PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Prices as of the 2026-10-02 close
Daedong Gear is broadening its medium-term revenue base through expanding orders across EV, agricultural machinery and construction equipment, but recent quarterly earnings remain volatile, swinging between profit and loss.
Cumulative order backlog since 2024 has reached about KRW 1.86 trillion, with EV and hybrid vehicle components accounting for 78%, reshaping the business toward future mobility.
The company secured KRW 262.8 billion in new orders in H1 2026 and is discussing roughly KRW 300 billion more for H2, making achievement of its full-year target of over KRW 500 billion in new orders a key watch point.
Consolidated operating profit in 2025 was near breakeven at about KRW 162 million, and net income attributable to owners turned negative, with profit and loss alternating quarter to quarter from Q3 2025 through Q2 2026.
A combined KRW 80 billion rights offering and 30% bonus issue expanded total shares outstanding to about 19.18 million, with proceeds earmarked for EV production facility expansion and robotics business groundwork.
The key EV reducer component for Hyundai Transys is set for pilot production in November 2026 and full-scale mass production in April 2027, meaning its revenue contribution has yet to fully materialize.
Founded in 1973, Daedong Gear is a powertrain specialist that has produced power-transmission components for automobiles, agricultural machinery, and industrial equipment for more than five decades.
Its core products are transmissions, axles, reducers, and axle shafts, supplied to automakers including Hyundai Motor, Kia, and GM Korea, as well as parts affiliates such as Hyundai Transys.
Backed by its partnership with parent company Daedong, a specialist agricultural machinery maker, tractor transmission parts have long formed the base of its revenue.
More recently, in response to the shift toward electrification, the company has expanded into core EV drivetrain components such as input gears, output gears, and output shaft assemblies for electric and hybrid vehicles.
In the construction equipment segment, it is expanding supply of reducers for excavators and forklifts, diversifying its industrial machinery customer base.
It has also begun developing robot reducers and actuators by leveraging its existing reducer and precision machining technology, preparing to enter the robotics components market.
In the auto parts industry, after a customer project is won it goes through product development, production facility construction, quality verification, and customer approval before mass production begins, after which the part is typically supplied for seven to ten years. This structure means that once a project is secured, revenue visibility tends to be relatively high.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩59.1B | ₩400M | 0.6% |
| 2025Q3 | ₩50B | -₩500M | −1.0% |
| 2025Q4 | ₩51.1B | -₩200M | −0.4% |
| 2026Q1 | ₩59.3B | -₩1.4B | −2.4% |
| 2026Q2 | ₩67B | ₩1.6B | 2.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩242.1B | ₩7.6B | ₩4.2B | 3.1% | 5.7% | 230.9% |
| 2023 | ₩281.2B | ₩8.1B | ₩2.8B | 2.9% | 3.2% | 182.8% |
| 2024 | ₩257.1B | ₩4.5B | ₩1.2B | 1.7% | 1.4% | 191.5% |
| 2025 | ₩220.9B | ₩200M | -₩4.7B | 0.1% | −6.0% | 240.6% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-05
Daedong Gear's consolidated revenue rose from KRW 242.1 billion in 2022 to KRW 281.2 billion in 2023, but then declined for two consecutive years to KRW 257.1 billion in 2024 and KRW 220.9 billion in 2025.
Operating profit contracted sharply as well, from KRW 7.59 billion in 2022 and KRW 8.09 billion in 2023 to KRW 4.46 billion in 2024 and just KRW 0.16 billion in 2025, effectively falling to breakeven.
Net income attributable to owners shrank from KRW 4.23 billion in 2022 to KRW 2.77 billion in 2023 and KRW 1.17 billion in 2024, before turning negative at KRW -4.74 billion in 2025.
On a quarterly basis, operating losses of KRW 0.52 billion in Q3 2025 and KRW 0.20 billion in Q4 2025 were followed by a widened operating loss of KRW 1.41 billion in Q1 2026, before the company swung back to an operating profit of KRW 1.65 billion in Q2 2026.
Net income showed similar volatility, moving from a loss of KRW 1.62 billion in Q3 2025 to a profit of KRW 0.60 billion in Q4 2025, back to a loss of KRW 2.02 billion in Q1 2026, and then a profit of KRW 0.57 billion in Q2 2026.
This fluctuation is largely attributable to changing demand for the company's core tractor transmission and power-transmission components combined with the auto industry's sensitivity to economic cycles.
Over the trailing four quarters (Q3 2025 through Q2 2026), combined revenue was about KRW 227.5 billion with net income attributable to owners of about KRW -2.46 billion, still in loss territory. Operating cash flow in 2025, however, remained positive at KRW 9.63 billion despite the net loss.
The auto parts industry is directly linked to automakers' electrification transitions and shifts in global production volumes.
In the agricultural machinery industry, mechanization demand driven by the spread of smart farming and rural aging is cited as a long-term growth driver, but the global agricultural machinery market itself has been in a downturn in recent years.
In H1 of this year, the North American agricultural machinery market shrank 13% year over year and the domestic market fell 3.4%, while the European market grew only 0.7%.
Even so, Daedong, Daedong Gear's parent, posted its highest-ever quarterly revenue in Q2, with operating profit also rising more than 60% year over year.
In construction equipment, orders for excavator and forklift reducers with domestic and overseas parts makers have been increasing, giving this segment a relatively more stable order flow compared with automotive and agricultural machinery.
The EV drivetrain component market is characterized by a significant time lag between when orders are concentrated, based on automakers' electrification roadmaps, and when actual revenue is recognized.
Daedong Gear has secured a supplier position within the domestic automotive value chain led by Hyundai Transys and Hyundai Motor based on its precision machining capability, while also attempting to extend its powertrain technology into the adjacent robotics reducer market.
The company has laid out a roadmap to complete mass-production preparation for the EV and hybrid components ordered in 2024-2025 within 2026, and to start generating meaningful related revenue from 2027.
The output shaft assembly for EV reducers to be supplied to Hyundai Transys, worth about KRW 138.5 billion over an eight-year supply period from 2027, is planned to go through pilot production in November this year before full-scale mass production begins in April 2027.
Three types of tractor gearboxes to be supplied to a top-three global agricultural machinery maker, worth about KRW 71.8 billion over seven years, are currently in the sample-order stage targeting mass-production supply in the second half of 2027.
A small-excavator reducer supply contract with a domestic construction equipment parts company, worth about KRW 52.5 billion, has a six-year supply period that has already begun starting 2026.
Following the KRW 262.8 billion in new orders secured through H1, the company is discussing roughly KRW 300 billion in additional EV and agricultural machinery projects for H2, and if these materialize as planned, annual new orders could expand to about KRW 570 billion.
To fund this, of the KRW 80 billion rights offering decided in April, the company plans to invest KRW 50 billion in future-mobility production facilities, with related investment to be executed sequentially from the second half of 2026.
The robotics component business is at the actuator prototype development stage, based on existing reducer and precision-machining technology, as the company pushes toward becoming a robotics company.
Since Daedong Gear's net income attributable to owners turned negative in 2025, profit and loss have continued to alternate quarter by quarter through 2026, making it difficult to compare valuation multiples against past annual earnings as before.
With total shares outstanding having expanded significantly through the April rights offering and August bonus issue, per-share metrics before and after the capital increases are not directly comparable.
Looking at the relationship between market price and net assets, the stock trades at a level below its own calculated book value per share, highlighting a discount relative to net assets.
Because recent per-share dividend disclosures are not clearly available, there is little basis to assess dividend appeal at this time.
The future direction of valuation will likely hinge on whether profitability recovers as EV component revenue ramps up around 2027, meaning the current price appears to reflect expectations tied to the future business transition more than to past earnings performance.
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 2026-09-05
Cumulative order backlog since 2024 has surpassed KRW 1.86 trillion, with EV and hybrid components accounting for 78% of the total.
Orders have been secured evenly across different industries, including electrification, agricultural machinery, and construction equipment, reducing dependence on any single customer or sector. Discussions are also underway for roughly KRW 300 billion in additional projects in H2, sustaining order momentum.
The customer and industry base is expanding from a previously agriculture-heavy revenue structure into EV, construction equipment, and robotics components. This diversification can mitigate the risk of results being overly swayed by a single industry cycle, whether automotive or agricultural machinery.
A first overseas OEM deal with a top-three global agricultural machinery maker also reflects progress on customer diversification.
A combined KRW 80 billion rights offering and 30% bonus issue raised funds needed for EV production facility expansion and robotics business groundwork. Of the proceeds, KRW 50 billion is earmarked for future-mobility-related facilities, with the remainder for working capital. This provides funding support for ongoing investments such as the construction of 20 EV production lines.
Consolidated operating profit shrank to near breakeven in 2025 and net income turned negative. In 2026, results have continued to swing, with an operating loss widening in Q1 before turning to profit in Q2. On a trailing four-quarter basis, the company remains in a net loss position.
Key EV projects are not scheduled for full mass production and revenue recognition until 2027, meaning the current expansion in orders has limited impact on near-term results. Some projects, such as the tractor gearboxes, are also expected to generate revenue only from the second half of 2027. In the interim, the burden of facility investment may be reflected first.
Following the KRW 80 billion rights offering and 30% bonus issue, total shares outstanding more than doubled. This means that even if profitability improves going forward, per-share metrics may take relatively longer to recover. The process of absorbing newly issued shares could also create supply-related pressure.
The automotive, agricultural machinery, and construction equipment industries are all sensitive to economic cycles and to raw material and currency fluctuations.
Weakening consumer sentiment in autos, semiconductor supply instability, or seasonal and policy-driven demand shifts in agricultural machinery can affect results simultaneously. While the multi-industry structure spreads risk, it also exposes the company to multiple variables at once.
Construction of 20 EV production lines for supply to Hyundai Motor and Hyundai Transys is underway, with progress in the 80% range as of a recent update, meaning it is not yet complete. Delays in line construction or quality verification schedules could push back the timing of pilot and mass production. This represents an execution risk to the company's stated roadmap for revenue ramp-up from 2027.
The debt-to-equity ratio reached 240.6% in 2025, the highest level in the past four years. With net income showing significant volatility, elevated leverage could affect interest burden and financial flexibility.
During a period of continued large-scale facility investment, the funding structure warrants ongoing monitoring.
A point to check whether pilot production begins for the Hyundai Transys EV reducer component, alongside the release of preliminary Q3 2026 results.
A point to check whether the roughly KRW 300 billion in additional H2 projects under discussion are finalized, and whether the annual new-order target of KRW 500-570 billion is met.
Worth monitoring the start of execution for the KRW 50 billion facility investment fund from the rights offering, and progress on new EV production line construction.
A point to confirm whether full-scale mass production begins for the Hyundai Transys EV reducer component and whether related revenue recognition starts.
A point to confirm whether mass-production supply of tractor gearboxes to the top-three global agricultural machinery maker begins.
Daedong Gear has significantly widened its order pipeline while pursuing a business transition centered on EVs and robotics, built on decades of powertrain technology.
Cumulative order backlog since 2024 has exceeded KRW 1.86 trillion, a large share of which consists of EV and hybrid components, giving the medium-term revenue base a more diversified profile than in the past.
However, actual profitability has yet to reflect much of this momentum: consolidated operating profit hovered near breakeven in 2025, net income turned negative, and results continued to swing between profit and loss on a quarterly basis through 2026.
The KRW 80 billion rights offering and 30% bonus issue, which substantially increased capital and shares outstanding, carry the dual character of securing investment funding while also diluting existing shareholders.
With full-scale mass production of key EV projects set to begin in 2027, the pace at which orders convert into actual results, and the margin level at that point, will likely be the key factors shaping the company's future earnings trajectory.
The stability of the agricultural machinery and construction equipment supply base, along with progress in the new robotics components business, also merit continued attention.
Report written 2026-09-05 · Data as of 2026-09-04
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