Kbi Dongkook Ind.Co.,Ltd provides automobile components in South Korea. It offers interior and exterior components, air conditioning, and lamp parts. The company was founded in 1955 and is headquartered in Seoul, South Korea.

Korea

Kbi Dongkook Ind.Co.,Ltd.

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

001620.KS reported revenue of KRW 668 400mn in the last 12 months, up 3% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 253% from FY23 to KRW 229.40.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 2ppts and its growth accelerated by 5ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported modest EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 13.8% in the last 12 months, up from 9.0% in FY23. 

Historically, 001620.KS has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 3.8%, a growth from 1.1% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 8.5%, above the peers. 

Kbi Dongkook Ind.Co.,Ltd. reported a return on equity (RoE) of 12.3% in the last 12 months, up from 4.0% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.7% in the last 12 months, an increase from 1.3% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.0 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

001620.KS has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and is unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, and poor working capital management. 

In highly turbulent market conditions, 001620.KS is highly volatile. In other words, the stock will fall substantially more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be significant. 

In normal market circumstances, 001620.KS is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. 

Considering past and projected metrics, the stock is distinctly 'cheaper' than its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITD. 

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Kbi Dongkook Ind.Co.,Ltd.

₩ 522

4

Kbi Dongkook Ind.Co.,Ltd.

₩ 522

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

₩ 522

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