TKG Huchems is a fine-chemicals company that supplies chemical intermediates to large chemical firms, with about 96% of revenue from fine chemicals. Its NT line (DNT, MNB, and others - roughly two-thirds), which serves as raw material for polyurethane, and its NA line (nitric acid, ammonium nitrate, and others - roughly a quarter) are handed over almost entirely under long-term supply contracts to customers such as BASF Korea, Hanwha, and Kumho Mitsui Chemicals, and it also books side income from carbon-credit sales. In March it voluntarily disclosed a corporate-value-up plan, in April it issued ₩50 billion of convertible bonds (0% coupon, 1% maturity yield, conversion price ₩17,735) to prepare funds for new businesses, and in May it disclosed preliminary Q1 results (operating profit +20.4%). The key point to watch is that with Q1 operating profit up 20% the core business is turning, and with net cash, a 214% current ratio, a 6.2% dividend yield, a P/B of 0.73x, EV/EBIT of 8x, and a 13.8% free-cash-flow yield, the valuation is subdued; on the other hand, product prices track raw-material and downstream polyurethane conditions, dependence on a few large customers is high, and the convertible bonds leave room for more shares if converted.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue fell 5.1% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 9.5% higher than a year earlier.
- ROE is 6.6% (controlling-interest basis). It is above the sector average.
- Operating margin is 5.8%.
- P/B is low versus peers too, so it looks cheap on an asset basis as well.
Ownership & governance As of 2025-12-31
Largest shareholder TKG Taekwang 39.95% (corporate)
Controlling bloc incl. related parties 43.41%
With the controlling bloc holding 43%, the ownership structure is stable.
🔎 In-depth analysis
- TKG Huchems is a fine-chemicals company that makes chemical intermediates and supplies them to large chemical firms.
- Most of its revenue (about 96%) comes from the fine-chemicals segment.
- Its core products fall into two lines.
- One is the NT line (DNT, MNB, and others), which makes up about two-thirds of revenue.
- MNB is a raw material for polyurethane used in car seats, furniture, and building insulation, and DNT also feeds into the polyurethane family.
- The other is the NA line (nitric acid, ammonium nitrate, and others), at about a quarter.
- A distinctive feature is the sales structure.
- Nitric acid goes to BASF Korea and Solvay Korea, DNT to Hanwha affiliates, and MNB to Kumho Mitsui Chemicals and Japan's Mitsui Chemicals, essentially in full under long-term supply contracts.
- In short, it is a B2B structure supplying a small number of large customers stably.
- On top of this, it books side income from selling carbon credits generated in the course of reducing greenhouse-gas emissions.
- The latest close is ₩16,040 and market capitalization is ₩655.7 billion.
- The price sits above its 20-day line (₩15,894) but below its 60-day line (₩16,929).
- Short-term and medium-term trends are diverging, so they should be read separately.
- The RSI (a gauge that weighs upward versus downward strength over the past 14 days on a 0-100 scale) is 50.0, a neutral level.
- The one-month change is +5.5%, the three-month change is -6.7%, and the price is -24.3% from its 52-week high.
- Relative strength versus the KOSPI is 23 (on a 1-99 scale, computed from the past year's return versus the index with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 78% of all stocks by strength.
- Over the past three months it lagged the index by 26.6%.
- Chart reading is best done alongside trading volume and disclosure dates.
- The valuation sits in an undervalued zone.
- The P/E ratio (how many times a year's earnings the price represents) is 10.95x, not particularly expensive.
- The P/B ratio (the price relative to net assets) is 0.73x, trading below book equity.
- Profitability is unremarkable but sound for the chemical sector: ROE (how much it earns per year on equity) is 6.6% and operating margin is 5.8%.
- The balance sheet is on the sturdy side.
- The debt ratio (debt relative to equity) is 129%, not excessive for a chemical-plant company, and a current ratio of 214% gives ample short-term solvency.
- Notably, net debt is negative - a net-cash state with about ₩131.8 billion more cash than borrowings.
- Reflecting debt makes the picture even better.
- EV/EBIT (enterprise value divided by operating profit, akin to a debt-adjusted P/E) is 8.0x, below the P/E, because ample cash makes enterprise value smaller than market cap.
- The free-cash-flow yield (cash actually generated relative to market cap; higher is more attractive) is a high 13.8%.
- The dividend is good too: ₩1,000 per share, a 6.2% dividend yield.
- First, the path so far.
- Revenue fell 5.1% year over year to ₩1,127.7 billion in 2025.
- Net profit dropped 22.9% to ₩59.9 billion.
- Profit has been on a downslope for the past three years (₩134.8 billion in 2023 to ₩59.9 billion in 2025).
- That said, the size of the decline is shrinking, suggesting it is nearing the bottom.
- Here a signal of a turn appeared.
- Q1 2026 revenue rose 9.5% year over year.
- Operating profit rose 20.4% to ₩15.2 billion.
- In other words, core-business profitability is back on a recovery path.
- Net profit fell 4.6% to ₩13.3 billion, but that owes to a base effect from large non-operating gains (such as FX) in the prior-year first quarter, not to the core business worsening.
- The industry backdrop is also favorable: demand for polyurethane, fertilizer, and fine chemicals - where nitric acid, MNB, and DNT are used - is firming gradually into 2026.
- If this recovery continues, this year's profit shapes up as a modest rebound off last year's trough.
- So while the P/E on last year's earnings looks ordinary at 11x, it falls lower on this year's recovered earnings.
- Into 2026, disclosures took care of shareholder returns and growth preparation at the same time.
- In March it voluntarily disclosed a corporate-value-up plan.
- It set out directions of stronger shareholder returns, expanded dividends, improved capital efficiency, and new-business development - a plan that spelled out direction rather than concrete targets.
- In April it decided to issue ₩50 billion of convertible bonds.
- With a low funding cost of a 0% coupon and 1% maturity yield, the purpose is to secure funds preemptively ahead of new-business investment.
- The conversion price is ₩17,735, set above the current share price.
- In May it disclosed preliminary Q1 results (operating profit +20.4%) via fair disclosure and held an IR.
- Taken together, the company is maintaining and strengthening dividends and shareholder returns while securing future investment funds at low cost.
- Consider the points to watch and the cautions separately.
- First, the strengths.
- First, the core business has turned - Q1 operating profit rose 20%, signaling the end of the profit-decline cycle.
- Second, the balance sheet is safe - a net-cash structure with a 214% current ratio gives strong staying power.
- Third, shareholder returns are generous - a 6.2% dividend yield acts as a defense line in a down market.
- Fourth, the valuation is subdued - a P/B of 0.73x, EV/EBIT of 8x, and a 13.8% free-cash-flow yield leave room if profit recovers.
- Now the cautions.
- First, product prices track raw materials (such as ammonia) and downstream polyurethane conditions, so profit has some volatility.
- Second, high dependence on a few large customers means results can hinge on specific customers' utilization.
- Third, the convertible bonds leave room for more shares upon future conversion (conversion price ₩17,735).
- In short, when downstream chemical demand firms gradually, profit recovery and a high dividend work together; conversely, if polyurethane and nitric-acid demand turns down again, the profit rebound can be delayed.
🔎 Valuation vs peers Undervalued
Among domestically listed fine- and basic-chemical companies, those with similar business character were taken as peers. Lotte Fine Chemical handles specialty and fine-chemical materials, and Kukdo Chemical handles polyurethane and epoxy downstream, so their downstream demand overlaps.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Lotte Fine Chemical | 10.44x | 0.45x | 4.36% |
| Kukdo Chemical | 15.15x | 0.38x | 2.53% |
Placed side by side with peers, its position is clear. Its P/E of 11x is similar to Lotte Fine Chemical (11.05x) and lower than Kukdo Chemical (14.7x). Yet its ROE of 6.6% is the highest of the three and its dividend yield of 6.2% is the most generous. In other words, it earns more and returns more while trading at a lower multiple. Its P/B of 0.73x, trading below net assets, is likewise the case. The P/E on last year's earnings looks ordinary because profit was near the trough of a three-year decline. Factoring in the 20% rebound in Q1 operating profit, the multiple on this year's recovered earnings falls further. Adding EV/EBIT of 8x - which reflects net cash of about ₩131.8 billion - and a 13.8% free-cash-flow yield, it looks undervalued relative to its cash generation. That said, the fact that product prices track downstream polyurethane and nitric-acid conditions should be factored in.
Price history Close · MA20 · MA60
The latest close is ₩16,040 and the market capitalization is ₩655.7 billion. The price sits above its 20-day moving average (₩15,894) and below its 60-day moving average (₩16,929). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 50.0, a neutral level. The one-month change is +5.5%, the three-month change is -6.7%, and the position relative to the 52-week high is -24.3%. Relative strength versus the KOSPI is 23 (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 22% of all stocks. Over the past three months it lagged the index by 26.6%. 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 -26.61% / 6M -44.48% / 12M -60.60%
Key metrics vs sector median
Valuation
The P/E of 10.95x is below the sector median (14.79x). The P/B of 0.73x is below the sector median (0.97x). 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.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.8%, initial growth 5.4%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.054x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 6.6%, above the sector average (4.0%). The operating margin is 5.8%. The debt ratio is 129.5%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $697.7M | $787.5M | $747.4M | -5.10% ↓ slower |
| Operating profit | $80.3M | $53.6M | $43.5M | -18.80% ↑ faster |
| Net profit | $89.3M | $51.5M | $39.7M | -22.85% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $570.8M | $819.1M | $697.7M | $787.5M | $747.4M |
| Operating profit | $61.9M | $77.6M | $80.3M | $53.6M | $43.5M |
| Net profit | $50.1M | $54.2M | $89.3M | $51.5M | $39.7M |
| Revenue CAGR | 4-yr avg 6.97% | ||||
Revenue fell 5.1% year over year (2023 ₩1.1 trillion → 2024 ₩1.2 trillion → 2025 ₩1.1 trillion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating profit fell 18.8% year over year. That said, the decline narrowed. Over the 5 years on record, revenue compound annual growth (CAGR) is 7.0%. The two-year revenue CAGR is 3.5%. In the most recent quarter (Q1 2026), revenue was 9.5% 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 6.2%, is on the high side.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- Revenue fell 5.1% year over year (3-year trend: mixed).
Recent news & events searched · sourced
- 2026-03-26FilingVoluntary disclosure of a corporate-value-up plan - set out directions of stronger shareholder returns, expanded dividends, improved capital efficiency, and new-business development (no concrete targets given)Medium term: confirms commitment to sustained dividends and shareholder returns. A support factor for the current 6%-range dividend yield. Source
- 2026-04-08FilingDecision to issue ₩50 billion of convertible bonds - 0% coupon, 1% maturity yield, aimed at securing funds preemptively for new-business investment, conversion price ₩17,735 (above the current price)Short term: securing investment funds at low cost (positive). Medium term: room for more shares upon future conversion (mind dilution). Source
- 2026-05-08EarningsQ1 2026 consolidated preliminary results via fair disclosure - revenue of ₩294.89 billion (+9.5% YoY), operating profit of ₩15.20 billion (+20.4% YoY), net profit of ₩13.33 billion (-4.6% YoY)Short term: a double-digit rebound in operating profit signals core-business recovery. The slight net-profit decline reflects the base effect of prior-year non-operating gains. Source
- 2026-05-08IRNotice of investor briefing (IR) - a venue to explain results and business statusMedium term: maintaining the investor-communication channel. Source
- 2026-03-26DividendYear-end dividend for fiscal 2025 confirmed at the annual general meeting - ₩1,000 per share (payout ratio about 65%)Medium term: dividend maintained despite lower profit, supporting a dividend yield in the 6% range. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 operating profit YoY | operating profit 152.0, +20.4% YoY | — | Confirmed | link |
| Convertible-bond issuance size and terms | base | ₩50.0 billion, 0.0%· 1.0%, ₩17,735, 2031-04-23 | Confirmed | link |
| Dividend per share (DPS) | DPS ₩1,000,x 6.2%, approx. 65% | — | Confirmed | link |
| 2026 net-profit estimate | approx. ₩63.0 billion(self-estimate, forward PER 10.4) | — | Unverified | — |
Recent filings
- 2026-05-29Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-08Disclosure
- 2026-05-08EarningsFair-disclosure notice
- 2026-04-27OwnershipOwnership-change filing
- 2026-04-23Paid-in capital increase
- 2026-04-08Material-fact report
- 2026-04-02PeriodicAnnual business report (amended)
- 2026-04-02OwnershipOfficers'/major-shareholders' holdings report
- 2026-03-26Disclosure
- 2026-03-26Shareholders' meeting notice
- 2026-03-26Disclosure
📖 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.