Ask Warren

HCT

072990 · KOSDAQ · ₩072990 · 에이치시티

₩2,945▼ ₩150 (4.85%)End-of-day · Oct 29, 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

₩10,286

vs the current price (₩2,945)

Enterprise value
₩197B
Equity value
₩149B
WACC
5.6%

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 249% 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 ₩2,945, the model needs an operating margin of 6.5% every year (it uses 10.0%).
  • Or revenue growth −17.4 points a year higher than assumed in each of the 5 years.
  • Margins ranged from 7.7% to 17.5% 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.
  • 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 49.3× against a typical 9.8× 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
₩2,880
−2.2%
Base
₩10,286
+249.3%
Bull
₩25,557
+767.8%

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 (10.0%).

Revenue growth

  • 17%

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

    Default: the last 3 years' revenue growth (17% a year, annual reports), fading to 3% by year 5.

  • 13.5%

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

    Default: the last 3 years' revenue growth (17% a year, annual reports), fading to 3% by year 5.

  • 10%

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

    Default: the last 3 years' revenue growth (17% a year, annual reports), fading to 3% by year 5.

  • 6.5%

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

    Default: the last 3 years' revenue growth (17% 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 (17% a year, annual reports), fading to 3% by year 5.

Business

  • 10%

    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.

  • 18.8%

    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).

  • 23.5%

    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).

  • 9.2%

    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.

  • 4.01%

    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.

  • 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 0.08, 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.

  • 5.51%

    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)
₩103B
Net debt (borrowings and leases − cash and deposits)
₩47B
− Minority interests
₩1.1B
Shares
14,498,206
Share price
₩2,945
Market cap
₩43B

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₩74B₩94B₩108B₩121B₩137B₩150B₩160B₩165B
Growth10.4%27.4%13.9%17.0%13.5%10.0%6.5%3.0%
EBIT₩8B₩11B₩8.3B₩12B₩14B₩15B₩16B₩17B
EBIT margin10.8%11.9%7.7%10.0%10.0%10.0%10.0%10.0%
After-tax EBIT₩5.8B₩8.1B₩6B₩8.7B₩9.9B₩11B₩12B₩12B
+ Depreciation———₩23B₩26B₩28B₩30B₩31B
− Capital spending₩17B₩17B₩32B₩28B₩32B₩35B₩38B₩39B
− Working capital−₩4.9B₩2.7B−₩14B₩1.6B₩1.5B₩1.3B₩900M₩442M
Free cash flow———₩1.5B₩2B₩2.6B₩3.2B₩3.8B
Discount factor———0.9470.8970.8500.8050.763
Present value———₩1.4B₩1.8B₩2.2B₩2.6B₩2.9B

Terminal value ₩245B, worth ₩187B today: 95% 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 ₩6,630 a share)Now 0.44×₩4,2970.65×₩5,5390.84×₩9,5621.44×
Price / earnings (last 12 months: ₩60 a share)Now 49.3×₩4267.13×₩5899.85×₩81813.7×

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%
4.6%₩11,042₩13,198₩16,193₩20,633₩27,902
5.1%₩9,077₩10,659₩12,755₩15,665₩19,981
5.6%₩7,546₩8,748₩10,286₩12,323₩15,152
6.1%₩6,322₩7,261₩8,429₩9,923₩11,903
6.6%₩5,321₩6,070₩6,982₩8,118₩9,570

Now (TTM)

Market cap
₩43B
Enterprise value
₩90B
P/E
49.3×
P/B
0.4×
P/S
0.4×
EV/EBITDA
—
Dividend yield
1.5%

Over time (at each year end)

20252024202320222021
Price₩5,640₩4,188₩4,352₩4,086₩8,336
Market cap₩82B₩61B₩63B₩59B₩121B
P/E13.0×8.7×8.6×10.2×11.6×
P/B0.9×0.7×0.8×0.8×1.7×
P/S0.8×0.6×0.9×0.9×1.9×
EV/EBITDA—————
Dividend yield0.8%1.1%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
HCT49.3×0.4×0.4×—1.5%
Samsung E&A18.6×2.5×1.3×—1.3%
HD Hyundai Marine Solution22.1×8.3×3.4×—2.4%
KEPCO Engineering & Construction94.3×5.7×6.3×46.9×1.5%
POSCO DX90.9×5.2×3.0×—0.0%
Hanyang ENG7.5×0.7×0.4×3.7×0.0%
SemiFive—2.0×3.8×—0.0%
Similar companies (median)22.1×3.8×3.2×25.3×0.6%

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

Also known as: HCT / 에이치시티 / 072990 / KRX:072990

Source: KRX statistical information