KOSPIIT & Software023590

Daou Technology

₩38,000▼ 1.30%2026-10-02 close

Market Cap

₩1.6T

Turnover

₩1.1B

Volume

30,000 shares

Shares out.

43.3M

PER

2.2×

PBR

0.4×

EPS

₩17,353

Dividend Yield

4.70%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,800 per share · Prices as of the 2026-10-02 close

Report overview

An IT parent whose profits hinge on its brokerage arm

Daou Tech is an IT company by name, but almost all of its consolidated earnings come from its brokerage subsidiary Kiwoom Securities; after a first-half 2026 profit surge driven by record trading volumes, it now faces the opposite variable of a sharp third-quarter drop in market turnover.

1
Most consolidated revenue comes from financial services. C-Journal reported in November 2025, citing the company's half-year filing, that the financial segment accounted for 98.54% of consolidated revenue as of the second quarter of 2025.
2
In the second quarter of 2026, consolidated revenue reached KRW 16.185 trillion, operating profit KRW 817.8 billion and net profit attributable to owners KRW 281.8 billion, expanding both top line and earnings.
3
Kiwoom Securities disclosed in its preliminary second-quarter 2026 release that its daily average trading value rose 236.1% year on year to KRW 36.3 trillion, while its domestic retail market share slipped to 25.0% from the prior quarter.
4
In August, the daily average trading value on the KOSPI fell to its lowest level of the year, making the direction of second-half earnings the key question.
5
Because a securities subsidiary is consolidated, the debt-to-equity ratio stood at 1,006.9% in 2025 and operating cash flow was negative for four straight years, so its financial metrics must be read differently from those of a typical software firm.

Business structure

Daou Tech, founded in 1986 as one of Korea's first-generation IT ventures, is in consolidated terms closer to an operating parent that houses a securities subsidiary.

C-Journal reported in November 2025, citing the company's half-year filing, that the financial segment made up 98.54% of Daou Tech's consolidated revenue as of the second quarter of 2025.

According to Bloter, Daou Tech held 11,134,003 voting common shares of Kiwoom Securities at the end of the first quarter of 2026, a 42.48% stake.

The group's control chain is multi-layered: Daou Tech is the largest shareholder of Kiwoom Securities (42.31%), Daou Data owns 45.2% of Daou Tech, unlisted Emoney holds 31.56% of Daou Data, and Emoney's largest shareholder is chief executive Kim Dong-jun with 33.13%.

Its own IT business centers on data centers and cloud services. The company states that Daou IDC operates multiple centers including Mapo and Seocho, providing colocation and broadband line services as well as network operations for group data centers such as Kiwoom Securities.

In cloud, it builds and operates AWS-based environments with round-the-clock monitoring and managed services, alongside enterprise communication offerings such as bulk messaging.

The competitive landscape is therefore dual: the IT arm competes with large system integrators and cloud managed service providers, while the financial arm is directly exposed to retail brokerage competition, where Kiwoom Securities' domestic retail market share fell 0.7 percentage point to 25.0% in the second quarter of 2026 from 25.7% in the prior quarter.

Of the KRW 1.156 trillion consolidated net profit in 2025, KRW 505.2 billion was attributable to owners of the parent, meaning a large share of subsidiary earnings flows to non-controlling interests, a defining feature of this profit structure.

Earnings trend

Quarterly revenue · Operating profit

₩4.6T₩429.5B25Q2₩3.5T₩426.8B25Q3₩5.7T₩358.5B25Q4₩9.5T₩641.3B26Q1₩16.2T₩817.8B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩9.2T₩718.7B2022₩9.9T₩639.9B2023₩11.6T₩1.2T2024₩17.5T₩1.6T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩4.6T	₩429.5B	9.3%
2025Q3	₩3.5T	₩426.8B	12.3%
2025Q4	₩5.7T	₩358.5B	6.3%
2026Q1	₩9.5T	₩641.3B	6.8%
2026Q2	₩16.2T	₩817.8B	5.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩9.2T	₩718.7B	₩372.6B	7.8%	16.1%	849.4%
2023	₩9.9T	₩639.9B	₩226B	6.5%	9.0%	861.0%
2024	₩11.6T	₩1.2T	₩355.8B	10.1%	12.3%	808.2%
2025	₩17.5T	₩1.6T	₩505.2B	8.9%	14.7%	1006.9%

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

Earnings analysis

On an annual basis, revenue expanded from KRW 9.211 trillion in 2022 to KRW 9.855 trillion in 2023, KRW 11.626 trillion in 2024 and KRW 17.495 trillion in 2025.

Operating profit slipped from KRW 718.7 billion in 2022 to KRW 639.9 billion in 2023 before recovering to KRW 1.175 trillion in 2024 and KRW 1.559 trillion in 2025, with operating margins of 7.8%, 6.5%, 10.1% and 8.9% respectively.

Net profit attributable to owners bottomed at KRW 226.0 billion in 2023, then rose to KRW 355.8 billion in 2024 and KRW 505.2 billion in 2025.

Quarterly, revenue and operating profit moved from KRW 4.595 trillion and KRW 429.5 billion in the second quarter of 2025 to KRW 3.466 trillion and KRW 426.8 billion in the third quarter and KRW 5.687 trillion and KRW 358.5 billion in the fourth, before jumping to KRW 9.483 trillion and KRW 641.3 billion in the first quarter of 2026 and KRW 16.185 trillion and KRW 817.8 billion in the second.

The second-quarter 2026 operating margin of roughly 5% was below the prior quarter's roughly 6.8%, largely a dilution effect as brokerage trading and valuation revenue is booked on a gross basis, so revenue growth far outpaced profit growth.

The driver of the profit surge is visible at the subsidiary level: Kiwoom Securities reported preliminary consolidated second-quarter 2026 operating profit of KRW 788.9 billion and net profit of KRW 680.6 billion, up 93.2% and 119.4% year on year, with equity commission income up 178.3% to KRW 451.9 billion as daily average trading value rose from KRW 10.8 trillion to KRW 36.3 trillion.

Operating cash flow was negative for four consecutive years at minus KRW 2.018 trillion in 2022, minus KRW 2.050 trillion in 2023, minus KRW 4.908 trillion in 2024 and minus KRW 6.534 trillion in 2025, reflecting the structural fact that growth in the securities subsidiary's financial assets and loan receivables is recorded within operating activities.

For the same reason, the debt-to-equity ratio of 861.0% in 2023, 808.2% in 2024 and 1,006.9% in 2025 cannot be compared on the same basis as a typical software company.

Over the four quarters from the third quarter of 2025 to the second quarter of 2026, net profit attributable to owners totaled KRW 748.8 billion, already above the full-year 2025 figure.

Industry analysis

This company's profit cycle is effectively the domestic equity trading-volume cycle. Based on Korea Exchange data cited by Yonhap, the KOSPI daily average trading value fell from KRW 50.215 trillion in May 2026 and KRW 50.347 trillion in June to KRW 36.875 trillion in July and KRW 26.277 trillion in August.

For August as a whole, the KOSPI daily average trading value was KRW 25.757 trillion, the lowest of the year and roughly half the level of May and June when the index was setting record highs.

Sidelined cash also shrank: investor deposits peaked at a record KRW 139.695 trillion on June 4, 2026, then fell back to the high KRW 90 trillion range by the end of August. Regulation added to the shift.

After single-stock leveraged exchange-traded fund rules took effect in late July, raising the base deposit requirement to KRW 30 million in cash, the related daily average trading value shrank from around KRW 11 trillion in June and July to around KRW 900 billion in August. Sector views diverge.

SK Securities calculated August daily average trading value at KRW 67.2 trillion, down 32.5% from KRW 99.5 trillion the prior month, and cut its 2026 daily average trading value forecast from KRW 101.3 trillion to KRW 95.5 trillion, while maintaining an overweight stance on the brokerage sector, citing a rebound in margin loan balances.

Meanwhile, demand in the cloud market that feeds the IT arm is expanding: the AWS Summit Seoul held in May 2026 drew some 50,000 registrations, the largest of the company's global events that year.

In short, the financial segment has entered a post-peak adjustment phase while the IT segment sits in a structurally growing market, an asymmetry made sharper by the IT arm's small contribution to consolidated profit.

Outlook

No separate company-issued annual guidance could be verified, so the outlook hinges on subsidiary variables and market indicators.

On the second half, Samsung Securities, in a report covered on July 30, 2026, said Kiwoom Securities' second-half profit could fall about 50% from the first half and lowered its target price from KRW 520,000 to KRW 400,000 while maintaining a buy rating.

In the same report, analyst Jung Min-ki of Samsung Securities noted that Kiwoom has a relatively high proportion of proprietary investment within its trading results, so the earnings impact during share price declines needs close monitoring.

There is a counterpoint as well: SK Securities forecast that even if third-quarter trading value declines from the prior quarter, the absolute level would still be more than double a year earlier.

Subsidiary base metrics kept improving: Kiwoom Securities' client assets under management grew 54.4% to KRW 26.1 trillion in the second quarter of 2026, and investment banking fee income rose 6.4% to KRW 83.3 billion.

The in-house IT arm benefits from data center and cloud demand, but its share of consolidated revenue is too small to swing near-term results. On governance, 10.30 million of the 20,278,000 Daou Tech shares held by Daou Data, or 50.79%, are pledged as collateral, which remains an item for continued monitoring.

As a result, from the third quarter onward investors may see contradictory signals at once: earnings reflecting lower turnover alongside rising client assets and recovering margin loans.

Valuation

PER

2.2×

PBR

0.4×

ROE

21.4%

EPS

₩17,353

BPS

₩89,995

Dividend per share

₩1,800

The first thing to weigh when reading this stock's multiples is where the profit originates.

Most consolidated profit comes from Kiwoom Securities, yet of the KRW 1.156 trillion consolidated net profit in 2025 only KRW 505.2 billion was attributable to owners of the parent, less than half, so a gap exists between headline multiples and earnings that actually accrue to shareholders.

The share price trades well below net asset value per share, overlapping with the discount typically applied to multi-layered structures that consolidate a financial subsidiary.

Earnings-based multiples likewise sit well below the KOSPI average and the averages of domestic and global IT and software peers, directly reflecting how sharply the last four quarters of profit rose on the brokerage boom.

Conversely, that same profit base is tied to the trading-volume cycle, so if the cycle turns back, multiples could rise again at an unchanged share price, and this deserves equal weight. The dividend yield has run above the recent KOSPI average, though the payout source is linked to subsidiary dividends and earnings.

For reference, Ilyo Shinmun reported in March 2024 that brokerages had not published research on Daou Tech or Daou Data for years, prompting criticism of weak capital market communication.

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

Bull factors

Step-up in subsidiary earnings power

Consolidated operating profit expanded from KRW 639.9 billion in 2023 to KRW 1.175 trillion in 2024 and KRW 1.559 trillion in 2025, reaching KRW 817.8 billion in the second quarter of 2026 alone. Net profit attributable to owners also rose from KRW 226.0 billion in 2023 to KRW 505.2 billion in 2025.

This owes much to the external tailwind of booming turnover, but the fact remains that the absolute level of profit entering the second half is a step above historical norms.

Buffer from interest and asset-based revenue

Brokerage commissions track turnover instantly, while revenue tied to client asset balances moves more gradually. Kiwoom Securities' client assets under management rose 54.4% year on year to KRW 26.1 trillion in the second quarter of 2026.

SK Securities said in a September 2, 2026 report that margin loan balances were showing a rebound. That means asset-based revenue can partly offset profit declines even as turnover falls.

Expanding end-demand in the core IT business

The in-house business centers on data center colocation and managed cloud services. The company states that it builds and operates AWS-based environments with continuous monitoring.

In Korea, AWS has anchored cloud migration around its Seoul region and is now seen as expanding into artificial intelligence transition infrastructure. As long as AI-related infrastructure investment continues, demand for managed services has room to grow.

Bear factors

The turnover cycle is rolling over

The KOSPI daily average trading value exceeded KRW 50 trillion in May and June but halved within two months. It fell to around KRW 37 trillion in July and to the mid-KRW 20 trillion range in August.

Because most consolidated profit derives from brokerage commissions and trading income, this decline must flow directly into results from the third quarter onward. The strength of first-half earnings also raises the comparison base.

Governance discount and non-controlling interests

The fact that profit originates in a subsidiary held at a roughly 42% stake within a multi-tier chain acts as a structural constraint on valuation. Of the KRW 7.494 trillion in consolidated equity at end-2025, KRW 4.048 trillion belonged to non-controlling interests, more than half.

It has also been noted that roughly half the shares at two rungs of the control chain running from Emoney through Daou Data and Daou Tech to Kiwoom Securities are tied to collateral agreements with financial institutions, a point the market is watching.

Share erosion and regulatory variables

Kiwoom Securities' domestic retail market share fell to 25.0% in the second quarter of 2026 from the prior quarter, continuing a downtrend, and commentary noted that while commission income rose on surging turnover, its grip on the core business weakened.

On regulation, trading value in single-stock leveraged exchange-traded funds plunged after new rules took effect, showing how policy now shapes trading activity itself. If share loss and regulation work against it simultaneously, the benefit from any cycle recovery could be smaller than in the past.

Risk factors

Market and cycle risk

Trading value and index volatility, the core profit variables, are uncontrollable external factors. Market leaders Samsung Electronics and SK Hynix ended August down 31.37% and 44.66% respectively from their June peaks.

Analysts noted that with Kiwoom Securities' first-half equity trading gains estimated at around KRW 200 billion, trading income volatility could widen if the market falls. Proprietary investment results can swing quarterly earnings more than expected.

Balance sheet and cash flow interpretation risk

Total liabilities stood at KRW 75.456 trillion at end-2025 and the debt-to-equity ratio rose to 1,006.9% from 808.2% in 2024. Operating cash flow was minus KRW 6.534 trillion in 2025, negative for a fourth straight year.

These are structural consequences of consolidating a securities subsidiary, yet the very fact that headline ratios cannot be used to judge financial soundness creates information asymmetry risk for investors. In a rising rate environment, subsidiary interest costs and funding terms need to be checked separately.

Governance and succession risk

More than half of the Daou Tech shares held by parent Daou Data are pledged to financial institutions, and part of the pledged block has been used not only for Daou Data's own borrowings but also for funding at other group affiliates.

Commentary suggests that how borrowing size and collateral terms change at each contract renewal, not just the pledged share count, is the gauge of stability at the upper tiers of the ownership chain.

Should share transfers tied to succession or affiliate restructuring resurface, uncertainty from a minority shareholder perspective could increase.

What to watch next

Late October to early November 2026
Kiwoom Securities' third-quarter 2026 results. This is the first quarter to fully reflect August's year-low KOSPI turnover, so the size of the decline in brokerage commissions and trading income is the key figure.
Mid-November 2026
Daou Tech's third-quarter 2026 filing. Worth checking together are the revenue split between the financial segment and the in-house IT business, the share of profit attributable to owners, the debt ratio and the direction of operating cash flow.
Monthly from September 2026
Korea Exchange daily average trading value, investor deposits from the Korea Financial Investment Association, and margin loan balances. Whether the actual trend runs above or below SK Securities' revised 2026 daily average turnover forecast of KRW 95.5 trillion is a leading indicator for earnings direction.
January to March 2027
Full-year 2026 results, the cash and in-kind dividend resolution, and the annual general meeting. The dividend decision in a year of sharply higher profit, and any change in shareholder return policy, are the points to verify.
As new filings occur
Large shareholding reports triggered by changes to Daou Data's collateral agreements on Daou Tech shares, plus progress on Kiwoom Securities' capital raising and any pursuit of mega investment bank licensing. These are clues to shifts in the upper ownership chain and subsidiary capital policy.

Overall view

Daou Tech carries IT in its name, but its consolidated results are effectively brokerage results. The 98.54% financial segment share reported by C-Journal in November 2025, based on the half-year filing, captures that structure.

Earnings moved back onto a recovery path after a weak 2023, expanding to consolidated revenue of KRW 16.185 trillion, operating profit of KRW 817.8 billion and net profit attributable to owners of KRW 281.8 billion in the second quarter of 2026.

Yet the turnover that generates this profit collapsed from the KRW 50 trillion range in May and June to the mid-KRW 20 trillion range in August, and views diverge: Samsung Securities in a July report projected Kiwoom Securities' second-half profit could fall roughly 50% from the first half and cut its target price, while SK Securities in a September report maintained an overweight stance on the brokerage sector.

Financially, metrics peculiar to consolidating a securities subsidiary coexist, such as a 1,006.9% debt ratio and four consecutive years of negative operating cash flow, and the fact that more than half of consolidated equity and profit belongs to non-controlling interests complicates valuation interpretation.

On top of that, a multi-tier ownership chain in which more than half of the parent's stake is pledged to financial institutions remains a separate item to watch.

Ultimately, the material for the next assessment is how large the actual profit decline is from the third quarter and how much asset-based revenue and recovering margin loans offset it. This report is for informational purposes and contains no buy or sell recommendation.

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.