KOSPIAutomotive000430

Daewonkangup

₩4,530▼ 2.79%2026-10-02 close

Market Cap

₩278.1B

Turnover

₩500M

Volume

110,000 shares

Shares out.

62M

PER

3.8×

PBR

0.4×

EPS

₩1,155

Dividend Yield

2.51%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩110 per share · Prices as of the 2026-10-02 close

Report overview

Earnings Recovery Meets EV Motor-Core Push

Daewon Kangup is navigating a recovery in its core auto-spring business alongside expansion into EV drive motor cores.

1
2025 consolidated revenue reached KRW 1.5991 trillion with operating profit of KRW 47.0 billion, marking a clear improvement from the prior year.
2
After a one-off operating loss of KRW 3.39 billion in Q3 2025, the company posted four consecutive profitable quarters, with Q2 2026 operating profit expanding to KRW 38.49 billion.
3
The company is the domestic No.1 in suspension springs, which account for the bulk of revenue, supplying Hyundai and Kia as well as global automakers such as GM and Tesla.
4
The firm has entered the EV drive motor core business, securing orders including Hyundai Mobis' IONIQ 7 project as a new growth driver.
5
The stock trades at a discount to book value, while the payout ratio remains relatively low, leaving room for debate on expanded shareholder returns.

Business structure

Founded in 1946 and listed on the KOSPI in 1977, Daewon Kangup is an auto parts specialist whose core businesses are automotive springs and automotive seats.

As the only integrated spring maker in Korea, it produces the full range of suspension springs (coil springs, leaf springs, stabilizer bars) and automotive seats, supplying Hyundai and Kia as well as global automakers including GM and Tesla.

The spring segment accounts for the majority of revenue, while the seat segment has expanded beyond automotive use into railway, high-speed rail, and heavy-equipment seating.

The company operates a global network across 12 sites in seven countries, with domestic plants in Cheonan, Changwon, and Haman, and overseas subsidiaries in the United States (Alabama), China, India, Poland, Russia, and Mexico.

An affiliate, Samwon Steel, supplies spring raw materials (hot-rolled products), giving the group a vertically integrated cost and quality advantage.

More recently, through its electrification research institute, the company has been developing EV drive motor core technology and lightweighting capabilities, aiming to replace revenue once generated by transmission and engine precision springs with new business lines.

Reliance on domestic automakers remains significant, though revenue diversification through overseas subsidiaries and expanded direct supply to global OEMs is ongoing.

Competitively, the company holds a leading domestic market share in springs, while in the drive motor core market it is a newer entrant competing against the incumbent leader, POSCO Mobility Solution.

Earnings trend

Quarterly revenue · Operating profit

₩421.7B₩16.6B25Q2₩390B-₩3.4B25Q3₩405.4B₩15.4B25Q4₩432.8B₩23.3B26Q1₩472B₩38.5B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1T₩22.1B2022₩1.1T₩59.2B2023₩1.4T₩22.6B2024₩1.6T₩47B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩421.7B	₩16.6B	3.9%
2025Q3	₩390B	-₩3.4B	−0.9%
2025Q4	₩405.4B	₩15.4B	3.8%
2026Q1	₩432.8B	₩23.3B	5.4%
2026Q2	₩472B	₩38.5B	8.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1T	₩22.1B	₩18.9B	2.2%	3.9%	69.0%
2023	₩1.1T	₩59.2B	₩30.6B	5.3%	6.0%	66.0%
2024	₩1.4T	₩22.6B	₩23.6B	1.6%	4.6%	91.2%
2025	₩1.6T	₩47B	₩36.4B	2.9%	6.5%	98.5%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-22

Earnings analysis

Consolidated revenue in 2025 reached KRW 1.59907 trillion, up roughly 17% from KRW 1.36759 trillion in 2024, while operating profit more than doubled to KRW 47.0 billion from KRW 22.56 billion in 2024.

Net income attributable to owners also expanded from KRW 23.62 billion in 2024 to KRW 36.42 billion in 2025, underscoring the earnings recovery.

Compared with 2023, when operating margin stood at 5.3% (operating profit of KRW 59.17 billion), margins compressed sharply in 2024 to 1.6% amid cost pressures before partially recovering to 2.9% in 2025, reflecting year-to-year volatility in profitability.

On a quarterly basis, revenue was KRW 421.73 billion with operating profit of KRW 16.59 billion in Q2 2025, before revenue slipped to KRW 389.95 billion in Q3 2025, when the company posted a one-off operating loss of KRW 3.39 billion and an owners' net loss of KRW 4.99 billion.

Performance then rebounded sharply in Q4 2025, with revenue of KRW 405.43 billion, operating profit of KRW 15.42 billion, and owners' net income of KRW 22.52 billion, followed by continued improvement in Q1 2026 with revenue of KRW 432.81 billion, operating profit of KRW 23.27 billion, and owners' net income of KRW 29.41 billion.

In Q2 2026, revenue rose to KRW 472.01 billion and operating profit hit KRW 38.49 billion, the highest quarterly figure in the recent five-quarter window, although owners' net income of KRW 24.71 billion was slightly below the prior quarter.

Over the trailing four quarters (Q3 2025 through Q2 2026), cumulative owners' net income reached KRW 71.65 billion, roughly double the full-year 2025 figure of KRW 36.42 billion.

On the cash flow side, operating cash flow surged to KRW 111.22 billion in 2025 from KRW 55.14 billion in 2024, indicating the earnings recovery has been accompanied by improving cash generation.

Industry analysis

Korea's auto parts industry is highly sensitive to OEM production volumes, steel raw material prices, and currency swings, and Daewon Kangup is no exception.

Industry reports suggest that domestic auto production in 2026 is expected to rise year-on-year as U.S. trade risks ease and global preference for hybrid vehicles grows, though cost pressures may limit the extent of margin improvement for parts suppliers.

Indeed, Q1 2026 results showed that stabilizing domestic auto production combined with competitive hybrid and EV lineups drove firm demand in North America and Europe, lifting spring and seat segment revenue.

The domestic suspension spring market remains an oligopoly where Daewon Kangup has long held a dominant position, with high barriers to entry limiting new competitive threats.

In contrast, the electrified powertrain component market—particularly drive motor cores—has historically been dominated by POSCO Mobility Solution, and Daewon Kangup enters as a later mover after developing its own press and bonding technology.

As the shift to EVs and hybrids accelerates, demand for internal-combustion-specific components such as transmission and engine precision springs is structurally declining, while demand for electrified components is rising amid this industry reshaping.

Hyundai and Kia's domestic and overseas production plans, changes in U.S. tariff policy, and raw material price trends stand out as key variables for future performance.

Outlook

Daewon Kangup is pursuing growth by scaling up production in its new drive motor core business on top of a stable revenue base from its legacy spring and seat operations.

The company secured a contract to supply approximately 220,000 units (roughly KRW 84 billion) of drive motor core components for Hyundai Mobis' IONIQ 7 electric SUV over six years starting in 2024, with volumes being recognized progressively in revenue.

Additional orders have reportedly been secured for rear motor cores based on a dedicated Genesis EV platform and for hybrid drive motor cores for large SUVs, suggesting room for the electrified component share of revenue to expand over time.

However, these order figures were estimates circulating in the market around 2023-2024, and the actual pace of mass-production ramp-up and revenue recognition timing require ongoing confirmation through quarterly disclosures.

Recent results indicate that if OEM hybrid and EV lineup competitiveness is sustained alongside continued North American and European demand, top-line growth in the spring and seat segments could occur in parallel.

The outcome of bidding for drive motor and motor core orders tied to Hyundai Motor Group's next-generation EV platforms, and whether Daewon Kangup secures additional contracts, is cited as a key variable for the medium-to-long-term growth path.

Normalization of raw material costs, whether the fixed-cost burden from the new business eases, and shifts in OEM production plans are likely to shape future margin trends.

Valuation

PER

3.8×

PBR

0.4×

ROE

12.5%

EPS

₩1,155

BPS

₩9,878

Dividend per share

₩110

Following the recent earnings recovery, the trailing four-quarter earnings multiple appears to be trading below its historical average range. The price-to-book level is also positioned below the multi-year average, meaning shares trade at a discount to net asset value.

On the dividend front, per-share payouts continued alongside the 2025 earnings improvement, but the payout ratio relative to profit remains comparatively low, keeping the debate over expanded shareholder returns alive.

This valuation profile is consistent with the generally low multiples seen across the domestic-OEM-dependent auto parts sector, and some market observers have suggested that a more meaningful contribution from the electrification business could change how the market values the stock.

That view, however, reflects specific outside opinions rather than a certainty, and any actual re-rating will depend on future earnings and market conditions.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-22

Bull factors

Continuation of the Earnings Recovery

Following a one-off loss in Q3 2025, both operating profit and owners' net income improved for four consecutive quarters, confirming a clear recovery trend. Q2 2026 operating profit reached KRW 38.49 billion, the highest level in the past five quarters.

Operating cash flow also jumped from KRW 55.1 billion in 2024 to KRW 111.2 billion in 2025, showing the earnings improvement is translating into actual cash generation. If this trend continues, it could also support balance sheet stability.

Expansion into Electrified Components

The drive motor core business is reported to have expanded from the initial Hyundai Mobis IONIQ 7 project to rear motor cores for the Genesis EV platform and hybrid motor cores for large SUVs.

The company has entered a market previously monopolized by POSCO Mobility Solution and is in the process of establishing its competitiveness. Continued technology development through its electrification research institute provides a foundation to respond to future OEM bidding opportunities. As the shift to EVs and hybrids progresses, the revenue contribution from this business has potential to grow.

Dominant Position in the Domestic Spring Market

Daewon Kangup is the sole integrated spring maker that has long held a dominant position in Korea's automotive spring market. Beyond Hyundai and Kia, it has expanded supply to global automakers including GM and Tesla, diversifying its customer base.

Vertical integration of raw materials through affiliate Samwon Steel gives it a cost and quality management advantage. Given the high barriers to entry in this business, the threat from new competitors is relatively low.

Bear factors

OEM Dependence and Earnings Volatility

A significant portion of revenue is concentrated among a small number of automakers, chiefly Hyundai and Kia, making performance highly sensitive to their production and sales fluctuations.

In Q3 2025, both operating profit and owners' net income swung into losses, illustrating substantial quarter-to-quarter earnings volatility. Annual operating margin also swung sharply, from 2.2% in 2022 to 5.3% in 2023, then down to 1.6% in 2024 before recovering to 2.9% in 2025.

This volatility reflects simultaneous exposure to raw material prices, currency movements, and OEM utilization rates.

Intensifying New-Business Competition and Early-Stage Investment Burden

Competition in the drive motor core market with incumbent leader POSCO Mobility Solution is unavoidable, and changes to OEM dual-sourcing policies could alter order conditions. Concerns have also been raised that fixed-cost burdens during the early ramp-up phase of the new business could weigh on margins.

If EV demand slows amid a broader chasm in adoption, the pace of drive motor core demand growth could lag expectations. Unlike the established spring business, the new business still has a short track record, requiring further validation of its profitability.

Low Payout Ratio and Capital Efficiency Debate

Despite improved earnings, the payout ratio remains relatively low, which could keep market pressure for expanded shareholder returns alive. The debt ratio rose from 66.0% in 2023 to 98.5% in 2025, indicating a capital structure trend that warrants monitoring.

Some observers suggest that if the pace of capital efficiency improvement falls short of market expectations, any valuation re-rating could be delayed. Amid ongoing policy attention on low price-to-book stocks in Korea, it may take time before concrete changes in shareholder return policy are confirmed.

Risk factors

Raw Material and FX Risk

Fluctuations in steel prices, the key spring raw material, directly affect costs, and cost pressure has been cited as a factor behind the sharp operating margin decline in 2024. With a substantial share of operations overseas, results are also exposed to currency movements such as the won-dollar rate. Whether raw material prices normalize is a key variable for the pace of future margin recovery.

OEM Production and Trade Policy Risk

A significant share of revenue is tied to the production plans of a small number of automakers, chiefly Hyundai and Kia, so any production cuts, strikes, or new model launch delays could directly hurt results.

Changes in the trade environment, such as U.S. tariff policy, are also cited as a factor that could affect OEM production and parts demand. Should domestic OEM production slow, an adverse impact on spring and seat segment revenue would be difficult to avoid.

New-Business Competition and Execution Risk

The drive motor core business carries several execution risks, including competition with the incumbent market leader, potential changes in OEM sourcing policy, and fixed-cost burdens during early-stage mass production.

If EV demand growth slows more than expected, the timing of the new business's revenue contribution could be delayed. The scale of related orders and the actual timing of revenue recognition require ongoing verification through quarterly disclosures.

What to watch next

Around November 2026
The Q3 2026 quarterly report disclosure will show whether the recent earnings recovery trend continues, particularly regarding operating margin and any revenue contribution from the new drive motor core business.
During Q4 2026
It will be important to monitor how any changes in production plans at key customers such as Hyundai and Kia, or shifts in U.S. trade policy, affect OEM production volumes and parts demand.
H2 2026 through early 2027
Any announcement of additional drive motor core orders or the outcome of bidding for Hyundai Motor Group's next-generation EV platform would provide grounds to reassess the medium-to-long-term revenue contribution of the new business.
Early 2027
The Q4 and full-year 2026 earnings release, together with the board's dividend resolution disclosure, will indicate whether shareholder return policy has changed.

Overall view

Daewon Kangup has shown a clear earnings recovery trajectory, posting four consecutive quarters of profit improvement from Q3 2025's one-off loss through the first half of 2026.

Building on its stable, market-leading spring business, the company is attempting to diversify its growth path through the electrified drive motor core business, with related order news serving as a key variable for gauging future revenue contribution.

However, factors such as revenue concentration among a small number of automakers, margin volatility tied to raw material and currency swings, and the potential for intensifying competition in the new business warrant balanced consideration.

Valuation currently sits at a discount to net asset value, while a relatively low payout ratio keeps market interest in expanded shareholder returns alive.

Ongoing monitoring of quarterly earnings disclosures, progress on new-business orders, and shifts in OEM production and trade conditions will be key to understanding this stock going forward. This report is provided for informational purposes only and does not constitute a buy or sell recommendation or a price target.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.