Hwaseung Enterprise is an ODM company that designs and produces footwear for global sports brands and supplies it without a brand of its own; most of its revenue comes from footwear, its single customer Adidas accounts for roughly 90% of footwear revenue, and it runs Vietnam and Indonesia as its two main production bases. In March it presented a corporate value-up plan targeting a payout ratio of around 20% and raised its 2025 dividend 11.1% to ₩50 per share, and the May Q1 report confirmed a joint decline in revenue and profit. On balance, its strengths are a low P/B of 0.41x and P/S of 0.13x on assets and revenue, along with a dividend it raised even in a loss year, while the cautions are a Q1 loss following 2025, reliance on the single customer Adidas, and a tight balance sheet with a 286% debt ratio and a 76% current ratio, all of which must be viewed alongside confirmation of an earnings recovery.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 286.2%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 76.1%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue fell 2.8% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 17.1% lower than a year earlier.
- ROE is -6.3% (controlling-interest basis). It is below the sector average.
- Operating margin is 2.3%.
- P/E is hard to compute here, so this is read on P/B.
Ownership & governance As of 2025-12-31
Largest shareholder Hwaseung Industries 68.37% (corporate)
Controlling bloc incl. related parties 68.65%
With the controlling bloc holding 69%, control is very secure but the free float is thin.
🔎 In-depth analysis
- Hwaseung Enterprise is an ODM company (developing and manufacturing to the buyer's requirements) that designs and produces footwear for global sports brands and supplies it without a brand of its own.
- Most of its revenue comes from the footwear segment, where its single customer Adidas dominates with roughly 90% of footwear revenue.
- With Vietnam and Indonesia as its two main production bases plus a factory in China, it runs an overseas manufacturing structure, so labor costs, exchange rates, freight, and shifts in customer order volumes flow straight through to results.
- Headquartered in Korea, it has broadened into four segments and 24 affiliates spanning footwear plus apparel and accessories, materials, and supply-chain solutions, but the axis of its profit and loss remains contract footwear production for Adidas.
- The latest close is ₩3,045 and the market cap is ₩184.5 billion.
- The price sits below its 20-day line (₩3,238) and below its 60-day line (₩3,895).
- Trading under both its short- and mid-term moving averages, the trend looks subdued.
- The RSI (a supplementary gauge that compares upward versus downward strength over the past 14 days on a 0-100 scale) is 35.0, a neutral level.
- The one-month change is -12.8%, the three-month change is -31.9%, and the position versus the 52-week high is -63.8%.
- Relative strength versus the KOSPI is 2 (on a 1-99 scale, computed from returns against 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 99% of all stocks by strength.
- Over the past three months it lagged the index by 46.5%.
- Chart reading is best done alongside trading volume and disclosure dates.
- With profit currently in the red, the P/E (how many times a year's profit the price represents) cannot be computed, and the weight of valuation shifts toward assets and revenue.
- The P/B (how many times book value per share the price represents) is 0.40x, a price below even half of book net assets, and the P/S (how many times revenue the price represents) is also 0.13x, a market cap small relative to revenue.
- This means the price is clearly in a low band against assets and revenue.
- On profitability, ROE (how much is earned in a year on equity) is -6.3%, a loss, and operating margin sits at just 2.3%, so showing a return to profit is the key.
- On the balance sheet, the debt ratio (debt against equity) is high at 286%, the current ratio is 76%, meaning debts due within a year exceed assets that can be turned into cash immediately, and the interest-coverage ratio is below 1x, so covering interest from operating profit alone is tight.
- In sum, the share price is in a cheap band against assets and revenue, but for that discount to narrow, profit and financial strength need to recover together.
- The top line jumped from ₩1,213.8 billion in 2023 to ₩1,609.6 billion in 2024 (+32.6%), then rested a beat at ₩1,564.4 billion in 2025 (-2.8%), and profit and loss swung more sharply.
- Operating profit surged more than sixfold to ₩82.6 billion in 2024, then fell below half to ₩35.7 billion in 2025 (-56.8%), and net profit swung from +₩33.1 billion in 2024 to -₩28.9 billion in 2025, into the red.
- Q1 2026 continued the loss, with revenue of ₩350.9 billion (-17.1%), an operating profit of -₩4.8 billion, and net profit of -₩9.2 billion, so no sign of a turn in profit has yet been confirmed.
- While profit is in the red, P/E-family metrics carry little meaning, so a forward P/E on this year's earnings was not computed either.
- The direction of results is a structure heavily governed by a recovery in order volumes from customers such as Adidas and by improvements in production efficiency.
- Recent disclosures show both "intent to return capital to shareholders" and "weak results" together.
- In March 2026, through a corporate value-up plan (voluntary disclosure), the company presented a target payout ratio of around 20% based on a three-year average of separate net profit (excluding one-offs), and set the 2025 dividend at ₩50 per share, or ₩3.03 billion in total, up 11.1% from the prior year.
- In April it held an investor briefing (IR) for institutional investors, explaining its results and management situation directly.
- The Q1 2026 report filed in May confirmed a joint decline in revenue and profit, marking a phase with a gap between the resolve of the shareholder-return policy and immediate profit and loss.
- The strengths are (1) that the share price is in a low band against assets and revenue, at a P/B of 0.41x and a P/S of 0.13x, and (2) a shareholder-return policy that specifies a payout ratio of around 20% and a track record of raising the dividend even in a loss year.
- The cautions are (1) that an earnings recovery has yet to be confirmed, with a Q1 2026 loss following the 2025 loss; (2) that with most of revenue tied to Adidas alone, results swing heavily with the customer's order volumes and inventory cycle; and (3) that financial headroom is tight, with a 286% debt ratio and a 76% current ratio.
- Taken together, it is an asset-type structure in which, once profit settles back on a recovery in customer orders and improved production efficiency, the low P/B becomes a foothold for re-valuation, and conversely, if the loss runs long, the discount to that asset value may persist.
- It is a stock with two distinct sides: cheap on assets and revenue, needing confirmation of a recovery on profit and the balance sheet.
🔎 Valuation vs peers Inconclusive
The business substance is ODM/OEM footwear manufacturing for global sports brands, and with no suitable domestic listed peer, judgment rests on its own time series (past P/B and P/S) and its position against assets and revenue; simple numeric comparison within the same dataset carries limited meaning because the industry differs.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hwaseung Enterprise | 0.00x | 0.40x | -6.26% |
(a) With profit in the red, the P/E cannot be computed, so comparison on an earnings multiple is impossible, and judgment shifts to asset- and revenue-based measures such as P/B and P/S. A P/B of 0.46x is a price below half of net assets, but this is also a signal that the market is discounting the asset value by that much. (b) The trailing P/E on last year's confirmed results is meaningless because of the loss, and the forward P/E on this year's projected earnings is also hard to set as a positive value as long as the Q1 loss continues. In other words, before an earnings inflection is confirmed, it is hard to call the stock cheap or expensive outright. (c) Until a swing to profit and a recovery in Adidas orders are confirmed, it is hard to nail down as either undervalued or overvalued, so it is left Inconclusive. The low P/B can be a foothold for re-valuation, or grounds for a further discount if losses persist.
Price history Close · MA20 · MA60
The latest close is ₩3,045 and the market capitalization is ₩184.5 billion. The price sits below its 20-day moving average (₩3,238) and below its 60-day moving average (₩3,895). 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 35.0, a neutral level. The one-month change is -12.8%, the three-month change is -31.9%, and the position relative to the 52-week high is -63.8%. Relative strength versus the KOSPI is 2 (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 1% of all stocks. Over the past three months it lagged the index by 46.5%. 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 -46.46% / 6M -61.47% / 12M -84.26%
Key metrics vs whole-market median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 0.40x is below the whole-market median (1.15x).
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 -6.3%, below the whole-market average (5.0%). The operating margin is 2.3%. The debt ratio is 286.2%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $804.5M | $1.1B | $1.0B | -2.81% ↓ slower |
| Operating profit | $8.6M | $54.7M | $23.7M | -56.77% ↓ slower |
| Net profit | -$17.4M | $21.9M | -$19.2M | -187.33% |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $754.6M | $1.1B | $804.5M | $1.1B | $1.0B |
| Operating profit | $4.7M | $35.0M | $8.6M | $54.7M | $23.7M |
| Net profit | -$4.3M | -$6.6M | -$17.4M | $21.9M | -$19.2M |
| Revenue CAGR | 4-yr avg 8.27% | ||||
Revenue fell 2.8% year over year (2023 ₩1.2 trillion → 2024 ₩1.6 trillion → 2025 ₩1.6 trillion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating profit fell 56.8% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 8.3%. The two-year revenue CAGR is 13.5%. In the most recent quarter (Q1 2026), revenue was 17.1% 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.
Points to watch
- Debt is somewhat higher than equity (debt ratio 286.2%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 76.1%).
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 2.8% year over year (3-year trend: mixed).
Recent news & events searched · sourced
- 2026-03-05FilingCorporate value-up plan (voluntary disclosure): presents a dividend policy targeting a payout ratio of around 20% based on a three-year average of separate net profit (excluding one-offs). 2025 payout ratio 25.0%, dividend ₩3.03 billion (+11.1% year on year).A medium-term positive that formalizes the intent to return capital to shareholders, but with no revenue or operating-profit targets presented, the direct effect on earnings visibility is limited. Source
- 2026-04-07IRNotice of an investor briefing (IR) for major domestic and overseas institutional investors. Results and key management status, with Q&A (2026-04-08).A near-term communication channel for the company to explain its management status directly. An occasion to review business direction amid weak results. Source
- 2026-05-14EarningsQ1 2026 report filed: revenue ₩350.9 billion (-17.1% year on year), operating profit -₩4.8 billion (swing to a loss), net profit -₩9.2 billion, a joint deterioration in profit and loss.A near-term negative. Following the 2025 annual loss, the quarterly loss widened, confirming a delayed profitability recovery. Source
- 2026-03-12Filing2025 annual report filed: annual revenue ₩1,564.4 billion (-2.8%), operating profit ₩35.7 billion (-56.8%), net profit -₩28.9 billion, a confirmed swing to a loss.A medium-term negative. The sharp 2024 improvement reversed within a single year, reconfirming a business structure with large profit-and-loss volatility. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| 2025 dividend (per share / total / payout ratio) | DPS ₩50,x 1.43% | ₩50,x ₩3.0 billion, 2025 25.0% | Confirmed | link |
| Q1 2026 profit and loss | revenue 3,509, operating profit -48, net profit -92(revenue YoY -17.1%) | 2026 1 revenue·operating profit·net profit | Confirmed | link |
| 2025 annual profit and loss (swing to a loss) | revenue 15,644, operating profit 357, net profit -289 | 2025 | Confirmed | link |
Recent filings
- 2026-06-01Corporate governance report
- 2026-05-20PeriodicQuarterly report (amended)
- 2026-05-14PeriodicQuarterly report
- 2026-04-08Audit report
- 2026-04-07Disclosure
- 2026-04-07Disclosure
- 2026-03-30Audit report
- 2026-03-20Disclosure
- 2026-03-20Shareholders' meeting notice
- 2026-03-12PeriodicAnnual business report
- 2026-03-05Disclosure
- 2026-03-05Amended filing
📖 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.