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Hanchang Industry

079170 · KOSDAQ · ₩079170 · 한창산업

₩5,260▼ ₩240 (4.36%)End-of-day · Oct 28, 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

₩11,058

vs the current price (₩5,260)

Enterprise value
₩57B
Equity value
₩58B
WACC
7.4%

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 110% 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 ₩5,260, the model needs an operating margin of 3.2% every year (it uses 5.7%).
  • 37% 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.
  • Today's P/E is 7.6× against a typical 8.9× 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
₩5,713
+8.6%
Base
₩11,058
+110.2%
Bull
₩20,807
+295.6%

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 (5.7%).

Revenue growth

  • -0.2%

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

    Default: the last 3 years' revenue growth (-0.2% a year, annual reports), fading to 3% by year 5.

  • 0.6%

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

    Default: the last 3 years' revenue growth (-0.2% 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 (-0.2% a year, annual reports), fading to 3% by year 5.

  • 2.2%

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

    Default: the last 3 years' revenue growth (-0.2% 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 (-0.2% a year, annual reports), fading to 3% by year 5.

Business

  • 5.7%

    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.

  • 3.4%

    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).

  • 2.5%

    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).

  • 40%

    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.

  • 0.6

    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 0.07, 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)
₩93B
Net debt (borrowings and leases − cash and deposits)
−₩876M
+ Stakes and investments
₩47M
Associates, long-term financial assets and deposits (book value)
Shares
5,200,000
Share price
₩5,260
Market cap
₩27B

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₩67B₩95B₩99B₩92B₩93B₩94B₩96B₩99B
Growth−32.6%41.4%4.1%−0.2%0.6%1.4%2.2%3.0%
EBIT₩1.6B₩8.8B₩7.9B₩5.3B₩5.3B₩5.4B₩5.5B₩5.7B
EBIT margin2.3%9.3%8.0%5.7%5.7%5.7%5.7%5.7%
After-tax EBIT₩1.1B₩6.4B₩5.7B₩3.8B₩3.8B₩3.9B₩4B₩4.1B
+ Depreciation₩2.7B₩2.9B₩2.9B₩3.1B₩3.2B₩3.2B₩3.3B₩3.4B
− Capital spending₩3.8B₩1.3B₩521M₩2.3B₩2.3B₩2.4B₩2.4B₩2.5B
− Working capital−₩294M₩1.9B₩40M−₩74M₩222M₩521M₩830M₩1.2B
Free cash flow₩279M₩6.1B₩8.1B₩4.7B₩4.5B₩4.2B₩4B₩3.8B
Discount factor———0.9310.8670.8070.7510.700
Present value———₩4.4B₩3.9B₩3.4B₩3B₩2.7B

Terminal value ₩56B, worth ₩39B today: 69% 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 ₩14,470 a share)Now 0.36×₩6,6310.46×₩9,2950.64×₩13,6140.94×
Price / earnings (last 12 months: ₩690 a share)Now 7.62×₩3,4965.06×₩6,1298.88×₩14,28120.7×
P/E on run-rate earnings (Q2 2026 × 4: ₩711 a share)Now 7.39×₩3,6035.06×₩6,3168.88×₩14,71620.7×

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%
6.4%₩12,475₩12,847₩13,298₩13,858₩14,573
6.9%₩11,492₩11,755₩12,065₩12,440₩12,904
7.4%₩10,661₩10,845₩11,058₩11,309₩11,610
7.9%₩9,950₩10,076₩10,219₩10,384₩10,577
8.4%₩9,334₩9,417₩9,510₩9,614₩9,732

Now (TTM)

Market cap
₩27B
Enterprise value
₩26B
P/E
7.6×
P/B
0.4×
P/S
0.3×
EV/EBITDA
4.4×
Dividend yield
4.0%

Over time (at each year end)

20252024202320222021
Price₩6,500₩6,710₩8,260₩8,780₩8,300
Market cap₩34B₩35B₩43B₩46B₩43B
P/E5.1×5.1×27.6×7.5×10.9×
P/B0.5×0.5×0.7×0.7×0.8×
P/S0.3×0.4×0.6×0.5×0.6×
EV/EBITDA2.9×2.5×8.8×4.3×8.1×
Dividend yield3.2%3.3%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Hanchang Industry7.6×0.4×0.3×4.4×4.0%
POSCO Holdings16.6×0.4×0.3×7.8×3.5%
Korea Zinc18.9×1.6×0.9×—2.2%
Hyundai Steel—0.2×0.2×—1.9%
Poongsan8.3×0.7×0.3×6.0×2.8%
SeAH Besteel Holdings12.6×0.6×0.3×9.6×3.8%
Sama Aluminium—4.3×3.2×—0.0%
Similar companies (median)14.6×0.6×0.3×7.8×2.5%

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

Also known as: Hanchang Industry / 한창산업 / 079170 / KRX:079170

Source: KRX statistical information