Ask Warren

KEPCO Engineering & Construction

052690 · KOSPI · ₩052690 · 한전기술

₩96,200▲ ₩4,600 (5.02%)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

₩9,680

vs the current price (₩96,200)

Enterprise value
₩345B
Equity value
₩370B
WACC
8.2%

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 is 90% 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 ₩96,200, the model needs an operating margin of 58.4% every year (it uses 6.2%).
  • Today's P/E is 102.2× against a typical 67.7× 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
₩5,696
−94.1%
Base
₩9,680
−89.9%
Bull
₩16,500
−82.8%

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 (6.2%).

Revenue growth

  • 0.9%

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

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 1.4%

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

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 1.9%

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

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 2.5%

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

    Default: the last 3 years' revenue growth (0.9% 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 (0.9% a year, annual reports), fading to 3% by year 5.

Business

  • 6.2%

    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.

  • 2.9%

    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).

  • 1.4%

    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).

  • 36.4%

    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.

  • 0.75

    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 0.63, 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)
₩537B
Net debt (borrowings and leases − cash and deposits)
−₩21B
+ Stakes and investments
₩4.4B
Associates, long-term financial assets and deposits (book value)
Shares
38,220,000
Share price
₩96,200
Market cap
₩3.7T

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₩545B₩553B₩519B₩542B₩549B₩560B₩574B₩591B
Growth7.9%1.5%−6.3%0.9%1.4%1.9%2.5%3.0%
EBIT₩29B₩55B₩35B₩34B₩34B₩35B₩36B₩37B
EBIT margin5.2%9.9%6.8%6.2%6.2%6.2%6.2%6.2%
After-tax EBIT₩21B₩40B₩26B₩24B₩25B₩25B₩26B₩27B
+ Depreciation₩16B₩16B₩16B₩16B₩16B₩16B₩17B₩17B
− Capital spending₩7.2B₩7.1B₩7.7B₩7.6B₩7.7B₩7.8B₩8B₩8.3B
− Working capital₩63B₩18B₩98B₩1.8B₩2.8B₩3.8B₩5.1B₩6.3B
Free cash flow−₩34B₩30B−₩64B₩31B₩30B₩30B₩29B₩29B
Discount factor———0.9240.8540.7890.7290.673
Present value———₩28B₩26B₩23B₩21B₩20B

Terminal value ₩336B, worth ₩226B today: 66% 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 ₩15,508 a share)Now 6.20×₩63,1844.07×₩77,7175.01×₩116,4007.51×
Price / earnings (last 12 months: ₩941 a share)Now 102.2×₩25,59927.2×₩63,74667.7×₩84,35789.6×
P/E on run-rate earnings (Q2 2026 × 4: ₩285 a share)Now 337.1×₩7,76327.2×₩19,33367.7×₩25,58389.6×

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%
7.2%₩10,626₩10,903₩11,229₩11,620₩12,099
7.7%₩9,936₩10,146₩10,388₩10,674₩11,015
8.2%₩9,341₩9,499₩9,680₩9,890₩10,135
8.7%₩8,821₩8,941₩9,076₩9,229₩9,407
9.2%₩8,363₩8,453₩8,553₩8,665₩8,793

Now (TTM)

Market cap
₩3.7T
Enterprise value
₩3.7T
P/E
102.2×
P/B
6.2×
P/S
6.9×
EV/EBITDA
50.8×
Dividend yield
1.4%

Over time (at each year end)

20252024202320222021
Price₩90,000₩53,000₩62,100₩54,600₩85,000
Market cap₩3.4T₩2T₩2.4T₩2.1T₩3.2T
P/E40.3×34.6×72.7×116.2×197.5×
P/B5.5×3.5×4.3×3.8×6.3×
P/S6.6×3.7×4.4×4.1×7.5×
EV/EBITDA66.5×28.1×52.6×69.8×121.9×
Dividend yield1.5%1.9%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
KEPCO Engineering & Construction102.2×6.2×6.9×50.8×1.4%
Samsung E&A19.0×2.5×1.3×—1.2%
HD Hyundai Marine Solution23.4×8.8×3.6×—2.3%
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%
Korea Electronic Power Industrial Development69.7×3.1×0.8×—0.0%
Similar companies (median)23.4×2.8×2.2×3.8×0.0%

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

Also known as: KEPCO Engineering & Construction / 한전기술 / 052690 / KRX:052690

Source: KRX statistical information