PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Prices as of the 2026-10-02 close
Daehan Flour Mills posted a net loss in 2025 after booking a large provision tied to the flour price-fixing case, but has returned to profit for two consecutive quarters in the first half of 2026 as it seeks normalization.
Owners' net income turned negative at -KRW 25.3bn in 2025, mainly due to an estimated KRW 94.4bn provision booked ahead of an antitrust fine.
On May 20, 2026 the Korea Fair Trade Commission fined Daehan Flour Mills KRW 179.27bn as part of a KRW 671bn total penalty on seven millers, leaving a roughly KRW 80bn gap versus the provision already booked.
The company returned to profit in both Q1 and Q2 2026, but operating profit of roughly KRW 7bn per quarter was less than half of the KRW 15-16.6bn seen a year earlier.
Flour demand remains supported by expanding K-ramyeon exports and bakery/confectionery capacity additions, though voluntary price adjustments could pressure margins.
The debt ratio stood at a manageable 52.1% in 2025, and the company retired treasury shares in three separate tranches between late 2024 and early 2026.
Founded in 1952, Daehan Flour Mills is a leading Korean milling company whose core businesses are grain milling, wheat flour sales, and feed wholesale distribution. Most revenue comes from its wheat flour food segment, centered on the flagship 'Gompyo' brand of flour and fried-food/batter premixes.
Under the Gompyo trademark, the company offers well-recognized products such as strong and weak flour along with noodles and pasta, and it also runs intellectual-property-based collaboration campaigns.
The company consolidates ten subsidiaries including Daehan Feed, reflecting a long history of diversification beyond milling and feed.
Its pet care business operates through Uriwa, founded in 2010, its cafe-bakery business runs through the Artisee brand under Bonavie, acquired in 2012, and its foodservice distribution business is run through Chef's Food, acquired in 2022.
Some observers note that diversification into pet care and food and beverage has yet to produce clearly visible results, prompting continued portfolio realignment through M&A and expansion of B2C operations.
The largest shareholder is unlisted affiliate D&B Company, holding a 27.82% stake, with governance centered on third-generation Chairman Lee Geon-young.
In Korea's B2B wheat flour market, the top three players—Daehan Flour Mills, CJ CheilJedang, and Sajo Dongaone—hold a combined 62.0% share, while seven registered millers together account for 87.7%, forming an oligopolistic competitive structure.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩336.3B | ₩15B | 4.5% |
| 2025Q3 | ₩347.7B | ₩16.6B | 4.8% |
| 2025Q4 | ₩350.5B | ₩15B | 4.3% |
| 2026Q1 | ₩334.3B | ₩7B | 2.1% |
| 2026Q2 | ₩351.1B | ₩7B | 2.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.4T | ₩43.3B | ₩41.2B | 3.2% | 4.5% | 43.4% |
| 2023 | ₩1.4T | ₩54.9B | ₩81.2B | 3.8% | 8.2% | 41.0% |
| 2024 | ₩1.4T | ₩72.3B | ₩48.7B | 5.3% | 4.7% | 50.4% |
| 2025 | ₩1.4T | ₩62.3B | -₩25.3B | 4.5% | −2.5% | 52.1% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-24
Consolidated revenue in 2025 was KRW 1.3752tn, essentially flat versus 2024's KRW 1.3747tn (+0.03%), while operating profit fell 13.9% year-on-year to KRW 62.26bn from KRW 72.31bn, and the operating margin slipped to 4.5% from 5.3%.
The larger shift occurred at the net-income line, where owners' net income swung from a profit of KRW 48.74bn in 2024 to a loss of KRW 25.26bn in 2025. This reversal reflects an estimated KRW 94.4bn provision booked in anticipation of the Fair Trade Commission's flour cartel penalty.
On a quarterly basis, results stayed stable through Q3 2025, with Q2 revenue of KRW 336.32bn, operating profit of KRW 15.0bn, and owners' net income of KRW 23.37bn, improving further in Q3 to revenue of KRW 347.68bn, operating profit of KRW 16.6bn, and net income of KRW 22.84bn.
However, in Q4, despite normal operating performance of KRW 350.45bn in revenue and KRW 15.0bn in operating profit, owners' net income swung to a large loss of KRW 82.78bn, a one-off effect attributable to the cartel-related provision noted above.
In 2026, Q1 posted revenue of KRW 334.34bn, operating profit of KRW 7.02bn, and net income of KRW 7.31bn, while Q2 posted revenue of KRW 351.12bn, operating profit of KRW 7.03bn, and net income of KRW 12.15bn, marking two consecutive profitable quarters—though operating profit levels remain less than half of the year-earlier KRW 15-16.6bn range, indicating margin recovery is not yet complete.
Separately, the fine the FTC finalized for Daehan Flour Mills on May 20, 2026 was KRW 179.27bn, about three times the company's 2025 consolidated operating profit of KRW 62.26bn, and roughly KRW 80bn larger than the provision already recorded, leaving room for an additional expense to be booked.
Cash generation has held up relatively well: operating cash flow reached KRW 140.11bn in 2025, up sharply from KRW 76.0bn in 2024 and a marked improvement versus the negative KRW 59.5bn recorded in 2022.
Korea's milling industry is an oligopoly, with the top three players—Daehan Flour Mills, CJ CheilJedang, and Sajo Dongaone—holding a combined 62.0% share and seven registered millers together accounting for 87.7%.
Korea imports roughly 4.55 million tonnes of wheat annually, of which 64% is used for milling, while per-capita flour consumption has risen steadily from 33.4kg in 2009 to 38.3kg in 2024.
Expanding K-ramyeon exports are driving capacity additions among noodle makers, including Nongshim's export-dedicated plant in Busan's Noksan district targeted for completion in 2026 and Samyang Foods' expanded output from its second Miryang plant, supporting a solid base of demand for noodle-grade flour.
In bakery and confectionery, capacity expansions such as SPC Group's frozen-dough plant and product line extensions at Orion and SPC Samlip are also underpinning demand.
At the same time, the industry as a whole continues to face structural challenges from facility overcapacity and intensifying competition amid subdued consumption.
Following the May 2026 cartel sanctions, the FTC ordered millers to independently re-determine prices and to file biannual written reports on flour pricing changes for the next three years, a measure that constrains the free pricing discretion millers had prior to the cartel while pushing the industry toward greater pricing transparency.
With FTC cartel investigations having moved from sugar to flour and now to starch sweeteners, the broader food-ingredient sector is operating with heightened regulatory vigilance.
International wheat prices fell roughly 35% over the four years following December 2021, yet domestic Gompyo flour retail prices rose more than 20% over the same period, generating public pressure over the gap between input costs and selling prices.
Against this backdrop, some millers were reported to have moved to adjust prices, and under the FTC's independent price re-determination order, cartel participants including Daehan Flour Mills must reset prices back toward pre-cartel levels and report the basis and results to the regulator.
Because pricing changes must be reported in writing twice a year for the next three years, the scope for the kind of autonomous pricing discretion the company previously enjoyed is expected to narrow considerably.
On the diversification front, the company continues to operate its Uriwa pet care brand, its Artisee cafe-bakery brand run through Bonavie, and its Chef's Food foodservice distribution unit, alongside ongoing Gompyo IP-based collaborations.
On shareholder returns, the company retired treasury shares in three separate rounds in December 2024, February 2025, and February 2026, a move that can be read as an effort to manage share count and support per-share value.
Two consecutive profitable quarters in the first half of 2026 suggest the company has entered a normalization phase following the one-off cartel-related loss, but how the final penalty amount is treated and the pricing constraints imposed by the corrective order remain key variables for future results.
Daehan Flour Mills' shares appear to trade at a substantial discount to net asset value per share, which can be interpreted as reflecting the 2025 swing to a net loss and lingering concerns about additional cartel-related charges.
Because past results have oscillated between profit and loss, the direction of earnings itself is central to any valuation discussion, and posting profits for two consecutive quarters in 2026 can be read as a sign of normalization, even though operating profit levels remain below year-earlier figures.
Dividends have been sustained on the back of solid cash generation despite the net loss and the large antitrust fine burden, but whether this policy continues will depend on the pace of earnings recovery and whether further losses need to be booked.
Market attention also appears focused on the debt ratio being kept in the low-50% range and on the company's shareholder-return efforts through treasury share retirements.
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 2026-08-24
Daehan Flour Mills posted consecutive net profits in Q1 and Q2 2026, marking a normalization phase after the large Q4 2025 loss. Owners' net income improved sequentially from KRW 7.31bn in Q1 to KRW 12.15bn in Q2. Operating cash flow also remained solid at KRW 140.1bn in 2025, supporting the company's financial buffer.
Expanding K-ramyeon exports and capacity additions in Korea's bakery and confectionery industries support flour demand across the milling sector. Downstream investments continue, including Nongshim's export-dedicated plant in Busan's Noksan district and Samyang Foods' expanded output from its second Miryang plant. Per-capita flour consumption has also shown a long-term upward trend, underpinning a structural demand base.
The debt ratio rose from 43.4% in 2022 to 52.1% in 2025 but remains manageable, and owners' equity exceeds KRW 1tn. The company retired treasury shares in three separate rounds between December 2024 and February 2026, reducing shares outstanding. This can be interpreted as an ongoing effort to prevent dilution of per-share value.
The FTC fined Daehan Flour Mills KRW 179.27bn on May 20, 2026, roughly three times its 2025 consolidated operating profit of KRW 62.26bn. The provision the company booked earlier was about KRW 94.4bn, leaving a roughly KRW 80bn gap that may need to be expensed additionally. This could weigh on results over the coming quarters.
Operating profit in Q1 and Q2 2026 was KRW 7.02bn and KRW 7.03bn respectively, less than half of the KRW 15-16.6bn seen in the same period of 2025.
Given reports of some price adjustments amid criticism that domestic selling prices had stayed relatively elevated despite falling international wheat prices, near-term profitability could face pressure. Margin normalization may take time unless offset by cost savings or volume growth.
Daehan Flour Mills has reportedly come under scrutiny over allegations of excessive compensation paid to owner-family members and personal use of company vehicles. Its recently disclosed corporate governance report showed compliance with only 8 of 15 core indicators, a compliance rate of 53.3%. Such issues could affect brand trust and relationships with business partners.
Following the FTC's flour cartel sanctions, Daehan Flour Mills was fined KRW 179.27bn and also ordered to file biannual reports on pricing changes for the next three years. Even if the fine is challenged in administrative litigation, the financial burden remains unless the ruling is overturned. The possibility of further legal action from affected buyers or consumers over the cartel cannot be ruled out.
Fluctuations in international wheat prices and exchange rates directly affect input costs, and recently reported price adjustments could weigh on revenue and margins.
If wheat prices rise again, coordinating the timing and scale of price pass-through will likely be more difficult than before given heightened FTC monitoring.
Allegations concerning owner-family self-dealing and a low corporate governance compliance rate of 53.3% are concerns for investor confidence. If related investigations expand, there is potential for additional sanctions or reputational damage.
Q3 2026 earnings are expected to be disclosed around this time — a point to check revenue and operating margin trends and whether any additional cartel-related provisions are booked.
It is worth checking whether Daehan Flour Mills files an administrative lawsuit challenging the FTC fine, and how it progresses — the outcome could change the timing of when the financial impact is finally settled.
It is worth monitoring whether affected buyers or consumers file damage claims related to the cartel — any such filing could become an additional contingent liability factor.
Full-year 2026 results and dividend policy are expected to be announced — a point to check the pace of earnings recovery, whether additional cartel-related losses are booked, and whether the shareholder-return policy continues.
Daehan Flour Mills recorded a net loss in 2025 due to a large provision booked ahead of the flour cartel penalty, but has shown signs of earnings normalization by returning to profit for two consecutive quarters in the first half of 2026.
However, the fine finalized in May 2026 (KRW 179.27bn) exceeds the provision already recorded, leaving room for additional losses, and operating profit levels in the first half remain less than half of year-earlier figures.
Solid flour demand driven by expanding K-ramyeon exports and bakery/confectionery capacity additions is a positive factor, but the FTC's price re-determination order and biannual reporting requirement could constrain future pricing autonomy.
The balance sheet remains manageable with a debt ratio in the low-50% range, and shareholder-return efforts through treasury share retirements are also evident. Allegations of owner-family self-dealing and a low governance compliance rate remain separate risk factors.
Overall, the finalization of the cartel case's total financial impact and the pace of earnings normalization are likely to be the key variables shaping the company's future earnings trajectory.
Report written 2026-09-05 · Data as of 2026-09-04
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