PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,300 per share · Prices as of the 2026-10-02 close
Hwacheon Machinery swung from an operating loss in 2024 to profit in 2025, and quarterly operating income improved through the first half of 2026 as export orders tied to semiconductor and AI-related demand picked up.
2025 consolidated operating profit reached KRW 4.2 billion, reversing the prior year's operating loss of KRW 0.7 billion.
Second-quarter 2026 operating profit of KRW 6.5 billion and owners' net profit of KRW 9.3 billion marked the highest levels in the past five quarters.
The fourth quarter of 2025 posted revenue of KRW 51.2 billion with an operating loss of KRW 1.7 billion, underscoring continued quarter-to-quarter volatility.
According to the Korea Machine Tool Manufacturers' Association, overseas orders rose 23.3% year over year in the January-April 2026 period, driving the industry's export recovery.
As of end-2025, total equity stood at KRW 339.5 billion against total liabilities of KRW 81.0 billion, keeping the debt ratio at a stable 23.8%.
Hwacheon Machinery operates a machinery division producing CNC lathes, CNC milling machines, and machining centers at its Gwangju headquarters and Pyeongdong plant, alongside a materials division making robot components and industrial machinery materials at its Yeonggwang Plant No. 2.
In a previously disclosed quarter, the machinery division accounted for about 73.4% of segment revenue versus 26.6% for the materials division, showing machinery as the dominant business.
Regional revenue at that same point was split roughly 66% domestic, 15% Americas, 11% Europe, and 8% Asia, indicating a relatively high domestic weighting. The company traces its roots to a 1945 founding and now anchors the Hwacheon Group, which includes domestic affiliates and seven overseas subsidiaries.
A separately listed group company, Hwacheon Machine Tools (010660), sources CNC lathes, CNC milling machines, machining centers, and automated production lines from Hwacheon Machinery for resale, meaning the two firms share the Hwacheon brand while trading as distinct KOSPI-listed entities.
Among Korean machine tool exporters, industry coverage names DN Solutions, Hyundai WIA Machine Tool, Hwacheon Machinery, SMEC, Daesung Hi-Tech, and HK Co. as leading players, placing Hwacheon Machinery within that group.
Its product lineup spans general-purpose lathes and milling machines to mid-to-large CNC horizontal and vertical lathes, as well as large industrial machine tools serving aerospace, plant, wind power, and energy applications.
The materials division separately manufactures materials used in robotics and industrial machinery, forming a revenue base alongside the machinery business.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩58.5B | ₩2.1B | 3.5% |
| 2025Q3 | ₩65.7B | ₩3.7B | 5.6% |
| 2025Q4 | ₩51.2B | -₩1.7B | −3.3% |
| 2026Q1 | ₩55.2B | ₩1.9B | 3.4% |
| 2026Q2 | ₩74.9B | ₩6.5B | 8.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩244.1B | ₩8.2B | ₩37.5B | 3.4% | 10.9% | 37.3% |
| 2023 | ₩225.7B | ₩4.6B | ₩10.6B | 2.0% | 3.1% | 34.2% |
| 2024 | ₩222.2B | -₩700M | ₩8.7B | −0.3% | 2.6% | 27.1% |
| 2025 | ₩221.8B | ₩4.2B | ₩11.4B | 1.9% | 3.4% | 23.8% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Consolidated 2025 revenue of KRW 221.8 billion was roughly flat versus KRW 222.2 billion in 2024, but operating profit swung from an operating loss of KRW 0.7 billion to a profit of KRW 4.2 billion.
Owners' net profit also rose from KRW 8.7 billion in 2024 to KRW 11.4 billion in 2025, reflecting the profitability recovery across income lines.
Compared with 2022, however, when revenue reached KRW 244.1 billion, operating profit KRW 8.2 billion, and owners' net profit KRW 37.5 billion, overall revenue scale over the past three years has actually contracted somewhat.
The fact that 2022 net profit far exceeded operating profit suggests non-operating items, possibly equity-method or financial-asset related gains, significantly boosted that year's bottom line.
On a quarterly basis, third-quarter 2025 revenue of KRW 65.7 billion, operating profit of KRW 3.7 billion, and owners' net profit of KRW 5.6 billion showed improvement before revenue fell to KRW 51.2 billion in the fourth quarter with an operating loss of KRW 1.7 billion, highlighting pronounced seasonal swings.
In 2026, first-quarter operating profit of KRW 1.9 billion and second-quarter operating profit of KRW 6.5 billion marked two consecutive quarters of improvement, delivering the strongest quarterly result in the past five quarters.
Summed over the trailing four quarters from the third quarter of 2025 through the second quarter of 2026, owners' net profit totaled roughly KRW 20.5 billion, exceeding full-year 2025 results when annualized.
Operating cash flow rose steadily from KRW 5.3 billion in 2023 to KRW 12.9 billion in 2024 and KRW 15.8 billion in 2025, suggesting the profit recovery is translating into actual cash generation as well.
According to the Korea Machine Tool Manufacturers' Association, total domestic machine tool orders reached KRW 1.1924 trillion in the January-April 2026 period, up 11.2% year over year, with overseas orders surging 23.3% to KRW 798.1 billion to drive the growth.
In April alone, total orders rose 9.8% to KRW 316.5 billion, while overseas orders climbed 25.7% to KRW 202.8 billion, continuing the export-led recovery.
An association official said, "the recent machine tool market clearly shows a structure where exports, rather than domestic demand, are leading the industry recovery." Behind this trend is expanding investment in advanced manufacturing tied to AI infrastructure buildout, including data center construction and semiconductor capacity expansion, which is lifting demand for ultra-precision machine tools used in data center cooling equipment and semiconductor inspection gear.
U.S. reshoring policy, India's manufacturing promotion drive, and China's equipment upgrades centered on semiconductors, electric vehicles, and industrial robots are also cited as supporting factors.
Domestic manufacturing capital expenditure, however, remains cautious, meaning the domestic demand recovery is comparatively slower.
Hwacheon Machinery is named alongside DN Solutions, Hyundai WIA Machine Tool, SMEC, Daesung Hi-Tech, and HK Co. as one of the leading exporters in Korea's machine tool industry, placing it within the scope of this industry recovery.
Industry participants expect expanding capital investment in AI, semiconductors, automobiles, and aerospace to present growth opportunities for Korea's machine tool industry in the second half as well.
Hwacheon participated in SIMTOS 2026, Korea's largest manufacturing technology exhibition held at KINTEX in Goyang from April 13 to 17, 2026, unveiling a new product lineup that included three new models and four popular existing products.
This reflects continued investment in new model development and customer engagement through exhibitions.
Industry sources expect demand tied to data centers, semiconductors, automation equipment, and aerospace/defense to continue expanding in the second half, suggesting a potentially favorable order environment for domestic machine tool makers including Hwacheon Machinery.
The consecutive improvement in operating profit during the first and second quarters of 2026 supports the view that this industry recovery is partly feeding through into actual results.
That said, a repeat of the pattern seen in the fourth quarter of 2025, when revenue fell and an operating loss occurred, cannot be ruled out, warranting continued quarter-by-quarter monitoring. The company's stable financial structure is viewed as a factor that could provide a buffer amid industry fluctuations.
Key points to watch going forward include the time lag between rising overseas orders and their translation into export statistics and revenue, as well as the timing of any recovery in domestic manufacturing capital expenditure.
Hwacheon Machinery's shares tend to trade at a level below net asset value, with the market not assigning a large premium to book value per share.
On the earnings side, the shift from an operating loss in 2024 to profit in 2025, followed by continued profit recovery through the first half of 2026, means there may be a lag between valuation metrics formed during the prior downturn and the recently improving earnings trend.
The company has a track record of paying consistent cash dividends in recent years. On the balance sheet, total equity comfortably exceeds total liabilities, giving it a relatively solid net asset base, which is useful context when interpreting its price-to-book ratio.
That said, given that revenue has been broadly flat to slightly lower over several years, it is worth noting that the profit recovery has largely come from margin improvement rather than top-line growth.
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 2026-08-23
After swinging from a KRW 0.7 billion operating loss in 2024 to a KRW 4.2 billion operating profit in 2025, the company posted consecutive improvements of KRW 1.9 billion in the first quarter and KRW 6.5 billion in the second quarter of 2026.
Owners' net profit also hit KRW 9.3 billion in the second quarter of 2026, the highest of the past five quarters. This sequential improvement suggests a potentially structural, rather than one-off, recovery.
According to Korea Machine Tool Manufacturers' Association data, overseas orders rose 23.3% year over year in the January-April 2026 period, underpinned by ultra-precision demand tied to AI, semiconductors, and data centers.
Hwacheon Machinery is named as one of the leading domestic machine tool exporters and falls within the scope of this trend. The industry expects these growth opportunities to continue in the second half.
As of end-2025, total equity was KRW 339.5 billion against total liabilities of KRW 81.0 billion, keeping the debt ratio at just 23.8%. Operating cash flow rose steadily from KRW 5.3 billion in 2023 to KRW 15.8 billion in 2025. This financial stability could serve as a buffer against industry fluctuations.
Annual revenue actually declined from KRW 244.1 billion in 2022 to KRW 221.8 billion in 2025 over several years. Recent profit improvement has largely stemmed from margin recovery rather than revenue expansion. Without an expanding revenue base, the durability of the profit improvement warrants continued observation.
Operating profit swung from KRW 3.7 billion in the third quarter of 2025 to an operating loss of KRW 1.7 billion in the fourth quarter, illustrating significant quarter-to-quarter variability. Such volatility could recur depending on seasonal factors or the timing of individual project deliveries. Continued quarter-by-quarter monitoring is needed to confirm whether the improving trend is sustained.
The Korea Machine Tool Manufacturers' Association has noted that domestic manufacturing capital expenditure remains cautious. In a structure where exports drive the industry, exposure to currency movements and overseas economic conditions could increase.
At affiliate Hwacheon Machine Tools, cumulative non-consolidated revenue and operating profit both declined through the third quarter of 2025, indicating that market weakness in the auto parts and machine tool segments could affect the broader group.
Machine tool demand is heavily influenced by the capital expenditure cycles of downstream industries such as semiconductors, automobiles, and aerospace. The current export recovery could shift direction depending on changes in the global economy or trade and tariff conditions.
Since domestic capex remains cautious, the structural reduction in reliance on domestic demand could itself become a risk factor.
Hwacheon Machinery is linked to separately listed Hwacheon Machine Tools through a product supply relationship, meaning weakness in Hwacheon Machine Tools' auto parts and machine tool sales could affect Hwacheon Machinery's sales channel.
The Hwacheon Group comprises domestic affiliates and numerous overseas subsidiaries, resulting in a relatively complex equity and investment structure. This group structure can make it more difficult to interpret the performance of any single entity.
Machine tool manufacturing is exposed to fluctuations in raw material prices such as steel, and as the export share grows, currency movements could have a greater impact on revenue and margins.
The fourth quarter of 2025, when revenue declined alongside an operating loss, illustrates how fixed cost burdens can quickly erode margins during periods of falling sales. The effectiveness of cost management and currency hedging strategies will need to be confirmed through future quarterly results.
Third-quarter 2026 results are expected to be disclosed around this time, offering a chance to check whether the operating profit improvement seen in the first half continued into the third quarter.
Monthly order statistics from the Korea Machine Tool Manufacturers' Association can be tracked to monitor whether the growth in overseas orders continues and whether domestic capex begins to recover.
The 2026 annual business report and regular shareholders' meeting will provide confirmed full-year results, dividend policy, and any changes in the financial structure.
Checking whether the revenue decline and operating loss pattern seen in the fourth quarter of 2025 recurs will help reassess the nature of the company's quarterly volatility.
Hwacheon Machinery moved from an operating loss in 2024 to profit in 2025, with operating profit and owners' net profit improving consecutively through the first half of 2026.
This improvement has coincided with an industry recovery reflected in the 23.3% year-over-year rise in overseas orders recorded by the Korea Machine Tool Manufacturers' Association for the January-April 2026 period.
That said, annual revenue has been broadly flat to slightly lower over several years since 2022, and volatility remains evident, as seen in the fourth quarter of 2025 when revenue fell and an operating loss occurred.
The financial structure is comparatively stable, with total equity well exceeding total liabilities and operating cash flow rising steadily.
However, the product supply relationship with affiliate Hwacheon Machine Tools and the Hwacheon Group's relatively complex equity and investment structure are factors that need to be considered when interpreting standalone results.
Third-quarter results, monthly order statistics, and any recovery in domestic capital expenditure will likely be key variables in gauging whether the profit improvement proves durable.
Report written 2026-09-05 · Data as of 2026-09-04
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