Ask Warren

Leeku Industrial

025820 · KOSPI · ₩025820 · 이구산업

₩3,750▲ ₩50 (1.35%)End-of-day · Oct 28, 2026 · End-of-day prices.
Trade
Alert me
SellBuy

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

₩13,013

vs the current price (₩3,750)

Enterprise value
₩600B
Equity value
₩435B
WACC
5.5%

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 247% 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 ₩3,750, the model needs an operating margin of 3.4% every year (it uses 5.6%).
  • Or revenue growth −29.6 points a year higher than assumed in each of the 5 years.
  • Margins ranged from 2.4% to 10.7% 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 9.0× against a typical 14.3× 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
₩2,235
−40.4%
Base
₩13,013
+247.0%
Bull
₩36,523
+873.9%

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 (5.6%).

Revenue growth

  • 5.7%

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

    Default: the last 3 years' revenue growth (5.7% a year, annual reports), fading to 3% by year 5.

  • 5%

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

    Default: the last 3 years' revenue growth (5.7% a year, annual reports), fading to 3% by year 5.

  • 4.4%

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

    Default: the last 3 years' revenue growth (5.7% a year, annual reports), fading to 3% by year 5.

  • 3.7%

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

    Default: the last 3 years' revenue growth (5.7% 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 (5.7% a year, annual reports), fading to 3% by year 5.

Business

  • 5.6%

    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.

  • 0.7%

    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).

  • 0.9%

    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).

  • 35.9%

    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.

  • 4.11%

    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.

  • 0.61

    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 0.41, 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.

  • 5.61%

    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)
₩595B
Net debt (borrowings and leases − cash and deposits)
₩165B
Shares
33,442,000
Share price
₩3,750
Market cap
₩125B

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₩433B₩472B₩508B₩629B₩661B₩690B₩715B₩737B
Growth0.9%9.0%7.5%5.7%5.0%4.4%3.7%3.0%
EBIT₩10B₩25B₩24B₩35B₩37B₩39B₩40B₩41B
EBIT margin2.4%5.3%4.8%5.6%5.6%5.6%5.6%5.6%
After-tax EBIT₩7.4B₩18B₩18B₩26B₩27B₩28B₩29B₩30B
+ Depreciation———₩4.4B₩4.6B₩4.8B₩5B₩5.2B
− Capital spending₩3.5B₩1.6B₩8.3B₩5.7B₩5.9B₩6.2B₩6.4B₩6.6B
− Working capital−₩17B₩14B₩22B₩12B₩11B₩10B₩9.2B₩7.7B
Free cash flow———₩12B₩14B₩16B₩18B₩21B
Discount factor———0.9480.8980.8510.8060.764
Present value———₩11B₩13B₩14B₩15B₩16B

Terminal value ₩696B, worth ₩532B today: 89% 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 ₩4,960 a share)Now 0.76×₩4,1200.83×₩5,3251.07×₩6,6861.35×
Price / earnings (last 12 months: ₩419 a share)Now 8.95×₩2,2525.37×₩6,01114.3×₩15,27836.5×

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%
4.5%₩15,499₩17,564₩20,432₩24,696₩31,720
5.0%₩12,817₩14,235₩16,110₩18,712₩22,579
5.5%₩10,731₩11,734₩13,013₩14,704₩17,049
6.0%₩9,062₩9,788₩10,687₩11,832₩13,344
6.5%₩7,697₩8,230₩8,876₩9,674₩10,689

Now (TTM)

Market cap
₩125B
Enterprise value
₩291B
P/E
9.0×
P/B
0.8×
P/S
0.2×
EV/EBITDA
—
Dividend yield
2.4%

Over time (at each year end)

20252024202320222021
Price₩5,570₩3,945₩3,855₩3,130₩3,635
Market cap₩186B₩132B₩129B₩105B₩122B
P/E17.1×10.5×196.4×18.3×5.8×
P/B1.3×1.0×1.0×0.8×1.0×
P/S0.4×0.3×0.3×0.2×0.4×
EV/EBITDA—————
Dividend yield1.6%1.3%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Leeku Industrial9.0×0.8×0.2×—2.4%
POSCO Holdings16.6×0.4×0.3×7.8×3.5%
Korea Zinc18.9×1.6×0.9×—2.2%
Hyundai Steel—0.2×0.2×—1.9%
Poongsan8.3×0.7×0.3×6.0×2.8%
SeAH Besteel Holdings12.6×0.6×0.3×9.6×3.8%
Sama Aluminium—4.3×3.2×—0.0%
Similar companies (median)14.6×0.6×0.3×7.8×2.5%

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

Also known as: Leeku Industrial / 이구산업 / 025820 / KRX:025820

Source: KRX statistical information