KOSPI · 298040 · Electrical equipment · ₩298040

Hyosung Heavy Industries효성중공업

298040 · KOSPI · ₩298040 · 효성중공업

₩1,911,000▼ ₩87,000 (4.35%)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

₩626,552

vs the current price (₩1,911,000)

Enterprise value: ₩6.3T
Equity value: ₩5.8T
WACC: 9.7%

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 67% 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 ₩1,911,000, the model needs an operating margin of 20.7% every year (it uses 7.5%).
Or revenue growth +29.8 points a year higher than assumed in each of the 5 years.
Analysts' forecasts for 2026: revenue ₩7.2T, operating profit ₩1.1T (14.8% margin) (1 broker). The model starts from the last 12 months reported.
Analysts' forecasts for 2027: revenue ₩9.7T, operating profit ₩1.8T (18.2% margin) (1 broker). The model starts from the last 12 months reported.
Margins ranged from 3.9% to 12.5% 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.
Today's P/E is 30.5× against a typical 25.2× 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: ₩327,977; −82.8%
Base: ₩626,552; −67.2%
Bull: ₩1,082,822; −43.3%

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 (7.5%).

Revenue growth

Revenue growth, year 119.4%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (19.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 215.3%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (19.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 311.2%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (19.4% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 47.1%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (19.4% 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 (19.4% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin7.5%
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 & amortisation1.6%
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 spending1.9%
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 capital4.2%
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

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.
Beta1.07
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 1.1, 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): ₩6.4T
Net debt (borrowings and leases − cash and deposits): ₩462B
+ Stakes and investments: ₩102B; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩141B
Shares: 9,324,548
Share price: ₩1,911,000
Market cap: ₩18T

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	₩4.3T	₩4.9T	₩6T	₩7.7T	₩8.8T	₩9.8T	₩11T	₩11T
Growth	22.5%	13.8%	21.9%	19.4%	15.3%	11.2%	7.1%	3.0%
EBIT	₩258B	₩362B	₩747B	₩574B	₩662B	₩736B	₩788B	₩812B
EBIT margin	6.0%	7.4%	12.5%	7.5%	7.5%	7.5%	7.5%	7.5%
After-tax EBIT	₩187B	₩263B	₩542B	₩416B	₩480B	₩534B	₩572B	₩589B
+ Depreciation	—	—	—	₩123B	₩141B	₩157B	₩168B	₩173B
− Capital spending	₩35B	₩99B	₩179B	₩145B	₩168B	₩187B	₩200B	₩206B
− Working capital	−₩289B	₩26B	₩107B	₩52B	₩49B	₩42B	₩29B	₩13B
Free cash flow	—	—	—	₩341B	₩404B	₩463B	₩511B	₩543B
Discount factor	—	—	—	0.911	0.830	0.757	0.689	0.628
Present value	—	—	—	₩311B	₩336B	₩350B	₩352B	₩341B

Terminal value ₩7.4T, worth ₩4.7T today: 73% 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 ₩277,474 a share)Now 6.89×	₩167,9700.61×	₩663,6022.39×	₩2,773,0009.99×
Price / earnings (last 12 months: ₩62,744 a share)Now 30.5×	₩885,47214.1×	₩1,578,89025.2×	₩3,473,04955.4×
P/E on run-rate earnings (Q2 2026 × 4: ₩74,036 a share)Now 25.8×	₩1,044,82914.1×	₩1,863,04125.2×	₩4,098,09055.4×

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%
8.7%	₩654,125	₩690,633	₩732,531	₩781,113	₩838,125
9.2%	₩608,790	₩640,171	₩675,862	₩716,822	₩764,316
9.7%	₩568,683	₩595,871	₩626,552	₩661,446	₩701,492
10.2%	₩532,952	₩556,676	₩583,260	₩613,257	₩647,375
10.7%	₩500,924	₩521,756	₩544,954	₩570,948	₩600,279

Now (TTM)

Market cap: ₩18T
Enterprise value: ₩18T
P/E: 30.5×
P/B: 6.9×
P/S: 2.8×
EV/EBITDA: —
Dividend yield: 0.4%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩1,781,000	₩393,000	₩161,900	₩78,000	₩58,300
Market cap	₩17T	₩3.7T	₩1.5T	₩727B	₩544B
P/E	31.9×	16.5×	13.0×	25.0×	7.1×
P/B	7.1×	1.9×	1.4×	0.7×	0.6×
P/S	2.8×	0.7×	0.4×	0.2×	0.2×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.4%	1.3%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Hyosung Heavy Industries	30.5×	6.9×	2.8×	—	0.4%
LS Electric	61.1×	11.2×	4.2×	37.8×	0.0%
HD Hyundai Electric	18.7×	7.0×	3.7×	—	0.0%
Gaon Cable	110.9×	13.4×	2.5×	57.9×	0.0%
Sanil Electric	26.6×	7.2×	8.2×	—	0.8%
Taihan Cable & Solution	—	2.1×	1.0×	—	0.0%
Iljin Electric	19.0×	4.1×	1.2×	—	0.9%
Similar companies (median)	26.6×	7.1×	3.1×	47.8×	0.0%

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

Also known as: Hyosung Heavy Industries / 효성중공업 / 298040 / KRX:298040

Source: KRX statistical information