KOSPI · 018880 · Machinery · ₩018880

Hanon Systems한온시스템

018880 · KOSPI · ₩018880 · 한온시스템

₩3,710▲ ₩25 (0.68%)End-of-day · Oct 28, 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

₩808

vs the current price (₩3,710)

Enterprise value: ₩3.8T
Equity value: ₩829B
WACC: 6.5%

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 78% 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 ₩3,710, the model needs an operating margin of 4.4% every year (it uses 3.0%).
Or revenue growth +16.4 points a year higher than assumed in each of the 5 years.
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: ₩808; −78.2%
Bull: ₩8,724; +135.2%

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 (3.0%).

Revenue growth

Revenue growth, year 18.1%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (8.1% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 26.8%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (8.1% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 35.5%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (8.1% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 44.3%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (8.1% 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 (8.1% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin3%
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 & amortisation5.4%
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 spending6.7%
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 capital8.2%
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 rate4.11%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-28.
Beta0.76
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 0.64, 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)5.61%
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): ₩11T
Net debt (borrowings and leases − cash and deposits): ₩2.8T
+ Stakes and investments: ₩43B; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩154B
Shares: 1,026,251,342
Share price: ₩3,710
Market cap: ₩3.8T

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	₩9.6T	₩10T	₩11T	₩12T	₩13T	₩13T	₩14T	₩14T
Growth	10.8%	4.6%	8.9%	8.1%	6.8%	5.5%	4.3%	3.0%
EBIT	₩277B	₩96B	₩270B	₩358B	₩382B	₩403B	₩420B	₩433B
EBIT margin	2.9%	1.0%	2.5%	3.0%	3.0%	3.0%	3.0%	3.0%
After-tax EBIT	₩201B	₩69B	₩196B	₩259B	₩277B	₩292B	₩305B	₩314B
+ Depreciation	—	—	—	₩644B	₩688B	₩726B	₩757B	₩779B
− Capital spending	₩800B	₩733B	₩480B	₩799B	₩853B	₩900B	₩939B	₩967B
− Working capital	₩90B	−₩309B	₩696B	₩73B	₩66B	₩57B	₩47B	₩34B
Free cash flow	—	—	—	₩31B	₩45B	₩60B	₩75B	₩92B
Discount factor	—	—	—	0.939	0.882	0.828	0.778	0.730
Present value	—	—	—	₩29B	₩40B	₩50B	₩59B	₩67B

Terminal value ₩4.8T, worth ₩3.5T today: 94% 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 ₩4,008 a share)Now 0.93×	₩4,0831.02×	₩8,9552.23×	₩18,6004.64×

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%
5.5%	₩1,145	₩1,525	₩2,013	₩2,662	₩3,570
6.0%	₩685	₩974	₩1,334	₩1,796	₩2,411
6.5%	₩310	₩534	₩808	₩1,149	₩1,586
7.0%	—	₩176	₩389	₩647	₩969
7.5%	—	—	₩47	₩247	₩491

Now (TTM)

Market cap: ₩3.8T
Enterprise value: ₩6T
P/E: —
P/B: 0.9×
P/S: 0.3×
EV/EBITDA: —
Dividend yield: 0.0%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩2,965	₩3,727	₩6,776	₩7,520	₩12,502
Market cap	₩3T	₩3.8T	₩7T	₩7.7T	₩13T
P/E	—	—	136.4×	377.6×	41.6×
P/B	0.8×	1.3×	2.9×	3.5×	5.5×
P/S	0.3×	0.4×	0.7×	0.9×	1.7×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.0%	—	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Hanon Systems	—	0.9×	0.3×	—	0.0%
Doosan Enerbility	217.2×	4.8×	2.2×	—	0.0%
Hanmi Semiconductor	87.4×	26.0×	35.2×	78.7×	0.4%
Jusung Engineering	1,189.7×	14.6×	38.2×	2,291.7×	0.0%
Rainbow Robotics	4,610.6×	59.1×	174.0×	—	0.0%
EO Technics	47.5×	6.9×	11.6×	—	0.0%
Wonik IPS	28.2×	4.5×	5.3×	42.7×	0.2%
Similar companies (median)	152.3×	10.7×	23.4×	78.7×	0.0%

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

Also known as: Hanon Systems / 한온시스템 / 018880 / KRX:018880

Source: KRX statistical information