Gaonchips is a semiconductor design house: rather than making chips itself, it takes designs from fabless customers and turns them into production-ready data that a real foundry can manufacture. As an official Samsung Foundry design partner (SAFE), it handles chip design directly on the latest fine process nodes, and its revenue comes from two streams: design services and turnkey mass production. The 2025 annual report showed a swing into the red, while the Q1 2026 quarterly report confirmed a revenue rebound of +35.3%; the company had recovered a quarterly operating profit once in Q4 2025, and a wave of convertible-bond conversions in April increased the share count. The key point to watch is that the losses stemmed from front-loaded investment rather than weak demand, so if design orders convert into mass-production revenue and quarterly operating profit, the upside is strong; on the other hand, quarterly operating profit has not yet settled into positive territory, mass-production revenue is concentrated in the fourth quarter and therefore swings sharply, and the convertible bonds could dilute per-share value as they convert.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 291.3%).
- The most recent full-year net result was a loss.
- Revenue fell 29.0% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 35.3% higher than a year earlier.
- ROE is -26.3% (controlling-interest basis). It is below the sector average.
- Operating margin is -24.4%.
- P/E is hard to compute here, so this is read on P/B.
Ownership & governance As of 2025-12-31
Largest shareholder Jeong Gyu-dong 28.81% (individual)
Controlling bloc incl. related parties 47.77%
With the controlling bloc holding 48%, the ownership structure is stable.
🔎 In-depth analysis
- Gaonchips does not make and sell chips itself.
- Instead, it is a semiconductor design-solution firm (a design house) that takes designs from fabless customers and completes them into data a real foundry can actually manufacture.
- One pillar is the design service, where it lays out and verifies a customer's circuit idea to match a given process; the other is turnkey mass production, where it takes that design and delivers prototype and production wafers.
- Revenue therefore splits into design service fees and fees tied to production volume.
- Its core strength is its status as an official design partner (SAFE) within the Samsung Foundry ecosystem, performing leading-edge fine-process chip design directly.
- Because mass-production revenue varies from quarter to quarter and is especially concentrated in the fourth quarter, quarterly results tend to be volatile.
- The latest close is ₩55,600 and market capitalization is ₩658.2 billion.
- The price sits above its 20-day line (₩46,288) but below its 60-day line (₩57,162).
- Short-term and medium-term trends are diverging, so they should be read separately.
- The RSI (a gauge that weighs upward versus downward strength over the past 14 days on a 0-100 scale) is 57.3, a neutral level.
- The one-month change is +18.3%, the three-month change is -8.2%, and the price is -30.4% from its 52-week high.
- Relative strength versus the KOSDAQ is 80 (on a 1-99 scale, computed from the past year's return versus the index with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 19% of all stocks by strength.
- Over the past three months it outpaced the index by 17.8%.
- Chart reading is best done alongside trading volume and disclosure dates.
- Because net profit was in the red last year (2025), the P/E ratio (how many times a year's earnings the price represents) cannot be calculated on a trailing basis.
- This is less a sign that the company is structurally unable to make money and more a case where advanced-process investment and labor costs ran ahead of mass-production revenue, temporarily depressing the bottom line.
- The P/B ratio (the price relative to net assets) is 12.04x, well above the sector median of 2.29x.
- As an inflection stock whose earnings are just turning up off the bottom, it is hard to call it cheap or expensive from last year's fixed figures alone, but on the net-asset multiple alone it sits in a not-inconsiderable premium position.
- The real picture comes from forward metrics based on this year's earnings; the forward P/E, while somewhat below the 100x P/E of the closest same-business peer (ADTechnology), runs well above the sector forward median (about 25x), suggesting recovery expectations are already substantially priced in.
- The debt ratio (debt relative to equity) is a somewhat high 291.3%, which includes convertible bonds that can be swapped into shares, so as conversion proceeds, debt falls while the share count rises.
- Over five years, revenue grew quickly from ₩32.2 billion in 2021 to ₩96.5 billion in 2024, then fell -29% to ₩68.5 billion in 2025.
- That same year, operating profit swung from positive to -₩16.7 billion and net profit to -₩14.4 billion, not because demand disappeared but because advanced-process design investment and headcount went in ahead of mass-production revenue.
- Broken down by quarter, Q4 2025 recovered to ₩33.1 billion in revenue and +₩1.7 billion in operating profit within a single quarter, and Q1 2026 revenue rose +35.3% year over year to ₩20.6 billion, continuing the revenue recovery (operating result was still -₩3.9 billion).
- Given that production volume clusters in the fourth quarter and the year opened with double-digit growth again in Q1, a return of revenue to the ₩100 billion range this year can be read not as a simple extrapolation but as a return to the normal path where design orders flow through to mass production.
- That said, the pace of recovery depends on whether mass-production revenue actually fills in each quarter, so it is worth watching whether quarterly operating profit settles into positive territory.
- Recent disclosures center on periodic reports and share-ownership changes.
- The May 15, 2026 quarterly report (as of March 2026) and the March 19 annual report (as of December 2025) are the primary documents confirming the swing into loss and the Q1 revenue rebound.
- The April 20 exercise of conversion rights is the process by which convertible bonds turn into shares, reducing debt but increasing the number of shares outstanding and thinning existing holders' stakes.
- Bulk-holding reports filed from May through June notify changes in the stakes of holders above 5% and serve as clues to shifts in supply and demand.
- No separate large supply contracts or order disclosures were found in recent public materials.
- The strengths are clear.
- The company holds an official Samsung Foundry design-partner seat handling leading-edge process chip design directly, and after recovering a single quarter of operating profit in Q4 2025, Q1 2026 revenue rose again by +35.3%, keeping the recovery direction alive.
- Because the losses came from front-loaded investment rather than weak demand, earnings can follow quickly once mass-production revenue fills in.
- The cautions are equally clear.
- Quarterly operating profit has not yet settled into positive territory, so continued recovery needs confirmation; the debt ratio is somewhat high; the convertible bonds could thin per-share value as they turn into shares; and mass-production revenue clusters in the fourth quarter, making quarterly results volatile.
- In short, this stock is strong when design orders flow through to mass-production revenue and quarterly operating profit, but if losses drag on even as revenue rises, or dilution proceeds quickly, it may struggle to hold the ground that recovery expectations imply.
🔎 Valuation vs peers Overvalued
The comparison prioritizes companies with the same semiconductor design-solution model (design services plus turnkey mass production), with ADTechnology, closest in business character as a Samsung Foundry design partner, taken as the core peer.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| AD Technology | 132.33x | 3.52x | 2.66% |
ADTechnology, the closest business match, is profitable (ROE 2.7%) with a P/B of 2.68x, whereas Gaonchips is loss-making (ROE -26.3%) yet trades at a far higher P/B of 8.02x. With earnings-based metrics weaker than the peer's and a much higher net-asset multiple, the current price appears to price in a substantial part of the recovery in advance. That said, last year's trailing P/E cannot be calculated at all because of the loss, and annual earnings can vary greatly given that mass-production revenue clusters in the fourth quarter; rather than flatly calling it expensive, this is a spot to re-value based on whether quarterly operating profit turns positive.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| Next quarter | Q2 2026 | ₩20.4 billion | — | — |
Price history Close · MA20 · MA60
The latest close is ₩55,600 and the market capitalization is ₩658.2 billion. The price sits above its 20-day moving average (₩46,288) and below its 60-day moving average (₩57,162). 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 57.3, a neutral level. The one-month change is +18.3%, the three-month change is -8.2%, and the position relative to the 52-week high is -30.4%. Relative strength versus the KOSDAQ is 80 (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 81% of all stocks. Over the past three months it outpaced the index by 17.8%. 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 +17.77% / 6M +23.97% / 12M +16.46%
Key metrics vs sector median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 12.04x is above the sector median (2.10x).
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
The operating margin is -24.4%. The debt ratio is 291.3%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $42.2M | $64.0M | $45.4M | -29.00% ↓ slower |
| Operating profit | $2.9M | $2.3M | -$11.1M | -574.38% ↓ slower |
| Net profit | $4.2M | $5.0M | -$9.5M | -290.81% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $21.4M | $28.7M | $42.2M | $64.0M | $45.4M |
| Operating profit | $4.1M | $2.6M | $2.9M | $2.3M | -$11.1M |
| Net profit | $4.1M | $2.9M | $4.2M | $5.0M | -$9.5M |
| Revenue CAGR | 4-yr avg 20.74% | ||||
Revenue fell 29.0% year over year (2023 ₩63.6 billion → 2024 ₩96.5 billion → 2025 ₩68.5 billion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating profit fell 574.4% year over year. The decline widened. Over the 5 years on record, revenue compound annual growth (CAGR) is 20.7%. The two-year revenue CAGR is 3.8%. In the most recent quarter (Q1 2026), revenue was 35.3% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- —
Points to watch
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 29.0% year over year (3-year trend: mixed).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-15EarningsQ1 2026 quarterly report filed - revenue of ₩20.6 billion (+35.3% YoY) and an operating loss of ₩3.9 billion; revenue rebounded but the loss persisted.Short term: a revenue-recovery signal, but with the loss continuing, confirmation of margin recovery is pushed to the next quarter. Medium term: the starting point for whether mass-production revenue normalizes. Source
- 2026-04-20FilingExercise of conversion rights - part of the convertible bonds converted into shares, reducing debt while increasing shares outstanding (dilution).Short term: possible supply pressure from newly listed shares. Medium term: eases interest and debt burden but dilutes per-share value. Source
- 2026-03-19Earnings2025 annual report (consolidated) filed - annual revenue of ₩68.5 billion (-29%), an operating loss of ₩16.7 billion and a net loss of ₩14.4 billion, confirming the swing into the red.Short term: the confirmed swing to a loss weighs on valuation. Medium term: whether Q4 operating profit recovers is a clue to the following year's direction. Source
- 2026-05-28UpdateBulk-holding report (general) - notification of a change in a major (over-5%) shareholder's stake.Short term: a clue to supply-and-demand shifts from major-shareholder trading. Medium term: a checkpoint for governance and ownership stability. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-10OwnershipOwnership-change filing
- 2026-05-28OwnershipOwnership-change filing
- 2026-05-15PeriodicQuarterly report
- 2026-05-06OwnershipOwnership-change filing
- 2026-05-06OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-06OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-30Disclosure
- 2026-04-20Disclosure
- 2026-03-27Disclosure
- 2026-03-27Shareholders' meeting notice
- 2026-03-19PeriodicAnnual business report
- 2026-03-19Audit 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.