PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩190 per share · Prices as of the 2026-10-02 close
YG-1, the world's largest endmill maker by market share, has shown a parallel improvement in revenue and operating margin since the second half of 2025.
Second-quarter 2026 operating margin rose to roughly 22.4 percent, more than double the approximately 10.3 percent recorded in the second quarter of 2025.
Owners' net income summed over the latest four quarters (Q3 2025 to Q2 2026) reached about KRW 74.9 billion, already exceeding the full-year 2025 figure of KRW 25.3 billion.
The first half of 2025 was a period when revenue grew but profitability was constrained by US protectionism and global trade tension.
The debt-to-equity ratio has stayed in a 166 to 177 percent range from 2022 to 2025, indicating financial leverage that is not low.
The global cutting tool market sits at the intersection of supply-chain realignment, US reshoring, and expanding 'China plus one' demand from ASEAN.
Founded in 1981, YG-1 is a specialized manufacturer and exporter of cutting tools, producing and selling endmills, drills, taps, and rotary burrs used in machining molds and mechanical parts, in both solid and indexable tool types.
Cutting tools are consumable products used broadly across secondary industries such as IT devices, automobiles, shipbuilding, and aircraft, giving the business relatively stable underlying demand.
The company holds the world's largest market share in the endmill category and has built a global supply chain with multiple production bases across the United States, Germany, China, Japan, and India, exporting to more than sixty countries.
Exports account for a substantial portion of revenue, making the business heavily dependent on overseas sales.
Its competitive landscape is anchored by global cutting-tool makers from Germany and Japan, and the company positions its price competitiveness—offering high-quality products at lower prices than global rivals—as a core strength.
It has developed in-house raw-material processing and coating technologies to raise product quality, while using technical seminars for global marketing to strengthen brand recognition.
More recently, the company has pursued both expansion into high-performance cutting-tool segments through product quality upgrades and internal efficiency gains such as rising production automation rates and greater emerging-market share.
In 2023, its Seowoon plant was selected for a smart eco-factory construction project, paralleling this push to upgrade manufacturing facilities.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩150.7B | ₩15.6B | 10.3% |
| 2025Q3 | ₩168.8B | ₩22.6B | 13.4% |
| 2025Q4 | ₩178.2B | ₩19.3B | 10.8% |
| 2026Q1 | ₩207.8B | ₩38.8B | 18.7% |
| 2026Q2 | ₩213.3B | ₩47.7B | 22.4% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩549.8B | ₩72.6B | ₩32B | 13.2% | 9.6% | 176.9% |
| 2023 | ₩553.2B | ₩54.7B | ₩23.4B | 9.9% | 6.7% | 170.6% |
| 2024 | ₩575B | ₩55.8B | ₩16.7B | 9.7% | 4.2% | 166.7% |
| 2025 | ₩639.4B | ₩66.5B | ₩25.3B | 10.4% | 5.9% | 170.8% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annual revenue rose steadily from KRW 549.8 billion in 2022 to KRW 553.2 billion in 2023, KRW 575.0 billion in 2024, and KRW 639.4 billion in 2025.
Operating profit, however, declined from KRW 72.6 billion (13.2 percent margin) in 2022 to KRW 54.7 billion (9.9 percent) in 2023 and KRW 55.8 billion (9.7 percent) in 2024, before recovering to KRW 66.5 billion (10.4 percent) in 2025.
Owners' net income followed a similar dip-and-recover pattern, falling from KRW 32.0 billion in 2022 to KRW 23.4 billion in 2023 and KRW 16.7 billion in 2024, then rebounding to KRW 25.3 billion in 2025.
The quarterly pattern shows the recovery accelerating: the operating margin was about 10.3 percent in the second quarter of 2025, rose to 13.4 percent in the third quarter and 10.8 percent in the fourth quarter of 2025, then jumped to 18.7 percent in the first quarter of 2026 and 22.4 percent in the second quarter of 2026.
Owners' net income expanded correspondingly, from KRW 2.4 billion in the second quarter of 2025 to KRW 10.7 billion in the third quarter, KRW 8.0 billion in the fourth quarter, KRW 25.9 billion in the first quarter of 2026, and KRW 30.4 billion in the second quarter of 2026.
As a result, owners' net income summed over the latest four quarters (Q3 2025 through Q2 2026) reached roughly KRW 74.9 billion, already surpassing the full 2025 annual figure of KRW 25.3 billion.
The first half of 2025, however, was a weaker period during which consolidated revenue grew 7.0 percent year on year while operating profit fell 6.4 percent and net income fell 41.9 percent, as revenue growth from rising demand for higher-quality products was offset by US protectionism and global trade tension that limited profitability.
Operating cash flow moved from KRW 13.1 billion in 2022 to KRW 40.2 billion in 2023, KRW 50.9 billion in 2024, and KRW 38.3 billion in 2025, a pattern that does not perfectly track the swings in operating profit or net income, suggesting that working-capital items such as inventory and receivables have influenced reported results.
The global machine tool market is estimated at roughly USD 112.03 billion in 2026, up from USD 108.47 billion in 2025, and is projected to reach USD 131.63 billion by 2031, growing at a compound annual rate of 3.28 percent.
This expansion is driven by supply-chain reconfiguration, tightening trade rules, and record investment in semiconductor fabs, all of which require ultra-precision machining capability.
By region, Asia-Pacific is expected to account for 45.10 percent of global revenue in 2026 and to grow fastest at a 6.05 percent compound annual rate, making it the pivotal market.
North America is benefiting from reshoring policies aimed at rebuilding strategic manufacturing self-sufficiency, with one industry survey noting that regional tool-maker bookings tied to large precision-machining equipment reached their highest level in recent years.
ASEAN countries such as Vietnam and Thailand are gaining share from manufacturers adopting a 'China plus one' sourcing model that emphasizes geographic risk diversification.
Because cutting tools are consumable components closely tied to machine-tool utilization rates, rising demand for multi-axis machining driven by automotive electrification and aerospace modernization is cited as a long-term growth driver for the cutting-tool industry.
Within this competitive landscape, YG-1 competes against global German and Japanese cutting-tool makers, positioning its price competitiveness as a lever to expand share in emerging markets.
Management has outlined a direction centered on expanding into high-performance cutting-tool segments through product quality upgrades, raising share in emerging markets, and accelerating internal efficiency via higher production automation rates.
In the first quarter of 2026, revenue rose 46.7 percent, operating profit 327.8 percent, and net income 501.6 percent year on year, a change attributed to rising demand for high-quality cutting tools across secondary industries including IT devices, automobiles, shipbuilding, and aircraft.
This momentum carried into the second quarter of 2026, pushing the operating margin above 22 percent, a notable feature of the most recent quarterly results.
Whether this improvement reflects a temporary concentration of demand from specific customers or regions, or a more structural gain in profitability, will require confirmation over the next several quarters of results.
The company has continued upgrading production facilities since its Seowoon plant was selected for a smart eco-factory construction project in 2023, alongside efforts to expand high-performance product lines through in-house raw-material processing and coating technology.
The broader industry backdrop of global supply-chain realignment and expanding ASEAN 'China plus one' demand could present opportunities for a company with multiple overseas production bases, though uncertainty tied to shifts in US trade policy also remains a persistent factor.
Given the recent pace of earnings recovery, the price-to-earnings ratio calculated on the latest four quarters of results appears to sit below the double-digit multiple band this stock has historically traded within.
The price-to-book ratio is around one time, sitting at a level without a pronounced premium or discount to net asset value. The dividend yield runs lower than that of high-dividend sectors, which can be interpreted as reflecting a policy that has favored reinvestment and facility upgrades over dividend payouts.
Because the profitability weakness of the first half of 2025 coexists with the sharp margin recovery seen in subsequent quarters, views on valuation may differ depending on how sustainable the market judges this recovery to be. That question is one that further quarterly results will need to help confirm.
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 2026-09-04
Operating margin rose from roughly 10.3 percent in the second quarter of 2025 to roughly 22.4 percent in the second quarter of 2026, improving across four consecutive quarters. Over the same period, owners' net income jumped from KRW 2.4 billion to KRW 30.4 billion.
The company attributes this to rising demand for high-quality cutting tools across secondary industries such as IT devices and automobiles.
YG-1 holds the world's largest market share in the endmill category and operates multiple production bases across the United States, Germany, China, Japan, and India along with an export network spanning more than sixty countries.
This globally distributed production structure can serve as a structural strength that reduces exposure to risk in any single region. Its price competitiveness relative to global rivals is also a favorable condition for expanding share in emerging markets.
Cutting tools are consumable products used broadly across secondary industries such as IT devices, automobiles, shipbuilding, and aircraft, giving the business relatively stable demand characteristics. Annual revenue rose for four consecutive years from 2022 through 2025, supporting this stability.
Equity also grew steadily from KRW 339.8 billion in 2022 to KRW 434.5 billion in 2025, expanding the balance sheet's cushioning capacity.
In the first half of 2025, consolidated revenue rose 7.0 percent year on year even as operating profit fell 6.4 percent and net income fell 41.9 percent. US protectionism and global trade tension were cited as the cause.
Given the export-heavy business structure, this episode illustrates how sensitive profitability can be to shifts in the trade environment.
The debt-to-equity ratio fell from 176.9 percent in 2022 to 166.7 percent in 2024 before rising back to 170.8 percent in 2025, remaining largely within a 170-percent-plus range. While equity has grown steadily, total liabilities also rose from KRW 601.1 billion in 2022 to KRW 742.0 billion in 2025. This is a metric that warrants ongoing observation from a financial-flexibility standpoint.
Operating cash flow was KRW 13.1 billion in 2022, KRW 40.2 billion in 2023, KRW 50.9 billion in 2024, and KRW 38.3 billion in 2025, a pattern that does not move in lockstep with operating profit or net income over the same period.
Notably, 2022 had the highest operating profit of the four years yet the lowest cash flow. This suggests that changes in working capital items such as inventory and receivables can affect cash generation relative to reported earnings.
Given an export-oriented business with a high share of overseas revenue, changes in tariff and trade policy in major markets including the United States can directly affect revenue and margins. US protectionism and global trade tension were cited as contributing to the profitability slowdown in the first half of 2025. Should the trade environment shift again, a similar impact cannot be ruled out.
With multiple overseas production bases and an export network spanning more than sixty countries, movements in key exchange rates such as the KRW/USD rate can affect both revenue and costs simultaneously.
Depending on the direction of currency movement, export profitability and the won-translated results of overseas subsidiaries can vary. This can act as a factor that increases quarter-to-quarter volatility in results.
Cutting-tool manufacturing depends on processing specialty raw materials such as tungsten carbide, and rising raw material prices can translate directly into cost pressure. While the company has in-house raw-material processing technology, it cannot fully control international raw material price movements.
To the extent that the recent quarterly margin improvement has coincided with stable raw material prices, a rebound in those prices could again weigh on margins.
The Q3 2026 provisional earnings disclosure should be checked to see whether the operating margin improvement that reached about 22.4 percent in the second quarter of 2026 continues.
Along with confirmed full-year 2026 results, the annual trends in dividend policy, debt ratio, and operating cash flow should be reconfirmed.
Any changes in tariff and trade policy in major markets such as the United States, and their impact on export profitability, should be continuously monitored.
The impact of raw material price movements (such as tungsten carbide) and KRW/USD exchange rate changes on costs and revenue in the following quarters should be checked.
YG-1 is a company with a stable base of consumable-product demand, underpinned by its position as the world's largest endmill maker by market share and multiple overseas production bases.
Profitability was pressured in the first half of 2025 by US protectionism and global trade tension, but the operating margin has improved clearly quarter by quarter since the third quarter of 2025, rising to about 22.4 percent in the second quarter of 2026.
As a result, owners' net income summed over the latest four quarters has already surpassed the full-year 2025 figure.
That said, the debt ratio has remained in the 170-percent-plus range, and operating cash flow has shown volatility that does not precisely track swings in operating profit or net income, both points worth watching.
Whether the recent earnings recovery reflects a temporary concentration of demand or a more structural improvement in profitability will require further confirmation from results over the coming quarters.
Given the export-heavy nature of the business, trade policy, exchange rates, and raw material price movements remain variables that will need continued observation going forward.
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.