KP Aero Industries is a small-cap stock with a market capitalization of ₩60.5 billion that machines and assembles aircraft parts and makes molds and jigs for guided weapons; rather than finished aircraft, it supplies the precision parts that go into aerospace and defense equipment and the tools used to make them. In the first quarter, profit rose several-fold relative to revenue, confirming an earnings inflection, and ROE of 9.1% is above the peer average, but the debt ratio of 478.9% and an interest-coverage ratio of 1.2x leave a meaningful debt burden, and a July 2025 convertible bond (conversion price ₩9,537, ₩4.0 billion) and merger-related disclosures followed. What stands out lately is that if the first-quarter earnings improvement carries into the remaining quarters and debt and share-count changes stay controlled, the undervaluation appeal of a below-peer forward P/E becomes clearer; on the other hand, if the earnings improvement proves temporary or a merger or conversion sharply raises the share count, that appeal could weaken.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 478.9%).
- Revenue rose 8.6% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 6.7% higher than a year earlier.
- ROE is 9.1% (total-net basis). It is above the sector average.
- Operating margin is 4.9%.
- The P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder Yoon Ki-hyung 20.5% (individual)
Controlling bloc incl. related parties 47.8%
With the controlling bloc holding 48%, the ownership structure is stable.
🔎 In-depth analysis
- Since its founding in 1990, KP Aero Industries has machined and assembled aircraft parts and made in-house the jigs and fixtures (dedicated tools and jigs used to cut and fit parts) used in that work.
- The business splits broadly in two.
- The aerospace segment covers aircraft-part machining, module assembly and tool making; the defense and space segment covers molds and jigs for guided weapons.
- In other words, it is not a company that sells finished aircraft but one that earns money by supplying the precision parts that go into aircraft and defense equipment and the tools used to make those parts.
- As a small-cap with a ₩60.5 billion market capitalization, it warrants watching not only the business itself but also how a single disclosure such as financing or a merger affects earnings and the share count.
- The latest close is ₩8,810 and market capitalization is ₩65.1 billion.
- The RSI (a supplementary gauge that weighs recent up-moves against down-moves over the past 14 days on a 0-100 scale) is 21.0, near oversold territory.
- The one-month change is -15.0% and the price stands -79.9% from its 52-week high.
- Chart reading is best done together with volume and disclosure dates.
- Recent full-year (2025) revenue is ₩53.9 billion, operating profit ₩2.6 billion and net profit ₩1.6 billion.
- The operating margin is 4.9% and ROE (how much a company earns in a year on its own equity) of 9.1% is above the peer average.
- On last year's confirmed results the P/E (how many times a year's earnings the price is) of 41.89x and the P/B (how many times book value the price is) of 3.81x look high on the numbers alone.
- But this company is at an inflection point where profit is rising quickly, so a trailing P/E based on last year's earnings tends to overstate the true value.
- The forward P/B on this year's earnings comes down to 3.81x, below the peer median, which is why the diagnosis reads as undervalued.
- In other words, the high trailing multiple is less a burden than a temporary feature of a moment when earnings have just begun to climb.
- That said, the debt ratio (debt relative to equity) of 478.9% is a clear point to check.
- Revenue rose for three straight years, from ₩34.6 billion in 2023 to ₩49.7 billion in 2024 and ₩53.9 billion in 2025.
- The top line kept expanding, but the pace of growth eased from +43.6% the prior year to +8.6%.
- The real change shows up in earnings.
- In the most recent quarter (first quarter 2026), revenue of ₩13.7 billion was up 6.7% year on year, while over the same period operating profit jumped 99.7% and net profit surged 562.6%.
- When profit rises several-fold on a small revenue gain, it signals that the company has crossed its fixed-cost threshold, so most additional revenue now drops to profit.
- On this year's forward basis, revenue of ₩62.6 billion and net profit of ₩10.3 billion are penciled in, reflecting the assumption that the strong earnings improvement confirmed in the first quarter carries through the year.
- Supportive demand for aerospace and defense parts and tools, and a profit structure that converts even small revenue gains well into earnings, underpin these figures.
- One caveat: 2025 annual net profit (₩1.6 billion) fell from 2024 (₩3.0 billion), so on an annual basis results are somewhat uneven, and it is worth confirming that the quarterly improvement holds through the remaining quarters.
- Recent disclosures cluster around financing and a merger.
- On July 31, 2025 the company decided to issue convertible bonds, raising ₩4.0 billion in operating funds at a conversion price of ₩9,537.
- Because convertible bonds can later convert into shares, the cash inflow should be weighed alongside the possibility of a rising share count.
- On February 23, 2026 a merger-related securities registration statement was amended (supplementing the business-content, risk-management and market-outlook items), and on April 28 a securities issuance report on the merger was filed.
- Because a merger can change the scope of the business, the capital structure and the share count all at once, the key is to check in the original text which businesses are being combined and on what terms.
- The strengths are clear.
- In the first quarter, profit rose several-fold relative to revenue, confirming an earnings inflection, so this year's forward P/E on earnings is below peers.
- ROE of 9.1% is also above the peer average, so relative to earnings power the stock reads as cheap.
- A sharp short-term drop also leaves the price positioned low.
- On the other side, the points to watch are financial and disclosure-related.
- The debt ratio is high at 478.9% and the interest-coverage ratio is 1.2x, so the debt burden is meaningful, and convertible-bond and merger-related disclosures have followed, leaving room for the share count to rise.
- In short, this stock's undervaluation appeal sharpens when the first-quarter earnings improvement carries into the remaining quarters and debt and share-count changes stay controlled; conversely, if the earnings improvement proves temporary or a merger or conversion sharply raises the share count, that appeal weakens.
🔎 Valuation vs peers Overvalued
A set of aircraft-related names with market capitalizations close to KP Aero Industries', drawn from public data.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Lumir | 2550.00x | 1.92x | 0.07% |
| Vitzro Nextech | — | 3.55x | -11.19% |
| Satrec Initiative | 56.94x | 3.50x | 6.14% |
Within aircraft, we looked first at a public-data peer set with nearby market capitalizations. The current P/E (how many times a year's earnings the price is) is 41.89x and the P/B (how many times book value the price is) is 3.81x. Because smaller-cap names are heavily swayed by earnings swings and financing disclosures, we did not draw firm conclusions from last year's confirmed-results metrics alone. The forward box is based on a DART seasonality approximation.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| This year | 2026 | ₩62.6 billion | — | ₩10.3 billion |
| Next quarter | Q2 2026 | ₩16.9 billion | — | ₩9.3 billion |
Price history Close · MA20 · MA60
The latest close is ₩8,810 and the market capitalization is ₩65.1 billion. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 21.0, near oversold territory. The one-month change is -15.0%, and the position relative to the 52-week high is -79.9%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Key metrics vs whole-market median
Valuation
The P/E of 41.89x is above the whole-market median (13.81x). The P/B of 3.81x is above the whole-market median (1.15x). 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.
Profitability & financials
Return on equity (ROE) is 9.1%, above the whole-market average (5.0%). The operating margin is 4.9%. The debt ratio is 478.9%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $22.9M | $32.9M | $35.7M | +8.57% ↓ slower |
| Operating profit | $570,781 | $2.3M | $1.7M | -24.36% ↓ slower |
| Net profit | $92,805 | $2.0M | $1.0M | -48.46% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | $22.9M | $32.9M | $35.7M |
| Operating profit | — | — | $570,781 | $2.3M | $1.7M |
| Net profit | — | — | $92,805 | $2.0M | $1.0M |
| Revenue CAGR | 2-yr avg 24.88% | ||||
Revenue rose 8.6% year over year (2023 ₩34.6 billion → 2024 ₩49.7 billion → 2025 ₩53.9 billion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit fell 24.4% year over year. The decline widened. Over the 3 years on record, revenue compound annual growth (CAGR) is 24.9%. The two-year revenue CAGR is 24.9%. In the most recent quarter (Q1 2026), revenue was 6.7% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- —
Points to watch
- Revenue rose 8.6% 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
- 2025-07-31UpdateReport on material matters (decision to issue convertible bonds): conversion price ₩9,537, operating funds ₩4.0 billionThis is a disclosure where the purpose of the cash inflow should be weighed alongside the change in the share count. When a facilities or operating purpose is stated, whether the investment is actually carried out and connects to revenue is the key. Source
- 2026-04-28UpdateSecurities issuance report (merger, etc.): securities issuance report (merger, etc.) 6.0 KP Aero Industries Co., Ltd. securities issuance report (merger, business transfer, asset transfer, comprehensive stock exchange/transfer, spin-off) to the Governor of the Financial Supervisory Service, April 28, 2026, company name: KP Aero Industries Co., Ltd., representative directors: Kim Jong-pan, Yoon Seung-wook, head office locationThis is a disclosure where the purpose of the cash inflow should be weighed alongside the change in the share count. When a facilities or operating purpose is stated, whether the investment is actually carried out and connects to revenue is the key. Source
- 2026-02-23Filing[Amendment] Securities registration statement (merger): additions to the content of the matter that arose (Note 29) before amendment (Note 29) after amendment, II. Content of the business, 5. Risk management and derivative transactions - f. Derivative transactions - correction of stated items (Note 30) before amendment (Note 30) after amendment, 7. Other reference matters - e. Market conditions and outlook - correction of stated items (Note 31) before amendment (Note 31) after amendmentThis is a recent change confirmed in the original official disclosure. Confirm whether it carries through to actual results and financial metrics. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Closing price | ₩8,810 | ₩8,810 | Confirmed | link |
| Latest quarterly results | revenue ₩13.7 billion, operating profit ₩0.6 billion | revenue ₩13.7 billion, operating profit ₩0.6 billion | Confirmed | link |
| Full-year results | revenue ₩53.9 billion, operating profit ₩2.6 billion | revenue ₩53.9 billion, operating profit ₩2.6 billion | Confirmed | link |
| Original text of the financing disclosure | : ₩9,537 · ₩4.0 billion | : ₩9,537 · ₩4.0 billion | Confirmed | link |
| Original text of the financing disclosure | : 6.0 2026 04 28 : : | : 6.0 2026 04 28 : : | Confirmed | link |
| Original text of the disclosure | []: II. 5. - . - 7. - . - | []: II. 5. - . - 7. - . - | Confirmed | link |
| Basis for the forward box | DART | DART | Confirmed | link |
Recent filings
- 2026-05-26OwnershipOwnership-change filing
- 2026-05-26OwnershipOwnership-change filing
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-26OwnershipOfficers'/major-shareholders' holdings report
📖 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.