PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩500 per share · Prices as of the 2026-10-02 close
DY Power, the domestic leader in hydraulic cylinders for construction equipment, has seen revenue plateau for three straight years, but its operating margin has been recovering since 2025 and the improvement has continued through the first half of 2026.
Annual revenue shrank for three consecutive years from KRW 430.0bn in 2023 to KRW 384.6bn in 2024 and KRW 382.8bn in 2025, yet the operating margin improved from 6.6% in 2024 to 8.0% in 2025.
Operating margins of 11.4% in Q1 2026 and 9.1% in Q2 2026 were the strongest of the past five quarters, extending the margin recovery trend.
Key customers HD Hyundai Infracore and HD Hyundai Construction Equipment merged into a combined entity in early 2026, and whether procurement policy changes follow is a key point to watch.
The debt ratio declined steadily from 36.3% in 2022 to 20.3% in 2025, reflecting a consistently improving balance sheet.
Global excavator exports have shown a recent recovery, though volatility by country and customer remains.
DY Power manufactures and sells hydraulic cylinders, a core component for construction equipment. The company was established in 2014 through a spin-off of the hydraulics division from DY Holdings (formerly Dongyang Machinery) and listed on the KOSPI in January 2015.
DY Power is the domestic leader in hydraulic cylinders and has been regarded as one of the world's top three manufacturers of excavator hydraulic cylinders.
The bulk of revenue comes from hydraulic cylinders, with excavator-use products representing the largest share, complemented by units used in aerial work platforms, forklifts, and loaders.
Key customers include HD Hyundai Infracore, HD Hyundai Construction Equipment, U.S.-based Terex and Caterpillar, Japan's Hitachi and Kobelco, Sweden's Volvo, and the U.K.'s JCB, all top-tier global construction equipment makers. Competitors include Japan's Kayaba (KYB), China's Hengli, and India's Wipro.
Production is centered at the Changwon plant in Korea, supplemented by overseas subsidiaries in China and India, and the company has secured a plant site in Mexico to respond to expanding parts outsourcing demand from North American customers.
Revenue is relatively evenly distributed across Korea, the U.S., China, Japan, and Europe, resulting in comparatively low customer and regional concentration.
More recently, the company has pursued a smart-factory transition, including AI-based automation of welding processes and a factory energy management system (FEMS).
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩107.3B | ₩7.8B | 7.2% |
| 2025Q3 | ₩95.5B | ₩8B | 8.4% |
| 2025Q4 | ₩86.3B | ₩4.8B | 5.6% |
| 2026Q1 | ₩102.9B | ₩11.8B | 11.4% |
| 2026Q2 | ₩115.9B | ₩10.5B | 9.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩419B | ₩27B | ₩17.9B | 6.4% | 7.4% | 36.3% |
| 2023 | ₩430B | ₩36.3B | ₩27.5B | 8.4% | 10.4% | 27.6% |
| 2024 | ₩384.6B | ₩25.5B | ₩21.9B | 6.6% | 7.5% | 20.4% |
| 2025 | ₩382.8B | ₩30.4B | ₩25.1B | 8.0% | 8.0% | 20.3% |
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
Annual revenue peaked at KRW 419.0bn in 2022 and KRW 430.0bn in 2023, before declining for two straight years to KRW 384.6bn in 2024 and KRW 382.8bn in 2025.
Operating profit, however, fell sharply from KRW 36.3bn (8.4% margin) in 2023 to KRW 25.5bn (6.6%) in 2024, then recovered to KRW 30.4bn (8.0%) in 2025, while net income attributable to owners rose from KRW 21.9bn in 2024 to KRW 25.1bn in 2025.
On a quarterly basis, revenue fell from KRW 107.3bn in Q2 2025 to KRW 95.5bn in Q3 2025, yet operating profit actually rose to KRW 8.0bn (8.4% margin) from KRW 7.8bn (7.2%), and net income of KRW 8.8bn exceeded operating profit, suggesting a contribution from non-operating items as well.
Q4 2025 then posted revenue of KRW 86.3bn, operating profit of KRW 4.8bn (5.6% margin), and net income of KRW 3.1bn, the weakest profitability of the past five quarters.
Momentum improved in 2026, with Q1 revenue of KRW 102.9bn, operating profit of KRW 11.8bn (11.4% margin), and net income of KRW 9.8bn, followed by Q2 revenue of KRW 115.9bn, operating profit of KRW 10.5bn (9.1%), and net income of KRW 10.3bn, marking two consecutive quarters with margins at or near double digits.
As a result, net income attributable to owners over the trailing four quarters (Q3 2025 through Q2 2026) reached KRW 32.0bn, already surpassing the full-year 2025 figure of KRW 25.1bn.
On the cash flow side, operating cash flow declined from KRW 49.9bn in 2023 to KRW 39.9bn in 2024 and KRW 23.1bn in 2025, moving in the opposite direction of net income improvement, which warrants attention to working-capital dynamics.
The debt ratio has steadily improved, falling from 36.3% in 2022 to 27.6% in 2023, 20.4% in 2024, and 20.3% in 2025.
The hydraulic cylinder industry for construction equipment is directly tied to the global demand cycle of upstream markets such as excavators and aerial work platforms.
According to the China Construction Machinery Association, sales by major Chinese excavator makers rose 19.5% year-on-year in Q1 2026, with export volume surging 36.1%, outpacing domestic growth.
Mining development and aging-equipment replacement demand across emerging and developed markets such as Africa, Oceania, and Europe have driven export diversification.
In Korea's construction equipment sector, HD Hyundai Construction Equipment absorbed HD Hyundai Infracore to form a combined entity, with expectations that the merged company would post results exceeding market expectations from its very first quarter.
This combined entity represents one of DY Power's largest customer groups, making the direction of its integrated procurement and sourcing policy a key point to monitor going forward.
Large Chinese manufacturers such as Sany Heavy Industry and Zoomlion have also been expanding their overseas revenue share, intensifying global competition, though this dynamic can simultaneously expand demand for outsourced parts.
Since DY Power has maintained a customer portfolio not concentrated in any single client or region, its exposure to these industry shifts may differ from that of narrower-focused competitors.
DY Power's future performance is likely to hinge heavily on the production and sales plans of its major customers and on the trajectory of global construction equipment exports.
Given that operating margins approached double digits in the first half of 2026, whether this margin level is sustained in the second half is a key metric to watch.
As the merger of the company's largest customer group, HD Hyundai Infracore and HD Hyundai Construction Equipment, was completed in early 2026, the concretization of the combined entity's procurement and parts-sourcing policy also warrants attention.
The company had previously disclosed plans to secure a Mexican production site to respond to expanding parts outsourcing from North American customers, and the progress of this investment could alter its regional revenue mix going forward.
In addition, how the ongoing smart-factory digitalization project affects cost and quality competitiveness is a medium-term point of interest.
However, specific revenue or profit guidance from the company itself has not been confirmed in recently available disclosures, so future quarterly and semiannual reports and IR materials will need to be checked for confirmation.
DY Power has shown an earnings recovery trend in recent years, while its share price has traded below net asset value.
During past upcycles in the construction equipment sector, the stock traded at relatively low multiples at times, so the current valuation level can be interpreted in the context of the relationship between the ongoing earnings recovery and market expectations.
On the dividend side, the company has maintained annual cash dividends, reflecting a consistent shareholder-return stance despite earnings volatility.
That said, given the pronounced quarter-to-quarter swings in results, it is useful to consider the trend across several recent quarters rather than a single quarter when assessing valuation.
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
After falling to 6.6% in 2024, the operating margin recovered to 8.0% in 2025, and reached 11.4% in Q1 2026 and 9.1% in Q2 2026, marking two consecutive strong quarters. That profitability is improving even as revenue remains flat suggests potential improvement in cost structure or product mix.
This trend is reinforced by trailing four-quarter net income of KRW 32.0bn, already exceeding the full-year 2025 figure.
The debt ratio has steadily declined from 36.3% in 2022 to 20.3% in 2025, stabilizing the balance sheet. Lower leverage can support relatively more flexible financial responses even during industry downturns. Total equity also expanded continuously, from KRW 240.4bn in 2022 to KRW 312.5bn in 2025.
The company's customer base spans top-tier global construction equipment makers including HD Hyundai Infracore, HD Hyundai Construction Equipment, Terex, Caterpillar, Hitachi, Volvo, and JCB, with revenue relatively evenly distributed across Korea, the U.S., China, Japan, and Europe.
This low dependence on any single customer or regional economy can help cushion the impact of downturns in individual markets.
Annual revenue declined for two consecutive years, from KRW 430.0bn in 2023 to KRW 384.6bn in 2024 and KRW 382.8bn in 2025, indicating stalled top-line growth.
If margin improvement has stemmed mainly from cost or structural factors rather than volume expansion, the durability of profit gains without a revenue recovery could be limited.
Major customers HD Hyundai Infracore and HD Hyundai Construction Equipment merged into a combined entity in early 2026. If procurement policy or vendor structures are reorganized following the integration, this could affect DY Power's supply volumes or pricing terms.
The operating margin fell sharply to 5.6% in Q4 2025, down from 7.2% and 8.4% in Q2 and Q3 of the same year, while net income dropped to KRW 3.1bn from KRW 8.8bn in the prior quarter.
This quarter-to-quarter volatility illustrates the company's sensitivity to external variables such as seasonality, currency, and raw material prices.
Given the company's export-heavy business structure, fluctuations in exchange rates such as the KRW/USD rate can directly affect revenue and margins. Changes in steel prices, a key raw material for hydraulic cylinders, are also a factor influencing cost structure.
With significant revenue dependence on a small number of large construction equipment manufacturers, mergers or procurement policy changes among these customers could affect order volumes or trading terms.
The situation following the integration of HD Hyundai Infracore and HD Hyundai Construction Equipment is a representative case to monitor.
DY Power's performance closely tracks the global construction and mining investment cycle, particularly demand for construction heavy equipment such as excavators.
Changes in national infrastructure budgets, interest rate environments, and commodity-price-driven mining investment can affect upstream demand and translate into earnings volatility.
Q3 2026 earnings are expected to be disclosed - it will be important to check whether the margin recovery seen in H1 2026 (operating margins of 11.4% in Q1 and 9.1% in Q2) continues into Q3.
Korea Customs Service is expected to release September excavator export statistics - a leading indicator for checking whether export momentum in key markets such as China and the U.S. is continuing.
Check whether the merged HD Hyundai Infracore/HD Hyundai Construction Equipment entity finalizes its parts procurement policy - any changes could affect DY Power's supply volumes and pricing.
Monitor progress on investment and operational plans for the North American (Mexico) production site - a matter that could shift the company's regional revenue mix.
DY Power is Korea's leading maker of hydraulic cylinders for construction equipment. While revenue has been flat to slightly declining since 2023, its operating margin improved from 6.6% in 2024 to 8.0% in 2025, and reached levels at or near double digits in the first half of 2026.
Trailing four-quarter (Q3 2025-Q2 2026) net income attributable to owners of KRW 32.0bn has already surpassed the full-year 2025 figure, underscoring a clear earnings recovery. The debt ratio also improved, falling from 36.3% in 2022 to 20.3% in 2025, strengthening the balance sheet.
That said, revenue itself remains stagnant, and quarter-to-quarter volatility persists, as seen in the sharp margin decline in Q4 2025.
With the merger of key customers HD Hyundai Infracore and HD Hyundai Construction Equipment completed in early 2026, the direction of the combined entity's procurement policy is a key factor to watch going forward.
Investors should consider upcoming quarterly results, customer policy developments, and global construction equipment export trends together before forming a view.
Report written 2026-09-05 · Data as of 2026-09-04
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