Ask Warren

SUNGDO Engineering & Construction

037350 · KOSDAQ · ₩037350 · 성도이엔지

₩6,680▲ ₩250 (3.89%)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

₩27,953

vs the current price (₩6,680)

Enterprise value
₩240B
Equity value
₩425B
WACC
8.3%

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 318% 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 ₩6,680, the model needs an operating margin of −0.6% every year (it uses 3.5%).
  • Margins ranged from −0.7% to 7.8% 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 5.1× against a typical 4.3× 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
₩16,391
+145.4%
Base
₩27,953
+318.5%
Bull
₩47,468
+610.6%

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 (3.5%).

Revenue growth

  • 1.7%

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

    Default: the last 3 years' revenue growth (1.7% a year, annual reports), fading to 3% by year 5.

  • 2.1%

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

    Default: the last 3 years' revenue growth (1.7% a year, annual reports), fading to 3% by year 5.

  • 2.4%

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

    Default: the last 3 years' revenue growth (1.7% a year, annual reports), fading to 3% by year 5.

  • 2.7%

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

    Default: the last 3 years' revenue growth (1.7% 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 (1.7% a year, annual reports), fading to 3% by year 5.

Business

  • 3.5%

    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.

  • 1.8%

    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).

  • 2.3%

    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).

  • 2.6%

    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.

  • 0.77

    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 0.66, 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)
₩661B
Net debt (borrowings and leases − cash and deposits)
−₩107B
+ Stakes and investments
₩79B
Associates, long-term financial assets and deposits (book value)
Shares
15,210,000
Share price
₩6,680
Market cap
₩102B

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₩679B₩1,000B₩743B₩672B₩686B₩703B₩722B₩744B
Growth−3.9%47.3%−25.6%1.7%2.1%2.4%2.7%3.0%
EBIT₩12B₩27B₩58B₩24B₩24B₩25B₩25B₩26B
EBIT margin1.8%2.7%7.8%3.5%3.5%3.5%3.5%3.5%
After-tax EBIT₩8.9B₩20B₩42B₩17B₩17B₩18B₩18B₩19B
+ Depreciation———₩12B₩12B₩13B₩13B₩13B
− Capital spending₩21B₩10B₩20B₩15B₩16B₩16B₩17B₩17B
− Working capital₩74B−₩222B₩1.7B₩292M₩367M₩428M₩493M₩563M
Free cash flow———₩13B₩14B₩14B₩14B₩15B
Discount factor———0.9230.8520.7860.7260.670
Present value———₩12B₩12B₩11B₩10B₩9.8B

Terminal value ₩276B, worth ₩185B today: 77% 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 ₩19,693 a share)Now 0.34×₩4,5530.23×₩5,0860.26×₩7,4700.38×
Price / earnings (last 12 months: ₩1,299 a share)Now 5.14×₩3,3302.56×₩5,6454.35×₩9,1157.02×
P/E on run-rate earnings (Q2 2026 × 4: ₩1,492 a share)Now 4.48×₩3,8242.56×₩6,4824.35×₩10,4667.02×

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%
7.3%₩28,645₩29,726₩31,008₩32,553₩34,454
7.8%₩27,394₩28,295₩29,349₩30,600₩32,108
8.3%₩26,314₩27,074₩27,953₩28,982₩30,203
8.8%₩25,373₩26,021₩26,762₩27,620₩28,624
9.3%₩24,546₩25,103₩25,735₩26,458₩27,296

Now (TTM)

Market cap
₩102B
Enterprise value
−₩5.9B
P/E
5.1×
P/B
0.3×
P/S
0.2×
EV/EBITDA
—
Dividend yield
3.7%

Over time (at each year end)

20252024202320222021
Price₩6,010₩4,900₩4,110₩4,460₩5,660
Market cap₩91B₩75B₩63B₩68B₩86B
P/E3.2×4.9×15.7×60.9×4.0×
P/B0.3×0.3×0.2×0.3×0.3×
P/S0.1×0.1×0.1×0.1×0.2×
EV/EBITDA—————
Dividend yield4.2%4.1%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
SUNGDO Engineering & Construction5.1×0.3×0.2×—3.7%
Samsung E&A19.0×2.5×1.3×—1.2%
HD Hyundai Marine Solution23.4×8.8×3.6×—2.3%
KEPCO Engineering & Construction102.2×6.2×6.9×50.8×1.4%
POSCO DX94.1×5.3×3.1×—0.0%
Hanyang ENG7.7×0.7×0.4×3.8×0.0%
SemiFive—2.2×4.0×—0.0%
Similar companies (median)23.4×3.9×3.3×27.3×0.6%

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

Also known as: SUNGDO Engineering & Construction / 성도이엔지 / 037350 / KRX:037350

Source: KRX statistical information