Ask Warren

LF

093050 · KOSPI · ₩093050 · LF

₩21,650▲ ₩550 (2.61%)End-of-day · Oct 27, 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

₩47,429

vs the current price (₩21,650)

Enterprise value
₩1.9T
Equity value
₩1.4T
WACC
5.9%

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 119% 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 ₩21,650, the model needs an operating margin of 6.2% every year (it uses 8.4%).
  • Or revenue growth −12.7 points a year higher than assumed in each of the 5 years.
  • 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 5.6× against a typical 4.7× 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
₩9,310
−57.0%
Base
₩47,429
+119.1%
Bull
₩125,068
+477.7%

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 (8.4%).

Revenue growth

  • -1.5%

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

    Default: the last 3 years' revenue growth (-1.5% a year, annual reports), fading to 3% by year 5.

  • -0.4%

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

    Default: the last 3 years' revenue growth (-1.5% a year, annual reports), fading to 3% by year 5.

  • 0.8%

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

    Default: the last 3 years' revenue growth (-1.5% 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 (-1.5% 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 (-1.5% a year, annual reports), fading to 3% by year 5.

Business

  • 8.4%

    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.

  • 3.3%

    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).

  • 10.5%

    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).

  • 26.6%

    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.

  • 0.6

    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 0.15, 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)
₩1.9T
Net debt (borrowings and leases − cash and deposits)
₩519B
+ Stakes and investments
₩103B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩141B
Shares
29,240,000
Share price
₩21,650
Market cap
₩633B

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₩1.9T₩2T₩1.9T₩1.9T₩1.9T₩1.9T₩1.9T₩2T
Growth−3.4%2.9%−3.8%−1.5%−0.4%0.8%1.9%3.0%
EBIT₩57B₩126B₩168B₩159B₩159B₩160B₩163B₩168B
EBIT margin3.0%6.4%8.9%8.4%8.4%8.4%8.4%8.4%
After-tax EBIT₩42B₩91B₩122B₩115B₩115B₩116B₩118B₩122B
+ Depreciation₩62B₩64B₩64B₩63B₩62B₩63B₩64B₩66B
− Capital spending₩228B₩172B₩203B₩199B₩198B₩200B₩204B₩210B
− Working capital−₩159B₩32B−₩147B−₩7.7B−₩2B₩4B₩9.6B₩15B
Free cash flow₩34B−₩49B₩130B−₩13B−₩19B−₩25B−₩31B−₩38B
Discount factor———0.9440.8920.8420.7950.751
Present value———−₩13B−₩17B−₩21B−₩25B−₩28B

Terminal value ₩2.7T, worth ₩2T today: 105% 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 ₩57,468 a share)Now 0.38×₩15,6830.27×₩19,0800.33×₩23,2500.40×
Price / earnings (last 12 months: ₩3,880 a share)Now 5.58×₩13,0223.36×₩18,4144.75×₩25,2206.50×
P/E on run-rate earnings (Q2 2026 × 4: ₩4,370 a share)Now 4.95×₩14,6683.36×₩20,7414.75×₩28,4076.50×

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%
4.9%₩53,695₩63,223₩76,009₩94,084₩121,619
5.4%₩43,485₩50,512₩59,584₩71,756₩88,963
5.9%₩35,408₩40,744₩47,429₩56,058₩67,636
6.4%₩28,871₩33,016₩38,088₩44,441₩52,642
6.9%₩23,480₩26,761₩30,698₩35,514₩41,547

Now (TTM)

Market cap
₩633B
Enterprise value
₩1.2T
P/E
5.6×
P/B
0.4×
P/S
0.3×
EV/EBITDA
4.6×
Dividend yield
3.2%

Over time (at each year end)

20252024202320222021
Price₩18,240₩15,500₩13,270₩15,900₩17,250
Market cap₩533B₩453B₩388B₩465B₩504B
P/E5.4×6.0×4.7×3.1×4.3×
P/B0.3×0.3×0.3×0.3×0.4×
P/S0.3×0.2×0.2×0.2×0.3×
EV/EBITDA4.5×4.4×5.3×2.8×3.5×
Dividend yield3.8%4.5%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
LF5.6×0.4×0.3×4.6×3.2%
F&F4.5×1.1×1.2×—4.4%
Chokwang Leather44.5×0.7×4.9×59.3×0.0%
Handsome6.9×0.3×0.3×—0.0%
Hansae9.4×0.4×0.2×—0.0%
JS4.0×0.6×0.2×—5.3%
Ilshin Spinning5.1×0.3×0.4×—3.8%
Similar companies (median)6.0×0.5×0.4×59.3×1.9%

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

Also known as: LF / 093050 / KRX:093050

Source: KRX statistical information