Hannong Chemicals한농화성

Hannong Chemicals shows thin margins and negative free cash flow on trailing numbers, with its shares down 16.6% over the past year.

Hannong Chemicals makes specialty chemicals such as glycol ethers, ethylene oxide additives and emulsifiers, sold to semiconductor, electronics, personal care and other industrial customers. On trailing twelve months to H1 2026 it reported revenue of ₩230.8B, operating income of ₩12.5B and net income of ₩9.3B, but free cash flow was negative at ₩11.4B and borrowings of ₩43.3B exceed cash of ₩10.3B. The share price is ₩12,730, well below its 52-week high of ₩29,450.

What stands out

• Revenue fell 13.3% in 2025 to ₩214.5B, and operating margin dropped to 1.7% from 2.5% in 2024.
• Trailing operating margin of 5.4% is higher than the 2025 full-year figure, but the data does not explain the drivers of that change.
• Net income of ₩9.3B on the trailing basis is above operating income, a gap the data does not explain.
• Valuation is shown at a P/E of 21.3 and P/B of 1.1, while the DCF fair value model gives a base value of ₩1,937, far below the current price; the data gives no further explanation of this gap.
• Foreign ownership fell from 4.0% to 3.3% over about 60 days, while retail investors were net buyers over the last 20 days.

What to watch

• The half-year report (Jun 2026) and the 28 July 2026 loan extension decision, which bear on debt levels and cash needs.
• Whether free cash flow turns positive, given the trailing deficit of ₩11.4B.
• The May 2026 corrected filing on new facility investment, which may affect capital spending; the data does not give details.