KOSDAQElectrical Equipment108380

Daeyang Electric

₩18,790▲ 0.80%2026-10-02 close

Market Cap

₩179.4B

Turnover

₩200M

Volume

8,252 shares

Shares out.

9.6M

PER

5.7×

PBR

0.6×

EPS

₩3,189

Dividend Yield

1.09%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩200 per share · Prices as of the 2026-10-02 close

Report overview

Shipbuilding Recovery Meets Sensor Growth

Daeyang Electric is benefiting from a shipbuilding upcycle on the back of its leading domestic position in marine lighting, while rapidly diversifying its revenue and profit base through automotive pressure sensors.

1
2025 revenue reached KRW 230.1 billion with operating profit of KRW 27.1 billion, marking a second consecutive record year.
2
Cumulative operating profit for the first half of 2026 exceeded KRW 13.8 billion, extending the profitability improvement trend.
3
Marine lighting and electrical systems are seeing rising orders amid the shipbuilding boom, while automotive ESC and hydrogen-vehicle pressure sensors have emerged as new growth drivers.
4
The debt ratio stays around 20% with a solid net cash position, providing a strong financial buffer.
5
Analysts note that the timing for large-scale catalysts such as the MASGA (Make American Shipbuilding Great Again) project to translate into actual earnings remains uncertain.

Business structure

Founded in 1988 and initially focused on industrial lighting, electronic systems, and switchboard manufacturing, Daeyang Electric listed on KOSDAQ in 2011 and has since grown into a specialized shipbuilding equipment company.

The firm operates through four divisions: Marine Solutions (shipbuilding), Defense Solutions, Sensing Solutions, and the Magok Central R&D Center.

Designated as a defense contractor, the company developed Korea's first and the world's fourth unmanned submersible and is regarded as the domestic leader in marine lighting.

Its subsidiary, Korea Special Battery, manufactures and sells batteries for the defense sector and also holds a high market share in marine lighting for shipbuilding.

Major clients include large domestic shipbuilders such as HD Hyundai Group, Hanwha Ocean, and Samsung Heavy Industries, meaning that increases in their vessel construction volumes translate directly into orders and revenue growth.

In the automotive segment, the company is rapidly expanding its market share in ESC (electronic stability control) pressure sensors and maintains a monopoly position in hydrogen-vehicle pressure sensors, evolving into a specialized land-based pressure sensor company.

In defense, it has supplied 27 mine-clearing unmanned underwater vehicles to date, building on the technology behind its Haemirae unmanned submersible capable of exploring depths of up to 6,000 meters.

The company's core characteristic is a portfolio combining a stable shipbuilding and defense cash-cow business with a fast-growing sensor segment.

Earnings trend

Quarterly revenue · Operating profit

₩56.3B₩5.8B25Q2₩61.5B₩7.7B25Q3₩56.6B₩7.8B25Q4₩50.9B₩6.3B26Q1₩70.8B₩7.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩130.4B-₩9.9B2022₩154.3B₩3.7B2023₩196.3B₩15.7B2024₩230.1B₩27.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩56.3B	₩5.8B	10.3%
2025Q3	₩61.5B	₩7.7B	12.6%
2025Q4	₩56.6B	₩7.8B	13.8%
2026Q1	₩50.9B	₩6.3B	12.3%
2026Q2	₩70.8B	₩7.6B	10.7%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩130.4B	-₩9.9B	-₩7.5B	−7.6%	−3.4%	19.5%
2023	₩154.3B	₩3.7B	₩8.4B	2.4%	3.7%	32.0%
2024	₩196.3B	₩15.7B	₩19.6B	8.0%	8.0%	25.8%
2025	₩230.1B	₩27.1B	₩24.8B	11.8%	9.2%	19.6%

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

Earnings analysis

In 2025, consolidated revenue reached KRW 230.1 billion with operating profit of KRW 27.1 billion (operating margin of 11.8%), a clear improvement from 2024's revenue of KRW 196.3 billion and operating profit of KRW 15.7 billion (8.0% margin).

The company posted an operating loss of KRW 9.9 billion and a net loss of KRW 7.5 billion in 2022 on revenue of KRW 130.4 billion, before turning profitable in 2023 with revenue of KRW 154.3 billion and operating profit of KRW 3.7 billion, followed by simultaneous growth in revenue and profit through 2024 and 2025.

On a quarterly basis, third-quarter 2025 revenue of KRW 61.5 billion, operating profit of KRW 7.7 billion, and controlling net income of KRW 8.1 billion showed clear improvement over the prior quarter (second-quarter 2025 revenue of KRW 56.3 billion, operating profit of KRW 5.8 billion, net income of KRW 4.4 billion).

In the fourth quarter of 2025, revenue slightly moderated to KRW 56.6 billion, yet operating profit rose to KRW 7.8 billion, reflecting margin improvement.

The first quarter of 2026 saw seasonal moderation with revenue of KRW 50.9 billion, but profitability held firm with operating profit of KRW 6.3 billion and net income of KRW 7.3 billion, while the second quarter of 2026 saw revenue expand again to KRW 70.8 billion, with operating profit of KRW 7.6 billion and controlling net income of KRW 7.7 billion.

Over the most recent four quarters (Q3 2025 through Q2 2026), cumulative controlling net income reached approximately KRW 29.5 billion, exceeding full-year net income levels recorded in both 2024 (KRW 19.6 billion) and 2025 (KRW 24.8 billion).

This improvement reflects the combined effects of rising marine lighting revenue tied to the shipbuilding recovery, an expanding revenue mix toward the higher-margin automotive sensor segment, and fixed-cost dilution from higher overall sales volume.

Given that the 2022 loss stemmed from a combination of low-priced order backlog flowing through revenue, rising raw material costs, and increased R&D facility investment, the subsequent recovery appears to reflect a structural normalization of profitability rather than a one-off rebound.

Industry analysis

Korea's shipbuilding industry is seen as entering a phase of profitability normalization, driven by a boom in high-value-added vessel orders alongside the runoff of previously low-priced order backlogs.

Daeyang Electric holds a high market share in the domestic marine lighting market, positioning it to benefit structurally as shipbuilders' construction volumes rise and translate directly into orders and revenue.

In the defense segment, the company has secured a stable revenue base through submarine lead-acid batteries and unmanned submersible technology, with exposure to large-scale defense projects such as a Canadian diesel submarine program as a domestic shipbuilding and defense equipment vendor.

In the automotive segment, the company has successfully localized ESC and hydrogen-vehicle pressure sensors, holding a unique domestic supplier position while expanding deliveries to automakers.

However, market expectations surrounding the MASGA (Make American Shipbuilding Great Again) project remain a work in progress; Shinyoung Securities noted that because the project is government-led rather than privately driven, it may proceed more slowly than private-sector initiatives, warranting tempered expectations on the timing of related momentum.

The shipbuilding sector index has recently underperformed relative to the KOSPI and KOSDAQ, a development attributed to prior share-price gains that had already priced in much of the anticipated U.S. shipbuilding revival, compounded by uncertainty over the pace of U.S. investment execution.

Even so, there is broad agreement that the sector's medium- to long-term growth story remains intact, supported by resilient profitability in the commercial vessel segment and emerging order opportunities in data-center engines and floating data centers.

Outlook

Ahead of its 50th anniversary next year, the company continues its transition from a traditional shipbuilding equipment maker to a mobility technology firm, having become the sole domestic company to localize automotive MEMS sensors manufactured through semiconductor processes.

Following its selection for the Busan Techno Park ManuCon program, the company is preparing an AI-based industrial safety management system, aiming to build an on-premises GPU-based analytics infrastructure for detecting worker protective gear, analyzing hazardous behavior, and automating safety reporting.

It also stated plans to develop eco-friendly marine lighting technology that blocks specific wavelengths and controls light distribution to protect marine ecosystems.

The company said it is nearing completion of development on an untethered underwater drone capable of autonomous wireless navigation at 2,000-meter depths and an unmanned submersible designed for submarine rescue operations in extreme environments.

The company is also pursuing a corporate restructuring in which it will acquire equity in its unlisted affiliate Daeyang Jeonjang to incorporate it as a subsidiary, with implementation targeted by the end of fiscal year 2026.

Separately, the selection of the Hanwha Ocean-HD Hyundai Heavy Industries team for the shortlist in Canada's large-scale submarine acquisition program is viewed as a potential event that could expose Daeyang Electric to the domestic defense equipment supply chain.

Whether these new business and restructuring timelines proceed as planned will be a key variable in assessing future earnings visibility.

Valuation

PER

5.7×

PBR

0.6×

ROE

11.1%

EPS

₩3,189

BPS

₩29,955

Dividend per share

₩200

The company's earnings profile has changed substantially, moving from a loss in 2022 to profitability in 2023 and then expanding continuously through 2024 and 2025, which is a factor that also shifts the benchmark against which the market assesses its valuation.

The current share price trades at a discount relative to net asset value, suggesting the market is assigning a relatively modest premium compared to the company's equity base.

Relative to the pace of earnings improvement, the price-to-earnings multiple appears to be tracking below the bands that prevailed during the company's earlier loss-making or low-profit periods.

The dividend policy remains one of annual payouts, though the dividend yield itself sits on the lower end compared with higher-yielding peers in the sector.

These metrics remain an area where market assessment could diverge depending on how durable the earnings recovery proves and how much the new sensor and defense businesses ultimately contribute.

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

Bull factors

Structural Expansion of the Automotive Pressure Sensor Business

The company's market share in ESC pressure sensors is expanding rapidly, while it maintains a monopoly position in hydrogen-vehicle pressure sensors. Its technological edge as the sole domestic firm to localize automotive MEMS sensors manufactured through semiconductor processes is also a competitive advantage.

As this relatively higher-margin segment grows as a share of revenue, it carries potential to contribute to overall operating margin improvement.

Order Structure Linked to Shipbuilding Recovery

The company's leading domestic position in marine lighting means that shipbuilders' expanding construction volumes translate directly into orders and revenue. The growing share of high-value-added vessel construction has also positively affected delivery pricing and product mix. Stable revenue from the defense segment further diversifies the foundation for top-line growth.

Financial Stability Backed by Low Leverage and Net Cash

The debt ratio stood at a low 19.6% at the end of 2025, and reports indicated it was similarly low at 21.2% as of the end of the first quarter of 2026.

Total borrowings including lease liabilities are minimal compared to cash and cash equivalents, leading to an assessment that the company operates on a virtually debt-free basis. This financial buffer provides capacity for new business investment and for responding to changes in the external environment.

Bear factors

Uncertain Pace of the MASGA Project

Shinyoung Securities noted that because the MASGA project is government-led, it may proceed more slowly than private-sector initiatives. Since the project involves government-to-government negotiations and the execution of U.S.-based investment, the timing for translation into actual results remains uncertain.

There are also views that much of the related optimism has already been priced in, suggesting it may take time before new orders are confirmed.

Dependence on Key Customers and End Markets

Major clients are concentrated among large domestic shipbuilders such as HD Hyundai Group, Hanwha Ocean, and Samsung Heavy Industries, meaning earnings are heavily tied to their order cycles.

The automotive sensor segment also carries a high supply concentration to specific automakers, with customer diversification still at an early stage. Should order intake from these end markets slow, the pace of revenue growth could adjust accordingly.

Sector-Wide Share Price Correction in Shipbuilding

The shipbuilding sector index has recently underperformed the KOSPI and KOSDAQ, a move interpreted as reflecting profit-taking. Despite resilient profitability in the commercial vessel segment, sector-wide investment sentiment could remain adjusted until additional growth drivers are confirmed.

This is a factor that could indirectly affect the share price movement of Daeyang Electric as a shipbuilding equipment supplier.

Risk factors

Industry and Order Cycle Risk

The shipbuilding order cycle is heavily influenced by global shipping conditions and vessel pricing, meaning a slowdown in new orders could weigh on revenue growth.

The automotive sector's sensor demand can also fluctuate depending on automakers' production plans or the pace of transition to electric and hydrogen vehicles. Large defense projects tend to depend on government budget allocation or the outcome of international contract negotiations.

Customer Concentration Risk

Revenue is concentrated among a small number of large shipbuilders and automakers, meaning changes in a specific client's ordering or sourcing policy could have a direct impact on results.

While efforts to secure new customers and diversify geographically are underway, they remain at an early stage, so reducing this dependence will likely take time.

Foreign Exchange and Raw Material Price Volatility

The 2022 earnings deterioration resulted from a combination of rising raw material prices amid global supply chain disruptions and the structural difficulty of immediately passing on cost increases under contract terms with large shipbuilders.

Should raw material prices or exchange rates swing sharply again, a recurrence of similar margin pressure cannot be ruled out.

What to watch next

Around November 2026 (expected third-quarter earnings release)
It is worth checking whether the third-quarter 2026 results confirm continued growth in the automotive sensor segment's revenue share and ongoing operating margin improvement.
By the end of fiscal year 2026 (planned restructuring implementation)
It is worth monitoring whether the planned incorporation of unlisted affiliate Daeyang Jeonjang as a subsidiary is completed as scheduled, and what changes emerge in earnings and financial structure afterward.
Timing of final contract confirmation for Canada's submarine acquisition program
Whether the Hanwha Ocean-HD Hyundai Heavy Industries team's shortlisting for Canada's diesel submarine program advances to a final contract is worth tracking, as it could affect the domestic defense equipment supply chain.
Progress on government-to-government talks and U.S. investment execution related to the MASGA project
As noted by Shinyoung Securities, because this is a government-led initiative, the timing of related momentum could be delayed, warranting continued monitoring of its progress.
Targeted development completion in 2027
It is worth checking whether the development of the unmanned submersible for submarine rescue operations is completed as planned and whether it subsequently translates into new revenue for the defense segment.

Overall view

Daeyang Electric is in a phase where two forces—recovery in its core shipbuilding equipment business and expansion of its new automotive pressure sensor business—are simultaneously driving earnings improvement.

The earnings trajectory, moving from a loss in 2022 to profitability in 2023 and continuous expansion through 2024 and 2025, carries the character of structural normalization, and quarterly results through the first half of 2026 support this trend.

Low leverage combined with a net cash position provides financial buffer capacity to invest in new businesses and respond to changes in the external environment.

That said, the timing for large-scale catalysts such as the MASGA project to translate into actual earnings remains uncertain, and sector-wide share price adjustment in shipbuilding along with customer concentration risk also warrant consideration.

A number of events remain to be confirmed going forward, including the incorporation of Daeyang Jeonjang, the outcome of the Canada submarine program, and new product development timelines.

On balance, this appears to be a phase where bullish factors from core business recovery and new business growth coexist with bearish factors related to the uncertain timing of major catalysts.

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.