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Changhae Ethanol

004650 · KOSDAQ · ₩004650 · 창해에탄올

₩9,300▼ ₩70 (0.75%)End-of-day · Oct 30, 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

₩23,936

vs the current price (₩9,300)

Enterprise value
₩219B
Equity value
₩220B
WACC
6.7%

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 157% 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 ₩9,300, the model needs an operating margin of 6.0% every year (it uses 12.7%).
  • Or revenue growth −28.8 points a year higher than assumed in each of the 5 years.
  • Today's P/E is 6.8× against a typical 7.5× 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
₩14,665
+57.7%
Base
₩23,936
+157.4%
Bull
₩40,496
+335.4%

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 (12.7%).

Revenue growth

  • 3.8%

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

    Default: the last 3 years' revenue growth (3.8% a year, annual reports), fading to 3% by year 5.

  • 3.6%

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

    Default: the last 3 years' revenue growth (3.8% a year, annual reports), fading to 3% by year 5.

  • 3.4%

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

    Default: the last 3 years' revenue growth (3.8% a year, annual reports), fading to 3% by year 5.

  • 3.2%

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

    Default: the last 3 years' revenue growth (3.8% 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 (3.8% a year, annual reports), fading to 3% by year 5.

Business

  • 12.7%

    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.

  • 2.9%

    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).

  • 3.6%

    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).

  • 37.9%

    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.

  • 4.01%

    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.

  • 0.6

    How much the share moves when the market moves: 1 means just like the market.

    Default: 104 weeks of weekly returns against KOSPI (official index); raw beta 0.03, 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.

  • 5.51%

    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)
₩120B
Net debt (borrowings and leases − cash and deposits)
₩18B
+ Stakes and investments
₩22B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩3.2B
Shares
9,190,885
Share price
₩9,300
Market cap
₩85B

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₩116B₩137B₩122B₩124B₩129B₩133B₩137B₩142B
Growth6.4%18.1%−11.0%3.8%3.6%3.4%3.2%3.0%
EBIT₩15B₩17B₩16B₩16B₩16B₩17B₩17B₩18B
EBIT margin12.5%12.6%13.0%12.7%12.7%12.7%12.7%12.7%
After-tax EBIT₩11B₩13B₩12B₩11B₩12B₩12B₩13B₩13B
+ Depreciation———₩3.6B₩3.7B₩3.9B₩4B₩4.1B
− Capital spending₩2.9B₩4.9B₩5.8B₩4.5B₩4.6B₩4.8B₩4.9B₩5.1B
− Working capital₩5.5B₩57M−₩7.6B₩1.7B₩1.7B₩1.7B₩1.6B₩1.6B
Free cash flow———₩8.9B₩9.3B₩9.7B₩10B₩10B
Discount factor———0.9370.8780.8220.7710.722
Present value———₩8.3B₩8.1B₩8B₩7.8B₩7.6B

Terminal value ₩249B, worth ₩180B today: 82% 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 ₩15,747 a share)Now 0.59×₩9,5940.61×₩10,8200.69×₩13,8930.88×
Price / earnings (last 12 months: ₩1,372 a share)Now 6.78×₩8,9576.53×₩10,3347.53×₩26,31319.2×
P/E on run-rate earnings (Q2 2026 × 4: ₩1,486 a share)Now 6.26×₩9,7036.53×₩11,1947.53×₩28,50419.2×

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%
5.7%₩25,743₩27,841₩30,495₩33,964₩38,694
6.2%₩23,203₩24,826₩26,827₩29,359₩32,668
6.7%₩21,108₩22,389₩23,936₩25,844₩28,258
7.2%₩19,351₩20,379₩21,600₩23,073₩24,891
7.7%₩17,857₩18,693₩19,672₩20,833₩22,236

Now (TTM)

Market cap
₩85B
Enterprise value
₩103B
P/E
6.8×
P/B
0.6×
P/S
0.7×
EV/EBITDA
—
Dividend yield
6.5%

Over time (at each year end)

20252024202320222021
Price₩9,820₩8,990₩9,710₩10,750₩13,200
Market cap₩90B₩83B₩89B₩99B₩121B
P/E6.8×6.6×—1,273.8×12.3×
P/B0.6×0.6×0.7×0.7×0.9×
P/S0.7×0.6×0.8×0.9×1.3×
EV/EBITDA—————
Dividend yield6.1%6.7%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Changhae Ethanol6.8×0.6×0.7×—6.5%
Samyang Foods17.6×5.6×3.1×—0.4%
Orion10.8×1.1×1.3×5.4×3.0%
CJ Cheiljedang—0.3×0.1×—3.5%
Nongshim12.3×0.8×0.7×—1.5%
Otoki17.4×0.6×0.3×—2.8%
Hite Jinro23.7×1.0×0.5×6.4×4.4%
Similar companies (median)17.4×0.9×0.6×5.9×2.9%

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

Also known as: Changhae Ethanol / 창해에탄올 / 004650 / KRX:004650

Source: KRX statistical information