STX Engine (077970) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
STX Engine makes large marine and power-generation diesel engines, special-purpose defense engines for the K9 self-propelled howitzer and tanks, and defense electronic and communications equipment. Its commercial diesel engines (around a 20% margin) drive profitability, and its in-house-developed 1,000-horsepower SMV1000 localized the engine for the K9 howitzer. In March 2026, a cluster of large defense contracts filled its revenue for the next two to three years, including a ₩264.4 billion export-engine supply deal with Hanwha Aerospace (36.5% of recent revenue) and a ₩53.6 billion deal for exports to India. The strengths to note are that, as a parts beneficiary of expanding K-defense exports, it has a 20% ROE and revenue visibility through 2028, making its forward valuation lower than that of finished-defense-product makers. The cautions are that the defense segment's operating margin is a thin 1.6%, the debt ratio is 237.5%, and concentration among large customers is high.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Machinery & Electrical Equipment” (Shipbuilding, Machinery, Defense & Power Equipment), a type typically read first through P/E.
Machinery and electrical-equipment makers build and sell industrial gear, and orders and shipments feed fairly directly into profit. Because revenue translates cleanly into current-year net income, price-to-earnings (P/E) is the natural first lens.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 235.6%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 99.4%).
- Revenue rose 8.9% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 35.8% higher than a year earlier.
- ROE is 20.8% (controlling-interest basis). It is above the sector average.
- Operating margin is 8.5%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder UAMCO Corporate Rebound No. 8 Corporate Financial Stability Private Equity Investment Limited Partnership 61.68% (corporate)
Controlling bloc incl. related parties 61.68%
With the controlling bloc holding 62%, control is very secure but the free float is thin.
🔎 In-depth analysis Reading
STX Engine makes large diesel engines and special-purpose engines for the defense industry. Its business splits into three main branches. First, the commercial business covers diesel engines for ships and power generators, which posted ₩249.4 billion in 2025 revenue with an operating margin of about 20%, the best-earning segment. Second, the special-purpose (defense) business covers engines for the K9 self-propelled howitzer and K1 tank plus naval propulsion engines, the largest segment at ₩362.5 billion in revenue (about 49% of the total). Third, electronics and communications covers defense electronic and communications equipment at ₩132.9 billion. The core is the in-house-developed 1,000-horsepower SMV1000 engine, which has been supplied in volume to Hanwha Aerospace since 2024 and localized the engine for the K9 howitzer.
The latest close is ₩27,300 and the market capitalization is ₩1.1 trillion. The price sits above its 20-day moving average (₩24,272) and below its 60-day moving average (₩32,211). 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 53.0, a neutral level. The one-month change is +4.0%, the three-month change is -52.8%, and the position relative to the 52-week high is -59.0%. Relative strength versus the KOSPI is 20 (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 20% of all stocks. Over the past three months it lagged the index by 44.7%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
The valuation metrics should be read with the earnings-surge phase in mind. The P/E ratio (how many times one year's earnings the price is) is 15.90x. That is on last year's confirmed earnings, so it does not reflect this year's earnings growth. The P/B ratio (how many times net assets the price is) is 3.04x. Profitability is excellent, with ROE (how much is earned per year on equity) at a high 20.1%. There is, however, some financial burden. The debt ratio (debt versus equity) is a somewhat high 237.5%, and the current ratio is 97.6%, meaning debt due within a year is slightly more than the assets to cover it. EV/EBIT (enterprise value divided by operating profit, in effect a P/E that reflects debt) is 18.5x, and EV/Sales (enterprise value divided by revenue) is 1.6x. Net debt (total borrowings minus cash) is about ₩149.5 billion. The FCF yield (actual cash generated versus market cap) is 4.7%, meaning the company generates cash as well as earnings.
The earnings growth is fierce. Revenue rose from ₩630.4 billion in 2023 to ₩724.6 billion in 2024 to ₩789.3 billion in 2025, growing at a 12% annual average over three years. Operating profit jumped over the same period from ₩18.9 billion to ₩42.2 billion to ₩69.6 billion. Net profit surged from ₩5.7 billion to ₩27.2 billion to ₩68.9 billion. After escaping a loss in 2022, earnings have stepped up on the back of defense demand. The first quarter of 2026 was strong too, with revenue of ₩189.0 billion (+35.8%) and net profit of ₩16.7 billion (+58.0%). The growth drivers are clear. Exports of the K9 self-propelled howitzer and K1 tank to Poland, Egypt and elsewhere are rising, boosting demand for the core component, special-purpose engines. Naval-engine revenue is also expanding. Reflecting this earnings trajectory, it is natural that this year's net profit grows above last year's. On that basis, on a forward (this year's expected earnings) basis, valuation is around 13x, below last year's confirmed P/E of 16.5x. Trailing (last year's) metrics may look expensive, but for a stock with rising earnings, forward is the real picture.
A cluster of large defense-engine contracts landed in March 2026. The biggest was an export-engine supply deal with Hanwha Aerospace for defense projects worth ₩264.4 billion (36.5% of recent revenue), running through November 2028. A ₩53.6 billion deal (7.4%) for high-altitude engine assemblies for export to India was also signed. Existing contracts were increased: a Hanwha Aerospace deal rose from ₩128.5 billion to ₩132.3 billion, with its period extended to September 2027. These contracts are engine volumes tied to K9 howitzer exports and will fill defense revenue for the next two to three years. Two large customers, each accounting for over 10% of revenue (₩152.4 billion and ₩109.0 billion), are both concentrated in the defense and electronics-communications segments, so the high dependence on defense customers such as Hanwha is a structure to keep in view.
The strengths are clear. It is one of the few companies to have localized the K9 howitzer engine, and it is a parts beneficiary of expanding K-defense exports. With a 20% ROE, profitability is good, and March's large orders raised revenue visibility through 2028. Reflecting earnings growth, its forward valuation is lower than that of finished-defense-product makers. The cautions deserve a fair look too. The defense (special-purpose) segment is the largest by revenue, but its operating margin is a thin 1.6%, so earnings are still carried by commercial diesel engines (a 20% margin). At a 237.5% debt ratio, financial headroom is not ample. High customer concentration means results can wobble around order timing. In sum, it is strong when export volumes load in as planned and special-purpose margins improve, and it grows more volatile when the financial burden and customer concentration come to the fore.
🔎 Valuation vs peers Undervalued
Compared against the K-defense export value chain (finished products and engines) and large defense and shipbuilding stocks.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 38.68x | 5.46x | 17.56% |
| Hyundai Rotem | 20.44x | 4.89x | 25.33% |
| Hanwha Ocean | 22.31x | 4.07x | 22.43% |
| LIG Defense & Aerospace | 60.96x | 10.23x | 20.46% |
Large finished-defense and shipbuilding stocks trade at P/E ratios of 26-66x and P/B ratios of 5-12x. STX Engine supplies core components (engines) to these very companies yet trades far lower, at a P/E of 16.5x (on last year) and a P/B of 3.3x. Last year's trailing P/E, at the start of an earnings surge, does not capture this year's growth. On a forward basis reflecting the earnings trajectory, it falls further to about 13x. It shares the same K-defense export flow at the parts level, yet its valuation is markedly lower than that of finished-product makers, so even allowing for a parts-maker discount it reads as undervalued. That said, the high debt ratio and the low margin of the special-purpose segment should be weighed together as discount factors.
Price history Close · MA20 · MA60
The latest close is ₩27,300 and the market capitalization is ₩1.1 trillion. The price sits above its 20-day moving average (₩24,272) and below its 60-day moving average (₩32,211). 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 53.0, a neutral level. The one-month change is +4.0%, the three-month change is -52.8%, and the position relative to the 52-week high is -59.0%. Relative strength versus the KOSPI is 20 (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 20% of all stocks. Over the past three months it lagged the index by 44.7%. 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 -44.68% / 6M -33.56% / 12M -40.46%
Key metrics Computed vs sector median
Valuation
The P/E of 15.90x is in line with the sector median (14.07x). The P/B of 3.04x is above the sector median (1.01x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
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) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 10.1%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.249x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 20.8%, above the sector average (2.0%). The operating margin is 8.5%. The debt ratio is 235.6%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $442.8M | $509.0M | $554.5M | +8.93% ↓ slower |
| Operating profit | $13.3M | $29.7M | $48.9M | +64.77% ↓ slower |
| Net profit | $4.0M | $19.1M | $48.4M | +153.34% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $346.7M | $382.2M | $442.8M | $509.0M | $554.5M |
| Operating profit | $2.6M | -$6.2M | $13.3M | $29.7M | $48.9M |
| Net profit | $706,016 | -$18.7M | $4.0M | $19.1M | $48.4M |
| Revenue CAGR | 4-yr avg 12.46% | ||||
Revenue rose 8.9% year over year (2023 ₩630.4 billion → 2024 ₩724.6 billion → 2025 ₩789.3 billion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 64.8% year over year. The pace of that profit growth is gradually easing. Over the 5 years on record, revenue compound annual growth (CAGR) is 12.5%. The two-year revenue CAGR is 11.9%. In the most recent quarter (Q1 2026), revenue was 35.8% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- ROE of 20.8% points to solid profitability.
Points to watch
- Revenue rose 8.9% year over year, and the pace is slowing (3-year trend: rising).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-03-25UpdateSigned a ₩264.4 billion export-engine supply contract for defense projects with Hanwha Aerospace (36.5% of recent revenue), running through 2028-11-24.A core pillar of medium-term defense revenue. Substantially raises special-purpose revenue visibility for 2026-2028. Source
- 2026-03-25UpdateSigned a ₩53.6 billion supply contract for high-altitude engine assemblies for export to India (7.4% of recent revenue), running through 2027-07-07.Engine volume linked to K9 howitzer exports to India. Broadens the export base. Source
- 2026-03-24UpdateIncreased an existing Hanwha Aerospace supply contract from ₩128.5 billion to ₩132.3 billion, with the period extended to 2027-09-21.Expanding an existing order and extending its term strengthens the durability of defense revenue. Source
- 2026-05-15EarningsFirst-quarter 2026 revenue of ₩189.0 billion (+35.8%), operating profit of ₩17.5 billion (+13.3%), net profit of ₩16.7 billion (+58.0%).Double-digit growth in revenue and net profit continues. The early stage of order fulfillment showing up in results. Source
- 2026-03-30FilingAmended to note that a revised contract to extend the end date of an existing ₩33.6 billion supply contract (6.2% of revenue) with the Defense Acquisition Program Administration was not concluded.Possibility of changed terms on some defense contracts. Shifts in contract timing and terms are a short-term variable. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-06-01Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-06Amended filing
- 2026-03-31Shareholders' meeting notice
- 2026-03-30Single supply/sales contract (amended)
- 2026-03-25Single supply/sales contract
- 2026-03-25Single supply/sales contract
- 2026-03-24Single supply/sales contract (amended)
- 2026-03-23PeriodicAnnual business report
- 2026-03-23Audit report
- 2026-03-16Shareholders' meeting notice
- 2026-03-16Shareholders' meeting notice
📖 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.