KG Steel is a surface-treated steelmaker that takes cold-rolled sheet — steel rolled thin from molten metal — coats it with zinc to make galvanized sheet, and then coats color on top to make color-coated sheet, selling to appliance, building-materials and automotive companies. In 2025 it posted revenue of ₩3.1934 trillion and net profit of ₩135.1 billion, but operating profit fell 27% from the prior year, and in Q1 2026 operating profit dropped 67% year on year, so core profitability is depressed in line with the steel cycle. What stands out recently is that the stock trades at 3.75x net profit (P/E), 0.25x net assets (P/B) and a 5.9% dividend yield, giving it a clear undervalued, high-dividend character, and the company has said it will return 50% of net profit to shareholders — a strength — but it is spending ₩400 billion to acquire control of used-car leader K Car, broadening beyond steel, so the acquisition's payoff and any recovery in the steel cycle bear watching together.
At-a-glance assessment financial health · growth · profitability · valuation
- Revenue fell 3.3% year over year (3-year trend: falling).
- Most recent quarter (Q1 2026) revenue was 0.9% lower than a year earlier.
- ROE is 6.6% (controlling-interest basis). It is above the sector average.
- Operating margin is 4.7%.
- The P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder KG Eco Solution 44.98% (corporate)
Controlling bloc incl. related parties 45.13%
With the controlling bloc holding 45%, the ownership structure is stable.
🔎 In-depth analysis
- KG Steel is a surface-treated steel company that takes cold-rolled sheet — steel rolled thin from molten metal — as its base material and makes zinc-coated (galvanized) sheet and color-coated sheet.
- These products are used in appliance outer panels such as refrigerators and washing machines, building materials such as roofs and exterior walls, and automotive parts.
- In other words, it takes coil from steelmakers, adds value through plating and coating, and resells, so the gap between raw-material prices (hot-rolled coil and zinc) and selling prices — the spread — drives profit.
- In 2025 revenue was ₩3.1934 trillion, and the company holds a leading position in the domestic color-coated and galvanized sheet market.
- The stock trades at ₩5,060, roughly 32% below its 52-week high.
- It sits below its 20-day (₩5,441), 60-day (₩6,010) and 120-day (₩5,802) moving averages, so the medium-term trend is weak.
- The one-month return is -11.4%, a short-term pullback.
- The RSI (a gauge that expresses recent up-and-down strength on a 0-100 scale) is 37.7, a depressed zone near the oversold threshold.
- Volatility has risen in a period overlapping catalysts such as the acquisition and shareholder returns.
- The valuation has a clearly undervalued character.
- The P/E ratio (how many times one year of profit the share price represents) is a low 3.75x.
- The P/B (how many times net assets the price represents) is 0.25x, so the stock trades at a quarter of its book net assets.
- ROE (how much the company earns in a year on its equity) is a decent 6.6%.
- The operating margin is 4.7%, thin as is typical of surface-treated steel.
- The debt-to-equity ratio is a somewhat high 151%.
- Even accounting for debt, though, it looks undervalued: EV/EBIT (enterprise value divided by operating profit — a debt-inclusive counterpart to the P/E) is 6.7x, and EV/Sales (enterprise value divided by revenue) is 0.32x.
- Net debt (total borrowings minus cash) is ₩484.3 billion.
- In particular, the FCF yield (the cash actually generated relative to market cap — the higher, the more attractive the cash generation) is a very high 22.8%, so the company generates cash well relative to the size of its profit.
- The top line is in mild negative growth.
- Revenue fell 3.3% to ₩3.1934 trillion in 2025, a third straight annual decline.
- Operating profit came down from ₩280.4 billion in 2023 to ₩150.7 billion in 2025, reflecting the industry slowdown.
- Net profit held near the prior year's level at ₩135.1 billion in 2025 (₩133.4 billion in 2024).
- In Q1 2026 revenue was ₩805.3 billion and net profit ₩45.1 billion — net profit was almost the same as a year earlier, but operating profit plunged 67% to ₩21.5 billion.
- In other words, core profitability was depressed while net profit was defended by non-operating factors.
- It is reasonable to see this year's net profit in the ₩140 billion range, with K Car's consolidated results added from the second half onward.
- In that case the forward P/E is around 3.5x, still a low zone with little difference from last year's trailing basis.
- If the steel spread recovers, there is room for core profit itself to move back up.
- The biggest event is the acquisition of control of K Car, the used-car sales leader.
- In March 2026 KG Steel agreed to buy a 52.5% stake in K Car (about 25.63 million shares) for ₩400 billion, and finalized the terms via a corrected disclosure in late June.
- The stated purpose of the acquisition is "diversifying the business portfolio and securing future growth drivers," an attempt to broaden beyond steel.
- In June it also disclosed a structure of contributing ₩100 billion to a private equity fund (PEF).
- Once the acquisition closes, K Car's results will be reflected in KG Steel's consolidation from the second half.
- Another important item is the medium-to-long-term shareholder-return policy disclosed on June 11: from fiscal 2026, over five years, the company will return 50% of adjusted net profit on a separate basis via dividends and share buybacks and cancellations.
- In fact the dividend per share rose from ₩200 in 2023 to ₩300 in 2025, and the payout ratio increased from 8.5% to 21.8%.
- In the past, the company also had a record of continued cash inflows by receiving proceeds from overseas asset (tangible-asset) sales in several installments.
- The strengths are clear.
- This is an undervalued, high-dividend stock with a low P/E and P/B and a dividend yield of 5.9%.
- On top of that, a policy of returning 50% of net profit to shareholders creates a channel for the low valuation to be realized through dividends and buybacks.
- With a high FCF yield of 22.8%, cash generation also provides support.
- The cautions are equally clear.
- In the core steel business, revenue has fallen for three straight years and the operating margin is thin, so if the spread does not recover, profit could stay depressed.
- The ₩400 billion K Car acquisition is a move into used cars, a business unlike steel, so post-deal integration and the funding burden (debt-to-equity of 151%) bear watching together.
- In short, if the steel cycle bottoms, shareholder returns are executed, and K Car contributes to consolidated profit, there is ample room for the undervaluation to resolve.
- Conversely, if a weak steel spread persists or the acquisition's benefits are delayed, the low valuation could linger for a considerable time.
🔎 Valuation vs peers Undervalued
Compared mainly against surface-treated steel (cold-rolled, galvanized and color-coated sheet) and large steelmakers.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| POSCO Steeleon | 16.50x | 0.73x | 440.00% |
| Hyundai Steel | 0.00x | 0.18x | -0.00% |
| SeAH Besteel Holdings | 19.37x | 0.56x | 290.00% |
Even next to surface-treated steel peers such as POSCO Steeleon (P/B 0.73x) and SeAH Besteel Holdings (P/B 0.56x), KG Steel's P/B of 0.25x is a clearly lower position. With an ROE of 6.6%, its profitability is if anything better than theirs. Last year's trailing P/E of 3.75x looks low, and given that net profit is swayed by non-operating factors, it is still a low zone on a forward basis (around 3.5x). Discount factors, though, are a thin operating margin, three straight years of falling revenue, and the funding burden of the K Car acquisition. Taken together, the stock looks undervalued relative to its assets, dividend and cash generation, but a recovery in the core business and a payoff from the acquisition are the conditions for the undervaluation to resolve.
Price history Close · MA20 · MA60
The latest close is ₩5,060 and the market capitalization is ₩506.0 billion. The price sits below its 20-day moving average (₩5,441) and below its 60-day moving average (₩6,010). 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 37.7, a neutral level. The one-month change is -11.4%, the three-month change is -1.9%, and the position relative to the 52-week high is -32.4%. Relative strength versus the KOSPI is 22 (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 21% of all stocks. Over the past three months it lagged the index by 24.8%. 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 -24.82% / 6M -39.73% / 12M -66.88%
Key metrics vs sector median
Valuation
The P/E of 3.75x is below the sector median (16.39x). The P/B of 0.25x is below the sector median (0.50x). 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 6.6%, above the sector average (2.0%). The operating margin is 4.7%. The debt ratio is 150.8%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.3B | $2.2B | $2.1B | -3.26% ↑ faster |
| Operating profit | $185.8M | $136.5M | $99.9M | -26.83% ↓ slower |
| Net profit | $155.3M | $88.4M | $89.6M | +1.31% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $2.2B | $2.5B | $2.3B | $2.2B | $2.1B |
| Operating profit | $196.8M | $225.6M | $185.8M | $136.5M | $99.9M |
| Net profit | $126.6M | $355.2M | $155.3M | $88.4M | $89.6M |
| Revenue CAGR | 4-yr avg -1.22% | ||||
Revenue fell 3.3% year over year (2023 ₩3.4 trillion → 2024 ₩3.3 trillion → 2025 ₩3.2 trillion), and the three-year trend is 'falling'. That said, the rate of decline narrowed from the prior year. Operating profit fell 26.8% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is -1.2%. The two-year revenue CAGR is -3.5%. In the most recent quarter (Q1 2026), revenue was 0.9% 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 5.9%, is on the high side.
Points to watch
- Revenue fell 3.3% year over year (3-year trend: falling).
Recent news & events searched · sourced
- 2026-03-31FilingDecision to acquire a 52.5% stake in used-car sales leader K Car (about 25.63 million shares) for ₩400 billion (terms corrected on June 29). The purpose is to diversify the business portfolio and secure future growth drivers.The largest event broadening the business beyond steel. On completion, K Car's results will be reflected in consolidation from the second half, but the funding burden and integration payoff are the key variables. Source
- 2026-06-11FilingEstablished a medium-to-long-term shareholder-return policy — from the fiscal 2026 settlement, over five years, return 50% of adjusted net profit on a separate basis via dividends and share buybacks and cancellations.A channel to realize the low valuation through dividends and buybacks. The payout ratio is already on an uptrend, from 8.5% in 2023 to 21.8% in 2025. Source
- 2026-06-29FilingDecision to contribute about ₩100 billion (94.79% stake) to a private equity fund (PEF) as part of the funding structure for the K Car acquisition.Confirms that the acquisition funding is being deployed split between own funds and borrowing. A stage where the deal structure has taken concrete shape. Source
- 2026-06-29FilingCorrected disclosure changing the schedule for receiving the balance on previously sold overseas tangible assets (dollar-denominated). A case of receiving the deposit and balance in several installments.A factor in which continued dollar inflows have supported cash flow and defended net profit. Source
- 2026-07-10FilingReceipt of a large-holding report (change in holdings of 5% or more).A change in the ownership structure — a holdings trend intertwined with the acquisition and shareholder-return events. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
📖 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.