M&C Solution is a defense-parts company that makes drive and stabilization units and hydraulic systems that let the guns and turrets of tanks, armored vehicles, and warships aim precisely and hold a target even amid movement. Its 2025 revenue of ₩403.3 billion came entirely from defense, split into ₩212.8 billion domestic and ₩190.5 billion export, lifting the export share to about 47%. On June 12 it decided a 1:2 bonus issue (new shares to be listed on July 29), on June 1 it signed a ₩6.5 billion towing-winch contract (1.6% of revenue) with LIG Defense & Aerospace, and on March 26 its corporate value-up plan set out expanding direct exports and entering civilian markets while raising the dividend 68%; a review by the largest shareholder, a private-equity fund, of selling its stake (Korea Investment Partners as preferred bidder, re-disclosure due September 11) is under way. What stands out lately is that, in barrier-to-entry drive units, it pairs an ROE in the 23% range, an order backlog of 2.5x annual revenue, and a 50% payout ratio, and its trailing P/E of 4.37x and P/B of 1.02x are below the sector medians (15.86x and 1.59x) — while seasonality concentrated in Q4, governance changes, and the change in quoted price from the bonus issue are variables to watch together.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 207.0%).
- Revenue rose 42.6% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 12.0% lower than a year earlier.
- ROE is 23.4% (total-net basis). It is above the sector average.
- Operating margin is 13.9%.
- The P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Sociuers Welto-si Investment No. 2 Corporate Financial Stability 73.78% (corporate)
Controlling bloc incl. related parties 73.78%
With the controlling bloc holding 74%, control is very secure but the free float is thin.
🔎 In-depth analysis
- M&C Solution is a defense-parts company that makes and sells components for weapon systems.
- Its core products are the 'drive and stabilization units' that let the guns and turrets of tanks, armored vehicles, and warships aim precisely and hold a target even amid movement, plus the hydraulic actuators and hydraulic systems that move them.
- It is an old company founded in 1974 and designated a defense industry firm in 1976 (the current corporate entity took a split-off and reorganized form in 2020), supplying electric drive units and hydraulic actuators across the land, guided-weapon, naval, aerospace, and space fields.
- Its 2025 revenue of ₩403.3 billion came entirely from defense, split into ₩212.8 billion domestic and ₩190.5 billion export, lifting the export share to about 47%.
- Its customers are domestic government and prime-system firms (large defense companies that assemble finished weapons) and overseas partners, and it does both direct exports and indirect exports through domestic prime-system firms.
- The latest close is ₩28,600 and market capitalization is ₩261.8 billion.
- The price sits below the 20-day line (₩55,980) and below the 60-day line (₩82,898).
- Trading below both the short- and medium-term moving averages, the trend is on the subdued side.
- The RSI (a supplementary gauge comparing upward and downward force over the last 14 days on a 0-100 scale) is 31.1, a neutral level.
- The one-month change is -59.1%, the three-month change is -71.5%, and the position versus the 52-week high is -87.2%.
- Relative strength against the KOSPI is 1 (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 100% of all stocks by strength.
- Over the past three months it lagged the index by 78.0%.
- Chart interpretation is best done alongside trading volume and disclosure dates.
- On last year's confirmed results, the P/E (how many times annual earnings the price is) is 5.74x and the P/B (how many times book net assets the price is) is 1.34x, both below the sector medians (P/E 15.86x, P/B 1.59x).
- Profitability is on the good side, with an ROE (how much is earned on equity in a year) of 23.4%, an operating margin of 13.9%, and a net margin of 11.3%.
- The debt ratio (borrowings against equity) is 207%, but that is because order-based industries carry large operating liabilities such as advances received upfront and trade payables, and interest-servicing capacity is ample, with interest coverage reaching 72x.
- One point to note is that the above P/E and P/B are both on a trailing (last-year confirmed earnings) basis.
- For a company like this where earnings change quickly, the figure on this year's expected earnings is closer to the true picture than last year's numbers.
- That said, on a current-price basis, the multiples are already below the sector medians against last year's confirmed earnings and assets, so as long as earnings hold up, the price is hard to call expensive.
- The dividend is ₩2,491 per share, a 50% payout ratio, and a dividend yield of about 11.5% at the current price — thick among defense stocks.
- Over three years revenue rose steeply (₩183.4 billion in 2023, ₩282.8 billion in 2024, ₩403.3 billion in 2025, about 48% annually).
- Operating profit also grew from ₩20.7 billion to ₩34.8 billion to ₩56.1 billion, and net profit from ₩14.5 billion to ₩27.0 billion to ₩45.6 billion — faster than revenue.
- Growth has two roots.
- First, the export share rose to 47%, so overseas demand has attached as a new growth axis on top of domestic procurement; second, the order backlog at the end of 2025 was about ₩1 trillion (₩1,003.7 billion), 2.5x annual revenue, so several years' worth of work is already secured.
- This company has pronounced seasonality with revenue concentrated in Q4 (about 36% of revenue in Q4 2025), so a year is hard to gauge from Q1 numbers alone.
- That this-year forward P/E being lower than last year's trailing P/E (15.18x) means the price is already reflecting a flow in which this year's earnings rise further than last year's on the backlog and export expansion.
- There is no confirmed basis that earnings will fall below this year's level from 2027 onward, so there is no reason to declare the present a cycle top.
- The biggest recent event is the 1:2 bonus issue decided on June 12 (two new shares per common share, listing due July 29), a step to increase floated shares and enliven trading.
- On June 1 it signed a ₩6.5 billion supply contract with LIG Defense & Aerospace for a minesweeper towing winch (a development and force-integration prototype); at 1.6% of revenue it is not large on its own, but it shows product expansion into naval and civilian-adjacent areas.
- Its 'corporate value-up plan' disclosed on March 26 set out expanding direct defense-parts exports and entering civilian markets as growth axes and, together, noted its high-dividend-company status and a dividend increase (up 68% from the prior year).
- Meanwhile, per rumor-clarification disclosures repeated from February, the largest shareholder, a private-equity fund (the Sociuers-Welto-si side), is reviewing a stake sale and negotiating with Korea Investment Partners as preferred bidder (nothing specific yet confirmed, re-disclosure due September 11), so the governance change is a variable to watch going forward.
- This is a company with clear strengths.
- In barrier-to-entry defense parts such as gun and turret drive units, it earns high profitability with an ROE in the 23% range, its export share has risen to 47%, and an order backlog of 2.5x annual revenue and a 50% payout ratio underpin its results.
- On price too, a trailing P/E of 4.37x and a P/B of 1.02x are lower than the sector medians (15.86x and 1.59x) and lower than comparable parts groups, so as long as earnings hold up, it is in a range with price appeal.
- The points to watch together are the quarterly flow and governance.
- With revenue concentrated in Q4, quarterly results can swing, and the largest shareholder's (private-equity fund) review of a stake sale and the change in quoted price from the 1:2 bonus issue are variables whose outcomes must be watched.
- In sum, as long as the backlog, exports, and dividend hold up and this year's earnings rise as expected, the structure highlights price appeal, and how it absorbs quarterly seasonality or the governance change is the variable in the flow.
🔎 Valuation vs peers Undervalued
M&C Solution is not a large prime-system firm assembling finished weapons but a parts supplier delivering core components such as gun and turret drive units; defense stocks for which data is available on the site are used as the comparison baseline, interpreted with allowance for differences in scale and business stage.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Systems | 50.46x | 2.52x | 5.00% |
| LIG Defense & Aerospace | 60.26x | 10.68x | 17.72% |
(a) Position versus peers: a trailing P/E of 4.37x is far below large prime-system firms such as Hanwha Systems (57x) and LIG Defense & Aerospace (64x) and the sector median (15.86x). Its ROE is in fact higher than theirs. (b) Premium/discount: a P/B of 1.02x is also below the sector median (1.59x), so it sits in a discount range against both net assets and earnings (P/E), with the two metrics pointing the same way. The base diagnosis reads 'undervalued' because both the P/E and P/B on last year's confirmed results are low versus peers. (c) Limits of trailing and the forward basis: last year's P/E of 4.37x is on confirmed earnings from a high-growth period, but Q1 earnings this year fell by double digits, putting it in an earnings inflection. Whether the Q1 softness carries through the year is the key branch point; if the backlog underpins it, the appeal of the low multiple holds, and if negative growth sets in, the multiple burden grows by the amount earnings fall. The current displayed metrics are therefore in undervalued territory but can change with this year's earnings flow, so it is reasonable to view them conditionally.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| Next quarter | Q2 2026 | approx. ₩85.7 billion | approx. ₩11.3 billion | approx. ₩8.4 billion |
Price history Close · MA20 · MA60
The latest close is ₩28,600 and the market capitalization is ₩261.8 billion. The price sits below its 20-day moving average (₩55,980) and below its 60-day moving average (₩82,898). 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 31.1, a neutral level. The one-month change is -59.1%, the three-month change is -71.5%, and the position relative to the 52-week high is -87.2%. Relative strength versus the KOSPI is 1 (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 78.0%. 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 -77.98% / 6M -89.45% / 12M -92.04%
Key metrics vs sector median
Valuation
The P/E of 5.74x is below the sector median (14.44x). The P/B of 1.34x is in line with the sector median (1.44x).
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 4.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 23.4%, above the sector average (5.0%). The operating margin is 13.9%. The debt ratio is 207.0%, so the financial structure is somewhat high.
Growth FY2025 · annual report (separate)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $121.6M | $187.4M | $267.3M | +42.63% ↓ slower |
| Operating profit | $13.7M | $23.1M | $37.2M | +60.99% ↓ slower |
| Net profit | $9.6M | $17.9M | $30.2M | +69.07% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | $121.6M | $187.4M | $267.3M |
| Operating profit | — | — | $13.7M | $23.1M | $37.2M |
| Net profit | — | — | $9.6M | $17.9M | $30.2M |
| Revenue CAGR | 2-yr avg 48.28% | ||||
Revenue rose 42.6% year over year (2023 ₩183.4 billion → 2024 ₩282.8 billion → 2025 ₩403.3 billion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 61.0% year over year. The pace of that profit growth is gradually easing. Over the 3 years on record, revenue compound annual growth (CAGR) is 48.3%. The two-year revenue CAGR is 48.3%. In the most recent quarter (Q1 2026), revenue was 12.0% 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.
- The dividend yield, at 8.7%, is on the high side.
- ROE of 23.4% points to solid profitability.
- Revenue grew 42.6% year over year, a sign of growth.
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
- 2026-06-12FilingBonus issue decided (two new shares per common share, shares outstanding 9.154 million → 27.462 million, new shares to be listed 2026-07-29)Short term: expanded floated shares are expected to enliven trading. The company's total value does not change, but the per-share price and the number of shares per unit of market cap change, so simple price comparisons before and after the new-share listing require care. Source
- 2026-06-12UpdateClarification of rumor/report: regarding the largest shareholder's (private-equity fund) pursuit of a stake sale, negotiations with a preferred bidder are under way with nothing specific confirmed (re-disclosure due 2026-09-11)Medium term: a possible change of largest shareholder is a variable that can affect governance and management continuity. It is at a pre-confirmation stage, and the direction may differ depending on whether it proceeds, so the re-disclosure date should be checked. Source
- 2026-06-01UpdateSingle supply contract signed (voluntary disclosure): a ₩6.5 billion minesweeper towing winch (development and force-integration prototype) with LIG Defense & Aerospace, 1.6% of revenue, contract period 2026-05 to 2029-10Short term: small in scale but shows product expansion in the naval field and continued dealings with prime-system firms. As a development-prototype stage, the revenue-recognition timing and whether it converts to follow-on mass production should be watched together. Source
- 2026-03-26IRCorporate value-up plan (voluntary disclosure): sets out expanding direct defense-parts exports and entering civilian markets as growth axes, noting its high-dividend-company status and a dividend increase of about 68% from the prior yearMedium term: shows the company's official growth direction and shareholder-return intent. But no concrete revenue or profit targets are given, so it should be read only as a qualitative direction. Source
- 2026-05-15UpdateQuarterly report (2026.03): Q1 2026 revenue of ₩66.1 billion, operating profit of ₩8.0 billion, net profit of ₩6.1 billion, order backlog of about ₩1 trillion (as of end-2025)Short term: revenue down 12.0% and operating profit down 16.2% year on year confirm the first negative growth. Still, the Q4-concentrated seasonality and the order backlog should be viewed together. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| 2025 annual revenue | ₩403.3 billion(₩403,348,735,243) | ₩403.3 billion | Confirmed | link |
| Q1 2026 operating profit | ₩8.0 billion | ₩8.0 billion | Confirmed | link |
| Order backlog (end-2025) | — | approx. ₩1 trillion(₩1.00 trillion) | Confirmed | link |
| This-year (2026) seasonality-approximated operating profit | approx. ₩47.0 billion | — | Unverified | link |
Recent filings
- 2026-06-10Disclosure
- 2026-06-10Shareholders' meeting notice
- 2026-06-02Disclosure
- 2026-06-01Single supply/sales contract
- 2026-05-29Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-12Disclosure
- 2026-05-12Shareholders' meeting notice
- 2026-05-12EarningsFair-disclosure notice
- 2026-05-07Disclosure
- 2026-05-07EarningsEarnings disclosure
- 2026-04-23Single supply/sales contract
📖 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.