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Hannong Chemicals

011500 · KOSPI · ₩011500 · 한농화성

₩12,360▼ ₩370 (2.91%)End-of-day · Oct 26, 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

₩1,971

vs the current price (₩12,360)

Enterprise value
₩36B
Equity value
₩31B
WACC
7.4%

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 84% 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 ₩12,360, the model needs an operating margin of 8.6% every year (it uses 2.9%).
  • Margins ranged from −1.1% to 7.3% over the last 5 years, so this is a cyclical business. The model uses the average; the price may be set by where the cycle is now. Try the margin fade option.
  • Today's P/E is 20.7× against a typical 20.7× 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
₩1,971
−84.1%
Bull
₩7,458
−39.7%

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 (2.9%).

Revenue growth

  • -3.6%

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

    Default: the last 3 years' revenue growth (-3.6% a year, annual reports), fading to 3% by year 5.

  • -2%

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

    Default: the last 3 years' revenue growth (-3.6% 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 (-3.6% a year, annual reports), fading to 3% by year 5.

  • 1.3%

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

    Default: the last 3 years' revenue growth (-3.6% 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 (-3.6% a year, annual reports), fading to 3% by year 5.

Business

  • 2.9%

    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.

  • 4.9%

    The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).

    Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).

  • 6.5%

    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).

  • 32%

    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.

  • 0.71

    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 0.57, 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)
₩231B
Net debt (borrowings and leases − cash and deposits)
₩34B
+ Stakes and investments
₩29B
Associates, long-term financial assets and deposits (book value)
Shares
15,637,042
Share price
₩12,360
Market cap
₩193B

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₩212B₩247B₩214B₩223B₩218B₩217B₩220B₩227B
Growth−11.3%16.5%−13.3%−3.6%−2.0%−0.3%1.3%3.0%
EBIT−₩2.4B₩6.1B₩3.6B₩6.5B₩6.3B₩6.3B₩6.4B₩6.6B
EBIT margin−1.1%2.5%1.7%2.9%2.9%2.9%2.9%2.9%
After-tax EBIT−₩1.8B₩4.4B₩2.6B₩4.7B₩4.6B₩4.6B₩4.6B₩4.8B
+ Depreciation₩11B₩11B₩11B₩11B₩11B₩11B₩11B₩11B
− Capital spending₩13B₩5.3B₩24B₩14B₩14B₩14B₩14B₩15B
− Working capital−₩15B₩16B−₩15B−₩2.7B−₩1.4B−₩209M₩904M₩2.1B
Free cash flow₩11B−₩5.9B₩4.1B₩3.8B₩2.5B₩1.3B₩202M−₩974M
Discount factor———0.9320.8680.8080.7530.701
Present value———₩3.5B₩2.2B₩1.1B₩152M−₩683M

Terminal value ₩42B, worth ₩29B today: 83% 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 ₩11,662 a share)Now 1.06×₩14,1601.21×₩16,7121.43×₩23,6922.03×
Price / earnings (last 12 months: ₩598 a share)Now 20.7×₩6,53810.9×₩12,36020.7×₩37,88463.4×
P/E on run-rate earnings (Q2 2026 × 4: ₩659 a share)Now 18.8×₩7,20510.9×₩13,62220.7×₩41,75363.4×

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%
6.4%₩2,691₩2,617₩2,521₩2,396₩2,229
6.9%₩2,411₩2,325₩2,217₩2,081₩1,905
7.4%₩2,176₩2,084₩1,971₩1,832₩1,657
7.9%₩1,977₩1,882₩1,768₩1,630₩1,460
8.4%₩1,805₩1,710₩1,597₩1,463₩1,300

Now (TTM)

Market cap
₩193B
Enterprise value
₩226B
P/E
20.7×
P/B
1.1×
P/S
0.8×
EV/EBITDA
9.8×
Dividend yield
0.3%

Over time (at each year end)

20252024202320222021
Price₩14,800₩13,380₩15,770₩9,970₩16,300
Market cap₩231B₩209B₩247B₩156B₩255B
P/E59.9×46.6×19.9×18.2×12.9×
P/B1.3×1.3×1.5×1.0×1.7×
P/S1.1×0.8×1.2×0.7×0.9×
EV/EBITDA17.6×13.5×31.7×14.4×10.4×
Dividend yield0.3%0.4%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Hannong Chemicals20.7×1.1×0.8×9.8×0.3%
APR24.4×16.3×4.6×24.1×1.8%
Amorepacific25.7×1.3×1.6×—1.0%
LG H&H—0.7×0.6×6.9×0.8%
Cosmax16.5×4.7×1.1×14.0×1.2%
Kolmar Korea15.0×2.8×0.9×—0.7%
d'Alba Global17.2×7.4×2.9×—1.8%
Similar companies (median)17.2×3.7×1.4×14.0×1.1%

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

Also known as: Hannong Chemicals / 한농화성 / 011500 / KRX:011500

Source: KRX statistical information