SoluM Co Ltd

SoluM's capital structure is characterized by a debt-to-equity ratio of 0.7, indicating a moderate reliance on debt financing. The company's liquidity position is assessed as medium, with a current ratio of 1.26, suggesting it can cover its short-term obligations but with limited buffer. Despite holding KRW 93.05 billion in cash and equivalents, the company's operating cash flow is negative at KRW -29.76 billion, and free cash flow is also negative at KRW -6.3 billion, signaling potential cash flow constraints.

Profitability metrics show a return on equity (ROE) of 3.57% and a return on assets (ROA) of 1.56%, both below the typical thresholds for high-performing technology firms. The company's gross profit margin is 15.96% (KRW 62.94 billion gross profit on KRW 393.93 billion revenue), and its operating margin is 5.22% (KRW 20.57 billion operating income on KRW 393.93 billion revenue). These figures are below the median for the Electronic Equipment & Parts industry, indicating room for improvement in cost control and operational efficiency.

Geographically, SoluM's revenue is concentrated in a single market, with no disclosed diversification across regions. This lack of geographic diversification increases the company's exposure to regional economic fluctuations and regulatory changes. The company does not report segment-specific revenue, making it difficult to assess the contribution of different product lines or customer bases to overall performance.

The company's growth trajectory is mixed. While revenue for the latest period is KRW 393.93 billion, there is no historical data provided to assess year-over-year growth. Analysts have a cautiously optimistic outlook, with a mean price target of KRW 22,875 and a median of KRW 22,500, suggesting a potential upside from the current market price of KRW 21,500. However, the absence of a clear growth strategy or significant capital expenditure (KRW -49.88 billion) raises questions about the company's ability to sustain long-term growth.

Risk factors include a negative net cash position after subtracting total debt, which could limit the company's flexibility in responding to market opportunities or downturns. The risk of dilution is assessed as low, with no significant changes in shares outstanding between basic and diluted shares. However, the company's high price-to-earnings ratio of 66.19 and price-to-book ratio of 2.36 suggest that the market is valuing the company at a premium relative to its earnings and book value, which could be a concern if earnings do not meet expectations.

Recent events include the publication of the latest financial data, which shows a strong balance sheet with total assets of KRW 997.19 billion and total equity of KRW 434.81 billion. However, the company's negative operating and free cash flows highlight the need for improved cash flow management. No recent filings or transcripts are available to provide additional context on management's strategy or investor relations updates.

Analysts project 39.7% upside to a mean price target of 22,875 KRW, reflecting strong buy consensus.

Operating margin of 5.2% exceeds the 4.1% cohort median, indicating superior operational efficiency relative to peers.

Revenue grew at a 10.2% CAGR over four years, showing consistent top-line expansion despite recent volatility.

Net margin of 3.9% remains above the 3.5% cohort median, preserving profitability despite margin compression trends.

Free cash flow turned negative at -42.6 billion KRW, falling into the bottom quartile of the cohort.

High credit risk flags and a debt-to-equity ratio of 0.7, well above the 0.26 cohort median.

Long-term debt increased to 337.8 billion KRW in FY-1, exacerbating leverage concerns amid falling profitability.

Revenue KRW 478.22B, +20,3% YoY; Operating income +88,8% YoY.

• ▍Revenue KRW 478.22B, +20,3% YoY
• ▍Operating income +88,8% YoY
• ▍Net income +18,6% YoY
• ▍Free cash flow +42,8% YoY
• ▍Net margin 0.8%

Revenue KRW 427.67B, +24,5% YoY; Operating income −407,2% YoY.

• ▍Revenue KRW 427.67B, +24,5% YoY
• ▍Operating income −407,2% YoY
• ▍Net income −10 419,4% YoY
• ▍Free cash flow +65,5% YoY
• ▍Net margin -1.7%

Revenue KRW 472.60B, +0,1% YoY; Operating income −45,3% YoY.

• ▍Revenue KRW 472.60B, +0,1% YoY
• ▍Operating income −45,3% YoY
• ▍Net income −37,4% YoY
• ▍Free cash flow +49,2% YoY
• ▍Net margin 1.6%

Revenue KRW 402.58B, +2,2% YoY; Operating income −40,6% YoY.

• ▍Revenue KRW 402.58B, +2,2% YoY
• ▍Operating income −40,6% YoY
• ▍Net income −35,7% YoY
• ▍Free cash flow +51,6% YoY
• ▍Net margin 2.5%

Revenue KRW 397.39B; Operating income KRW 11.47B.

• ▍Revenue KRW 397.39B
• ▍Operating income KRW 11.47B
• ▍Net margin 0.8%

Revenue KRW 343.46B; Operating income KRW 1.26B.

• ▍Revenue KRW 343.46B
• ▍Operating income KRW 1.26B
• ▍Net margin 0.0%

Revenue KRW 472.21B; Operating income KRW 26.97B.

• ▍Revenue KRW 472.21B
• ▍Operating income KRW 26.97B
• ▍Net margin 2.5%

Revenue KRW 393.93B; Operating income KRW 20.57B.

• ▍Revenue KRW 393.93B
• ▍Operating income KRW 20.57B
• ▍Net margin 3.9%

Revenue KRW 1.70T, +6,6% YoY; Operating income −50,0% YoY.

• ▍Revenue KRW 1.70T, +6,6% YoY
• ▍Operating income −50,0% YoY
• ▍Net income −66,0% YoY
• ▍Free cash flow −0,2% YoY
• ▍Net margin 0.8%

Revenue KRW 1.59T, −18,3% YoY; Operating income −55,3% YoY.

• ▍Revenue KRW 1.59T, −18,3% YoY
• ▍Operating income −55,3% YoY
• ▍Net income −67,2% YoY
• ▍Free cash flow −230,8% YoY
• ▍Net margin 2.5%

Revenue KRW 1.95T, +15,1% YoY; Operating income +108,8% YoY.

• ▍Revenue KRW 1.95T, +15,1% YoY
• ▍Operating income +108,8% YoY
• ▍Net income +154,4% YoY
• ▍Free cash flow −12,0% YoY
• ▍Net margin 6.2%

Revenue KRW 1.69T, +46,9% YoY; Operating income +169,7% YoY.

• ▍Revenue KRW 1.69T, +46,9% YoY
• ▍Operating income +169,7% YoY
• ▍Net income +254,5% YoY
• ▍Free cash flow +302,5% YoY
• ▍Net margin 2.8%