KOSPI · 008730 · Rubber & plastics · ₩008730

Youlchon Chemical율촌화학

008730 · KOSPI · ₩008730 · 율촌화학

₩12,270▼ ₩580 (4.51%)End-of-day · Oct 29, 2026 · End-of-day prices.

Trade

Sell Buy

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: −₩268B
Equity value: −₩557B
WACC: 5.7%

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 gives no positive value at these assumptions. What we can see:

To match today's price of ₩12,270, the model needs an operating margin of 8.5% every year (it uses −0.4%).
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: —

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Cycle options

Margin path

Every year uses the cycle-average margin (−0.4%).

Revenue growth

Revenue growth, year 1-1.6%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-1.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 2-0.4%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-1.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 30.7%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-1.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 41.9%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-1.6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 53%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-1.6% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin-0.4%
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.
Tax rate27.5%
Share of operating profit paid as corporate tax.
Default: Korea's top corporate tax rate (25%) plus 10% local income tax.
Depreciation & amortisation10.2%
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).
Capital spending12.7%
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).
Working capital25.6%
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

Terminal growth2%
How fast cash flows keep growing every year after year 5.
Default: about Korea's long-run inflation plus real growth.
Risk-free rate4.01%
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.
Beta0.6
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 0.34, adjusted toward 1 and kept between 0.6 and 2.0.
Equity risk premium5.5%
The extra return investors want for owning shares instead of bonds.
Default: a typical premium for Korean shares.
Cost of debt (before tax)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): ₩516B
Net debt (borrowings and leases − cash and deposits): ₩288B
+ Stakes and investments: ₩6M; Associates, long-term financial assets and deposits (book value)
Shares: 24,800,000
Share price: ₩12,270
Market cap: ₩304B

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.

	FY2023	FY2024	FY2025	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	₩414B	₩457B	₩485B	₩508B	₩506B	₩509B	₩519B	₩535B
Growth	−18.6%	10.3%	6.2%	−1.6%	−0.4%	0.7%	1.9%	3.0%
EBIT	−₩16B	−₩18B	₩8.5B	−₩2B	−₩2B	−₩2B	−₩2.1B	−₩2.1B
EBIT margin	−3.9%	−4.0%	1.8%	−0.4%	−0.4%	−0.4%	−0.4%	−0.4%
After-tax EBIT	−₩12B	−₩13B	₩6.2B	−₩1.5B	−₩1.5B	−₩1.5B	−₩1.5B	−₩1.6B
+ Depreciation	—	—	—	₩52B	₩52B	₩52B	₩53B	₩55B
− Capital spending	₩56B	₩81B	₩35B	₩65B	₩64B	₩65B	₩66B	₩68B
− Working capital	−₩2.1B	₩15B	₩13B	−₩2.1B	−₩520M	₩907M	₩2.5B	₩4B
Free cash flow	—	—	—	−₩12B	−₩14B	−₩15B	−₩17B	−₩19B
Discount factor	—	—	—	0.946	0.895	0.847	0.801	0.758
Present value	—	—	—	−₩11B	−₩12B	−₩13B	−₩14B	−₩14B

Terminal value −₩269B, worth −₩204B today: 76% 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:

	Low	Typical	High
Price / book (book value ₩11,826 a share)Now 1.04×	₩18,3781.55×	₩26,4542.24×	₩32,9182.78×

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%
4.7%	—	—	—	—	—
5.2%	—	—	—	—	—
5.7%	—	—	—	—	—
6.2%	—	—	—	—	—
6.7%	—	—	—	—	—

Now (TTM)

Market cap: ₩304B
Enterprise value: ₩592B
P/E: 60.8×
P/B: 1.0×
P/S: 0.6×
EV/EBITDA: —
Dividend yield: 0.0%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩25,800	₩20,700	₩31,700	₩36,450	₩27,250
Market cap	₩640B	₩513B	₩786B	₩904B	₩676B
P/E	153.6×	—	—	—	80.0×
P/B	2.2×	1.8×	2.6×	2.7×	2.0×
P/S	1.3×	1.1×	1.9×	1.8×	1.3×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.0%	0.0%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Youlchon Chemical	60.8×	1.0×	0.6×	—	0.0%
Hankook Tire & Technology	5.8×	0.5×	0.3×	—	4.0%
Kumho Tire	3.1×	0.6×	0.3×	—	0.0%
Pum-Tech Korea	19.8×	2.5×	2.1×	—	0.7%
Dongwon Systems	9.7×	0.7×	0.4×	5.7×	2.8%
Nexen Tire	3.6×	0.3×	0.2×	—	3.5%
PI Advanced Materials	12.4×	1.2×	1.7×	5.0×	2.3%
Similar companies (median)	7.7×	0.6×	0.4×	5.4×	2.6%

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

Also known as: Youlchon Chemical / 율촌화학 / 008730 / KRX:008730

Source: KRX statistical information