KOSDAQMachinery101680

Hnk Machine Tool

₩2,915▼ 1.19%2026-10-02 close

Market Cap

₩25B

Turnover

₩29,146,990

Volume

9,941 shares

Shares out.

8.4M

PER

—

PBR

0.7×

EPS

-₩721

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

Large Machine-Tool Order Rally, Profitability Recovery in Focus

Korea Precision Machinery has secured a series of large overseas machine-tool orders from India and Turkey in 2026, but consolidated earnings remain in loss territory, making the timing gap between order intake and profit recovery the key variable to watch.

1
2025 consolidated revenue fell to KRW 30.57bn from KRW 63.70bn a year earlier, with an operating loss of KRW 7.53bn and a net loss attributable to owners of KRW 8.09bn.
2
The company signed a roughly KRW 32.6bn VTL supply contract with India's Powerstatic Solutions (an EDF Group affiliate) in January 2026 and an approximately KRW 7.9bn CNC VTL contract with Turkey's TEI in August 2026.
3
Korea's domestic machine-tool industry showed a recovery in H1 2026 driven by rising overseas orders, with January-April overseas orders up 23.3% year over year.
4
The company posted operating losses in all four quarters from 2025Q3 through 2026Q2, though the loss size narrowed from KRW -2.04bn in 2025Q2 to KRW -0.88bn in 2026Q2.
5
Over the past three fiscal years the company changed auditors twice, and executive/major-shareholder ownership reports were filed repeatedly within short periods—points worth noting from a governance perspective.

Business structure

Korea Precision Machinery was established in 1998 and listed on KOSDAQ in 2009 as a manufacturer of large machine tools and industrial machinery.

The company is a specialized manufacturer that produces extra-large component processing machines, holding proprietary design capability and technology in the large machine-tool segment, with core products including CNC vertical turning lathes (VTL), CNC horizontal boring machines, and CNC double-column boring machines.

Machine tools are closely tied to a wide range of downstream industries such as automotive, power generation, shipbuilding, wind power, and machinery, meaning revenue and profitability are highly sensitive to customers' capital expenditure plans.

More recently the company has expanded into nuclear power and steam turbine-related power equipment supply, exemplified by the VTL supply contract signed in January 2026 with India's Powerstatic Solutions, an affiliate of France's EDF Group.

In August 2026 it also signed a single sales contract for CNC VTL equipment with Turkey's aircraft engine maker TEI, responding to aerospace and defense-related demand.

The company is described as the sole specialized domestic manufacturer with proprietary design and technical capability in the large machine-tool niche, which provides some entry barriers, though its overall revenue base is small enough that a single large contract can materially swing annual results.

The company maintains an R&D workforce of roughly 40 people and pursues growth tied to developments across automotive, power, shipbuilding, wind, and aerospace industries both domestically and abroad.

In terms of competitive positioning, it is a relatively small player compared with Korea's leading machine-tool exporters such as DN Solutions, HYUNDAI WIA Machine Tools, Hwacheon Machinery, SMEC, and Daesung Hi-Tech.

Earnings trend

Quarterly revenue · Operating profit

₩4.9B-₩2B25Q2₩11.4B-₩1.3B25Q3₩7.3B-₩1.6B25Q4₩4.5B-₩1.5B26Q1₩8.4B-₩900M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩42.3B₩1.5B2022₩43.7B-₩7B2023₩63.7B₩2.1B2024₩30.6B-₩7.5B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩4.9B	-₩2B	−41.4%
2025Q3	₩11.4B	-₩1.3B	−11.8%
2025Q4	₩7.3B	-₩1.6B	−21.6%
2026Q1	₩4.5B	-₩1.5B	−33.7%
2026Q2	₩8.4B	-₩900M	−10.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩42.3B	₩1.5B	₩500M	3.6%	1.0%	88.2%
2023	₩43.7B	-₩7B	-₩7.8B	−16.0%	−19.1%	117.0%
2024	₩63.7B	₩2.1B	₩1.5B	3.3%	3.6%	73.6%
2025	₩30.6B	-₩7.5B	-₩8.1B	−24.6%	−23.8%	109.1%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23

Earnings analysis

In 2025 consolidated revenue fell to KRW 30.57bn from KRW 63.70bn in 2024, more than halving, while the company posted an operating loss of KRW 7.53bn and a net loss attributable to owners of KRW 8.09bn, reversing from 2024's operating profit of KRW 2.07bn and net profit of KRW 1.50bn.

The operating margin deteriorated sharply from 3.3% in 2024 to -24.6% in 2025, and operating cash flow swung from +KRW 8.66bn in 2024 to -KRW 9.14bn in 2025.

Looking further back, the earnings pattern has been volatile: a profitable 2022 with revenue of KRW 42.29bn and operating profit of KRW 1.52bn, a return to loss in 2023 with revenue of KRW 43.73bn and an operating loss of KRW 7.02bn, a brief profit in 2024, and another loss in 2025.

On a quarterly basis, revenue rose from KRW 4.93bn with an operating loss of KRW 2.04bn in 2025Q2 to KRW 11.44bn with a narrower operating loss of KRW 1.35bn in 2025Q3, before the loss widened slightly again in 2025Q4 with revenue of KRW 7.31bn and an operating loss of KRW 1.58bn.

In 2026, revenue fell to KRW 4.49bn in Q1 with a wider operating loss of KRW 1.52bn, but Q2 saw revenue recover to KRW 8.36bn alongside a narrower operating loss of KRW 0.87bn.

Over the trailing four quarters (2025Q3-2026Q2), the cumulative net loss attributable to owners was approximately KRW 6.06bn, indicating the company remains in an annualized net loss position.

Equity declined from KRW 41.76bn in 2024 to KRW 33.97bn in 2025, and the debt ratio rose from 73.6% to 109.1%, reflecting mounting capital erosion pressure and financial burden alongside the persistent losses.

However, the large overseas orders secured in early 2026 (roughly KRW 32.6bn from India and KRW 7.9bn from Turkey) are scheduled to be recognized as revenue over their 2026-2027 contract periods, suggesting quarterly earnings volatility is likely to continue.

Industry analysis

Korea's domestic machine-tool industry has shown a demand recovery in 2026, driven by rising overseas orders.

According to the Korea Machine Tool Manufacturers' Association, total domestic machine-tool orders for January-April 2026 reached KRW 1.1924tn, up 11.2% year over year, with overseas orders surging 23.3% to KRW 798.1bn, the main driver of growth.

April alone showed a similar pattern, with total orders of KRW 316.5bn (up 9.8% year over year) and overseas orders of KRW 202.8bn (up 25.7%).

Industry observers note that while domestic manufacturing capex remains cautious, global demand—particularly capital expenditure expansion tied to AI infrastructure buildout and semiconductor, automotive, and aerospace industries—is providing growth opportunities for the machine-tool sector.

Demand for ultra-precision processing machine tools used in data center cooling systems and semiconductor inspection equipment is also emerging as a notable new theme.

Leading domestic machine-tool exporters include DN Solutions, HYUNDAI WIA Machine Tools, Hwacheon Machinery, SMEC, Daesung Hi-Tech, and HK, with Korea Precision Machinery positioned as a smaller niche player specialized in large component processing machines relative to these peers.

Amid expectations that the global nuclear energy market will expand over the medium to long term, potential beneficiaries include suppliers of large precision processing equipment for nuclear and steam turbine applications, a trend that Korea Precision Machinery appears to be capturing.

Outlook

The approximately KRW 32.6bn VTL supply contract with India's Powerstatic Solutions signed in January 2026 runs through June 2027, with revenue recognition tied to payment terms of 30% down payment, 60% upon shipment, and 10% final balance.

The contract involves equipment to be used in India's nuclear power and steam turbine-related projects, and there have been reports of discussions for additional large equipment contracts related to this relationship.

In May 2026 the company signed a roughly KRW 3.33bn turning machine supply contract with CS Bearing, and disclosed cumulative contracts of about KRW 35.9bn from January through May 2026.

This was followed in August 2026 by a roughly KRW 7.9bn CNC VTL contract with Turkey's aircraft engine maker TEI, to be delivered sequentially through April 2027.

Because these contracts span long periods, revenue is recognized across multiple quarters, creating a lag between the contract announcement and the actual booking of revenue and profit.

Industry association officials have projected that overseas demand-led growth will likely continue in the second half of the year for the broader machine-tool sector, making the company's ability to secure additional orders and the pace of revenue recognition on existing contracts key factors to watch going forward.

Valuation

PER

—

PBR

0.7×

ROE

-17.8%

EPS

-₩721

BPS

₩3,726

Dividend per share

₩0

Korea Precision Machinery's share price trades at a level below its per-share net asset value, placing it in a discount zone relative to book value, which can be interpreted as reflecting the recurring losses and equity erosion of recent years.

Given that historical earnings have swung repeatedly between profit and loss, traditional earnings-multiple valuation carries limited meaning while the company remains in a net loss position.

On the dividend front, no per-share cash dividend has recently been confirmed, placing the dividend yield on the lower end compared with dividend-paying peers in the sector.

With share price volatility having increased following a string of large overseas order announcements in 2026, the pace of revenue and profit recovery tied to contract execution is likely to be an important reference point when assessing valuation going forward.

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 2026-08-23

Bull factors

Expanding Large Overseas Orders

The company signed a series of large supply contracts with counterparts in India and Turkey in 2026, with the India contract alone equivalent to 51.1% of recent revenue. Given the company's small revenue base, individual large contracts can meaningfully contribute to results over the next one to two years.

Expansion into new downstream sectors such as nuclear power and aircraft engines could help diversify a revenue base historically concentrated in power generation, shipbuilding, and automotive.

Industry Entering Recovery Phase

According to the Korea Machine Tool Manufacturers' Association, domestic overseas orders rose 23.3% year over year in January-April 2026, indicating a broader industry recovery.

Expanding capital expenditure centered on new industries such as AI infrastructure, semiconductors, and aerospace is underpinning demand for precision processing equipment. If this industry improvement continues, it could translate into additional order opportunities for the company.

Narrowing Quarterly Losses

The operating loss narrowed from KRW 1.52bn in Q1 2026 to KRW 0.87bn in Q2 2026 alongside a revenue recovery. As the timing for recognizing revenue from large orders approaches, this improving earnings trend could potentially continue.

However, this represents only a partial improvement within a still ongoing four-quarter streak of operating losses.

Bear factors

Persistent Annual Net Losses

The 2025 net loss attributable to owners was KRW 8.09bn, reversing from 2024's profit of KRW 1.50bn, following a similar net loss of KRW 7.79bn in 2023.

The cumulative net loss attributable to owners over the trailing four quarters (2025Q3-2026Q2) also reached approximately KRW 6.06bn, showing that the loss trend has not resolved in the short term.

Equity declined from KRW 41.76bn in 2024 to KRW 33.97bn in 2025, while the debt ratio rose to 109.1%, indicating a weakening financial buffer.

Earnings Volatility and Revenue Concentration

Because revenue is generated on a per-contract basis for individual large machine tools, quarterly variance is substantial, and 2025 revenue of KRW 30.57bn fell to less than half of the prior year's KRW 63.70bn.

A revenue structure concentrated in a small number of large contracts implies that delays or cancellations could have an outsized impact on results. The historical pattern of profit in 2022, loss in 2023, profit in 2024, and loss again in 2025 underscores this volatility.

Governance and Audit-Related Signals

Over the past three fiscal years the auditor changed once, from Samduk Accounting Corporation to Samil PricewaterhouseCoopers, and within August 2026 alone multiple executive/major-shareholder ownership change reports and amended filings were submitted.

Such frequent reporting and amendments could be read by investors as a signal that the composition of key stakeholders and the ownership structure may be fluid. The specific background of individual filings would require further disclosure review.

Risk factors

Profitability

The 2025 operating margin deteriorated sharply to -24.6% from 3.3% the prior year, likely reflecting cost pressures or fixed-cost burden from a smaller revenue base. Cost management and project execution capability will be key to converting large orders into actual profit.

Financial Structure

The debt ratio rose from 73.6% in 2024 to 109.1% in 2025, and operating cash flow recorded a net outflow of KRW 9.14bn in 2025. Continued losses and deteriorating cash flow could increase the need for external financing.

Order Execution and FX

Large overseas contracts in India and Turkey are structured to be executed sequentially over extended periods, so changes in the counterparty's business schedule or delivery delays could push back revenue recognition.

As the share of overseas orders grows, currency fluctuations could also have a greater impact on revenue and profitability.

What to watch next

Around November 2026 (Q3 earnings disclosure)
Check the Q3 2026 results to see whether revenue recognition from the large India and Turkey contracts is progressing and whether the narrowing operating loss trend continues.
Early 2027 (around contract completion timelines)
Monitor completion of delivery and final revenue/payment collection for the Powerstatic Solutions India contract (ending June 2027) and the TEI Turkey contract (ending April 2027).
Upon future supply-contract disclosures
If additional large order disclosures are made, check the contract size relative to recent revenue and the contract period and payment terms.
Upon audit report and periodic disclosures
Review the background of the auditor change history and executive/major-shareholder ownership change reports through periodic disclosures.

Overall view

Korea Precision Machinery has secured a series of large overseas machine-tool orders from India and Turkey in 2026, creating an opportunity for revenue expansion, but consolidated results have yet to escape loss territory following an operating loss of KRW 7.53bn and a net loss of KRW 8.09bn in 2025, extending into losses through Q1-Q2 2026.

That said, the operating loss narrowed from KRW 1.52bn in Q1 2026 to KRW 0.87bn in Q2 2026, offering a gauge of potential earnings improvement as large contracts begin to be recognized as revenue in earnest.

The broader domestic machine-tool industry is showing a recovery driven by rising overseas orders, providing a favorable backdrop, but because the company's revenue is heavily dependent on a small number of large contracts, the pace of contract execution and payment collection will be key determinants of results.

The rising debt ratio, declining equity, and recent history of auditor changes and ownership-change filings are factors worth monitoring from a financial and governance standpoint.

Overall, the timing gap between order momentum and earnings recovery, along with the stability of the financial structure, are likely to be the central points to watch going forward.

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.