KOSPIFood & Beverage001790

Ts

₩2,825▲ 1.25%2026-10-02 close

Market Cap

₩241B

Turnover

₩200M

Volume

60,000 shares

Shares out.

86.2M

PER

—

PBR

0.5×

EPS

-₩974

Dividend Yield

4.12%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩120 per share · Prices as of the 2026-10-02 close

Report overview

Daehan Sugar's Value-Up Push Amid Earnings Volatility

Daehan Sugar improved operating profit in 2025 but posted a full-year net loss due to a large fourth-quarter shortfall, and the company is pursuing a value-up plan through 2028 to restore profitability and expand shareholder returns.

1
2025 revenue was 1,356.3 billion won and operating profit 56.6 billion won, both improved year over year, but net loss attributable to owners was 60.4 billion won.
2
Fourth-quarter 2025 operating profit was a positive 14.96 billion won, but the net loss attributable to owners reached 118.6 billion won, suggesting a large non-operating charge.
3
Net profit attributable to owners returned to positive territory in the first and second quarters of 2026, at 9.4 billion won and 12.3 billion won respectively.
4
The company disclosed a value-up plan targeting a price-to-book ratio of 0.8x and annual dividends of around 10 billion won plus additional by 2028.
5
The debt ratio rose to 159.4% in 2025 from 120.6% a year earlier, and operating cash flow turned negative at -8.6 billion won.

Business structure

Daehan Sugar, founded in 1956, is a comprehensive food company operating in food (sugar and related products), feed, livestock distribution, and other segments including golf courses and food service.

According to the company's disclosed value-up plan, the food segment accounts for 51.2% of revenue and 67.7% of operating profit, making it the core profit driver for the group.

The food segment represents more than half of total sales, the livestock distribution segment maintains a stable supply system through partnerships, and the feed segment produces compound feed drawing on more than 40 years of manufacturing experience and technical partnerships.

Its main brands are the integrated food brand 'Foodream' and the compound feed brand 'Rainbow Feed,' and in the domestic sugar market it operates alongside CJ CheilJedang and Samyang Corporation in a three-player structure.

The feed segment has a relatively low domestic market share, creating a gap between its revenue contribution and its market position. The company has recently expanded overseas, pursuing the acquisition of JSG, establishing a Chile branch office, and setting up TS USA Inc. during 2026 to broaden its overseas footprint.

Subsidiaries include TS Dairy and Delichi Food, and the company also operates non-core businesses such as golf courses and food service. Because the company relies entirely on imports for raw sugar and feed grains, its earnings are sensitive to international commodity markets and currency fluctuations.

Earnings trend

Quarterly revenue · Operating profit

₩351.9B₩14.7B25Q2₩346B₩18.6B25Q3₩329B₩15B25Q4₩315.1B₩5.5B26Q1₩336.6B₩13.4B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.4T₩38.1B2022₩1.3T₩47.2B2023₩1.4T₩37B2024₩1.4T₩56.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩351.9B	₩14.7B	4.2%
2025Q3	₩346B	₩18.6B	5.4%
2025Q4	₩329B	₩15B	4.5%
2026Q1	₩315.1B	₩5.5B	1.7%
2026Q2	₩336.6B	₩13.4B	4.0%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.4T	₩38.1B	₩25.5B	2.8%	4.8%	126.8%
2023	₩1.3T	₩47.2B	₩32.6B	3.5%	5.9%	113.7%
2024	₩1.4T	₩37B	₩20.5B	2.7%	3.7%	120.6%
2025	₩1.4T	₩56.6B	-₩60.4B	4.2%	−12.5%	159.4%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21

Earnings analysis

Consolidated revenue in 2025 was 1,356.28 billion won, slightly down from 1,373.83 billion won in 2024, while operating profit rose sharply to 56.56 billion won from 37.00 billion won, lifting the operating margin from 2.7% to 4.2%.

Net profit attributable to owners, however, swung from a profit of 20.49 billion won in 2024 to a loss of 60.40 billion won in 2025, driven almost entirely by the fourth quarter.

Through the first three quarters of 2025, cumulative results were solid on a year-over-year basis, and the third quarter alone posted operating profit of 18.63 billion won and owners' net profit of 13.21 billion won, a strong result.

In the fourth quarter of 2025, however, despite operating profit remaining positive at 14.96 billion won, the net loss attributable to owners reached 118.64 billion won, indicating a large one-off item below the operating line.

As a result, total equity fell to 483.95 billion won at the end of 2025 from 559.15 billion won a year earlier, and the debt ratio rose from 120.6% to 159.4%.

In 2026, first-quarter operating profit declined seasonally to 5.49 billion won, but owners' net profit was a positive 9.44 billion won, and the second quarter showed further improvement with operating profit of 13.38 billion won and owners' net profit of 12.31 billion won.

Over the most recent four quarters (Q3 2025 through Q2 2026), cumulative owners' net profit remained negative at -83.68 billion won, still reflecting the fourth-quarter shortfall.

Operating cash flow stayed positive at 11.40 billion won, 40.03 billion won, and 50.35 billion won in 2022, 2023, and 2024 respectively, but turned negative at -8.60 billion won in 2025, a point worth monitoring separate from the operating profit improvement.

Industry analysis

The domestic sugar industry is a mature sector with stable demand given its status as a daily necessity, and CJ CheilJedang, Samyang Corporation, and Daehan Sugar have long dominated domestic production and sales in a largely fixed competitive structure.

Because raw sugar is entirely imported, crop conditions in major producing countries, international raw sugar prices, and exchange rates directly affect costs. In 2025, favorable harvests in raw-sugar-producing countries supported improved profitability in the food segment.

The feed industry is similarly exposed to imported grains such as corn, and results track international grain markets; in 2025, good harvests among major grain-exporting countries kept raw material prices relatively stable.

Daehan Sugar's market share in feed is reportedly lower than its revenue contribution to the group, reflecting a scale gap versus larger feed producers. The livestock distribution segment is exposed to price volatility by country of origin but manages supply stability through a diversified portfolio.

Overall, the two core businesses (food and feed) benefit from high entry barriers that provide earnings defensiveness, but structural high growth is difficult to expect given the maturity of the industry, prompting the company to pursue overseas expansion and non-core asset restructuring for new growth drivers.

Outlook

In May 2026, Daehan Sugar disclosed a 'value-up plan' setting financial targets through 2028, including a price-to-book ratio of 0.8x and annual dividends of around 10 billion won plus additional amounts.

The first pillar of the plan is overseas expansion, aiming to build a global distribution network through entry into the western United States and South America.

On non-core asset restructuring, the company plans to withdraw from its China feed business and sell its Ulsan feed plant by the end of 2026 to monetize assets, while pursuing vertical integration of its livestock value chain through the acquisition of quality farms in 2027-2028.

Real estate development is another key pillar: the company's Songpa-gu headquarters building is targeted for permitting completion by 2028 and construction start in 2030 as a mixed-use complex combining office and hotel functions, while a building in Gangnam-gu is targeted for development and sale to complete asset monetization within 2028.

On shareholder returns, the company previously retired treasury shares equal to 3.85% of total shares outstanding, and stated it will continue to review further share buybacks and cancellations.

Governance improvement plans include implementing electronic voting and avoiding shareholder meeting concentration dates in 2026, and issuing meeting notices four weeks in advance along with appointing an outside director as board chair by 2028.

These are self-set medium-to-long-term targets, and actual implementation and market reception will need to be confirmed through future annual implementation assessment disclosures.

Valuation

PER

—

PBR

0.5×

ROE

-15.5%

EPS

-₩974

BPS

₩5,621

Dividend per share

₩120

Daehan Sugar's net profit remained positive from 2022 through 2024 before swinging to a loss in 2025 due to a large fourth-quarter charge, and has shown signs of returning to profitability in the first half of 2026.

In terms of price-to-book ratio, the stock appears to trade at a discount to net asset value relative to the 0.8x target the company itself set out in its value-up plan, which it has not yet reached.

The reduction in owners' equity following the 2025 net loss is a factor to weigh when interpreting the price level relative to net assets.

The dividend policy centers on maintaining a stable total annual payout (around 10 billion won plus additional) rather than targeting a specific yield, placing emphasis on policy predictability rather than absolute dividend attractiveness.

Whether the recovery from loss to profit continues will affect how meaningfully earnings-based multiples such as the price-to-earnings ratio can be interpreted going forward.

The pace of execution on the value-up plan, along with actual progress on non-core asset sales and real estate development, will likely be key variables shaping future changes in net assets and capital efficiency metrics.

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 2026-08-21

Bull factors

Capital structure improvement via the value-up plan

The company disclosed a value-up plan through 2028 covering share buybacks and cancellations, non-core real estate development and sale, and a stable dividend policy. It has already retired treasury shares equal to 3.85% of total shares outstanding, offering some evidence of execution.

If the planned development and sale of properties in Seoul's Songpa and Gangnam districts proceeds as scheduled, there is room for balance sheet improvement through asset monetization.

Operating margin improvement and return to profit in 2026

The 2025 operating margin of 4.2% was higher than the 2.7-3.5% range seen from 2022 to 2024. In the first and second quarters of 2026, owners' net profit remained positive at 9.44 billion won and 12.31 billion won respectively, continuing the return-to-profit trend.

If the one-off loss factor seen in the fourth quarter of 2025 does not recur, quarterly earnings volatility could ease.

Diversified growth through overseas expansion

The company has been expanding its overseas footprint through the acquisition of JSG, the establishment of a Chile branch, and the founding of TS USA Inc. in 2026. The value-up plan also names global distribution network expansion into the western United States and South America as its first pillar.

This can be interpreted as an attempt to offset growth limits in the mature domestic sugar and feed markets through overseas entry.

Bear factors

Earnings volatility from a large one-off loss

In the fourth quarter of 2025, despite positive operating profit of 14.96 billion won, the net loss attributable to owners reached 118.64 billion won, reflecting a large swing in non-operating items.

As a result, annual owners' net profit flipped from a profit of 20.49 billion won in 2024 to a loss of 60.40 billion won in 2025. Even on a trailing four-quarter basis, owners' net profit remains negative at -83.68 billion won, so the possibility of similar volatility recurring cannot be ruled out.

Shrinking equity and weaker cash generation

Due to the 2025 net loss, total equity fell to 483.95 billion won from 559.15 billion won a year earlier, and the debt ratio rose from 120.6% to 159.4%.

Operating cash flow, which had been positive from 2022 through 2024, turned negative at -8.60 billion won in 2025, revealing a gap between operating profit improvement and actual cash flow. If execution of the balance sheet improvement plan is delayed, this burden could persist.

Mature industry structure and low feed market share

The domestic sugar market has long been fixed in a three-player structure that makes structural high growth difficult to expect. The feed segment reportedly has a market share lower than its contribution to revenue, potentially putting it at a competitive disadvantage in terms of scale.

Because raw sugar and grains are entirely imported, cost pressure from international commodity markets and currency swings remains a persistent risk factor.

Risk factors

Raw material and currency risk

Because the company relies entirely on imports for raw sugar and feed grains, crop conditions in major producing countries, international prices, and the won-dollar exchange rate directly affect costs.

Favorable harvests eased cost pressure in 2025, but future weather anomalies or sharp currency swings could again squeeze margins. The company has stated it manages price risk through forward contracts, but full hedging is difficult.

Execution risk on non-core asset sales and development

The value-up plan includes multiple asset restructuring items such as withdrawal from the China feed business, sale of the Ulsan feed plant, and development or sale of real estate in Seoul's Songpa and Gangnam districts.

These plans could face delays or changed terms depending on market conditions, permitting procedures, and buyer availability. For real estate development requiring large expenditures, the financing method chosen could affect the balance sheet differently than planned.

Earnings volatility and governance risk

If a large gap between operating profit and net profit recurs as it did in the fourth quarter of 2025, market confidence in earnings predictability could weaken.

The company has proposed governance improvements such as electronic voting and appointing an outside director as board chair, but target dates are spread across 2026-2028, requiring ongoing monitoring of actual implementation pace.

Since the value-up plan's implementation assessment is set to be disclosed annually, the gap between the plan and actual results will need to be checked periodically.

What to watch next

Mid-November 2026
The third-quarter 2026 quarterly report is due, offering a chance to check whether a large loss recurs and whether the operating profit trend continues.
End of 2026
This is when to check whether the withdrawal from the China feed business and the sale of the Ulsan feed plant, both targeted in the value-up plan, have been completed.
Early 2027
The final dividend disclosure for fiscal year 2026 is expected, allowing confirmation of whether the annual dividend target of around 10 billion won plus additional was met.
Around May 2027
The value-up plan and its implementation assessment are scheduled to be disclosed annually, providing a point to check actual performance against the 2026 plan.

Overall view

Daehan Sugar improved its core profitability in 2025, with the operating margin rising to 4.2%, but a large fourth-quarter net loss flipped annual owners' net profit into negative territory, accompanied by shrinking equity, a higher debt ratio, and weaker operating cash flow.

In the first half of 2026, both quarters posted positive net profit, showing signs of recovery, though the trailing four-quarter total still reflects the impact of the fourth-quarter loss.

The company has disclosed a value-up plan through 2028 covering capital efficiency improvement, stable dividends, treasury share cancellation, non-core asset sales, real estate development, and overseas expansion, attempting structural change.

However, this is a self-set target, and its actual implementation pace and results will need to be confirmed sequentially through future annual disclosures.

The domestic sugar and feed industries are stable given their maturity but offer limited structural growth, making the execution of overseas expansion and asset restructuring a key variable for the medium-to-long-term direction.

Readers should monitor upcoming quarterly results, the schedule for non-core asset sales, and value-up implementation disclosures alongside any investment decision.

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.