KOSPI · 051630 · Rubber & plastics · ₩051630

Chinyang Chemical진양화학

051630 · KOSPI · ₩051630 · 진양화학

₩3,185▲ ₩735 (30.00%)End-of-day · Oct 30, 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

With these assumptions the model gives no positive value.

Enterprise value: −₩13B
Equity value: −₩11B
WACC: 7.3%

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

To match today's price of ₩3,185, the model needs an operating margin of 32.1% every year (it uses −6.6%).
Margins ranged from −16.9% to −3.6% 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

Cycle options

Margin path

Every year uses the cycle-average margin (−6.6%).

Revenue growth

Revenue growth, year 1-10%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-13.9% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 2-6.7%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-13.9% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 3-3.5%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-13.9% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 4-0.2%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (-13.9% 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 (-13.9% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin-6.6%
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.
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 & amortisation0.3%
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 spending0.4%
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 capital-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

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 rate4.01%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-30.
Beta0.6
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.
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)5.51%
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): ₩19B
Net debt (borrowings and leases − cash and deposits): −₩2.7B
Shares: 21,200,000
Share price: ₩3,185
Market cap: ₩68B

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	₩28B	₩25B	₩19B	₩17B	₩16B	₩15B	₩15B	₩16B
Growth	−2.8%	−13.3%	−24.3%	−10.0%	−6.7%	−3.5%	−0.2%	3.0%
EBIT	−₩2.1B	−₩4.1B	−₩743M	−₩1.1B	−₩1.1B	−₩1B	−₩1B	−₩1B
EBIT margin	−7.6%	−16.9%	−4.0%	−6.6%	−6.6%	−6.6%	−6.6%	−6.6%
After-tax EBIT	−₩1.6B	−₩3B	−₩539M	−₩818M	−₩763M	−₩736M	−₩735M	−₩757M
+ Depreciation	—	—	—	₩51M	₩48M	₩46M	₩46M	₩47M
− Capital spending	₩0	₩289M	₩5.3M	₩68M	₩64M	₩62M	₩61M	₩63M
− Working capital	−₩4.6B	−₩1.1B	−₩34B	₩190M	₩114M	₩56M	₩3.1M	−₩46M
Free cash flow	—	—	—	−₩1B	−₩893M	−₩807M	−₩753M	−₩726M
Discount factor	—	—	—	0.932	0.868	0.809	0.754	0.703
Present value	—	—	—	−₩955M	−₩776M	−₩653M	−₩568M	−₩511M

Terminal value −₩14B, worth −₩9.9B today: 74% 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 ₩1,860 a share)Now 1.71×	₩2,0911.12×	₩3,4131.83×	₩6,0673.26×

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%
6.3%	—	—	—	—	—
6.8%	—	—	—	—	—
7.3%	—	—	—	—	—
7.8%	—	—	—	—	—
8.3%	—	—	—	—	—

Now (TTM)

Market cap: ₩68B
Enterprise value: ₩65B
P/E: 144.2×
P/B: 1.7×
P/S: 3.6×
EV/EBITDA: —
Dividend yield: 0.0%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩2,700	₩3,225	₩2,811	₩3,271	₩4,619
Market cap	₩57B	₩68B	₩60B	₩69B	₩98B
P/E	63.8×	—	—	—	—
P/B	1.4×	1.8×	1.8×	2.0×	3.9×
P/S	3.1×	2.8×	2.1×	2.4×	2.8×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.0%	—	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Chinyang Chemical	144.2×	1.7×	3.6×	—	0.0%
Hankook Tire & Technology	5.8×	0.5×	0.3×	—	4.0%
Kumho Tire	3.1×	0.6×	0.3×	—	0.0%
Pum-Tech Korea	19.5×	2.5×	2.1×	—	0.7%
Dongwon Systems	9.7×	0.7×	0.4×	5.7×	2.8%
Nexen Tire	3.7×	0.3×	0.2×	—	3.4%
PI Advanced Materials	12.0×	1.2×	1.6×	4.8×	2.4%
Similar companies (median)	7.7×	0.6×	0.4×	5.3×	2.6%

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

Also known as: Chinyang Chemical / 진양화학 / 051630 / KRX:051630

Source: KRX statistical information