PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩280 per share · Prices as of the 2026-10-02 close
Heungkuk, a small-cap KOSDAQ maker of undercarriage parts for excavators, has moved out of its 2024 earnings slump, posting improving revenue and operating margins through 2025 and the first half of 2026.
2025 revenue reached KRW 137.0bn (+6.5% YoY) with operating margin recovering to 10.9% from 6.8% in 2024
Quarterly revenue hit recent highs at KRW 39.0bn in Q1 2026 and KRW 42.7bn in Q2 2026, extending the growth trend
The debt ratio fell to 14.7% at end-2025, its fourth straight annual decline, alongside stable operating cash flow of KRW 15.6bn
Global sales network spans four overseas subsidiaries in China, Japan, India and the US, though a 2021-established Shandong unit was liquidated in 2024
As a micro-cap with roughly KRW 0.1tn in market value and limited trading volume, results are highly sensitive to the construction equipment cycle and steel prices
Heungkuk, established in 1974 and listed on KOSDAQ in 2009, is a specialized maker of construction machinery parts whose official English name is Heungkuk Metaltech Co., Ltd.
Its core business is manufacturing undercarriage components for tracked construction equipment (mainly excavators)-track rollers, carrier rollers, idlers and tension cylinders-alongside a forged-products business built on more than three decades of hot die-forging experience.
The forged-products segment accounted for roughly 3% of revenue as of 2019, supplying parts used across construction machinery, industrial machinery and automotive applications.
The construction machinery parts industry is characterized by high value-added but long production and capital payback cycles, requiring substantial capital expenditure and working capital.
To expand its global sales network, the company established overseas subsidiaries in China in 2005 (Heungkuk Technology Wuxi), Japan in 2018 (HK Japan), India in 2019 (Heungkuk India) and the United States in 2022 (Heungkuk America).
A separate China unit set up in Shandong in 2021 was decided for liquidation in January 2024 and completed liquidation that April. Under Korea's Standard Industrial Classification the company falls under "manufacture of construction and mining machinery,
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩34.8B | ₩3.8B | 10.8% |
| 2025Q3 | ₩34.9B | ₩3.6B | 10.3% |
| 2025Q4 | ₩34.1B | ₩3.9B | 11.5% |
| 2026Q1 | ₩39B | ₩4.9B | 12.6% |
| 2026Q2 | ₩42.7B | ₩4.6B | 10.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩134.6B | ₩11.2B | ₩8.5B | 8.3% | 9.3% | 27.8% |
| 2023 | ₩149.4B | ₩15.8B | ₩13.2B | 10.6% | 13.3% | 23.1% |
| 2024 | ₩128.7B | ₩8.8B | ₩10.6B | 6.8% | 9.7% | 15.7% |
| 2025 | ₩137B | ₩14.9B | ₩12.2B | 10.9% | 10.3% | 14.7% |
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
Consolidated 2025 revenue came to KRW 137.02 billion, up 6.5% from KRW 128.71 billion in 2024, while operating profit of KRW 14.90 billion translated into a 10.9% operating margin, a sharp improvement from 6.8% in 2024.
Net income attributable to owners rose 15.7% to KRW 12.20 billion from KRW 10.55 billion a year earlier.
The prior year, 2024, had been a weak one, with revenue of KRW 128.71 billion, operating profit of KRW 8.79 billion and a 6.8% margin that marked a steep step-down from 2023's KRW 149.38 billion revenue and 10.6% margin.
Across 2022-2025, revenue moved from KRW 134.6 billion to KRW 149.4 billion to KRW 128.7 billion to KRW 137.0 billion, while the operating margin swung from 8.3% to 10.6% to 6.8% and back up to 10.9% in 2025, confirming a genuine profitability recovery.
On a quarterly basis, revenue was flat around KRW 34.1-34.9 billion through the second to fourth quarters of 2025 before clearly accelerating to KRW 39.0 billion in Q1 2026 and KRW 42.7 billion in Q2 2026.
The operating margin climbed to 12.7% in Q1 2026 before easing slightly to 10.7% in Q2 2026, still holding in double digits.
Quarterly net income attributable to owners has not moved in lockstep with operating profit-Q3 2025 saw net income (KRW 3.72 billion) exceed operating profit (KRW 3.60 billion), while Q2 2026 saw net income (KRW 4.08 billion) fall below operating profit (KRW 4.57 billion)-suggesting non-operating items have added variability to quarterly results.
Over the trailing four quarters (Q3 2025-Q2 2026), net income attributable to owners totaled roughly KRW 16.26 billion, already exceeding full-year 2025 net income of KRW 12.20 billion.
The global excavator market is estimated at USD 85.48 billion in 2025, rising to USD 90.75 billion in 2026, with a projected 6.16% CAGR through 2034. Asia-Pacific held the largest regional share at 55.54% in 2025, a region that encompasses China, Japan and India, where Heungkuk's overseas subsidiaries are based.
China's construction equipment market is expected to expand from USD 56.18 billion in 2025 to USD 59.62 billion in 2026 and grow at a 6.12% CAGR through 2031, with excavators accounting for roughly 55% of that market's revenue.
However, some analyses note that Chinese production capacity currently exceeds order volumes, prompting some brands to cut prices sharply and compress margins across the industry.
Global OEM Komatsu has guided for a 27.3% decline in fiscal 2026 operating profit, illustrating how input cost inflation, including steel, is weighing on profitability across the sector.
Conversely, the US Infrastructure Investment and Jobs Act allocated USD 55 billion in new spending over eight years, supporting demand for earthmoving equipment, indicating diverging supply-demand conditions by region.
Within this landscape, Heungkuk operates as a tier-two supplier to large OEMs, directly exposed to shifts in their production volumes and raw-material cost pressures.
With revenue setting successive quarterly highs in Q1 and Q2 2026, whether this growth trend continues into the second half is a key point to watch.
That said, no official annual revenue or profit guidance, major new orders, or capacity expansion plans have been confirmed to date, meaning the trajectory of results must be tracked through sequential quarterly disclosures.
Among overseas units, the relatively newer US subsidiary (Heungkuk America) and India subsidiary (Heungkuk India) warrant attention for whether their local revenue contribution grows over the medium term.
On the industry side, construction machinery markets in Asia-Pacific and China are expected to continue growing moderately, though oversupply and intensifying price competition in China along with raw-material cost pressures such as steel remain headwinds for component makers' margins.
Expanding US infrastructure investment is cited as a favorable variable that could broaden a North American sales base, though the specific share of Heungkuk's revenue derived from its US subsidiary is not disclosed in available materials.
On the financial side, a debt ratio that has declined for four consecutive years alongside sustained cash generation appears to provide a foundation that could support further investment or shareholder returns.
Ultimately, the key points to watch in the second half are whether revenue growth persists and whether double-digit operating margins can be sustained amid raw-material cost pressure.
The current share price trades at a discount to the company's net asset value, with the price-to-book ratio sitting below 1x.
On the earnings side, the 2025 profit recovery and the fact that trailing four-quarter net income already exceeds the full 2025 annual figure suggest that the price level relative to earnings sits in a relatively low range.
On dividends, the 2025 profit recovery appears to have expanded the resource base available for distribution, though how recent earnings improvement will affect future dividend policy needs to be confirmed through the next settlement disclosure.
It should also be kept in mind that as a small-cap KOSDAQ stock with limited market value and trading volume, its valuation metrics can display greater volatility than large-cap peers.
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
The operating margin improved sharply to 10.9% in 2025 from 6.8% in 2024, and stayed in double digits through the first two quarters of 2026.
At the same time, the debt ratio has fallen for four straight years, from 27.8% in 2022 to 14.7% in 2025, while operating cash flow has consistently exceeded KRW 15 billion annually. This points to financial capacity to support investment and shareholder returns without relying on external funding.
Revenue that had been flat around KRW 34.1-34.8 billion through Q2-Q4 2025 rose sharply to KRW 39.0 billion in Q1 2026 and KRW 42.7 billion in Q2 2026, setting successive recent highs. Trailing four-quarter net income has already surpassed full-year 2025 net income, indicating the earnings recovery is broadening.
The overseas subsidiary network spanning China, Japan, India and the US aligns with growth in Asia-Pacific-centered construction equipment demand.
The global excavator market is projected to grow at a 6.16% CAGR from 2026 to 2034, and with Asia-Pacific already accounting for more than half of the market, the setup favors component makers with an established regional sales base.
In 2024, revenue fell 14% and operating profit dropped 37.7% year-on-year, illustrating significant exposure to a construction sector slowdown.
Because the parts industry itself is heavily influenced by domestic and overseas infrastructure investment policy and the construction cycle, annual revenue and profit have shown relatively wide swings.
China's construction equipment market is described as facing oversupply, with production lines exceeding order volumes, and price-cutting competition is said to be squeezing margins across the industry.
Global major Komatsu has also guided for a 27.3% decline in fiscal 2026 operating profit, suggesting that input cost inflation, including steel, is weighing on the broader parts supply chain.
As a KOSDAQ small-cap with roughly KRW 0.1 trillion in market value, limited trading volume can result in relatively higher share price volatility.
As a tier-two supplier, the company also likely has less pricing power than large OEMs, making it harder to fully pass through rising raw-material costs into selling prices.
According to market reports, steel prices fluctuate between roughly USD 600 and 900 per ton, directly affecting forging and parts production costs. In periods when cost increases cannot easily be passed through to OEM customers, operating margins can come under pressure.
Operating subsidiaries across China, Japan, India and the US exposes the company to exchange rate movements, labor cost changes, and shifting trade policy in each jurisdiction.
A China unit established in Shandong in 2021 was in fact liquidated in 2024, illustrating that overseas operations carry ongoing trial-and-error and restructuring risk.
Price-cutting competition stemming from excess production capacity in China could erode profitability across the parts supply chain, and if smaller manufacturers continue to face restructuring, supply chain uncertainty could increase.
A slowdown at global OEMs, such as Komatsu's projected decline in operating profit, could translate into weaker downstream demand that also weighs on component makers' revenue.
Q3 2026 earnings are due to be disclosed. It will be important to check whether the revenue growth and double-digit operating margin seen in Q1-Q2 2026 continue into Q3.
Global construction equipment makers are expected to report Q3 results and issue 2027 guidance in this window, providing reference points for reading downstream demand and raw-material cost trends.
The 2026 annual business and audit report is expected to be disclosed, allowing confirmation of final full-year revenue, operating margin and dividend policy figures.
It is worth monitoring for DART disclosures regarding the revenue contribution of newer overseas subsidiaries such as those in the US and India, or any additional investment or capacity expansion plans.
Heungkuk is a KOSDAQ small-cap parts maker focused on undercarriage components for construction equipment such as excavators, having emerged from a weak 2024 with revenue and operating margin recovering together in 2025 and growth continuing through the first half of 2026.
Its financial structure appears relatively stable, with the debt ratio declining for four consecutive years and cash generation sustained.
That said, because the construction machinery parts industry is heavily influenced by domestic and overseas infrastructure investment policy and the broader economic cycle, a renewed downturn similar to 2024 cannot be ruled out.
Oversupply and price competition in the Chinese market, along with raw-material cost pressures such as steel, remain ongoing variables for component makers' margins.
No official company guidance, major new orders, or capacity expansion plans have been confirmed to date, meaning the direction of future results must be verified sequentially through upcoming quarterly disclosures.
Ultimately, the durability of the earnings recovery and the ability to defend margins amid raw-material cost pressure stand as the key points to watch going forward.
Report written 2026-09-05 · Data as of 2026-09-04
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