Korea District Heating Corporation is a regulated public utility that captures heat from its combined heat-and-power plants and pipes it through insulated dual pipes to homes to sell hot water for heating and domestic use. Its revenue rests on two pillars: regulated heat-sales tariffs charged to households and buildings, and the sale of the electricity generated by its plants into the wholesale power market, with the core of its profit hinging on the gap between the heat tariff and the price of LNG. In May the company issued a fair-disclosure of its preliminary Q1 2026 results and followed with its quarterly report and an IR briefing, and at an extraordinary shareholders' meeting it improved its dividend process by fixing the dividend amount first and then setting the record date; its dividend yield stands at 9.3%. The notable point right now is that a P/B of 0.33x, an EV/EBITDA below 1x, a 44.8% free-cash-flow yield, a 9.3% dividend yield and even a 14.7% ROE mark a low valuation even among regulated utilities, which is a strength; the counterweight is that profit turns on the government-set spread between the heat tariff and LNG prices, that the 2025 tariff-hike benefit is normalizing through 2026, and that the debt ratio, unrecovered fuel-cost receivables and low current ratio all warrant attention.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 357.6%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 51.1%).
- Revenue rose 12.0% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 9.0% lower than a year earlier.
- ROE is 14.7% (controlling-interest basis). It is above the sector average.
- Operating margin is 13.2%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Government (Ministry of Climate, Energy and Environment) 34.55% (individual)
Controlling bloc incl. related parties 64.63%
With the controlling bloc holding 65%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Korea District Heating Corporation sells hot water for heating and domestic use to apartment complexes and buildings.
- The setup is that heat given off while generating electricity at its combined heat-and-power plants is piped to each home through insulated dual pipes.
- Money comes in from two main streams.
- The first is the heat-sales tariff charged to households and buildings.
- The second is revenue from selling the electricity produced during generation into the wholesale power market.
- On top of these sit district energy (CES) and renewable-energy operations.
- Because it is a regulated public utility exposed to government policy, the key swing factor for profit is the gap between the heat tariff and the price of its input fuel, LNG (gas).
- The latest closing price is 66,300 won and the market cap is 767.7 billion won.
- The price sits below its 20-day line (68,135 won) and below its 60-day line (71,765 won).
- Trading below both its short- and medium-term moving averages, the trend is on the soft side.
- The RSI (a supplementary gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 43.1, a neutral level.
- The one-month change is -3.4%, the three-month change is -4.6%, and the position versus the 52-week high is -41.0%.
- Relative strength against the KOSPI is 12 (1-99, calculated from returns versus the index over the past year with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 89% of all stocks by strength.
- Over the past three months it lagged the index by 27.9%.
- Chart reading is best done alongside trading volume and disclosure dates.
- The valuation metrics are clearly low.
- The P/E ratio (how many times one year's profit the share price is) is 2.27x.
- The P/B (how many times the book equity the share price is) is 0.33x, meaning the market cap is below book equity.
- Profitability is solid.
- ROE (how much is earned in a year on equity) is 14.7% and the operating margin is 13.3%.
- The dividend yield is a fairly high 9.3%.
- Factoring in debt makes the appeal even greater: EV/EBITDA (enterprise value divided by operating profit before depreciation) is 0.96x, below 1x.
- Net debt (total borrowings less cash) is 97.3 billion won, small relative to the market cap.
- The free-cash-flow yield (the ratio of actual cash generated to market cap) is a very high 44.8%.
- That said, there are clear cautions too.
- The debt ratio (debt versus equity) is high at 357.6%.
- The current ratio, which measures cash-like assets against debt due within a year, is low at 51.1%.
- Unrecovered fuel costs (fuel-cost receivables) are also a burden on the balance sheet.
- Earnings improved sharply in 2025.
- Revenue for 2025 was ₩3.9982 trillion, up 12.0% from the prior year.
- Operating profit jumped 61.5% to 529.6 billion won and net profit rose 61.3% to 338.9 billion won.
- This reflects a recovery in heat-sales margins as the heat-tariff hike flowed through.
- This business concentrates its profit in the winter heating season.
- Indeed, net profit for Q1 2026 alone was 216.3 billion won, meaning a large share of last year's full-year profit was earned in the first quarter.
- Q1 2026 stepped back slightly versus the same period last year, with revenue -9.0%, operating profit -1.1% and net profit -7.4%.
- This is the tariff-hike benefit passing its peak and normalizing.
- It is closer to a gentle adjustment than a sharp drop in profit, and operating profit effectively held at the prior-year level.
- Extending this trajectory, this year's net profit landing in the low ₩300 billion range, slightly below last year, looks reasonable.
- In that case the profit-based share multiple for this year would be in the low 2x, little different from the trailing figure.
- Recent disclosures center on results and shareholder returns.
- In May the company issued a fair-disclosure of its preliminary Q1 2026 results.
- In the same month it filed its quarterly report.
- In early May it held an IR briefing to explain results and business plans directly to the market.
- At an extraordinary shareholders' meeting it reworked its dividend process: fixing the dividend amount first and then setting the record date, an improvement that lets shareholders confirm the dividend before investing.
- For a stock with a high 9.3% dividend yield, this change carries meaning for income investors.
- Undervaluation signals overlap across several metrics.
- A P/B of 0.33x, an EV/EBITDA below 1x, a 44.8% free-cash-flow yield and a 9.3% dividend yield are a low valuation even among regulated utilities.
- Compared with fellow regulated utility Korea Electric Power (KEPCO), its P/E is lower and its dividend yield more than double.
- Profitability (ROE 14.7%) does not lag either.
- The cautions on the other side are equally clear.
- Because the core of profit is the government-set gap between the heat tariff and LNG prices, profit wobbles when the tariff or fuel-cost environment shifts.
- 2025 was a good year that reflected a tariff hike, and 2026 is the phase where that benefit normalizes.
- The high debt ratio, the remaining fuel-cost receivables and the low current ratio also warrant attention.
- It is a strong structure if the tariff and fuel environment stays favorable and dividends continue; conversely it weakens if tariffs are held down or LNG spikes.
🔎 Valuation vs peers Undervalued
Compared against domestic regulated energy public utilities (power and gas) that are exposed to government policy and tariff regulation.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Korea Electric Power | 2.64x | 0.47x | 17.74% |
| Korea Gas Corporation | 22.41x | 0.28x | 1.23% |
Against fellow regulated utility KEPCO, its P/E is lower and its dividend yield more than double, and its profitability (ROE 14.7%) does not fall behind. Korea Gas Corporation (KOGAS) has such minimal net profit that its P/E is distorted, making a direct comparison difficult. A P/B of 0.33x, an EV/EBITDA below 1x and a 44.8% free-cash-flow yield are a low valuation relative to assets and cash-generating power. The low trailing P/E stems from 2025 being a good year that reflected the heat-tariff hike, and since 2026 is the phase where that benefit normalizes, this year's profit multiple also sits in the low 2x, little changed. That said, the regulatory dependence in that the core of profit is the government-set gap between the heat tariff and LNG prices, the high debt ratio (357.6%) and the fuel-cost receivables should be viewed together as discount factors.
Price history Close · MA20 · MA60
The latest close is ₩66,300 and the market capitalization is ₩767.7 billion. The price sits below its 20-day moving average (₩68,135) and below its 60-day moving average (₩71,765). 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 43.1, a neutral level. The one-month change is -3.4%, the three-month change is -4.6%, and the position relative to the 52-week high is -41.0%. Relative strength versus the KOSPI is 12 (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 11% of all stocks. Over the past three months it lagged the index by 27.9%. 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 -27.85% / 6M -57.58% / 12M -65.06%
Key metrics vs sector median
Valuation
The P/E of 2.27x is below the sector median (5.77x). The P/B of 0.33x is in line with the sector median (0.30x).
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 14.7%, above the sector average (7.0%). The operating margin is 13.2%. The debt ratio is 357.6%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.6B | $2.4B | $2.6B | +11.98% ↑ faster |
| Operating profit | $208.6M | $217.4M | $351.0M | +61.50% ↑ faster |
| Net profit | $132.2M | $139.3M | $224.6M | +61.25% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.7B | $2.8B | $2.6B | $2.4B | $2.6B |
| Operating profit | $26.3M | -$267.7M | $208.6M | $217.4M | $351.0M |
| Net profit | $14.2M | -$121.9M | $132.2M | $139.3M | $224.6M |
| Revenue CAGR | 4-yr avg 12.05% | ||||
Revenue rose 12.0% year over year (2023 ₩4.0 trillion → 2024 ₩3.6 trillion → 2025 ₩4.0 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 61.5% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 12.0%. The two-year revenue CAGR is 0.6%. In the most recent quarter (Q1 2026), revenue was 9.0% 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 9.3%, is on the high side.
- ROE of 14.7% points to solid profitability.
- Revenue grew 12.0% year over year, a sign of growth.
Points to watch
- Debt far exceeds equity (debt ratio 357.6%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 51.1%).
Recent news & events searched · sourced
- 2026-05-22EarningsFair-disclosure of preliminary Q1 2026 operating results. Winter heating-season results delivered net profit of 216.3 billion won, though versus the same period last year revenue was -9.0%, operating profit -1.1% and net profit -7.4%, a slight decline.A signal that the heat-tariff-hike benefit has passed its peak and is normalizing gently. Operating profit effectively held at the prior-year level, so this is not a sharp deterioration. Source
- 2026-05-22FilingDisclosure of extraordinary shareholders' meeting results. Handled dividend-process agenda items in the direction of fixing the dividend amount first and then setting the record date.A governance improvement that raises the predictability of shareholder returns for a high-yield stock. Favorable for income investors. Source
- 2026-05-13FilingFiling of the quarterly report as of March 2026. Regular disclosure of Q1 financial statements and business status.A periodic report allowing the quarterly results and financial condition to be checked. It captures the actual figures of the tariff-normalization phase. Source
- 2026-05-06IRDisclosure announcing an IR briefing. Direct explanation of results and business plans to the market.A communication channel for confirming the direction of a regulated public utility's tariff and dividend policy. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Corporate governance report
- 2026-05-22EarningsFair-disclosure notice
- 2026-05-22Disclosure
- 2026-05-22Shareholders' meeting notice
- 2026-05-13PeriodicQuarterly report (amended)
- 2026-05-13PeriodicQuarterly report
- 2026-05-08EarningsFair-disclosure notice
- 2026-05-07Disclosure
- 2026-05-07Shareholders' meeting notice
- 2026-05-07Disclosure
- 2026-05-07Shareholders' meeting notice
- 2026-05-06Disclosure
📖 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.