Daedong Gear makes gears and transmissions that transmit power, with roughly two-thirds of revenue coming from power-transmission units for farm machinery such as tractors, and the remainder split between automotive (about 30%) and industrial machinery (about 5%); its largest shareholder is an affiliate of the farm-machinery group Daedong (000490). More recently the company has been expanding into EV reduction gears and precision reduction gears and actuator parts for robotics. In May 2026 it voluntarily disclosed a corporate value-up plan laying out mid- to long-term goals, and on June 10 it approved a first issue price (about ₩9,630) for a rights offering together with a bonus share issue; because the issue price was set below the prevailing share price, dilution concerns became a source of near-term weakness. What stands out now is that this is an undervalued components stock in transition, trading low relative to both net assets and revenue: it looks strong if new-business orders translate into actual revenue and profit and the raised funds flow into investment, but the prior year and Q1 2026 were both loss-making, financial headroom is tight with a debt-to-equity ratio of 340.6% and a current ratio of 65.7%, and the ongoing rights and bonus issues raise the share count and dilute per-share value.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 340.6%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 65.7%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue fell 14.1% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 2.2% lower than a year earlier.
- ROE is -6.0% (total-net basis). It is below the sector average.
- Operating margin is 0.1%.
- P/E is hard to compute here, so this is read on P/B.
Ownership & governance As of 2025-12-31
Largest shareholder Daedong 44.74% (individual)
Controlling bloc incl. related parties 52.1%
With the controlling bloc holding 52%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Daedong Gear makes gears and transmissions that transmit power.
- About two-thirds of revenue comes from power-transmission units for farm machinery such as tractors, with the rest split between automotive (about 30%) and industrial machinery (about 5%).
- In other words, its core business is machining and assembling precision parts that carry an engine's power to the wheels or attached implements, then selling them.
- More recently it has been broadening from its existing farm-machinery and internal-combustion parts into EV reduction gears and precision reduction gears and actuator components for robotics, and the ongoing rights offering (in which shareholders are invited to buy new shares to raise capital) and bonus share issue are tied to this new-business investment.
- Its largest shareholder is an affiliate of the farm-machinery group Daedong (000490), which gives it a stable sales channel linked to demand from the parent and its affiliates.
- The latest close is ₩10,030 and market capitalization is ₩90.1 billion.
- The price sits below its 20-day line (₩11,376) and its 60-day line (₩16,304).
- Trading beneath both its short- and mid-term moving averages, the trend is on the soft side.
- The RSI (a gauge comparing upward and downward strength over the past 14 days on a 0-100 scale) is 33.7, a neutral reading.
- The change is -38.1% over one month and -49.3% over three months, and the price sits -61.6% below its 52-week high.
- Relative strength versus the KOSDAQ is 46 (1-99, converted from the past year's return against the index with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 54% of all stocks by strength.
- Over the past three months it lagged the index by 36.7%.
- Chart reading is best done alongside trading volume and disclosure dates.
- On price positioning, the P/B (how many times net assets the price is) is 1.21x and the P/S (how many times revenue the price is) is 0.53x.
- With the price set low relative to both net assets and revenue, the stock falls into an undervalued zone on an asset and top-line basis.
- The P/E (how many times a year's profit the price is) cannot even be calculated because the prior year posted a net loss; this reflects not that the stock is expensive but that it has yet to turn a profit, so it is a different case from a stock burdened by a high P/E.
- On profitability, ROE (how much is earned in a year on equity) is -6.0%, in negative territory, and the operating margin is 0.07%, essentially breakeven, so for now the company is not making money.
- On the balance sheet, the debt-to-equity ratio is 340.6% and the current ratio (assets convertible to cash within a year against debt due within a year) is 65.7%, so reliance on debt is high and short-term funding room is tight.
- That said, the trailing profit figures are only a snapshot of a year that included losses, and do not directly show the company's normal earning power or the results of its new businesses.
- The top line has shrunk over the past two years.
- Revenue fell from ₩281.2 billion in 2023 to ₩257.1 billion in 2024 and ₩220.9 billion in 2025 (-14.1%), operating profit all but vanished at ₩160 million in 2025, and net profit swung to a loss of ₩4.7 billion.
- Q1 2026 continued in the red as well, with revenue of ₩59.3 billion (-2.2%), an operating loss of ₩1.4 billion, and a net loss of ₩2.0 billion.
- These figures read as the result of a downturn in the core farm-machinery business compounded by the burden of new-business investment.
- In its voluntarily disclosed corporate value-up plan, the company itself set out mid- to long-term goals of ₩1 trillion in revenue by 2030 (35.3% average annual growth) and lifting ROE from -6% to +8%.
- These are planning-stage figures that require EV reduction gear and robotics precision-parts orders to reach full stride, not numbers to be achieved this year.
- With both the prior year and Q1 in the red, no earnings-based forward P/E is assigned for this year, and the key to growth lies in when new-business revenue actually shows up in the numbers and the losses turn to profit.
- Recent disclosures center on financing and new businesses.
- In May 2026 the company voluntarily disclosed a corporate value-up plan setting out mid- to long-term revenue, profitability, and shareholder-return goals, and on May 15 it held an investor relations (IR) session to explain its new-business direction.
- On June 10 it fixed a first issue price (about ₩9,630) for a rights offering and also approved a bonus share issue, aimed at raising funds to invest in its EV and robotics parts businesses.
- However, because the first issue price was set below the prevailing share price and moving averages, dilution concerns became one cause of near-term price weakness.
- A quarterly report (as of March 2026) was also filed around the same time, confirming the Q1 loss.
- The core of this stock is an undervalued components maker in transition.
- With the price low relative to net assets and revenue, asset-based valuation risk is modest; the direction of broadening from farm machinery into EV reduction gears and robotics precision parts is clear; and the company has directly pledged mid- to long-term growth and shareholder-return goals through disclosure, a clear strength.
- So if new-business orders translate into actual revenue and profit and the raised funds flow into investment, today's low P/B can be read as a base that leaves room for recovery.
- On the other hand, the cautions are just as clear.
- Both the prior year and Q1 2026 were loss-making, so the business is not yet earning money; financial headroom is tight with a 340.6% debt-to-equity ratio and a 65.7% current ratio; and the ongoing rights and bonus issues, while adding capital, raise the share count and dilute per-share value.
- In short, this is a stock that looks strong when new-business results show up in the numbers and the balance sheet holds up, and weak when losses drag on or funding pressure builds, with the outcome heavily tied to the success or failure of the new businesses.
🔎 Valuation vs peers Inconclusive
A peer set of power-transmission and machine-parts makers, plus an affiliate within the same farm-machinery group, of comparable market capitalization.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Daedong | 0.00x | 0.40x | -3.47% |
Because the prior year posted a net loss, a P/E cannot be calculated, so an earnings-based valuation is itself hard to assess. Daedong (000490), an affiliate in the same farm-machinery group, trades at a P/B of 0.47x with an ROE of -3.5%, whereas Daedong Gear trades at a higher 1.46x P/B relative to net assets, which can be read as a premium that prices in expectations for its EV and robotics parts businesses. That said, with both companies recently in negative profitability, it is hard to conclude that a higher P/B simply means overvalued, and the trailing figures, mixed with losses, do not show the company's normal earning power. With no confirmed swing to profit this year either, an earnings-based forward valuation is also hard to assign reliably. For now, therefore, rather than settling on undervalued or overvalued, it is reasonable to hold off until new-business results show up in the numbers.
Price history Close · MA20 · MA60
The latest close is ₩10,030 and the market capitalization is ₩90.1 billion. The price sits below its 20-day moving average (₩11,376) and below its 60-day moving average (₩16,304). 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 33.7, a neutral level. The one-month change is -38.1%, the three-month change is -49.3%, and the position relative to the 52-week high is -61.6%. Relative strength versus the KOSDAQ is 46 (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 46% of all stocks. Over the past three months it lagged the index by 36.7%. 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 -36.70% / 6M -28.03% / 12M -43.83%
Key metrics vs sector median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 1.14x is below the sector median (1.44x).
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 -6.0%, below the sector average (5.0%). The operating margin is 0.1%. The debt ratio is 340.6%, so the financial structure is somewhat high.
Growth FY2025 · annual report (separate)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $186.4M | $170.4M | $146.4M | -14.05% ↓ slower |
| Operating profit | $5.4M | $3.0M | $107,660 | -96.36% ↓ slower |
| Net profit | $1.8M | $774,298 | -$3.1M | -505.69% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $134.5M | $160.5M | $186.4M | $170.4M | $146.4M |
| Operating profit | $5.0M | $5.0M | $5.4M | $3.0M | $107,660 |
| Net profit | $3.2M | $2.8M | $1.8M | $774,298 | -$3.1M |
| Revenue CAGR | 4-yr avg 2.15% | ||||
Revenue fell 14.1% year over year (2023 ₩281.2 billion → 2024 ₩257.1 billion → 2025 ₩220.9 billion), and the three-year trend is 'falling'. The rate of decline widened from the prior year. Operating profit fell 96.4% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 2.1%. The two-year revenue CAGR is -11.4%. In the most recent quarter (Q1 2026), revenue was 2.2% 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.
Points to watch
- Debt far exceeds equity (debt ratio 340.6%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 65.7%).
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 14.1% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-06-10FilingFirst issue price (about ₩9,630) for a rights offering set on June 10, 2026. This raises funds to invest in the new EV and robotics parts businesses, with the final issue price to be determined later.Near term: with the issue price below the current price and moving averages, dilution concerns weigh on the shares. Mid term: if the raised funds flow into new-business facility investment, it becomes a growth foundation. Source
- 2026-06-10FilingBonus share issue approved (material-event report). Approved together with the rights offering, so changes to capital and share count are set to follow.Near term: the share count increase tied to the rights offering may dilute per-share value. Mid term: shifts in trading liquidity and the shareholder base. Source
- 2026-05-07IRCorporate value-up plan (voluntary disclosure). Sets out mid- to long-term goals including ₩1 trillion in revenue by 2030 (35.3% average annual growth), improving ROE from -6% to +8%, and returning at least 20% of consolidated revenue to shareholders.Mid term: the company itself lays out a growth and shareholder-return direction centered on EV and robotics parts. These are planning-stage figures, though, and execution needs to be confirmed. Source
- 2026-05-15IRInvestor relations (IR) session held. Explains the current business situation and the direction of the new-business push to investors.Mid term: an opportunity to check on progress in the new-business transition. Source
- 2026-05-15EarningsQuarterly report (as of March 2026) filed. Q1 revenue of ₩59.3 billion (-2.2%), an operating loss of ₩1.4 billion, and a net loss of ₩2.0 billion, with losses continuing.Near term: confirmation of continued losses delays a recovery in earnings confidence. Mid term: the timing of when new-business revenue is reflected is the key. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-10Paid-in capital increase
- 2026-06-10Material-fact report (amended)
- 2026-06-10Disclosure
- 2026-05-28OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-22Amended filing
- 2026-05-22Amended filing
- 2026-05-21Amended filing
- 2026-05-15Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-08Amended filing
- 2026-05-07Amended filing
- 2026-05-07Disclosure
📖 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.