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Namhae Chemical

025860 · KOSPI · ₩025860 · 남해화학

₩5,460▼ ₩60 (1.09%)End-of-day · Oct 29, 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

₩1,389

vs the current price (₩5,460)

Enterprise value
₩266B
Equity value
₩69B
WACC
5.9%

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 75% 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 ₩5,460, the model needs an operating margin of 2.7% every year (it uses 1.9%).
  • Or revenue growth +56.7 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.
  • Today's P/E is 23.1× against a typical 12.3× 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
—
Base
₩1,389
−74.6%
Bull
₩19,370
+254.8%

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 (1.9%).

Revenue growth

  • -9.6%

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

    Default: the last 3 years' revenue growth (-9.6% a year, annual reports), fading to 3% by year 5.

  • -6.4%

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

    Default: the last 3 years' revenue growth (-9.6% a year, annual reports), fading to 3% by year 5.

  • -3.3%

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

    Default: the last 3 years' revenue growth (-9.6% a year, annual reports), fading to 3% by year 5.

  • -0.1%

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

    Default: the last 3 years' revenue growth (-9.6% 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 (-9.6% a year, annual reports), fading to 3% by year 5.

Business

  • 1.9%

    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.

  • 1.5%

    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).

  • 3.3%

    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).

  • 18.1%

    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.

  • 4.08%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-29.

  • 0.6

    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 -0.1, 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.

  • 5.58%

    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)
₩1.7T
Net debt (borrowings and leases − cash and deposits)
₩208B
+ Stakes and investments
₩12B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩2.1B
Shares
49,678,843
Share price
₩5,460
Market cap
₩271B

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₩1.6T₩1.5T₩1.6T₩1.6T₩1.5T₩1.4T₩1.4T₩1.5T
Growth−26.8%−4.3%5.6%−9.6%−6.4%−3.3%−0.1%3.0%
EBIT₩11B₩36B₩43B₩30B₩28B₩27B₩27B₩28B
EBIT margin0.7%2.4%2.7%1.9%1.9%1.9%1.9%1.9%
After-tax EBIT₩8B₩26B₩31B₩22B₩20B₩20B₩20B₩20B
+ Depreciation₩20B₩24B₩27B₩24B₩22B₩21B₩21B₩22B
− Capital spending₩78B₩49B₩27B₩52B₩49B₩47B₩47B₩48B
− Working capital−₩74B−₩64B−₩8.8B−₩30B−₩18B−₩8.8B−₩257M₩7.7B
Free cash flow₩23B₩65B₩41B₩24B₩12B₩2.8B−₩5.7B−₩14B
Discount factor———0.9440.8910.8410.7940.750
Present value———₩22B₩11B₩2.3B−₩4.6B−₩10B

Terminal value ₩328B, worth ₩246B today: 92% 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 ₩11,134 a share)Now 0.49×₩6,4730.58×₩7,8580.71×₩11,8191.06×
Price / earnings (last 12 months: ₩237 a share)Now 23.1×₩1,3675.78×₩2,90212.3×₩6,43227.2×
P/E on run-rate earnings (Q2 2026 × 4: ₩719 a share)Now 7.59×₩4,1525.78×₩8,81712.3×₩19,54127.2×

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%
4.9%₩2,650₩2,972₩3,395₩3,984₩4,867
5.4%₩1,821₩2,008₩2,244₩2,552₩2,979
5.9%₩1,164₩1,266₩1,389₩1,541₩1,739
6.4%₩631₩677₩730₩791₩863
6.9%₩190₩200₩207₩212₩213

Now (TTM)

Market cap
₩271B
Enterprise value
₩479B
P/E
23.1×
P/B
0.5×
P/S
0.2×
EV/EBITDA
9.7×
Dividend yield
1.6%

Over time (at each year end)

20252024202320222021
Price₩6,660₩6,130₩7,400₩8,510₩10,500
Market cap₩331B₩305B₩368B₩423B₩522B
P/E11.3×12.1×30.7×8.9×24.1×
P/B0.6×0.6×0.7×0.8×1.1×
P/S0.2×0.2×0.2×0.2×0.4×
EV/EBITDA5.4×6.1×16.2×7.3×14.5×
Dividend yield1.4%1.3%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Namhae Chemical23.1×0.5×0.2×9.7×1.6%
LG Chem—0.5×0.3×—0.9%
Hanwha Solutions—0.5×0.3×—0.0%
Hanwha6.1×0.4×0.1×—1.4%
SKC—1.8×1.7×—0.0%
KCC0.9×0.3×0.5×9.0×0.0%
Kumho Petro Chemical5.2×0.4×0.4×—1.6%
Similar companies (median)5.2×0.4×0.4×9.0×0.4%

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

Also known as: Namhae Chemical / 남해화학 / 025860 / KRX:025860

Source: KRX statistical information