PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩180 per share · Prices as of the 2026-10-02 close
Daechang Forging, a maker of heavy-equipment undercarriage parts and automotive crankshafts, has shown a joint recovery in revenue and operating profit since 2025.
2025 consolidated revenue rose to KRW 346.2 billion, with operating profit improving sharply to KRW 38.0 billion.
Revenue and operating profit rose sequentially in both Q1 and Q2 2026, with quarterly operating margin climbing into the mid-teens percent range.
The Indian joint venture Track Design India is expanding production and sales of heavy-equipment parts and is cited as a mid-to-long-term growth pillar.
The debt ratio has stayed in the low-20% range, indicating relatively sound financial stability.
Despite improving operating profit, net income attributable to owners declined in 2025, which appears related to non-operating factors.
Daechang Forging started in 1955 in Busan as a crankshaft forging workshop and listed on the KOSPI market in 1989 as a specialized forging manufacturer.
Its core products are undercarriage track components for heavy equipment such as excavators and bulldozers, including links, rollers and shoes, which are machined and assembled for OEM and aftermarket supply to heavy equipment makers.
The company also produces crankshafts, a core automotive engine component, for both passenger and commercial vehicles supplied to automakers and engine manufacturers.
Its consolidated subsidiaries are Trek Inc. in the United States, Track Design India Private Limited in India, and Bongrim Metal Co. domestically, with the US and Indian units serving as the major subsidiaries.
The Indian unit is understood to have begun sales after establishing a heavy-equipment parts plant and is reportedly progressing on local mass-production development with multiple OEM customers.
In the forging industry, cost competitiveness and heat-treatment quality are key competitive factors, with capacity expansion by Chinese producers acting as a persistent pricing pressure.
The company cites vertical integration as a source of cost competitiveness and is reported to be pursuing smart-factory investment to improve processes and automation to mark its 70th anniversary.
Revenue is built on two pillars—heavy-equipment parts and automotive parts—making results closely linked to the global construction-equipment and automotive cycle.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩85B | ₩8.7B | 10.3% |
| 2025Q3 | ₩86.5B | ₩10.6B | 12.2% |
| 2025Q4 | ₩87.6B | ₩7.5B | 8.5% |
| 2026Q1 | ₩98.4B | ₩11.5B | 11.7% |
| 2026Q2 | ₩102.1B | ₩15.7B | 15.4% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩421.5B | ₩49.9B | ₩36.7B | 11.8% | 15.5% | 39.5% |
| 2023 | ₩372.1B | ₩46.4B | ₩33.9B | 12.5% | 12.7% | 22.8% |
| 2024 | ₩322.2B | ₩30.1B | ₩33.6B | 9.3% | 11.2% | 23.6% |
| 2025 | ₩346.3B | ₩38B | ₩27.5B | 11.0% | 8.5% | 24.3% |
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
2025 consolidated revenue reached KRW 346.267 billion, up from KRW 322.237 billion in 2024, while operating profit rose sharply to KRW 38.034 billion from KRW 30.074 billion, lifting the operating margin from 9.3% to 11.0%.
However, net income attributable to owners fell to KRW 27.477 billion from KRW 33.575 billion in 2024, suggesting non-operating factors weighed on the bottom line even as operating performance improved.
Looking at the trailing four-quarter window from Q3 2025 through Q2 2026, revenue rose sequentially each quarter—KRW 86.462 billion, KRW 87.552 billion, KRW 98.354 billion, and KRW 102.055 billion—while operating profit came in at KRW 10.565 billion, KRW 7.460 billion, KRW 11.523 billion, and KRW 15.725 billion, pushing the quarterly operating margin up to 15.4% in Q2 2026.
In Q3 2025, owner net income of KRW 8.474 billion appeared relatively large compared to revenue and operating profit for that quarter, which cannot rule out the possibility of a one-off item.
Over 2022 to 2024, revenue contracted from KRW 421.498 billion to KRW 322.237 billion before rebounding in 2025, while the operating margin fluctuated from 11.8% in 2022 and 12.5% in 2023 down to 9.3% in 2024 before recovering to 11.0% in 2025.
On the cash-flow side, operating cash flow was large at KRW 73.418 billion in 2023 but narrowed to KRW 40.925 billion in 2024 and KRW 17.705 billion in 2025, showing a gap between improving operating profit and cash generation.
The debt ratio stayed low at 39.5% in 2022, 22.8% in 2023, 23.6% in 2024 and 24.3% in 2025, indicating limited financial burden.
Research firms generally project moderate growth for the global excavator market, supported by expanding infrastructure investment.
India in particular has been forecast by Off-Highway Research to see roughly 10% average annual demand growth from 2022 through 2026, with replacement demand also emerging from the CEV-V emission standard implementation.
North America is assessed as maintaining steady demand backed by infrastructure-related spending, while emerging markets such as the Middle East and Africa are seeing expanded entry by equipment makers.
However, raw material cost volatility in steel prices and freight costs has been flagged as a margin pressure across the industry, with reports noting that a major industry player lowered its fiscal 2026 operating profit outlook.
Among equipment makers, HD Hyundai Construction Equipment and others are expanding market share in India and the Middle East, meaning Daechang Forging's results as a parts supplier are closely tied to order flow from these customers.
The automotive parts segment, centered on crankshafts, is closely linked to internal-combustion-engine vehicle production trends, with the shift toward electric vehicles remaining a long-term variable for this segment's demand.
Within the forging industry, capacity expansion by Chinese producers continues to be cited as a persistent pricing pressure, prompting domestic makers to compete on quality and cost efficiency.
The company filed its Q1 2026 quarterly report on May 14, and its consolidated subsidiary structure of three companies (with two major subsidiaries) has been maintained.
The Indian joint venture Track Design India is reported to have started sales after building a heavy-equipment parts plant and to be progressing on local mass-production development with multiple OEMs, making the utilization ramp-up of this unit a key point to watch going forward.
Ongoing smart-factory investment tied to the company's 70th anniversary is reportedly aimed at improving processes and automation to boost production efficiency, a factor that could affect the cost structure over the medium to long term.
Given that both Q1 and Q2 2026 results showed sequential increases in revenue and operating profit, external variables such as operating days, exchange rates, and raw material prices in the second half remain factors that will determine whether this trend continues.
Amid industry views that benefits from expanding infrastructure investment in North America and India could persist, order volumes from equipment makers and their inventory adjustments are expected to directly affect future revenue.
The automotive parts segment's volume can be influenced by automakers' production plans and engine lineup changes, making ongoing monitoring of the segment revenue mix warranted.
Even though owner net income declined in 2025 versus 2024, quarterly results have shown improvement in both revenue and operating profit since Q3 2025, making the durability of this recovery a key variable for valuation assessment.
The share price trades at a level below the company's net asset value per share, suggesting the market is applying a discount relative to book equity.
The company has maintained cash dividend payments in recent years, and the continuity of this dividend policy is a factor worth noting from a financial stability standpoint. With the debt ratio staying in the low-20% range, risk from financial leverage can be assessed as limited.
However, the gap between improving operating profit and cash generation (operating cash flow), along with the fluctuation in owner net income, remain factors that should be weighed together when interpreting valuation.
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
Revenue and operating profit have risen sequentially each quarter since Q3 2025, with the Q2 2026 operating margin climbing into the mid-teens percent range. The debt ratio has also remained in the low-20% range, indicating limited financial burden. Whether this improvement trend continues into the second half is a key point to watch.
Research firms project continued average annual growth in Indian excavator demand, and the Indian joint venture Track Design India is expanding local sales. North America is also assessed as maintaining steady demand backed by infrastructure-related spending. As a parts supplier to these regions, Daechang Forging has potential exposure to expanding downstream demand.
A vertically integrated structure with subsidiaries and affiliates has been cited as a source of cost competitiveness. Smart-factory investment for process improvement and automation is also reportedly under way. This could serve as a counterweight to pricing pressure from Chinese competitors.
Even in 2025, when operating profit improved, owner net income actually declined from the prior year. On a quarterly basis, Q3 2025 net income also appeared relatively large versus revenue and operating profit, hinting at the influence of non-operating factors. This volatility raises uncertainty in earnings forecasting.
Operating cash flow has continued to decline, from KRW 73.4 billion in 2023 to KRW 40.9 billion in 2024 and KRW 17.7 billion in 2025. This runs counter to the improving operating profit trend and is presumed to be influenced by changes in working capital such as inventory or receivables. Whether cash generation recovers warrants monitoring.
Volatility in raw material-related costs such as steel prices and freight has been cited as a margin pressure across the industry. Reports have noted that a major industry player's operating profit outlook was lowered, suggesting Daechang Forging may not be free from similar cost pressures.
Currency fluctuations are also a variable that could affect results given the export-oriented nature of the business.
Since revenue depends on orders from heavy-equipment OEMs and automotive engine makers, changes in customer inventory adjustments or production plans can directly affect results. The cyclical nature of the construction equipment industry also heightens earnings volatility.
Volatility in raw material prices such as steel and ocean freight rates directly affects margins given the nature of the forging business. In a business structure with export exposure, currency fluctuations can also increase earnings uncertainty.
If the utilization ramp-up and local mass-production development at the Indian joint venture Track Design India do not proceed as planned, expected growth contribution could be delayed. Earnings volatility at overseas subsidiaries such as Trek Inc. in the United States could also affect consolidated results.
The Q3 2026 quarterly report is expected to be filed around this time; it will be important to check whether the sequential increase in revenue and operating profit continues into Q3.
Additional disclosures or media reports on the utilization ramp-up and local OEM mass-production development progress at the Indian joint venture Track Design India should be monitored.
Trends in cost indicators such as steel prices and ocean freight rates, along with order trends from major equipment OEMs in the India and North America markets, warrant continued monitoring.
The annual finalized results (business report) for fiscal year 2026 are expected to be disclosed around this time, allowing final confirmation of whether owner net income, which declined in 2025, has recovered.
Daechang Forging is a specialized forging company built on two pillars—heavy-equipment undercarriage parts and automotive crankshafts—and has shown a sequential improvement in both revenue and operating profit since 2025 on a quarterly basis.
However, owner net income actually declined in 2025 versus the prior year, and operating cash flow has continued to shrink since 2023, revealing a gap between improving operating profit and other indicators.
Expanding infrastructure investment in India and North America is cited as a favorable factor within the industry, but external variables such as raw material prices, currency fluctuations, and customer order flow also carry significant influence.
On the financial structure side, the debt ratio has remained stable in the low-20% range. Going forward, Q3 results and the utilization ramp-up at the Indian joint venture are likely to be key variables in assessing the durability of this recovery.
Before making investment decisions, it is worth examining quarterly earnings volatility and the impact of non-operating factors together.
Report written 2026-09-05 · Data as of 2026-09-04
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