Hwaseung Enterprise is an ODM company that produces footwear and headwear on commission for global brands such as Adidas and Nike. Of its 2025 consolidated revenue of ₩1.781 trillion, the ODM segment made up ₩1,564.7 billion (about 88%), with the chemical segment at ₩190.9 billion (about 11%) and the distribution and finance segment at ₩25.4 billion (about 1%) filling out the rest. A February 2026 disclosure of a change in profit/loss structure confirmed annual revenue of ₩1.8 trillion, operating profit of ₩76.6 billion and net profit of ₩19.3 billion, and in March the company voluntarily disclosed a corporate value-up plan, having earlier announced the termination of a treasury-share acquisition trust contract in November 2025. What stands out lately is that a P/B of 0.38x, a P/E ratio of 6.65x and a dividend yield of about 8.9% (with a payout ratio of 51%) are appealing against assets and earnings; but the debt burden of a 476.8% debt ratio, a 73.9% current ratio and a 1.26x interest coverage ratio must be weighed alongside the sharp drop in first-quarter 2026 earnings, and ultimately the fork lies in where brand order recovery and debt management head.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 476.8%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 73.9%).
- Revenue fell 4.6% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 15.9% lower than a year earlier.
- ROE is 5.8% (controlling-interest basis). It is below the sector average.
- Operating margin is 4.3%.
- The P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Hyun Suk-ho 27.26% (individual)
Controlling bloc incl. related parties 33.59%
With the controlling bloc holding 34%, the ownership structure is stable.
🔎 In-depth analysis
- Hwaseung Enterprise is an ODM company (a model in which the customer entrusts design and the maker produces on commission) that makes and delivers footwear and headwear on behalf of global brands.
- Of its 2025 consolidated revenue of ₩1.781 trillion, the ODM segment made up ₩1,564.7 billion, or about 88%, and its main customer brands are Adidas and Nike.
- The remainder is the chemical segment at ₩190.9 billion (about 11%) and the distribution and finance segment at ₩25.4 billion (about 1%).
- In a word, the company's core engine is producing footwear and headwear on order for the world's leading sports brands, and given the large revenue scale, the brands' order volumes and unit prices drive the results.
- The latest close is ₩2,350 and market capitalization is ₩130.0 billion.
- The price sits below the 20-day line (₩2,532) and below the 60-day line (₩2,952).
- Trading below both the short- and medium-term moving averages, the trend is on the soft side.
- The RSI (a supplementary gauge that measures upward versus downward force over the last 14 days on a 0-100 scale) is 33.2, a neutral level.
- The one-month change is -10.8%, the three-month change is -28.5%, and the position versus the 52-week high is -55.4%.
- Relative strength against the KOSPI is 3 (on a 1-99 scale, computed from returns versus the index over the past year with recent periods weighted more heavily; higher means stronger than the market).
- That puts it in roughly the top 98% of all stocks by strength.
- Over the past three months it lagged the index by 44.0%.
- It is best to read the chart alongside trading volume and disclosure dates.
- For 2025, annual revenue was ₩1.781 trillion, operating profit ₩76.6 billion and net profit ₩19.3 billion, with an operating margin of 4.3% and ROE (how much is earned on equity in a year) of 5.8%.
- Looking at valuation alone, the stock trades at 6.65x a year's earnings (P/E) and 0.38x book value (P/B).
- A P/B of 0.38x means the market buys and sells the company at 38% of the net assets it holds, a level marked low against asset value.
- Because this is an inflection phase in which earnings fall for a year, the forward P/E converted to this year's basis rises somewhat, but that is similar to peers Unitron Tech (8.67x) and Wonik (9.51x), so it is hard to call it particularly expensive.
- That said, the debt ratio (debt relative to equity) is high at 476.8%, the current ratio, which shows assets readily convertible to cash versus debt due within a year, is 73.9%, and the interest coverage ratio, which measures how far operating profit covers interest, is 1.26x.
- A debt burden that is large relative to earnings is the weak link that genuinely warrants attention.
- Revenue rose sharply from ₩1,466.6 billion in 2023 to ₩1,867.7 billion in 2024, then fell 4.6% in a year to ₩1,781.0 billion in 2025.
- Operating profit jumped from ₩24.7 billion in 2023 to ₩118.2 billion in 2024 before coming down to ₩76.6 billion in 2025, while net profit traced a path from a loss (-₩25.0 billion) in 2023 back to profit.
- Most recently, the first quarter of 2026 saw a sizable slowdown, with revenue of ₩408.2 billion (-15.9% year on year), operating profit of ₩8.5 billion (-64.0%) and net profit of ₩0.4 billion (-93.1%).
- Taking that first quarter as a starting point, the full year flows to about ₩1.6 trillion in revenue, roughly ₩41.4 billion in operating profit and about ₩13.8 billion in net profit.
- These figures reflect a situation in which global brand order volumes fell versus the prior year and unit-price and exchange-rate conditions cooled a beat, closer to a picture that steps last year's high earnings base down a notch.
- In other words, this is not because the company broke down but rather a pullback from an exceptionally strong prior year, and the brand-ODM business structure itself remains intact.
- On March 5, 2026, the company voluntarily disclosed a corporate value-up plan.
- As material in which the company itself lays out how it will lift shareholder value, if it contains specific figures it becomes a primary basis for gauging this year's direction.
- On February 19, 2026, a disclosure of a change in profit/loss structure confirmed 2025 annual revenue of ₩1.8 trillion, operating profit of ₩76.6 billion and net profit of ₩19.3 billion; it is worth checking whether this points the same way as the annual trend and whether any one-off factors are present.
- Earlier, on November 11, 2025, the company announced a decision to terminate a treasury-share acquisition trust contract; because this bears on cash returns and changes in share count, it is a point to check whether earnings capacity and cash flow provide support.
- Starting with the strengths, the stock at 0.38x book value and 6.65x a year's earnings sits low against assets and earnings, and a dividend yield reaching about 8.9% (with a payout ratio of 51%) thickens the cash reward while waiting.
- The business is also grounded in clear demand, producing footwear and headwear on commission for major brands like Adidas and Nike.
- On the flip side, the cautions are clear.
- With a 476.8% debt ratio, a 73.9% current ratio and a 1.26x interest coverage ratio, the debt burden is heavy, and the sharp drop in first-quarter 2026 earnings, which weakened the short-term results trend, weighs directly.
- In short, if global brand orders recover and the debt burden is managed, the low valuation and high dividend gain traction; conversely, if the order slowdown drags on longer or the financial burden grows, both earnings and dividend capacity could waver together.
- More than whether the price is cheap, the more important fork is where brand order recovery and debt management head.
🔎 Valuation vs peers Overvalued
Companies with adjacent market capitalization within wholesale.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Unitrontech | 8.62x | 0.79x | 9.12% |
| Wonik | 8.40x | 0.34x | 4.05% |
| Heungkuk Petroleum | 1016.98x | 2.06x | 0.20% |
Within wholesale, we first looked at a public-data peer set with nearby market capitalization. The current P/E ratio (how many times a year's earnings the price is) is 6.72x and P/B is 0.39x. That said, for smaller-cap names, earnings swings and financing disclosures carry a lot of weight, so we did not draw firm conclusions from metrics based solely on last year's confirmed results. 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 | ₩1.6 trillion | ₩41.4 billion | ₩13.8 billion |
| Next quarter | Q2 2026 | ₩416.4 billion | ₩10.4 billion | ₩2.9 billion |
Price history Close · MA20 · MA60
The latest close is ₩2,350 and the market capitalization is ₩130.0 billion. The price sits below its 20-day moving average (₩2,532) and below its 60-day moving average (₩2,952). 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 33.2, a neutral level. The one-month change is -10.8%, the three-month change is -28.5%, and the position relative to the 52-week high is -55.4%. Relative strength versus the KOSPI is 3 (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 2% of all stocks. Over the past three months it lagged the index by 44.0%. 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 -44.01% / 6M -57.91% / 12M -80.11%
Key metrics vs sector median
Valuation
The P/E of 6.72x is below the sector median (9.68x). The P/B of 0.39x is below the sector median (0.80x). Both metrics are low versus peers, so the price is not expensive relative to earnings and assets.
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 5.8%, below the sector average (7.0%). The operating margin is 4.3%. The debt ratio is 476.8%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $972.0M | $1.2B | $1.2B | -4.64% ↓ slower |
| Operating profit | $16.4M | $78.4M | $50.8M | -35.23% ↓ slower |
| Net profit | -$16.6M | $25.9M | $12.8M | -50.58% |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $905.0M | $1.3B | $972.0M | $1.2B | $1.2B |
| Operating profit | $11.4M | $48.6M | $16.4M | $78.4M | $50.8M |
| Net profit | -$1.4M | $567,503 | -$16.6M | $25.9M | $12.8M |
| Revenue CAGR | 4-yr avg 6.87% | ||||
Revenue fell 4.6% year over year (2023 ₩1.5 trillion → 2024 ₩1.9 trillion → 2025 ₩1.8 trillion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating profit fell 35.2% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 6.9%. The two-year revenue CAGR is 10.2%. In the most recent quarter (Q1 2026), revenue was 15.9% lower 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 8.8%, is on the high side.
Points to watch
- Debt far exceeds equity (debt ratio 476.8%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 73.9%).
- Revenue fell 4.6% year over year (3-year trend: mixed).
Recent news & events searched · sourced
- 2026-03-05UpdateCorporate value-up plan (voluntary disclosure): check the original plan textMaterial the company itself put forward. If it contains figures, treat them as the primary basis for the outlook box; if not, treat it only as directional material. Source
- 2026-02-19EarningsChange of 30% or more in revenue or profit/loss structure (15% or more for large corporations): annual revenue ₩1.8 trillion, operating profit ₩76.6 billion, net profit ₩19.3 billionRecent confirmed or preliminary results. Check whether they point the same way as the annual trend and whether one-off factors are present. Source
- 2025-11-11UpdateMaterial fact report (decision to terminate treasury-share acquisition trust contract): check the return termsA disclosure related to cash returns or changes in share count. Confirm whether earnings capacity and cash flow provide support. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Closing price | ₩2,350 | ₩2,350 | Confirmed | link |
| Latest quarterly results | revenue ₩408.2 billion, operating profit ₩8.5 billion | revenue ₩408.2 billion, operating profit ₩8.5 billion | Confirmed | link |
| Annual results | revenue ₩1.8 trillion, operating profit ₩76.6 billion | revenue ₩1.8 trillion, operating profit ₩76.6 billion | Confirmed | link |
| Outlook/plan disclosure original text | : | : | Confirmed | link |
| Results disclosure original text | revenue30%: revenue ₩1.8 trillion · operating profit ₩76.6 billion · net profit ₩19.3 billion | revenue30%: revenue ₩1.8 trillion · operating profit ₩76.6 billion · net profit ₩19.3 billion | Confirmed | link |
| Shareholder-return disclosure original text | : | : | Confirmed | link |
| Outlook box basis | DART | DART | Confirmed | link |
Recent filings
- 2026-06-01Corporate governance report
- 2026-05-14PeriodicQuarterly report
- 2026-05-13Disclosure
- 2026-04-07Disclosure
- 2026-04-07Disclosure
- 2026-04-01OwnershipOwnership-change filing
- 2026-03-24OwnershipOwnership-change filing
- 2026-03-20Disclosure
- 2026-03-20Shareholders' meeting notice
- 2026-03-12PeriodicAnnual business report
- 2026-03-05Disclosure
- 2026-03-05Amended 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.