Chokwang Leather조광피혁

Chokwang Leather's trailing profits have held up on lower sales, but returns on equity remain very low and the shares trade at a high earnings multiple.

Chokwang Leather makes leather fabric for car seats and steering wheel covers, selling mainly to automakers and their parts suppliers. For the twelve months to the first half of 2026 it reported revenue of about ₩87.9B, operating income of about ₩5.1B and net income of about ₩9.7B, with a net margin of 11% and a return on equity of 1.7%. The shares closed at ₩66,800 on 19 October 2026, inside a 52-week range of ₩57,600 to ₩84,300.

What stands out

• Trailing operating margin fell to 5.8%, down from 9% in 2025 and 10.5% in 2021, so the core business earns less per won of sales than before.
• Net income is well above operating income, so the trailing net margin of 11% likely reflects non-operating items; the data does not break this down.
• Valuation looks stretched on trailing numbers: P/E of 45.8 and EV/EBITDA of 60.6, against peers such as F&F, LF and JS at P/E ratios of roughly 4 to 10.
• The data's discounted cash flow fair value model gives a base of ₩19,921, well below the current price; this is a model output, not a forecast, and the model's assumptions are not shown.
• Cash of about ₩52.1B is reported with no borrowings, and liabilities are 15.4% of equity, so the balance sheet looks conservative.
• Recent filings are mostly ownership and governance reports; no news headlines were provided, and foreign ownership fell from 0.8% to 0.6% over 60 days.

What to watch

• The next half-year and quarterly results, to see whether operating margin recovers from 5.8% or continues to slide.
• Raw material price moves, since most inputs are imported and the data says these strongly affect profitability.
• Further 5%+ holding and insider shareholding filings, given the recent cluster of ownership reports in September and October 2026.