×0.2×0.2×0.2×
EV/EBITDA—————
Dividend yield0.9%0.9%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Korea Petroleum Industries9.6×0.7×0.2×—1.1%
Tokai Carbon Korea30.7×4.3×7.0×—0.7%
Hanilcementco12.1×0.7×0.9×—6.0%
Wonik QnC13.8×1.2×0.7×—0.5%
Sampyo Cement16.9×0.8×0.9×6.0×2.2%
Hanil Holdings9.5×0.3×0.3×—5.9%
IS Dongseo5.2×0.3×0.4×—3.5%
Similar companies (median)13.0×0.7×0.8×6.0×2.8%

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

Also known as: Korea Petroleum Industries / 한국석유 / 004090 / KRX:004090

Source: KRX statistical information