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Korea Arlico Pharm

260660 · KOSDAQ · ₩260660 · 알리코제약

₩1,950▼ ₩40 (2.01%)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

₩702

vs the current price (₩1,950)

Enterprise value
−₩2.3B
Equity value
₩11B
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 64% 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 ₩1,950, the model needs an operating margin of 1.3% every year (it uses 0.7%).
  • Or revenue growth +48.4 points a year higher than assumed in each of the 5 years.
  • Margins ranged from −2.7% to 5.9% 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.

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
—
Base
₩702
−64.0%
Bull
₩6,277
+221.9%

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

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Cycle options

Margin path

Every year uses the cycle-average margin (0.7%).

Revenue growth

  • 6.3%

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

    Default: the last 3 years' revenue growth (6.3% a year, annual reports), fading to 3% by year 5.

  • 5.4%

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

    Default: the last 3 years' revenue growth (6.3% a year, annual reports), fading to 3% by year 5.

  • 4.6%

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

    Default: the last 3 years' revenue growth (6.3% a year, annual reports), fading to 3% by year 5.

  • 3.8%

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

    Default: the last 3 years' revenue growth (6.3% 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 (6.3% a year, annual reports), fading to 3% by year 5.

Business

  • 0.7%

    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.

  • 4.7%

    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).

  • 5.8%

    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).

  • -1.8%

    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)
₩196B
Net debt (borrowings and leases − cash and deposits)
−₩11B
+ Stakes and investments
₩1.7B
Associates, long-term financial assets and deposits (book value)
Shares
15,327,021
Share price
₩1,950
Market cap
₩30B

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₩187B₩190B₩201B₩208B₩219B₩229B₩238B₩245B
Growth11.6%1.8%5.7%6.3%5.4%4.6%3.8%3.0%
EBIT₩3.1B−₩5.2B₩989M₩1.5B₩1.5B₩1.6B₩1.7B₩1.7B
EBIT margin1.6%−2.7%0.5%0.7%0.7%0.7%0.7%0.7%
After-tax EBIT₩2.2B−₩3.7B₩717M₩1.1B₩1.1B₩1.2B₩1.2B₩1.2B
+ Depreciation———₩9.8B₩10B₩11B₩11B₩12B
− Capital spending₩24B₩3.7B₩6B₩12B₩13B₩13B₩14B₩14B
− Working capital−₩12B−₩13B−₩2.3B−₩222M−₩202M−₩182M−₩157M−₩129M
Free cash flow———−₩1B−₩1.1B−₩1.2B−₩1.3B−₩1.3B
Discount factor———0.9310.8670.8070.7510.700
Present value———−₩941M−₩951M−₩950M−₩942M−₩926M

Terminal value ₩3.4B, worth ₩2.4B today: -102% 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 ₩4,950 a share)Now 0.39×₩3,1240.63×₩4,3450.88×₩6,6471.34×

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%₩660₩695₩738₩792₩863
6.9%₩652₩682₩718₩763₩819
7.4%₩645₩671₩702₩740₩787
7.9%₩640₩663₩690₩723₩762
8.4%₩637₩657₩681₩709₩742

Now (TTM)

Market cap
₩30B
Enterprise value
₩18B
P/E
—
P/B
0.4×
P/S
0.2×
EV/EBITDA
—
Dividend yield
3.8%

Over time (at each year end)

20252024202320222021
Price₩4,275₩3,455₩5,700₩6,550₩7,680
Market cap₩66B₩53B₩87B₩100B₩118B
P/E——28.5×12.5×23.9×
P/B0.8×0.7×1.0×1.1×1.5×
P/S0.3×0.3×0.5×0.6×0.8×
EV/EBITDA—————
Dividend yield1.8%2.2%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Korea Arlico Pharm—0.4×0.2×—3.8%
Samsung Biologics32.0×7.6×14.0×—0.0%
Celltrion27.9×2.5×9.0×—0.0%
Alteogen80.5×29.0×61.2×—0.1%
SK biopharmaceuticals14.7×5.8×6.8×—0.0%
Yuhan24.0×2.4×2.5×31.3×0.8%
HLB—15.7×55.6×—0.0%
Similar companies (median)27.9×6.7×11.5×31.3×0.0%

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

Also known as: Korea Arlico Pharm / 알리코제약 / 260660 / KRX:260660

Source: KRX statistical information