KOSDAQMachinery083650

Bhi

₩59,300▼ 1.66%2026-10-02 close

Market Cap

₩1.8T

Turnover

₩10.6B

Volume

180,000 shares

Shares out.

30.9M

PER

35.7×

PBR

9.2×

EPS

₩1,683

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Backlog Now Converting Into Earnings

The HRSG orders that surged in 2024-2025 are now converting into revenue and margin, lifting quarterly results for several straight quarters, while regional order concentration and FX-driven swings in net profit have also grown.

1
FY2025 revenue reached KRW 774.1bn with operating profit of KRW 75.5bn, a different order of magnitude from 2022 (revenue KRW 330.2bn, operating profit KRW 8.1bn), and the 2022 net loss has turned into profit.
2
First-half 2026 operating profit alone (Q1 KRW 35.3bn plus Q2 KRW 45.5bn) already exceeds the full-year 2025 figure, and the company said the Q2 2026 operating margin of 15.4% was a quarterly record.
3
Order backlog stood at about KRW 2.4tn at the end of Q1 (KRW 828.9bn domestic, KRW 1,571.2bn overseas), and the company has set a 2026 new-order target of KRW 2tn.
4
On September 2, 2026 the company disclosed a contract to supply four HRSG units for Kuwait's Az-Zour North Phase 2-3 power and desalination plant, worth KRW 145.3bn, equal to 18.8% of 2025 revenue.
5
Unlike the operating line, net profit swings sharply by quarter (Q1 2026 owners' net profit of KRW 5.1bn), and the debt-to-equity ratio was still an elevated 367.6% at end-2025.

Business structure

BHI designs, manufactures and installs power generation equipment for power plants and steel processes, with its core product being the heat recovery steam generator (HRSG), a main component of gas combined-cycle plants.

An HRSG uses high-temperature exhaust gas from a gas turbine to produce steam for secondary generation, and the company holds the underlying technology for it. It began the business under a license from Amec in 2005 and acquired the original technology itself in 2020.

Beyond HRSG, the portfolio spans coal and steel-process boilers, nuclear balance-of-plant (B.O.P) equipment, and other components and EPC work.

Samsung Securities, in an October 2025 report, put the cumulative revenue mix for the first three quarters of 2025 at 57% HRSG, 27% other equipment and EPC, 15% boilers and about 1% B.O.P.

According to IBK Investment Securities, Q1 2026 divisional revenue was KRW 190.7bn for HRSG (up 93.3% year on year), KRW 63.2bn for boilers (up 214.2%) and KRW 10.3bn for nuclear B.O.P (up 144.2%), with the boiler jump driven by revenue recognition on a KRW 517.7bn coal boiler contract signed with a Philippine utility in April 2025.

Its customers span global EPC contractors, power developers and gas turbine makers. The company says its collaboration record with major turbine makers including GE Vernova, Mitsubishi Heavy Industries and Siemens Energy allows it to serve all gas turbine types.

In the McCoy Report's 2025 HRSG market analysis it ranked first globally in both the technology and fabrication categories, and the company said this was its fourth time at number one, alongside 2014, 2021 and 2024.

In nuclear B.O.P it is supplying Korea's Shin-Hanul units 3 and 4 while leveraging past references abroad, and domestically it competes with players such as Doosan Enerbility and SNT Energy.

Earnings trend

Quarterly revenue · Operating profit

₩169.3B₩20.4B25Q2₩204.7B₩18.4B25Q3₩264.8B₩24.3B25Q4₩280.8B₩35.3B26Q1₩296.3B₩45.5B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩330.2B₩8.1B2022₩367.4B₩15.1B2023₩404.7B₩21.9B2024₩774.1B₩75.5B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩169.3B	₩20.4B	12.0%
2025Q3	₩204.7B	₩18.4B	9.0%
2025Q4	₩264.8B	₩24.3B	9.2%
2026Q1	₩280.8B	₩35.3B	12.6%
2026Q2	₩296.3B	₩45.5B	15.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩330.2B	₩8.1B	-₩19.1B	2.5%	−38.8%	807.1%
2023	₩367.4B	₩15.1B	₩7.5B	4.1%	10.2%	477.2%
2024	₩404.7B	₩21.9B	₩19.6B	5.4%	16.8%	350.7%
2025	₩774.1B	₩75.5B	₩65.2B	9.8%	36.7%	367.6%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The earnings trajectory has changed completely in four years. Revenue rose from KRW 330.2bn in 2022 to KRW 367.4bn in 2023, KRW 404.7bn in 2024 and KRW 774.1bn in 2025, while operating profit expanded from KRW 8.1bn to KRW 15.1bn, KRW 21.9bn and KRW 75.5bn over the same period.

The operating margin climbed from 2.5% in 2022 to 4.1% in 2023, 5.4% in 2024 and 9.8% in 2025, and the owners' net loss of KRW 19.1bn in 2022 has given way to net profit of KRW 65.2bn in 2025. The quarterly path also points up.

Revenue increased for five consecutive quarters, from KRW 169.3bn in Q2 2025 to KRW 204.7bn, KRW 264.8bn, KRW 280.8bn and KRW 296.3bn in Q2 2026, while operating profit rose from KRW 35.3bn in Q1 2026 to KRW 45.5bn in Q2, lifting the quarterly operating margin above 15%.

The company attributed the improvement to greater revenue recognition on higher-margin projects, better cost competitiveness in key divisions and operating leverage from a larger revenue base. The net profit line tells a different story.

Owners' net profit moved unevenly from KRW 29.9bn in Q2 2025 to KRW 11.7bn, KRW 15.0bn, KRW 5.1bn and KRW 20.3bn in Q2 2026, and for the first quarter the company said net profit was held to KRW 5.1bn by foreign exchange effects from the high won-dollar rate.

Cash flow and equity are trending better: operating cash flow grew from KRW 15.2bn in 2022 to KRW 112.3bn in 2025 and total equity thickened from KRW 49.5bn to KRW 177.6bn, yet total liabilities of KRW 653.1bn and a debt-to-equity ratio of 367.6% mean leverage remains a live issue.

Industry analysis

The end market is in an expansion phase for gas combined-cycle orders.

A JP Morgan report cited by Gyeongnam Ilbo said gas turbine orders have surged in recent years on AI data center growth and electrification, and projected that combined-cycle gas turbines delivered in 2031 would cost three times those delivered last year.

Industry sources say that as turbine makers concentrate capacity on turbines themselves, they are increasingly outsourcing HRSGs they once built in-house to specialist suppliers.

On the supply side, competition eased after rivals exited or restructured during the mid-2010s downturn, and the company's order backlog grew rapidly from KRW 687.3bn at end-2023 to KRW 2,200.9bn at the end of Q3 2025. Geographically the Middle East looms large.

The company said it won nine Middle East projects, five in 2024 and four in 2025, with equipment capacity in the region exceeding 15GW over the past two years. Nuclear offers a different growth axis.

Macquarie Securities, in a March 2026 report, described the nuclear balance-of-plant business as an area that can add gradual growth on structurally higher margins.

Whether the cycle sits mid or late in its expansion depends on when owners take investment decisions, and the heavy Middle East weighting means regional risk can translate directly into earnings volatility.

Outlook

The confirmed facts are the backlog and the order target. IBK Investment Securities put the order backlog at KRW 2.4tn, split between KRW 828.9bn domestic and KRW 1,571.2bn overseas, and the company has set a 2026 new-order target of KRW 2tn. Recent contracts have kept coming.

On September 2, 2026 the company disclosed an LNG combined-cycle equipment supply contract with Tie Jun International (HK) Limited; the confirmed value of KRW 145.25bn (USD 106m at 1,370.30 won per dollar) equals 18.8% of 2025 consolidated revenue, with the contract running to April 15, 2029.

The counterparty is a special purpose company of global EPC firm SEPCO-3, and four HRSG units will go to Kuwait's Az-Zour North Phase 2-3 power and desalination plant.

In Japan, a June 1, 2026 disclosure covered a KRW 188.3bn contract with Toshiba Plant Systems & Services to supply two 800MW-class HRSGs to the Sodegaura plant in Chiba prefecture, which the company described as demand for repowering aged LNG plants into high-efficiency units.

In nuclear, it has won four Shin-Hanul units 3 and 4 items so far: containment liner plate, stainless steel liner, containment piping penetrations and the condenser.

Overseas nuclear remains at the discussion stage: at an April 2026 industry event in Busan the company said it discussed cooperation with Fermi Nuclear, which handles plant construction for Project Matador, an 11GW private power hub being built in Texas. iM Securities, in a May 26, 2026 report, projected that nuclear balance-of-plant orders would materialize as cooperation prospects rise around US investment projects and Westinghouse's AP1000 program.

The watch items therefore narrow to how fast the Middle East and Asia backlog converts into revenue, and whether North American, European and nuclear discussions turn into signed contracts.

Valuation

PER

35.7×

PBR

9.2×

ROE

29.4%

EPS

₩1,683

BPS

₩6,529

Dividend per share

₩0

The shares trade on multiples that already embed much of the profit recovery. Measured against the most recent four quarters of profit, the earnings multiple sits above the usual trading range for KOSDAQ machinery and equipment names, and the premium to net assets is also wide.

That said, the denominator itself swung from a 2022 loss to profit and then expanded rapidly through 2025 and again in the first half of 2026, so the same share price implies very different multiples depending on which period's profit is used.

Macquarie Securities, in a March 30, 2026 report, presented a Buy rating and a target price of KRW 140,000, stating it was derived by applying a target multiple to next year's estimated earnings per share that embeds a 10% premium to the global peer average.

With no cash dividend identified, the phase looks oriented toward working through the backlog and repairing the balance sheet rather than shareholder returns. The debt-to-equity ratio still in the high-300% range is another variable to weigh alongside the multiples.

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

Backlog conversion is coming with margin

The distinguishing feature of this phase is that revenue growth is arriving together with margin improvement. The operating margin rose from 2.5% in 2022 to 9.8% in 2025, followed by operating profit of KRW 35.3bn in Q1 2026 and KRW 45.5bn in Q2.

The company attributed this to revenue recognition on higher-margin projects, better cost competitiveness and operating leverage working at the same time. The 15.4% operating margin in Q2 2026 was, per the company, a quarterly high.

Structural position in HRSG supply

Every combined-cycle unit requires an HRSG, so expanding gas turbine orders feed directly into HRSG demand. The company is described as Korea's only holder of original HRSG technology and has ranked first in market share several times according to the McCoy Power Report.

Another demand channel is that turbine makers, focusing capacity on turbines, are increasingly outsourcing HRSGs to proven specialists. A supplier base thinned by rivals' exits reinforces the same dynamic.

Nuclear balance-of-plant as a second axis

Nuclear balance-of-plant work is a revenue stream on a different cycle from LNG. At Shin-Hanul units 3 and 4 the company has secured four items: containment liner plate, stainless steel liner, containment piping penetrations and the condenser.

Abroad, it has a record of supplying balance-of-plant equipment to Barakah in the UAE and the Vogtle and Summer projects in the US. Macquarie Securities, in a March 2026 report, described the business as one that can add gradual growth on structurally higher margins.

Bear factors

Quarterly volatility in new orders

The backlog is thick, but new orders swing widely quarter to quarter. Q1 2026 new orders came to KRW 293.3bn, down 51.2% year on year, most of it a single HRSG for Israel's Tzafit plant won in March at KRW 56.6bn. Against the company's KRW 2tn annual target, the pace through the year becomes the key question. If a handful of large projects slip, a given quarter's order intake can deteriorate sharply.

Net profit exposed to FX

A gap between operating and net profit keeps recurring. Q1 2026 operating profit was KRW 35.3bn but owners' net profit was KRW 5.1bn, and the company pointed to foreign exchange effects from the high won-dollar rate.

The pattern is described as a timing mismatch in which valuation losses on hedging currency forwards are booked up front while the offsetting gains are spread across future revenue recognition. With a high overseas revenue share, the predictability of the net profit line is correspondingly lower.

High leverage and working capital burden

The balance sheet is improving, but the absolute level remains heavy. Total liabilities stood at KRW 653.1bn at end-2025 with a debt-to-equity ratio of 367.6%, down from 477.2% in 2023 yet still high.

Even allowing for a business model in which advance payments and trade payables make up much of the liabilities, running several large projects at once can inflate working capital needs. Operating cash flow of KRW 112.3bn in 2025 is a buffer, but cost overruns or delayed collections would thin that buffer quickly.

Risk factors

Regional concentration and geopolitics

Order concentration in the Middle East is pronounced. The company said it won nine projects across Saudi Arabia, Kuwait, Qatar and others in 2024-2025, with regional equipment capacity exceeding 15GW over two years.

IBK Investment Securities noted in May 2026 material that project delays or suspensions from intensified US-Iran tensions appeared limited so far. That assessment can change with time, so it is worth tracking how shifting regional conditions feed through to schedules, logistics and costs.

Reversal in the order cycle

Current demand leans heavily on AI data centers and electrification. JP Morgan was reported as saying this trend has driven a surge in gas turbine orders and projecting a tripling of prices for units delivered in 2031.

If data center investment plans are pared back or the generation mix tilts further toward renewables and storage, the intensity of combined-cycle orders could soften. Because the business takes years to move from order to revenue, any reversal also shows up in results with a long lag.

Project cost and delivery risk

The core risk in order-based manufacturing is cost movement after a contract is fixed. Regarding the Kuwait contract, the company stated that the contract period and amount may change as construction progresses.

Higher steel or logistics costs can compress margins on backlog already booked, and late delivery can trigger liquidated damages. Starting work under a limited notice to proceed, as with the Kuwait project, helps secure delivery schedules but means resources are committed before the formal contract is finalized.

What to watch next

Mid-November 2026
Q3 2026 results and the quarterly report. The key points are whether the mid-teens operating margin from Q2 holds and whether the gap between net and operating profit narrows as FX stabilizes.
Q4 2026
Progress against the company's KRW 2tn annual new-order target and the backlog trend. Also worth watching is whether actual contracts emerge in North America and Europe, the regions the company named as this year's focus.
Around February 2027
Preliminary FY2026 results and the dividend decision. With first-half 2026 operating profit already above the full-year 2025 figure, the annual margin level will be settled, and it is worth checking whether shareholder return policy changes after the profit expansion.
Q1 2027
Publication of the McCoy Report's annual HRSG market analysis. Whether the company's share ranking holds is an external gauge of shifts in the competitive landscape.
On an ongoing basis
Disclosures of additional nuclear balance-of-plant orders. The issues are whether items beyond the four already secured at Shin-Hanul units 3 and 4 are added, and whether the cooperation around Westinghouse's AP1000 and US investment projects that iM Securities projected in May 2026 is confirmed in contracts.

Overall view

The past four years took BHI from revenue of KRW 330.2bn and operating profit of KRW 8.1bn in 2022 to KRW 774.1bn and KRW 75.5bn in 2025, with the 2022 net loss turning into profit.

Expansion continued in 2026, with Q1 revenue of KRW 280.8bn and operating profit of KRW 35.3bn followed by KRW 296.3bn and KRW 45.5bn in Q2, so first-half operating profit alone exceeded the full-year 2025 figure.

A backlog of KRW 2.4tn per IBK Investment Securities and a Kuwait contract equal to 18.8% of 2025 revenue are facts that underpin revenue visibility for the next few years.

On the other side sit Q1 2026 new orders of just KRW 293.3bn, down 51.2% year on year, net profit volatility driven by exchange rates, and a 367.6% debt-to-equity ratio.

Valuation multiples already reflect much of the profit recovery, so the pace of backlog conversion and margin durability will keep testing the assumptions behind those multiples.

What ultimately needs checking is margin persistence from the third quarter onward, progress against the annual order target, and whether North American and nuclear discussions convert into contracts. This report is for information purposes and contains no buy or sell opinion or target price.

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.