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Seoul Electronics & Telecom

027040 · KOSDAQ · ₩027040 · 서울전자통신

₩1,792▲ ₩73 (4.25%)End-of-day · Oct 27, 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

With these assumptions the model gives no positive value.

Enterprise value
−₩14B
Equity value
−₩15B
WACC
11.2%

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 gives no positive value at these assumptions. What we can see:

  • To match today's price of ₩1,792, the model needs an operating margin of 13.3% every year (it uses −7.9%).
  • Margins ranged from −14.9% to −0.2% 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.
  • 100% of the last 12 months' net profit came from outside operations (stakes in other companies, interest, one-offs). The model adds those stakes at book value but doesn't project that income.
  • 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
—
Bull
—

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 (−7.9%).

Revenue growth

  • -10%

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

    Default: the last 3 years' revenue growth (-13.3% a year, annual reports), fading to 3% by year 5.

  • -6.7%

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

    Default: the last 3 years' revenue growth (-13.3% a year, annual reports), fading to 3% by year 5.

  • -3.5%

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

    Default: the last 3 years' revenue growth (-13.3% a year, annual reports), fading to 3% by year 5.

  • -0.2%

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

    Default: the last 3 years' revenue growth (-13.3% 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 (-13.3% a year, annual reports), fading to 3% by year 5.

Business

  • -7.9%

    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.

  • 4.3%

    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).

  • 2.2%

    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).

  • -10%

    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.

  • 1.37

    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 1.55, 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)
₩30B
Net debt (borrowings and leases − cash and deposits)
₩1.4B
Shares
13,917,769
Share price
₩1,792
Market cap
₩25B

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₩35B₩36B₩34B₩27B₩26B₩25B₩25B₩25B
Growth−33.3%3.6%−5.8%−10.0%−6.7%−3.5%−0.2%3.0%
EBIT−₩3.8B−₩2.2B−₩1.6B−₩2.2B−₩2B−₩2B−₩1.9B−₩2B
EBIT margin−10.9%−6.2%−4.8%−7.9%−7.9%−7.9%−7.9%−7.9%
After-tax EBIT−₩2.7B−₩1.6B−₩1.2B−₩1.6B−₩1.5B−₩1.4B−₩1.4B−₩1.5B
+ Depreciation₩2B₩1.3B₩1.1B₩1.2B₩1.1B₩1.1B₩1.1B₩1.1B
− Capital spending₩1.1B₩621M₩591M₩604M₩563M₩544M₩542M₩559M
− Working capital−₩25B₩7.4B₩16B₩305M₩184M₩90M₩4.9M−₩74M
Free cash flow₩23B−₩8.4B−₩16B−₩1.3B−₩1.1B−₩986M−₩899M−₩847M
Discount factor———0.9000.8090.7280.6550.589
Present value———−₩1.2B−₩900M−₩718M−₩589M−₩499M

Terminal value −₩17B, worth −₩9.9B today: 72% 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 ₩915 a share)Now 1.96×₩4680.51×₩6150.67×₩1,9422.12×

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%
10.2%—————
10.7%—————
11.2%—————
11.7%—————
12.2%—————

Now (TTM)

Market cap
₩25B
Enterprise value
₩26B
P/E
17.6×
P/B
2.0×
P/S
0.8×
EV/EBITDA
—
Dividend yield
0.0%

Over time (at each year end)

20252024202320222021
Price₩955₩1,067₩1,999₩2,804₩3,581
Market cap₩13B₩15B₩28B₩39B₩50B
P/E————852.1×
P/B1.5×1.0×0.7×0.7×0.6×
P/S0.4×0.4×0.8×0.8×0.7×
EV/EBITDA————30.5×
Dividend yield0.0%————

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Seoul Electronics & Telecom17.6×2.0×0.8×—0.0%
LS Electric61.0×11.1×4.2×37.7×0.0%
Hyosung Heavy Industries30.5×6.9×2.8×—0.4%
HD Hyundai Electric19.1×7.2×3.7×—0.0%
Gaon Cable106.8×12.9×2.4×55.6×0.0%
Sanil Electric27.2×7.4×8.3×—0.8%
Taihan Cable & Solution—2.2×1.0×—0.0%
Similar companies (median)30.5×7.3×3.3×46.7×0.0%

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

Also known as: Seoul Electronics & Telecom / 서울전자통신 / 027040 / KRX:027040

Source: KRX statistical information