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Dongkuk Steel Mill

460860 · KOSPI · ₩460860 · 동국제강

₩9,160▼ ₩270 (2.86%)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

₩23,618

vs the current price (₩9,160)

Enterprise value
₩2.5T
Equity value
₩1.2T
WACC
4.9%

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 158% 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 ₩9,160, the model needs an operating margin of 3.4% every year (it uses 4.1%).
  • Or revenue growth −9.4 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 42.5× against a typical 13.1× 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
—
Base
₩23,618
+157.8%
Bull
₩140,121
+1,429.7%

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 (4.1%).

Revenue growth

  • 10.3%

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

    Default: the last 2 years' revenue growth (10.3% a year, annual reports), fading to 3% by year 5.

  • 8.5%

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

    Default: the last 2 years' revenue growth (10.3% a year, annual reports), fading to 3% by year 5.

  • 6.7%

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

    Default: the last 2 years' revenue growth (10.3% a year, annual reports), fading to 3% by year 5.

  • 4.8%

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

    Default: the last 2 years' revenue growth (10.3% 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 2 years' revenue growth (10.3% a year, annual reports), fading to 3% by year 5.

Business

  • 4.1%

    Operating profit as a share of revenue.

    Default: through-the-cycle average of the last 12 months and the last 3 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.

  • 7.4%

    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).

  • 9.3%

    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).

  • 16.3%

    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 0.31, 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)
₩3.4T
Net debt (borrowings and leases − cash and deposits)
₩1.3T
+ Stakes and investments
₩14B
Associates, long-term financial assets and deposits (book value)
Shares
49,608,017
Share price
₩9,160
Market cap
₩454B

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₩2.6T₩3.5T₩3.2T₩3.8T₩4.1T₩4.4T₩4.6T₩4.7T
Growth—34.0%−9.2%10.3%8.5%6.7%4.8%3.0%
EBIT₩235B₩102B₩59B₩155B₩169B₩180B₩189B₩194B
EBIT margin8.9%2.9%1.9%4.1%4.1%4.1%4.1%4.1%
After-tax EBIT₩171B₩74B₩43B₩113B₩122B₩130B₩137B₩141B
+ Depreciation———₩281B₩304B₩325B₩340B₩351B
− Capital spending₩68B₩99B₩722B₩353B₩383B₩408B₩428B₩441B
− Working capital—−₩34B₩163B₩58B₩53B₩45B₩34B₩22B
Free cash flow———−₩17B−₩8.4B₩2.1B₩15B₩28B
Discount factor———0.9530.9090.8660.8250.787
Present value———−₩16B−₩7.6B₩1.9B₩12B₩22B

Terminal value ₩3.2T, worth ₩2.5T today: 99% 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 ₩38,144 a share)Now 0.24×₩8,9880.24×₩10,2070.27×₩12,9180.34×
Price / earnings (last 12 months: ₩216 a share)Now 42.5×₩7393.43×₩2,81813.1×₩12,00455.7×
P/E on run-rate earnings (Q2 2026 × 4: ₩438 a share)Now 20.9×₩1,5023.43×₩5,73013.1×₩24,40955.7×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2023, 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%
3.9%₩30,049₩39,421₩53,663₩77,954₩128,839
4.4%₩20,593₩26,780₩35,507₩48,767₩71,381
4.9%₩13,580₩17,873₩23,618₩31,722₩44,034
5.4%₩8,179₩11,266₩15,241₩20,561₩28,063
5.9%₩3,896₩6,178₩9,028₩12,696₩17,604

Now (TTM)

Market cap
₩454B
Enterprise value
₩1.8T
P/E
42.5×
P/B
0.2×
P/S
0.1×
EV/EBITDA
—
Dividend yield
4.4%

Over time (at each year end)

202520242023
Price₩8,240₩8,000₩12,040
Market cap₩409B₩397B₩597B
P/E49.7×11.4×4.2×
P/B0.2×0.2×0.3×
P/S0.1×0.1×0.2×
EV/EBITDA———
Dividend yield4.9%7.5%—

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Dongkuk Steel Mill42.5×0.2×0.1×—4.4%
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: Dongkuk Steel Mill / 동국제강 / 460860 / KRX:460860

Source: KRX statistical information