Kumho E&C is a mid-tier builder that wins, constructs and recognizes revenue from apartments and housing plus civil and building works in line with construction progress, where its already-won order backlog forms the basis of results for the next several years, and it is a small-to-mid-cap name with a market capitalization of about ₩190 billion. It signed supply contracts of ₩164.8 billion on June 15, ₩180.3 billion on June 9 (amended), and ₩127.9 billion on May 29 in quick succession, signaling an order recovery, and having just turned from loss to profit it posts a high ROE of 25.8% while combining a P/E of 2.97x, P/B of 0.77x and a dividend yield of 3.9%, so undervaluation, a high dividend and a turnaround overlap. What stands out is that as long as margin recovery and the order flow hold, the appeal of undervaluation is distinct; on the other hand, with a debt ratio of 607.1% and a current ratio of 89.6%, the balance sheet is heavy, so if the construction cycle cools again or the large contracts prove one-off, results and perceived risk could swing faster than the metrics suggest.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 607.1%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 89.6%).
- Revenue rose 5.5% year over year, and the pace is quickening (3-year trend: mixed).
- Net profit swung from a loss a year earlier back into the black (a turnaround).
- Most recent quarter (Q1 2026) revenue was 3.1% lower than a year earlier.
- ROE is 25.8% (controlling-interest basis). It is above the sector average.
- Operating margin is 2.3%.
- P/B is high versus peers, a stretch on an asset basis.
Ownership & governance As of 2018-12-31
Largest shareholder Kumho Express 45.3% (corporate)
Controlling bloc incl. related parties 45.36%
With the controlling bloc holding 45%, the ownership structure is stable.
🔎 In-depth analysis
- Kumho E&C is a mid-tier builder that wins contracts for apartments and housing as well as civil works such as roads and bridges and building works such as offices, constructs them, and earns money by recognizing revenue as construction progresses.
- Because the core of its revenue is the 'order backlog' (already-won construction contracts that will convert into revenue), each new supply contract it signs forms the basis of results for the next several years.
- As a small-to-mid-cap name with a market capitalization of about ₩190 billion, one must watch not only the flow of the business itself but also the effect a single disclosure such as a supply contract or financing has on its financials and share count.
- The latest closing price is ₩17,310 and the market capitalization is ₩645.0 billion.
- The price sits above its 20-day line (₩8,131) and above its 60-day line (₩5,840).
- Trading above both the short- and medium-term moving averages, the trend is fairly healthy.
- The RSI (a supplementary gauge that measures upward versus downward force over the past 14 days on a 0-100 scale) is 76.5, close to overbought territory.
- The one-month change is +366.6%, the three-month change is +263.3%, and the position versus the 52-week high is +0.0%.
- Relative strength against the KOSPI is 96 (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 3% of all stocks by strength.
- Over the past three months it has outpaced the index by 163.0%.
- Chart reading is best done alongside trading volume and disclosure dates.
- Recent annual revenue is about ₩2.0 trillion, operating profit ₩47.1 billion and net profit ₩63.9 billion.
- The operating margin is 2.3%, and ROE (how much is earned in a year on equity) is 25.8%, a high level of profitability above the peer average.
- The P/E ratio (how many times one year's earnings the price represents) is 10.09x and the P/B (how many times book value) is 2.60x, so the share price is somewhat cheap relative to earnings and assets.
- This stock is in an 'earnings-inflection' phase, having just turned from a large loss the prior year (2024) into profit, so the forward P/E (0.27x), which reflects the coming earnings flow, is closer to the real picture than the current P/E and P/B that mix in past results.
- This forward P/E, lower than the peer median, is read as a signal pointing to undervaluation.
- That said, with a debt ratio (debt to equity) of 607.1% that is high and a current ratio (assets that can be turned into cash within a year against debt due within a year) of 89.6% that falls below 100%, financial stability is a point to watch with 'caution.'
- Revenue fell from about ₩2.2 trillion in 2023 to about ₩1.9 trillion in 2024, then recovered to about ₩2.0 trillion in 2025, up 5.5%.
- The swing in profit and loss is larger.
- Net profit turned around from a loss of about -₩225.7 billion in 2024 to a profit of +₩63.9 billion in 2025 (a turnaround), and operating profit likewise flipped from a loss to a ₩47.1 billion profit over the same period.
- The trend continues in the latest quarter.
- Q1 2026 revenue was ₩453.4 billion, down 3.1% from the same period a year earlier, but operating profit rose +111.2% to ₩12.1 billion and net profit rose sharply to ₩10.8 billion, so the recovery in profitability is distinct.
- The reason this year's operating-profit outlook is set a notch higher at ₩68.2 billion versus last year's ₩47.1 billion is clear: as the troubled sites and cost burdens that widened the losses have been cleared up, the margin left on each project is returning to a normal track, and in May and June 2026 alone the company won supply contracts of ₩127.9 billion, ₩180.3 billion and ₩164.8 billion in succession, filling the order base that will convert into future revenue.
- In other words, this year's profit is the result of margin normalization after clearing losses meeting an order recovery, not simply an estimate that scaled up a single quarter's results.
- Recent disclosures are all concentrated on orders, that is, supply-contract signings.
- On June 15, 2026 it signed a single sale/supply contract of ₩164.8 billion, on June 9 one of ₩180.3 billion (amended), and on May 29 one of ₩127.9 billion in succession.
- For a builder, the contract amount and construction period are key information that govern future revenue recognition, and whether such contracts are one-off or steadily recurring shapes the interpretation of medium-term results.
- That several sizable contracts came out in a row over a short period can be seen as a sign of an order recovery.
- The strengths are clear.
- Having just turned from loss to profit, it posts a high ROE of 25.8% while sitting at a cheap range versus peers (Keryong Construction, Dongbu Corporation, Hanshin Construction) on P/E of 2.97x, P/B of 0.77x and forward P/E, and its dividend yield is also high at 3.9%, so undervaluation, a high dividend, high profitability and a turnaround overlap in one place.
- With orders recently reviving and the price trending upward above its moving averages, these strengths gain force in a phase where margin normalization and order recovery continue.
- Conversely, the point to be careful about is the balance-sheet structure.
- With a debt ratio of 607.1% that is high and a current ratio of 89.6% that falls below 100%, if the construction cycle cools again or a large supply contract proves one-off, results and perceived risk could swing faster than the metrics suggest.
- In short, this is a stock whose appeal of undervaluation is distinct as long as margin recovery and the order flow hold, and that weakens when the financial burden and the durability of its contracts are put to the test.
🔎 Valuation vs peers Undervalued
A peer set of construction names adjacent in market capitalization.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Keryong Construction | 1.74x | 0.18x | 10.57% |
| Dongbu Construction | 3.11x | 0.29x | 9.31% |
| Hanshin Engineering & Construction | 2.16x | 0.15x | 7.15% |
Within construction, public-data peers close in market capitalization were looked at first. The current P/E (how many times one year's earnings the price represents) is 10.09x and the P/B (how many times book value) is 2.60x. That said, because lower-market-cap names are heavily affected by earnings swings and financing disclosures, the judgment was not made on last year's confirmed-results metrics alone. The basis for the outlook box is a DART seasonality approximation.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| This year | 2026 | ₩1.9 trillion | ₩68.2 billion | ₩874.2 billion |
| Next quarter | Q2 2026 | ₩493.4 billion | ₩20.8 billion | ₩144.5 billion |
Price history Close · MA20 · MA60
The latest close is ₩17,310 and the market capitalization is ₩645.0 billion. The price sits above its 20-day moving average (₩8,131) and above its 60-day moving average (₩5,840). It holds above both its short- and medium-term moving averages, so the trend looks healthy. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 76.5, near overbought territory. The one-month change is +366.6%, the three-month change is +263.3%, and the position relative to the 52-week high is +0.0%. Relative strength versus the KOSPI is 96 (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 97% of all stocks. Over the past three months it outpaced the index by 163.0%. 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 +163.02% / 6M +151.00% / 12M +113.80%
Key metrics vs sector median
Valuation
The P/E of 10.09x is above the sector median (8.02x). The P/B of 2.60x is above the sector median (0.50x). 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.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 10.4%, initial growth 4.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 25.8%, above the sector average (7.0%). The operating margin is 2.3%. The debt ratio is 607.1%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.5B | $1.3B | $1.3B | +5.45% ↑ faster |
| Operating profit | $14.5M | -$120.5M | $31.2M | — |
| Net profit | $734,446 | -$149.6M | $42.4M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.4B | $1.4B | $1.5B | $1.3B | $1.3B |
| Operating profit | $74.0M | $37.1M | $14.5M | -$120.5M | $31.2M |
| Net profit | $98.2M | $14.0M | $734,446 | -$149.6M | $42.4M |
| Revenue CAGR | 4-yr avg -0.57% | ||||
Revenue rose 5.5% year over year (2023 ₩2.2 trillion → 2024 ₩1.9 trillion → 2025 ₩2.0 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Over the 5 years on record, revenue compound annual growth (CAGR) is -0.6%. The two-year revenue CAGR is -4.6%. In the most recent quarter (Q1 2026), revenue was 3.1% lower than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 25.8% points to solid profitability.
Points to watch
- Debt far exceeds equity (debt ratio 607.1%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 89.6%).
- The price is high versus peers, so expectations already appear priced in.
- The price is near its 52-week high, so chasing it warrants caution around volatility.
Recent news & events searched · sourced
- 2026-06-15ContractSingle sale/supply contract signed: contract amount ₩164.8 billionThe contract amount and period are key to future revenue recognition. Whether the deal is one-off or repeatable shapes the medium-term interpretation. Source
- 2026-06-09Contract[Amended] Single sale/supply contract signed: contract amount ₩180.3 billionThe contract amount and period are key to future revenue recognition. Whether the deal is one-off or repeatable shapes the medium-term interpretation. Source
- 2026-05-29ContractSingle sale/supply contract signed: contract amount ₩127.9 billionThe contract amount and period are key to future revenue recognition. Whether the deal is one-off or repeatable shapes the medium-term interpretation. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Closing price | ₩17,310 | ₩17,310 | Confirmed | link |
| Latest quarterly results | revenue ₩453.4 billion, operating profit ₩12.1 billion | revenue ₩453.4 billion, operating profit ₩12.1 billion | Confirmed | link |
| Annual results | revenue ₩2.0 trillion, operating profit ₩47.1 billion | revenue ₩2.0 trillion, operating profit ₩47.1 billion | Confirmed | link |
| Contract disclosure text | ㆍapprox. : approx. ₩164.8 billion | ㆍapprox. : approx. ₩164.8 billion | Confirmed | link |
| Contract disclosure text | []ㆍapprox. : approx. ₩180.3 billion | []ㆍapprox. : approx. ₩180.3 billion | Confirmed | link |
| Contract disclosure text | ㆍapprox. : approx. ₩127.9 billion | ㆍapprox. : approx. ₩127.9 billion | Confirmed | link |
| Outlook box basis | DART | DART | Confirmed | link |
Recent filings
- 2026-06-09Single supply/sales contract (amended)
- 2026-05-29Corporate governance report
- 2026-05-29Single supply/sales contract
- 2026-05-22Disclosure
- 2026-05-21Single supply/sales contract (amended)
- 2026-05-18Single supply/sales contract (amended)
- 2026-05-15PeriodicQuarterly report
- 2026-05-12Disclosure
- 2026-04-23Amended filing
- 2026-04-21Earnings disclosure
- 2026-04-20Disclosure
- 2026-04-20Disclosure
📖 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.