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
Daesung Hi-Tech has sharply expanded its order backlog through new businesses in defense, robotics, and AI data center (AIDC) cooling components, but it also carries the financial burden of multi-year operating losses and net income volatility driven by derivative valuation gains and losses tied to its convertible bonds.
Order backlog stood at KRW 76.5 billion as of end-June 2026, up 144% year-on-year, with H2 revenue recognition as the key watch point.
Operating profit turned marginally positive in Q1 2026 (about KRW 42 million) but swung back to a KRW 2.19 billion operating loss in Q2, attributed to delayed equipment shipment schedules.
The company is diversifying into defense (Israel's Elbit, Romania-linked Elmet), robotics (MOU with Twinny, investment in Tesollo), and AIDC liquid-cooling components.
Owners' net loss reached roughly KRW 15.96 billion in Q1 2026 due to expanded derivative valuation losses on convertible bonds, described by the company as a non-cash accounting loss.
The company posted operating losses for three consecutive years from 2023 to 2025, with revenue stagnating in the KRW 90-billion range.
Daesung Hi-Tech was founded in 1995 as Daesung Precision, changed its name to the current one in 2001, and accelerated its global push in 2014 by acquiring Japanese machine-tool maker Nomura VTC.
Its core businesses are precision components, Swissturn automatic lathes, and compact machining centers, and it has recently been expanding into secondary battery and semiconductor equipment.
Since 2022, the company has concentrated on expanding precision component sales into advanced industries such as defense, electric vehicles, semiconductors, and robotics.
Its defense business began with a roughly KRW 3 billion order from an Israeli company in 2021, and it has since begun transacting with Korea's Defense Acquisition Program Administration and now supplies more than 100 types of precision parts to global defense company Elbit Systems.
From late 2025, the company signed a roughly KRW 22.7 billion European defense parts supply agreement with Romania-linked Elmet International, covering a contract period from January 2026 through October 2027.
In robotics, the company signed a memorandum of understanding with autonomous robot maker Twinny for manufacturing innovation and global expansion, and made an equity investment in robot-hand specialist Tesollo.
In its AIDC (AI data center) growth segment, the company signed its first supply contract for liquid-cooling core component manufacturing equipment in March 2026, secured a follow-on order in August, and is mass-producing related components (QDC, UQD) in Vietnam.
Swissturn automatic lathes are a niche precision-machinery category that only a handful of companies worldwide, mostly Japanese, can produce, and Daesung Hi-Tech has built its domestic market position around this segment together with its precision component business.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩28.9B | -₩1.5B | −5.2% |
| 2025Q3 | ₩23.1B | -₩400M | −1.9% |
| 2025Q4 | ₩24.9B | -₩100M | −0.6% |
| 2026Q1 | ₩17.6B | ₩41,792,018 | 0.2% |
| 2026Q2 | ₩23.1B | -₩2.2B | −9.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩128.4B | ₩11.5B | ₩2.2B | 8.9% | 3.2% | 129.5% |
| 2023 | ₩92.8B | -₩6.6B | -₩7.2B | −7.1% | −9.7% | 154.9% |
| 2024 | ₩92.8B | -₩13.1B | -₩12.4B | −14.2% | −19.5% | 198.0% |
| 2025 | ₩95.2B | -₩2.3B | -₩5.6B | −2.4% | −8.7% | 197.3% |
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
On an annual basis, revenue was KRW 128.37 billion in 2022 with an operating profit of KRW 11.48 billion (operating margin 8.9%), before revenue fell sharply to KRW 92.80 billion in 2023, turning to an operating loss of KRW 6.58 billion (margin -7.1%).
In 2024, revenue stagnated at KRW 92.83 billion while the operating loss widened to KRW 13.14 billion (margin -14.2%), making it the weakest of the three years. In 2025, revenue edged up to KRW 95.22 billion and the operating loss narrowed to KRW 2.30 billion (margin -2.4%).
By quarter, Q2 2025 revenue was KRW 28.89 billion with an operating loss of KRW 1.51 billion and an owners' net loss of KRW 4.63 billion; Q3 2025 revenue fell to KRW 23.09 billion but the operating loss narrowed to KRW 0.44 billion and owners' net income turned positive at KRW 0.47 billion.
Q4 2025 revenue was KRW 24.92 billion with an operating loss of KRW 0.15 billion and a net loss of KRW 1.08 billion, while Q1 2026 revenue declined to KRW 17.58 billion but operating profit turned positive at roughly KRW 42 million.
However, the Q1 2026 owners' net loss reached KRW 15.96 billion, largely due to a sharp increase in accounting-based derivative valuation losses on convertible bonds as the share price rallied.
In Q2 2026, revenue rose again to KRW 23.12 billion but the operating loss widened to KRW 2.19 billion, while owners' net income turned positive at KRW 1.92 billion.
Over the most recent four quarters from Q3 2025 through Q2 2026, the combined owners' net loss totaled approximately KRW 14.65 billion, reflecting large quarter-to-quarter swings driven by the non-cash accounting effects tied to the convertible bonds.
On the demand side, an analyst noted that a recovery in Japan's machine-tool market contributed to higher average selling prices (ASP) in the precision component business.
The global defense industry is seen as entering a phase where major defense companies are replenishing depleted weapons inventories following conflicts in the Middle East and Ukraine, with the company projecting a multi-year growth phase over the next three to five years.
Rising European defense spending was also cited as a factor that could increase demand for domestic precision-component suppliers with established economies of scale.
In robotics, demand for ground robots linked to manned-unmanned combat systems is expanding, tightening quality requirements for ultra-precision metal parts used in robot joints and drivetrains. Growing demand for data center liquid cooling amid AI infrastructure expansion has also been flagged as a new growth pillar.
In terms of competitive positioning, only a handful of companies worldwide can produce Swissturn automatic lathes, giving Daesung Hi-Tech a distinctive niche, while its precision component business benefits from a diversified customer base spanning defense, robotics, and AIDC applications.
The company explained that H1 2026 results were temporarily affected by the postponement of some equipment shipments to align with customer schedules, and said that secured orders have been converting into revenue in earnest since July.
The order backlog stood at KRW 76.5 billion at the end of June 2026, up 144% year-on-year, and since revenue recognition typically lags orders by three to twelve months, the company expects this backlog to flow into results progressively from the second half.
Shipments of European defense parts under the Elmet International contract are slated to begin in the second half, alongside the buildout of local production capability in Romania.
In robotics, having passed sample testing for roughly 80 types of ultra-precision parts for a domestic defense conglomerate, the company expects full-scale part deliveries once the customer's robot mass production begins.
In the AIDC business, following its first supply contract in March 2026 and a follow-on order in August, the company said it is running domestic production lines at maximum capacity through year-end while negotiating supply volumes for next year.
However, Yuanta Securities, in a late-May 2026 report, projected that new order volumes for defense and AI data centers would be substantially reflected in revenue starting in Q2, driving earnings improvement, while not issuing an investment rating or target price.
The company has set a goal of sustaining growth across defense, robotics, medical devices, and now AIDC through the second half and into 2027.
Because the company's combined net income over the most recent four quarters remains in loss territory, conventional earnings-based valuation metrics are difficult to compute. The price-to-book ratio trades above net asset value, implying the market is pricing in a certain premium to book value.
The company currently pays no dividend, so dividend-related metrics carry limited meaning.
On the earnings side, the business has moved from consecutive annual operating losses in 2023-2025 to a marginal operating profit in Q1 2026 and back to a loss in Q2 2026, a volatile pattern that can also weigh on how the market assesses valuation for this stock.
Yuanta Securities, in a report following a 2026 non-deal roadshow, spoke positively about the medium- to long-term growth visibility of the defense and robotics segments but did not issue an investment rating or target price, suggesting a clear brokerage consensus on valuation has yet to form.
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
Beyond supplying more than 100 types of precision parts to Israel's Elbit Systems, the company signed a roughly KRW 22.7 billion European defense parts contract with Romania-linked Elmet International. With the contract running from 2026 through 2027, this could provide a predictable revenue base going forward.
Additional orders remain possible if defense companies continue replenishing inventories depleted by global conflicts.
The company is building a track record in robot components through its MOU with autonomous robot maker Twinny and its equity investment in robot-hand specialist Tesollo.
In AIDC liquid-cooling components, it secured a follow-on order in August 2026 following its first supply contract in March, and is now mass-producing in Vietnam.
It has also passed sample testing for roughly 80 types of ultra-precision robot parts for a domestic defense conglomerate, which could support revenue growth once mass production begins.
The order backlog reached KRW 76.5 billion at the end of June 2026, up 144% year-on-year. Given a typical three-to-twelve-month lag between order intake and revenue recognition, results are expected to reflect this backlog progressively from the second half.
Orders across diversified new businesses in defense, robotics, and AIDC are rising simultaneously, broadening the company's revenue base.
The company posted annual operating losses for three consecutive years from 2023 to 2025, with the loss widening to KRW 13.14 billion in 2024. After a marginal profit in Q1 2026, it swung back to a KRW 2.19 billion operating loss in Q2, making it difficult to conclude that a stable profit trend has taken hold.
Revenue has also shrunk from KRW 128.37 billion in 2022 to the KRW 90-billion range in 2023-2025, where it has since stagnated.
The KRW 15.96 billion owners' net loss in Q1 2026 was mainly driven by expanded derivative valuation losses tied to convertible bonds as the share price rose.
Because CBs with refixing conditions are valued as derivative liabilities that move with the stock price, net income could continue to swing sharply depending on price movements. A significant increase in the debt ratio at the end of Q1 2026 versus the prior year-end is also linked to this dynamic.
The company explained that H1 2026 results were temporarily affected by delays in equipment shipments tied to customer schedules. This illustrates that even as orders increase, the timing of revenue recognition can be dictated by customer circumstances.
Quarterly revenue has fluctuated between roughly KRW 17.6 billion and KRW 28.9 billion, adding uncertainty to earnings forecasting.
With multiple convertible bonds outstanding, including unconverted balances from the 5th and 6th issues and a 7th issue in May 2026, there is a risk of share dilution if these are converted into equity.
Under the refixing clauses, a rising share price increases derivative valuation losses while a falling price lowers the conversion price, so movements in either direction affect the financial statements.
Cash and cash equivalents remaining below short-term borrowings is an ongoing condition, keeping liquidity management an important task.
The company's new-business growth narrative depends heavily on geopolitical conditions such as depleted weapons inventories in the Middle East and Ukraine and rising European defense spending. If conflicts ease or national defense budgets are adjusted, order momentum could weaken. A rising reliance on revenue from specific overseas defense customers is also a risk factor.
The precision components and Swissturn lathe businesses remain influenced by end-market demand, including conditions in Japan's machine-tool sector.
The newer businesses in defense, robotics, and AIDC are also still in early stages, with revenue recognition dependent on customers' mass-production timing and shipment schedules.
As multiple business lines expand simultaneously, managing priorities across personnel, equipment, and capital allocation remains an important challenge.
At the Q3 2026 earnings disclosure, check whether European defense shipment revenue is reflected, whether margin improvement is sustained, and how quickly the order backlog converts into revenue.
Verify the actual start of European shipments and the scale of revenue recognition under the KRW 22.7 billion Elmet International contract (staged supply from January 2026 to October 2027).
Check the outcome of 2027 supply volume negotiations for AIDC liquid-cooling components and whether the Vietnam production lines (QDC, UQD) are expanded.
Monitor the conversion and early redemption progress of the remaining 5th and 6th convertible bond balances, along with the debt ratio trend driven by changes in derivative valuation gains and losses.
Daesung Hi-Tech has built on its traditional precision component and Swissturn lathe business to simultaneously expand into new areas such as defense, robotics, and AIDC liquid-cooling components, sharply growing its order backlog in the process.
The order backlog stood at KRW 76.5 billion at the end of June 2026, up 144% year-on-year, and the company expects these orders to be reflected in revenue progressively from the second half.
However, the company posted operating losses for three consecutive years from 2023 to 2025, and in 2026 it has swung between a marginal profit in Q1 and a return to loss in Q2, meaning earnings stability has not yet been established.
In particular, derivative valuation gains and losses tied to convertible bonds continue to move net income sharply depending on share price trends, so investors should watch for financial statement volatility that is distinct from core operating performance.
The fact that three new growth pillars—defense, robotics, and AIDC—are advancing simultaneously broadens the growth narrative, but since each business is still at an early stage, variables such as customers' mass-production timing and shipment schedules also warrant attention.
Some brokerages, including Yuanta Securities, have spoken positively about medium- to long-term growth visibility but have not issued investment ratings or target prices, meaning a clear market consensus has yet to form.
Going forward, Q3 results, the start of European shipments, and how the remaining convertible bond balances are handled are likely to be key variables for assessing both earnings and financial structure.
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.