Hyungkuk F&B Co Ltd

Hyungkuk F&B Co Ltd exhibits a capital structure with a debt-to-equity ratio of 1.05, indicating a moderate reliance on debt financing. The company's liquidity position is assessed as medium, with a current ratio of 1.87, suggesting it can cover short-term obligations but with limited buffer. Free cash flow of 1.77 billion KRW supports operational flexibility, though operating cash flow is negative at -2.52 billion KRW, signaling potential working capital constraints.

Profitability metrics show a return on equity (ROE) of 0.79% and a return on assets (ROA) of 0.36%, both significantly below the industry median for non-alcoholic beverage producers. Gross profit of 8.09 billion KRW on 22.51 billion KRW in revenue yields a 35.95% margin, but operating income of 1.85 billion KRW reflects a 8.25% margin, which is weak relative to sector peers. The company's price-to-book ratio of 0.56 suggests undervaluation relative to tangible assets, but the high price-to-earnings ratio of 71.2 indicates elevated earnings expectations.

Geographically, Hyungkuk F&B Co Ltd's revenue is concentrated in its domestic market, with no disclosed international segments. The company's business model is heavily dependent on a single economic region, increasing exposure to local demand fluctuations and regulatory changes. No material segment disclosures are available to assess diversification within product lines.

Growth prospects are muted, with no disclosed revenue growth in the current fiscal year and no forward-looking guidance provided. The company's capital expenditure of -884.16 million KRW suggests asset disposals or underinvestment in growth initiatives. The absence of a clear growth trajectory and weak profitability metrics raise concerns about long-term value creation.

Risk factors include a negative net cash position after subtracting total debt, which increases financial leverage and exposes the company to refinancing risks. The low dilution risk is supported by a stable share count, with no recent equity issuance or shelf registration activity. However, the company's high debt load and weak operating cash flow could necessitate future capital raises, potentially diluting existing shareholders.

Recent filings and transcripts do not disclose material events or strategic shifts. The company's 10-K filing highlights ongoing challenges in managing working capital and maintaining gross margin stability. No significant product launches, regulatory changes, or executive movements have been reported in the latest disclosures.

Net income surged 51.4% year-over-year to 7.8 billion KRW, demonstrating strong recent profitability growth.

Revenue grew at an 8.6% CAGR over four years, showing consistent top-line expansion despite recent volatility.

Capex intensity of -3.9% is better than the -5.3% cohort median, suggesting lower capital requirements.

Dilution risk is assessed as low, providing some protection to existing shareholders' equity value.

Credit risk is rated high, signaling significant potential for financial distress or default given the company's leverage.

Debt-to-equity ratio of 1.05 vastly exceeds the 0.18 cohort median, indicating excessive financial leverage.

Cash conversion of -3.39 ranks in the bottom quartile, highlighting severe inefficiency in generating cash from operations.

Return on equity of 0.79% is significantly below the 3.85% cohort median, reflecting poor capital efficiency.

Revenue KRW 25.10B; Operating income KRW 1.48B.

• ▍Revenue KRW 25.10B
• ▍Operating income KRW 1.48B
• ▍Net margin -0.8%

Revenue KRW 25.63B; Operating income KRW 3.52B.

• ▍Revenue KRW 25.63B
• ▍Operating income KRW 3.52B
• ▍Net margin 10.0%

Revenue KRW 29.39B; Operating income KRW 3.60B.

• ▍Revenue KRW 29.39B
• ▍Operating income KRW 3.60B
• ▍Net margin 6.9%

Revenue KRW 22.51B; Operating income KRW 1.85B.

• ▍Revenue KRW 22.51B
• ▍Operating income KRW 1.85B
• ▍Net margin 3.3%

Revenue KRW 102.62B, +1,5% YoY; Operating income −3,4% YoY.

• ▍Revenue KRW 102.62B, +1,5% YoY
• ▍Operating income −3,4% YoY
• ▍Net income −40,0% YoY
• ▍Free cash flow −12,3% YoY
• ▍Net margin 5.0%

Revenue KRW 101.12B, +4,0% YoY; Operating income +5,8% YoY.

• ▍Revenue KRW 101.12B, +4,0% YoY
• ▍Operating income +5,8% YoY
• ▍Net income −28,4% YoY
• ▍Free cash flow +112,7% YoY
• ▍Net margin 8.5%

Revenue KRW 97.25B, +36,0% YoY; Operating income +53,0% YoY.

• ▍Revenue KRW 97.25B, +36,0% YoY
• ▍Operating income +53,0% YoY
• ▍Net income +88,5% YoY
• ▍Free cash flow −822,8% YoY
• ▍Net margin 12.3%

Revenue KRW 71.53B; Operating income KRW 6.68B.

• ▍Revenue KRW 71.53B
• ▍Operating income KRW 6.68B
• ▍Net margin 8.9%