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.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 237.5%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 97.6%).
- 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 20.1% (controlling-interest basis). It is above the sector average.
- Operating margin is 8.8%.
- The forward P/E sits below the sector median.
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
- 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 closing price is ₩24,750 and the market cap is ₩993.7 billion.
- The price sits below its 20-day line (₩30,462) and below its 60-day line (₩40,655).
- Trading below both its short- and mid-term moving averages, the trend is on the subdued side.
- The RSI (a supplementary gauge that weighs buying versus selling strength over the past 14 days on a 0-100 scale) is 33.7, a neutral level.
- The one-month change is -24.5%, the three-month change is -28.7%, and the position versus the 52-week high is -62.8%.
- Relative strength against the KOSPI is 23 (on a 1-99 scale, converted 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 78% of all stocks for strength.
- Over the past three months it has lagged the index by 43.0%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- 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 14.41x.
- 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 2.90x.
- 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 | 34.98x | 5.07x | 14.51% |
| Hyundai Rotem | 22.77x | 5.69x | 25.01% |
| Hanwha Ocean | 19.33x | 3.90x | 20.19% |
| LIG Defense & Aerospace | 60.26x | 10.68x | 17.72% |
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 ₩24,750 and the market capitalization is ₩993.7 billion. The price sits below its 20-day moving average (₩30,462) and below its 60-day moving average (₩40,655). 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 -24.5%, the three-month change is -28.7%, and the position relative to the 52-week high is -62.8%. 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 43.0%. 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 -43.05% / 6M -54.76% / 12M -49.99%
Key metrics vs sector median
Valuation
The P/E is 14.41x. The P/B of 2.90x is above the sector median (1.44x). 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)
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 20.1%, above the sector average (5.0%). The operating margin is 8.8%. The debt ratio is 237.5%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $417.8M | $480.3M | $523.2M | +8.93% ↓ slower |
| Operating profit | $12.5M | $28.0M | $46.1M | +64.77% ↓ slower |
| Net profit | $3.8M | $18.0M | $45.7M | +153.34% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $327.0M | $360.6M | $417.8M | $480.3M | $523.2M |
| Operating profit | $2.4M | -$5.8M | $12.5M | $28.0M | $46.1M |
| Net profit | $666,088 | -$17.7M | $3.8M | $18.0M | $45.7M |
| 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 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.
- ROE of 20.1% points to solid profitability.
Points to watch
- Revenue rose 8.9% year over year, and the pace is slowing (3-year trend: rising).
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
- 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.