KOSDAQ · 111710 · Hotels & Leisure · ₩111710

Namhwa Industrial남화산업

111710 · KOSDAQ · ₩111710 · 남화산업

₩2,880▼ ₩35 (1.20%)End-of-day · Oct 29, 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

₩5,483

vs the current price (₩2,880)

Enterprise value: ₩67B
Equity value: ₩113B
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 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 ₩2,880, the model needs an operating margin of 9.2% every year (it uses 41.1%).
Margins ranged from 24.4% to 58.2% 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.
67% 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.
The group includes a financial business (an insurer, bank or broker), whose investments and minority shareholders are left out here. A sum-of-the-parts view usually fits groups like this better.
Today's P/E is 9.3× against a typical 9.3× 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: ₩4,505; +56.4%
Base: ₩5,483; +90.4%
Bull: ₩7,060; +145.1%

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 (41.1%).

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 (-18% 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 (-18% 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 (-18% 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 (-18% 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 (-18% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin41.1%
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 & amortisation5.6%
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 spending7%
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 capital13.4%
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

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 0.14, 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): ₩16B
Net debt (borrowings and leases − cash and deposits): −₩46B
Shares: 20,588,000
Share price: ₩2,880
Market cap: ₩59B

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	₩25B	₩21B	₩17B	₩14B	₩13B	₩13B	₩13B	₩13B
Growth	−18.9%	−16.1%	−19.0%	−10.0%	−6.7%	−3.5%	−0.2%	3.0%
EBIT	₩12B	₩8B	₩4.1B	₩5.9B	₩5.5B	₩5.3B	₩5.3B	₩5.4B
EBIT margin	47.8%	38.7%	24.4%	41.1%	41.1%	41.1%	41.1%	41.1%
After-tax EBIT	₩8.6B	₩5.8B	₩3B	₩4.2B	₩4B	₩3.8B	₩3.8B	₩3.9B
+ Depreciation	—	—	—	₩797M	₩744M	₩718M	₩716M	₩738M
− Capital spending	₩4.3B	₩728M	₩11M	₩997M	₩930M	₩897M	₩895M	₩922M
− Working capital	−₩46B	−₩343M	₩4.1B	−₩212M	−₩128M	−₩62M	−₩3.4M	₩51M
Free cash flow	—	—	—	₩4.3B	₩3.9B	₩3.7B	₩3.6B	₩3.7B
Discount factor	—	—	—	0.932	0.868	0.809	0.754	0.703
Present value	—	—	—	₩4B	₩3.4B	₩3B	₩2.7B	₩2.6B

Terminal value ₩73B, worth ₩52B today: 77% 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 ₩9,142 a share)Now 0.32×	₩4,1540.45×	₩5,7700.63×	₩10,0771.10×
Price / earnings (last 12 months: ₩310 a share)Now 9.30×	₩2,0456.60×	₩2,8809.30×	₩4,06913.1×
P/E on run-rate earnings (Q2 2026 × 4: ₩571 a share)Now 5.04×	₩3,7706.60×	₩5,3119.30×	₩7,50413.1×

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%	₩5,610	₩5,889	₩6,232	₩6,666	₩7,231
6.8%	₩5,319	₩5,546	₩5,819	₩6,155	₩6,580
7.3%	₩5,075	₩5,262	₩5,483	₩5,751	₩6,080
7.8%	₩4,867	₩5,023	₩5,205	₩5,422	₩5,684
8.3%	₩4,687	₩4,819	₩4,971	₩5,150	₩5,362

Now (TTM)

Market cap: ₩59B
Enterprise value: ₩14B
P/E: 9.3×
P/B: 0.3×
P/S: 3.7×
EV/EBITDA: —
Dividend yield: 0.0%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩4,430	₩5,130	₩6,410	₩8,300	₩8,300
Market cap	₩91B	₩106B	₩132B	₩171B	₩171B
P/E	13.7×	9.7×	7.5×	8.3×	12.4×
P/B	0.5×	0.6×	0.7×	1.0×	1.1×
P/S	5.4×	5.1×	5.3×	5.6×	6.6×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.0%	0.0%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Namhwa Industrial	9.3×	0.3×	3.7×	—	0.0%
Kangwon Land	8.8×	0.7×	2.0×	8.9×	0.0%
Paradise	11.8×	0.5×	0.7×	—	1.6%
Seobu T&D	7.4×	0.7×	2.4×	10.9×	0.9%
Grand Korea Leisure	10.5×	1.1×	1.1×	4.6×	5.2%
Ananti	—	0.6×	1.6×	—	0.0%
Mona Yongpyong	—	0.2×	0.5×	—	0.0%
Similar companies (median)	9.7×	0.6×	1.4×	8.9×	0.4%

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

Also known as: Namhwa Industrial / 남화산업 / 111710 / KRX:111710

Source: KRX statistical information