Novarex is a contract manufacturer (ODM/OEM) that develops and produces health-functional foods for other companies' brands rather than selling under its own. OEM work and higher-margin ODM design each account for roughly half of revenue, and the company holds the industry's largest portfolio of 'individually approved ingredients' that the Ministry of Food and Drug Safety has recognized on a stand-alone basis, which serves as a barrier to entry. Exports, notably to China, are driving recent growth. In February 2026 it filed a preliminary disclosure of a 30%-plus rise in revenue and profit, and in March it declared a dividend of ₩400 per share (a yield of about 2.9% and a payout ratio of about 20%); full-year 2025 figures were confirmed at revenue of ₩404.3 billion, operating profit of ₩43.1 billion and net profit of ₩35.4 billion, near record highs, with double-digit growth also confirmed in Q1, while a new Osong plant is expanding capacity. What stands out is that, with peers Cosmax NBT (ROE -34%) and Kolmar BNH (ROE -6.4%) having slipped into losses, Novarex delivers a 14% ROE and double-digit operating margin while growing revenue at a 30%-plus pace, yet trades near book value at a P/B of 0.95x and a forward P/E of 3.02x. On the cautious side, the share price sits below its moving averages in a weak trend, and the expansion outlay lands before the return on that investment does, so the appeal could fade if growth slows.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 35.8% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 33.2% higher than a year earlier.
- ROE is 14.0% (controlling-interest basis). It is above the sector average.
- Operating margin is 10.7%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Kwon Suk-hyung 12.5% (individual)
Controlling bloc incl. related parties 31.3%
With the controlling bloc holding 31%, the ownership structure is stable.
🔎 In-depth analysis
- Novarex is a contract manufacturer (ODM/OEM) that develops and produces health-functional foods for other companies' brands rather than selling under its own.
- Revenue is split almost evenly between OEM work, made to a client's specifications, and ODM, where the company also designs the formulation and ingredients using its own technology; the design-heavy ODM side carries higher margins.
- Its core strength lies in 'individually approved ingredients' - ingredients the company itself has taken through clinical testing and review to win stand-alone functional approval from the Ministry of Food and Drug Safety.
- It holds the most such ingredients in the industry, a barrier that competitors cannot easily replicate.
- Recently, exports, notably to China, have grown quickly and driven revenue growth.
- The latest close is ₩13,170 and market capitalization is ₩240.4 billion.
- The price sits above its 20-day line (₩13,110) but below its 60-day line (₩14,518).
- With the short- and medium-term trends diverging, the direction should be read separately.
- RSI (a gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 46.2, a neutral level.
- The one-month change is -9.3%, the three-month change is -0.2%, and the position versus the 52-week high is -40.1%.
- Relative strength against the KOSDAQ is 72 (1-99, computed 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 28% of all stocks by strength.
- Over the past three months it outpaced the index by 34.9%.
- Chart reading is best done alongside trading volume and disclosure dates.
- The P/E ratio (how many times one year's earnings the price represents) is 6.79x and the P/B (how many times net asset value per share the price represents) is 0.95x, so the stock trades around book value.
- ROE (how much is earned in a year on shareholders' equity) is 14.0%, showing efficient use of capital, and profitability is sound with a 10.7% operating margin and an 8.8% net margin.
- The debt ratio (debt against equity) is 142%, which looks somewhat elevated on its own, but with a current ratio (readily realizable assets against debt due within a year) of 226% and an interest coverage ratio (how many times operating profit covers interest) of 9.6x, there is ample capacity to service interest.
- One point to note is that the 6.25x P/E above is a trailing figure based on confirmed 2025 earnings.
- With profit now rising quickly, the forward P/E on this year's expected earnings drops to around 4.5x, which is low even against profitable peers (roughly in line with Seohung's forward P/E) and can be read as a signal of undervaluation.
- On past earnings alone it looks ordinary, but measured against this year's larger earnings it looks cheaper.
- Growth is clear.
- In 2025 revenue rose 35.8%, operating profit 85.6% and net profit 53.9% year on year, all three accelerating, and over five years the trend has been upward (₩302.2 billion in 2023 to ₩404.3 billion in 2025).
- Cumulative Q1 2026 results held the pace, with revenue up 33.2%, operating profit up 68.0% and net profit up 106.4%.
- The reason earnings have stepped up is clear: the ODM mix, led by individually approved ingredients, is rising and improving margins, while exports - notably to China - grow quickly, adding both clients and volume.
- On top of this, the new Osong plant is expanding capacity, securing the room to absorb rising demand.
- The forward P/E on this year's expected earnings falling to 4.5x reflects this actual earnings increase, not a figure simply extrapolated from one quarter.
- That said, some of the Q1 net-profit increase may include non-operating factors, so tracking the operating-margin trend each quarter gives a more precise read on earnings quality.
- Recent disclosures center on improving results and shareholder returns.
- In February 2026 a preliminary disclosure flagged a 30%-plus change (increase) in annual revenue and profit, and in March the company declared a ₩400-per-share cash dividend (a yield of about 2.9%, a payout ratio of about 20%), continuing to share profit with shareholders.
- The 2025 annual report filed in March confirmed near-record results of ₩404.3 billion in revenue, ₩43.1 billion in operating profit and ₩35.4 billion in net profit, and the Q1 2026 report filed in May again confirmed double-digit growth in revenue and profit.
- The company is expanding capacity through a new plant in the Osong area, which can be seen as a medium- to long-term investment to meet rising domestic and overseas demand.
- The essence of Novarex is a contract-manufacturing leader that pairs profit with growth.
- While fellow contract manufacturers Cosmax NBT (ROE -34%) and Kolmar BNH (ROE -6.4%) have slipped into losses, Novarex has held a 14% ROE and a double-digit operating margin while lifting revenue at a 30%-plus pace, and it owns a hard-to-copy asset in its individually approved ingredients.
- Even so, the P/B stays at 0.95x, around book value, and the forward P/E on this year's earnings falls to 3.02x.
- A company with better profitability and growth trades at asset value, which is enough to read as undervalued.
- Points to watch: (1) the price is in a weak trend below all its moving averages, so there is no guarantee the gap between results and price closes quickly; (2) the sharp Q1 net-profit jump may include non-operating factors, so checking earnings quality each quarter helps; and (3) the plant expansion is a medium- to long-term growth base, but the investment burden lands before completion and start-up.
- In short, the strengths are clear as long as earnings growth and strong exports continue, and the appeal weakens if growth slows or the return on the expansion outlay is delayed.
🔎 Valuation vs peers Undervalued
Health-functional-food contract developer-manufacturers (ODM/OEM) and capsule/ingredient-based peers; Cosmax NBT and Kolmar BNH share the same contract-manufacturing business, while Seohung is closely adjacent in capsules and health-food materials.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Cosmax NBT | — | 3.70x | -34.00% |
| Kolmar BNH | — | 0.69x | -6.41% |
| Suheung | 5.11x | 0.45x | 8.90% |
Against its direct peer set, Novarex's position stands out. Fellow contract manufacturers Cosmax NBT and Kolmar BNH are in losses and cannot even be assigned a P/E, whereas Novarex keeps growing profitably with a 14% ROE and a 10.7% operating margin, yet its P/B stays at 0.95x, around book value. A company with better profitability and growth trading at asset value can be viewed as a discount. That said, the 7.0x P/E shown is a trailing figure on confirmed 2025 earnings, which has limits at an earnings inflection point; measured on a forward basis that reflects this year's larger earnings, it drops further and supports the undervalued read. Still, with the price in a weak trend and earnings quality (non-operating factors) needing a check, rather than declaring it outright 'cheap' it is better seen as an attractive zone so long as continued growth and earnings quality are confirmed.
Price history Close · MA20 · MA60
The latest close is ₩13,170 and the market capitalization is ₩240.4 billion. The price sits above its 20-day moving average (₩13,110) and below its 60-day moving average (₩14,518). 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 46.2, a neutral level. The one-month change is -9.3%, the three-month change is -0.2%, and the position relative to the 52-week high is -40.1%. Relative strength versus the KOSDAQ is 72 (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 72% of all stocks. Over the past three months it outpaced the index by 34.9%. 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 +34.90% / 6M +14.32% / 12M -27.70%
Key metrics vs sector median
Valuation
The P/E of 6.79x is below the sector median (8.80x). The P/B of 0.95x is above the sector median (0.51x). 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 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 2.248x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 14.0%, above the sector average (4.0%). The operating margin is 10.7%. The debt ratio is 142.1%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $200.3M | $197.3M | $267.9M | +35.78% ↑ faster |
| Operating profit | $16.9M | $15.4M | $28.5M | +85.65% ↑ faster |
| Net profit | $14.6M | $15.3M | $23.5M | +53.87% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $184.8M | $186.7M | $200.3M | $197.3M | $267.9M |
| Operating profit | $19.9M | $16.7M | $16.9M | $15.4M | $28.5M |
| Net profit | $17.5M | $13.2M | $14.6M | $15.3M | $23.5M |
| Revenue CAGR | 4-yr avg 9.74% | ||||
Revenue rose 35.8% year over year (2023 ₩302.2 billion → 2024 ₩297.7 billion → 2025 ₩404.3 billion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 85.7% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 9.7%. The two-year revenue CAGR is 15.7%. In the most recent quarter (Q1 2026), revenue was 33.2% 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 3.0%, is on the high side.
- ROE of 14.0% points to solid profitability.
- Revenue grew 35.8% year over year, a sign of growth.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-05-15EarningsQ1 2026 report filed - cumulative revenue ₩120.8 billion (+33.2%), operating profit ₩14.1 billion (+68.0%), net profit ₩14.9 billion (+106.4%), continuing the uptrendShort term: confirms earnings momentum. Medium term: serves as a quarterly benchmark for whether export-led growth continues. Source
- 2026-03-12DividendCash dividend declared - ₩400 per share (yield about 2.9%, payout ratio about 20%), maintaining the shareholder-return stanceShort term: dividend appeal. Medium term: a signal of stable dividend capacity amid earnings growth. Source
- 2026-02-02EarningsPreliminary disclosure of a 30%-plus change (increase) in revenue and profit - 2025 annual revenue ₩404.3 billion, operating profit ₩43.1 billion, net profit ₩35.4 billionShort term: confirms the scale of annual earnings improvement. Medium term: a first signal of accelerating core profitability and growth, later confirmed by the annual report. Source
- 2026-03-19Filing2025 annual report filed - annual revenue ₩404.3 billion, operating profit ₩43.1 billion, net profit ₩35.4 billion, confirming near-record resultsShort term: confirms the annual fundamentals. Medium term: verifies the profitability and growth base of the core contract-manufacturing business. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-15OwnershipOwnership-change filing
- 2026-05-15OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-15PeriodicQuarterly report
- 2026-03-27Disclosure
- 2026-03-27Disclosure
- 2026-03-27Shareholders' meeting notice
- 2026-03-19PeriodicAnnual business report
- 2026-03-19Audit report
- 2026-03-12Shareholders' meeting notice
- 2026-03-12Shareholders' meeting notice
- 2026-03-12DividendCash/stock dividend decision
- 2026-03-12Shareholders' 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.