Hankook Tire & Technology Co Ltd

Hankook Tire maintains a conservative capital structure with a debt-to-equity ratio of 0.53 and a current ratio of 1.71, indicating adequate short-term liquidity coverage. The company holds cash and equivalents of 2.57 trillion KRW against long-term debt of 6.41 trillion KRW, resulting in a net debt position. Despite this, the firm generates robust operating cash flow of 1.61 trillion KRW, which partially offsets significant capital expenditures of 2.31 trillion KRW, leading to negative free cash flow of -288 billion KRW. The balance sheet shows total assets of 26.65 trillion KRW and total equity of 12.11 trillion KRW, providing a stable foundation for operations.

Profitability metrics reflect a return on equity of 10.36% and a return on assets of 4.7%, driven by an operating income of 1.58 trillion KRW on revenues of 21.20 trillion KRW. The gross profit stands at 4.66 trillion KRW, suggesting a gross margin of approximately 22%. The company trades at a price-to-earnings ratio of 6.8 and a price-to-book ratio of 0.7, indicating a valuation discount relative to book value. The EV/EBITDA multiple is 7.11, and EV/Revenue is 0.58, reflecting a low multiple valuation typical of mature cyclical industries.

Revenue concentration is not explicitly detailed in segment or geographic breakdowns within the provided data, but the company’s activity is classified under Automobiles, implying dependence on the broader automotive manufacturing cycle. The lack of specific segment data prevents a detailed analysis of revenue mix, but the primary activity remains tire and rubber product manufacturing.

Growth trajectory analysis is limited by the absence of historical period data in the input. However, the current revenue base of 21.20 trillion KRW and net income of 1.09 trillion KRW provide a snapshot of current scale. The negative free cash flow suggests ongoing investment in capacity or technology, which may support future growth but pressures near-term cash generation.

Risk assessment indicates medium liquidity risk and low dilution risk. A key flag notes that net cash is negative after subtracting total debt, highlighting leverage exposure. The company’s reliance on debt financing is evident from the long-term debt figure, which exceeds cash holdings. However, the strong operating cash flow provides a buffer against liquidity constraints.

Recent IR observations show strong analyst sentiment, with a mean recommendation of 1.70 (close to strong buy) and a mean price target of 78,125 KRW, implying upside from the current market price of 69,900 KRW. The high price target is 100,000 KRW, while the low is 40,000 KRW, indicating a wide range of expectations. The consensus is predominantly positive, with 8 strong buys and 10 buys versus only 2 holds.

Operating income surged to 1.5 trillion KRW in FY2025, reflecting strong profitability growth.

Net income reached 1.1 trillion KRW in FY2025, demonstrating significant bottom-line expansion.

Analysts project 9% upside to a mean price target of 78,125 KRW.

Free cash flow declined sharply to 443 billion KRW in FY2025 from 707 billion KRW prior.

Long-term debt increased to 1.8 trillion KRW in FY2025, reversing previous deleveraging trends.

Debt-to-equity ratio of 0.53 is higher than the 0.41 cohort median.

The company faces medium liquidity risk and medium credit risk according to risk flags.

The lowest analyst price target of 40,000 KRW implies significant downside potential.

Revenue KRW 5.31T, +7,1% YoY; Operating income +44,1% YoY.

• ▍Revenue KRW 5.31T, +7,1% YoY
• ▍Operating income +44,1% YoY
• ▍Net income +8,3% YoY
• ▍Free cash flow +85,3% YoY
• ▍Net margin 6.5%

Revenue KRW 5.46T, +115,5% YoY; Operating income +44,6% YoY.

• ▍Revenue KRW 5.46T, +115,5% YoY
• ▍Operating income +44,6% YoY
• ▍Net income +234,9% YoY
• ▍Free cash flow +4,9% YoY
• ▍Net margin 3.6%

Revenue KRW 5.41T, +122,3% YoY; Operating income +24,1% YoY.

• ▍Revenue KRW 5.41T, +122,3% YoY
• ▍Operating income +24,1% YoY
• ▍Net income +2,0% YoY
• ▍Free cash flow −87,2% YoY
• ▍Net margin 7.2%

Revenue KRW 4.96T; Operating income KRW 350.34B.

• ▍Revenue KRW 4.96T
• ▍Operating income KRW 350.34B
• ▍Net margin 6.4%

Revenue KRW 2.53T; Operating income KRW 209.36B.

• ▍Revenue KRW 2.53T
• ▍Operating income KRW 209.36B
• ▍Net margin 2.3%

Revenue KRW 2.44T; Operating income KRW 468.92B.

• ▍Revenue KRW 2.44T
• ▍Operating income KRW 468.92B
• ▍Net margin 15.7%

Revenue KRW 2.32T; Operating income KRW 419.15B.

• ▍Revenue KRW 2.32T
• ▍Operating income KRW 419.15B
• ▍Net margin 13.7%

Revenue KRW 9.41T, +5,3% YoY; Operating income +22,2% YoY.

• ▍Revenue KRW 9.41T, +5,3% YoY
• ▍Operating income +22,2% YoY
• ▍Net income +54,8% YoY
• ▍Free cash flow −37,3% YoY
• ▍Net margin 11.8%

Revenue KRW 8.94T, +6,5% YoY; Operating income +76,2% YoY.

• ▍Revenue KRW 8.94T, +6,5% YoY
• ▍Operating income +76,2% YoY
• ▍Net income +4,3% YoY
• ▍Free cash flow −16,6% YoY
• ▍Net margin 8.1%

Revenue KRW 8.39T, +17,6% YoY; Operating income +10,8% YoY.

• ▍Revenue KRW 8.39T, +17,6% YoY
• ▍Operating income +10,8% YoY
• ▍Net income +17,4% YoY
• ▍Free cash flow +10,4% YoY
• ▍Net margin 8.2%

Revenue KRW 7.14T; Operating income KRW 627.37B.

• ▍Revenue KRW 7.14T
• ▍Operating income KRW 627.37B
• ▍Net margin 8.2%