Oriental Precision & Engineering Co Ltd

Oriental Precision & Engineering Co Ltd maintains a debt-to-equity ratio of 0.55, indicating a moderate reliance on debt financing, while its liquidity position is characterized as medium. The company's current ratio of 0.8 suggests that its current liabilities exceed its current assets, which could signal potential short-term liquidity challenges. The company's free cash flow of 7,008,205,130 KRW and operating cash flow of 9,333,366,650 KRW demonstrate strong cash generation from operations, supporting its capital expenditures and debt servicing.

In terms of profitability, the company's return on equity of 7.01% and return on assets of 3.21% indicate that it is generating returns above the industry median for ROE but below the median for ROA. This suggests that the company is effectively utilizing equity capital but may not be as efficient in utilizing total assets. The gross profit margin of 21.2% and operating margin of 12.5% are in line with industry norms, reflecting the company's ability to maintain profitability in a competitive market.

The company's revenue is primarily concentrated in the shipbuilding segment, with a significant portion derived from domestic markets. While the company has a presence in international markets, its revenue is heavily influenced by domestic demand and government contracts. This concentration could expose the company to regional economic fluctuations and regulatory changes.

Looking ahead, the company is projected to experience a growth in revenue, driven by increased demand for shipbuilding and marine equipment. The outlook for the current fiscal year indicates a positive trajectory, with the next fiscal year expected to show continued growth. This growth is supported by the company's strong cash flow and strategic focus on expanding its market share. The company's capital expenditures are expected to remain stable, reflecting a balanced approach to investment and cost management.

The company faces several risk factors, including liquidity constraints due to its current ratio of 0.8 and the potential for dilution, although the risk of dilution is currently assessed as low. The company's net cash position is negative after accounting for total debt, which could impact its ability to meet short-term obligations. Additionally, the company's exposure to geopolitical risks, such as trade tensions and regulatory changes, could affect its operations and profitability.

Recent events, including analyst estimates and recommendations, indicate a strong buy sentiment with a mean price target of 11,500 KRW. The company has received one strong-buy recommendation, with no buy or hold recommendations, suggesting a positive outlook from the investment community. These recommendations are based on the company's financial performance and growth prospects.

Analysts project 66.4% upside to a mean price target of 11,500 KRW, signaling strong buy conviction.

Cash conversion ratio of 1.4 surpasses the 1.13 cohort median, reflecting efficient working capital management.

Long-term debt decreased to 40.0 billion KRW in FY2026, reducing leverage compared to prior periods.

High credit risk flag suggests potential solvency concerns or deteriorating financial health for the issuer.

Debt-to-equity ratio of 0.55 is well above the 0.31 shipbuilding cohort median, indicating higher leverage.

Medium liquidity risk flag indicates potential challenges in meeting short-term financial obligations.

Revenue KRW 56.45B, +10,6% YoY; Operating income −2,6% YoY.

• ▍Revenue KRW 56.45B, +10,6% YoY
• ▍Operating income −2,6% YoY
• ▍Net income −10,9% YoY
• ▍Free cash flow −14,0% YoY
• ▍Net margin 10.9%

Revenue KRW 51.86B, −8,7% YoY; Operating income −15,8% YoY.

• ▍Revenue KRW 51.86B, −8,7% YoY
• ▍Operating income −15,8% YoY
• ▍Net income −69,0% YoY
• ▍Free cash flow −195,8% YoY
• ▍Net margin 4.3%

Revenue KRW 52.82B, +1,2% YoY; Operating income −33,9% YoY.

• ▍Revenue KRW 52.82B, +1,2% YoY
• ▍Operating income −33,9% YoY
• ▍Net income −26,8% YoY
• ▍Free cash flow −28,1% YoY
• ▍Net margin 11.1%

Revenue KRW 51.54B, −6,6% YoY; Operating income +6,2% YoY.

• ▍Revenue KRW 51.54B, −6,6% YoY
• ▍Operating income +6,2% YoY
• ▍Net income −38,6% YoY
• ▍Free cash flow −80,5% YoY
• ▍Net margin 8.0%

Revenue KRW 51.04B; Operating income KRW 8.20B.

• ▍Revenue KRW 51.04B
• ▍Operating income KRW 8.20B
• ▍Net margin 13.5%

Revenue KRW 56.81B; Operating income KRW 4.08B.

• ▍Revenue KRW 56.81B
• ▍Operating income KRW 4.08B
• ▍Net margin 12.8%

Revenue KRW 52.22B; Operating income KRW 9.70B.

• ▍Revenue KRW 52.22B
• ▍Operating income KRW 9.70B
• ▍Net margin 15.4%

Revenue KRW 55.17B; Operating income KRW 6.89B.

• ▍Revenue KRW 55.17B
• ▍Operating income KRW 6.89B
• ▍Net margin 12.1%

Revenue KRW 207.26B, −0,0% YoY; Operating income −2,4% YoY.

• ▍Revenue KRW 207.26B, −0,0% YoY
• ▍Operating income −2,4% YoY
• ▍Net income −26,5% YoY
• ▍Free cash flow −63,0% YoY
• ▍Net margin 9.2%

Revenue KRW 207.31B, +31,6% YoY; Operating income +94,8% YoY.

• ▍Revenue KRW 207.31B, +31,6% YoY
• ▍Operating income +94,8% YoY
• ▍Net income +192,4% YoY
• ▍Free cash flow +191,8% YoY
• ▍Net margin 12.6%