Nexen Tire makes tires for passenger cars and SUVs, earning money from OE tires supplied to carmakers for new vehicles and from replacement (RE) tires that swap out worn tires on cars already sold, with the replacement market being larger and higher-margin; it has recently lifted the share of high-value products such as 18-inch-and-above high-rim and EV tires to around 40% and operates four plants in Korea, China and Czechia. In its April 29, 2026 Q1 preliminary results, revenue, operating profit and net profit all rose sharply for a record quarterly revenue, and it disclosed an automated logistics-warehouse expansion at its European plant, an average utilization rate of 92.8%, and that it is reviewing a fifth overseas base. What stands out is that its strengths are undervaluation, with a P/B of 0.32x (trading at a third of book), a net-cash position, an FCF yield of 19.9%, and margins improving from Q1; on the other hand, with a debt ratio of 229.8% and interest coverage of 1.03x, a rise in rates or a downturn could let interest costs erode profit, and U.S. and European tariff policy is a variable.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 229.8%).
- Revenue rose 12.0% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 8.7% higher than a year earlier.
- ROE is 7.4% (controlling-interest basis). It is above the sector average.
- Operating margin is 5.3%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Nexen 46.48% (corporate)
Controlling bloc incl. related parties 69.18%
With the controlling bloc holding 69%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Nexen Tire makes and sells tires for passenger cars and SUVs.
- It earns money in two main ways.
- One is OE tires supplied to carmakers for new vehicles, and the other is replacement (RE) tires that swap out the worn tires on cars already sold.
- The replacement market is larger and higher-margin.
- Recently it has improved its product mix by lifting the share of high-value products such as high-rim tires of 18 inches and above and EV tires to around 40%.
- Its production bases are four sites: Korea (Yangsan and Changnyeong), China (Qingdao) and Czechia, with the Czech plant in particular serving as the key hub for local supply in Europe.
- The latest closing price is ₩6,670 and the market capitalization is ₩651.4 billion.
- The price sits below its 20-day line (₩6,869) and below its 60-day line (₩7,014).
- Trading beneath both the short- and medium-term moving averages, the trend is somewhat subdued.
- The RSI (a supplementary gauge that measures upward versus downward force over the past 14 days on a 0-100 scale) is 45.9, a neutral level.
- The one-month change is -3.6%, the three-month change is -4.6%, and the position versus the 52-week high is -31.4%.
- Relative strength against the KOSPI is 31 (on a 1-99 scale that converts return versus the index over the past year, weighting recent performance more heavily; higher means stronger than the market).
- That places it in roughly the top 69% of all stocks by strength.
- Over the past three months it has lagged the index by 28.1%.
- Chart reading is best done alongside trading volume and disclosure dates.
- The valuation metrics are notably low.
- The P/E ratio (how many times one year's earnings the price represents) is 4.32x and the P/B (how many times book net assets) is 0.32x.
- A P/B of 0.32x means the share price (₩6,620) is set at a third of the company's book net-asset value per share (₩20,988).
- Profitability is unremarkable, with ROE (how much is earned in a year on equity) of 7.4% and an operating margin of 5.3%.
- There are two things to watch on the balance sheet.
- First, the debt ratio (debt to equity) is somewhat high at 229.8%, a mark of the heavy spending on the European plant expansion.
- Second, the interest coverage ratio (how many times operating profit can cover interest) is low at 1.03x, so operating profit only just covers interest costs.
- That said, net debt (total borrowings less cash) is negative at about -₩139.8 billion, a net-cash position in which the company holds more cash than interest-bearing debt.
- As a result, EV/EBIT (enterprise value divided by operating profit) is very low at 3.0x, and the FCF yield (the ratio of cash actually generated to market cap) is high at 19.9%.
- It is cheap on P/E and P/B alone, but factoring in debt and cash, it looks even cheaper relative to its cash-generation.
- Revenue rose for a fifth straight year, topping ₩3 trillion for the first time in 2025 (₩3.1896 trillion, +12.0% year on year).
- However, 2025 operating profit was ₩170.3 billion, roughly flat with the prior year.
- It was a year in which revenue grew but margins were squeezed by cost and expense pressure.
- Then the picture changed in 2026.
- Q1 revenue was ₩838.3 billion (+8.7% year on year), a record quarter; operating profit jumped 33.1% to ₩54.2 billion; and net profit surged 55.3% to ₩62.0 billion.
- This is a margin-improvement phase in which profit grew far more than revenue.
- There are three reasons.
- Utilization at the Czech European plant climbed to 98.9% as its second-phase production system stabilized, the share of high-value products of 18 inches and above grew to 40%, and European and North American sales revived.
- If this trajectory continues, full-year 2026 profit could clearly exceed 2025.
- The current P/E of 4.3x is based on the margin-squeezed 2025 results, so measured against the recovering 2026 earnings, the actual valuation is even lower.
- The most important signal is the Q1 preliminary results disclosed on April 29, 2026.
- Revenue, operating profit and net profit all rose sharply for a record quarterly revenue.
- Across April and May the company then held investor briefings (IR) to explain its results and strategy directly.
- In March, the regular shareholders' meeting saw governance changes including a change of CEO, and in May a governance report was disclosed.
- On the business side, the company expanded an automated logistics warehouse at its European plant to strengthen local supply competitiveness.
- It also disclosed that, with average utilization across its four existing plants at 92.8% and effectively near the limit, it is reviewing the establishment of a fifth overseas production base.
- On the risk side, the high tariffs the EU has imposed on Chinese-made tires and U.S. tariff policy remain variables.
- That said, Nexen has structured local production in Czechia to bypass European tariffs.
- The observation points are clear.
- The share price is set at a third of book (P/B 0.32x), the company is in a net-cash position, and the FCF yield is high at 19.9%.
- On top of that, from Q1 2026 margins improved and profit moved onto a recovery track.
- Results are getting better while the share price has come down, so the gap between valuation and results has widened.
- The conditions under which the strengths stand out are that European and North American replacement demand holds up and the share of high-rim products keeps growing.
- In that case, full Czech utilization and product-mix improvement push margins higher.
- Conversely, the conditions to be careful about are equally clear.
- With a debt ratio of 229.8% and interest coverage of 1.03x, a worsening in rates or the operating environment could let interest costs erode profit.
- And if U.S. and European tariff policy tightens, export profitability could waver.
- In short, the appeal of undervaluation relative to asset value and cash-generation is large, but financial leverage and tariff variables must be watched alongside it.
🔎 Valuation vs peers Undervalued
Compared against Korea's three tire makers, whose business compositions are essentially identical: Hankook Tire (industry leader), Kumho Tire (turnaround type) and Nexen Tire.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hankook Tire & Technology | 8.04x | 0.72x | 9.00% |
| Kumho Tire | 4.96x | 0.85x | 17.12% |
Among Korea's three tire makers, whose business compositions are essentially the same, Nexen's P/B of 0.32x is overwhelmingly the lowest. At about half the level of Hankook Tire (0.69x) and Kumho Tire (0.67x), it is discounted the most steeply relative to book net assets. Its P/E is 4.3x trailing, between Kumho (3.9x) and Hankook (7.7x), but there is a catch: 4.3x is based on the margin-squeezed 2025 results. Reflecting the trajectory of a 33% jump in Q1 2026 operating profit, the earnings-based valuation falls below this. Adding the net-cash position and a high FCF yield of 19.9%, the character of undervaluation relative to assets and cash-generation is clear. That said, with ROE at 7.4% lower than Kumho Tire and a high debt ratio, those factors partly justify the discount, so rather than 'unconditionally cheap,' the view is 'undervalued relative to asset value and cash flow, but with capital efficiency and financial leverage partly explaining the low valuation.'
Price history Close · MA20 · MA60
The latest close is ₩6,670 and the market capitalization is ₩651.4 billion. The price sits below its 20-day moving average (₩6,869) and below its 60-day moving average (₩7,014). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 45.9, a neutral level. The one-month change is -3.6%, the three-month change is -4.6%, and the position relative to the 52-week high is -31.4%. Relative strength versus the KOSPI is 31 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 31% of all stocks. Over the past three months it lagged the index by 28.1%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -28.09% / 6M -43.53% / 12M -55.25%
Key metrics vs sector median
Valuation
The P/E of 4.32x is below the sector median (12.90x). The P/B of 0.32x is below the sector median (0.75x). Both metrics are low versus peers, so the price is not expensive relative to earnings and assets. That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is 7.4%, above the sector average (6.0%). The operating margin is 5.3%. The debt ratio is 229.8%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.8B | $1.9B | $2.1B | +12.00% ↑ faster |
| Operating profit | $123.9M | $114.1M | $112.9M | -1.07% ↑ faster |
| Net profit | $68.1M | $83.8M | $100.0M | +19.36% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.4B | $1.7B | $1.8B | $1.9B | $2.1B |
| Operating profit | $2.9M | -$36.0M | $123.9M | $114.1M | $112.9M |
| Net profit | $3.2M | -$18.4M | $68.1M | $83.8M | $100.0M |
| Revenue CAGR | 4-yr avg 11.29% | ||||
Revenue rose 12.0% year over year (2023 ₩2.7 trillion → 2024 ₩2.8 trillion → 2025 ₩3.2 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit fell 1.1% year over year. That said, the decline narrowed. Over the 5 years on record, revenue compound annual growth (CAGR) is 11.3%. The two-year revenue CAGR is 8.6%. In the most recent quarter (Q1 2026), revenue was 8.7% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- The dividend yield, at 3.0%, is on the high side.
- Revenue grew 12.0% year over year, a sign of growth.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-04-29EarningsQ1 2026 consolidated preliminary results disclosure. Revenue ₩838.3 billion (+8.7% year on year, a record quarter), operating profit ₩54.2 billion (+33.1%), net profit ₩62.0 billion (+55.3%).With profit growth larger than revenue growth, confirms a margin improvement. An earnings-inflection signal reflecting higher Czech-plant utilization and an improved high-rim product mix. Source
- 2026-05-15FilingFiled the Q1 2026 quarterly report. Confirmed the detailed financials and business status of the preliminary results as a formal report.The preliminary figures were confirmed in a formal report, reinforcing the reliability of the results. Detailed information such as per-plant utilization and product mix was disclosed. Source
- 2026-04-30IRInvestor briefing (IR) notice. Q1 results, European-plant strategy and business direction explained directly to investors.The company officially communicated the background to its results and future plans. It reaffirmed its strategy of expanding local production in Europe. Source
- 2026-03-26FilingThe regular shareholders' meeting handled governance-related items including a change of CEO.A change of management is a variable for medium-to-long-term strategy execution. Continuity of shareholder-return policy such as dividends needs to be confirmed. Source
- 2026-03-18FilingFiled the 2025 business report. Annual revenue topped ₩3 trillion for the first time (₩3.1896 trillion) and annual financials were confirmed.Officially confirmed five straight years of revenue growth and a net-profit recovery (+19.4% year on year). However, operating profit was roughly flat, exposing margin pressure. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 revenue | ₩838.3 billion | ₩838.3 billion | Confirmed | link |
| Q1 2026 operating profit | ₩54.2 billion | ₩54.2 billion(+33.14%) | Confirmed | link |
| 2025 annual revenue | 3 ₩189.6 billion | 3 ₩189.6 billion | Confirmed | link |
| 2026 in-house estimated net profit | approx. ₩192.0 billion(forward PER 3.4) | — | Unverified | link |
Recent filings
- 2026-05-29Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-04-30Disclosure
- 2026-04-29EarningsFair-disclosure notice
- 2026-04-15Disclosure
- 2026-03-26Disclosure
- 2026-03-26Disclosure
- 2026-03-26Shareholders' meeting notice
- 2026-03-18PeriodicAnnual business report
- 2026-03-18Audit report
- 2026-03-12Amended filing
- 2026-03-12Amended filing
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.