Hansol Chemical Co Ltd

Hansol Chemical maintains a relatively strong liquidity position, with a current ratio of 1.45, indicating the company can cover its short-term liabilities with its short-term assets. However, the company's net cash position is negative after subtracting total debt, which raises some liquidity concerns. The company's liquidity risk is assessed as medium, suggesting that while it is not in immediate distress, it may face challenges in maintaining liquidity under stress scenarios.

In terms of profitability, Hansol Chemical's return on equity (ROE) of 3.72% and return on assets (ROA) of 2.23% are below the typical thresholds for high-performing specialty chemical firms. These metrics suggest that the company is generating modest returns relative to its equity and asset base. The company's gross profit margin of 26.8% and operating margin of 17.2% are in line with industry norms, but the net profit margin of 16.0% indicates that the company is effectively managing its operating and non-operating expenses.

Geographically, Hansol Chemical's revenue is concentrated in South Korea, with a significant portion of its business derived from domestic operations. The company's exposure to a single geographic market increases its vulnerability to local economic and regulatory changes. The company operates in a few key segments, with the majority of its revenue coming from the production and sale of specialty chemicals. There is no significant diversification across product lines or customer bases, which could limit its ability to adapt to market shifts.

Looking ahead, Hansol Chemical is expected to maintain a stable growth trajectory, with revenue and earnings projected to remain relatively flat in the next fiscal year. The company's capital expenditure of -25.4 billion KRW suggests a reduction in investment in new projects or facilities, which may indicate a focus on cost optimization rather than expansion. The company's free cash flow of 18.7 billion KRW provides some flexibility for dividends or debt reduction, but the lack of significant capital spending may limit long-term growth potential.

The company's risk profile is characterized by moderate liquidity risk and low dilution risk. The debt-to-equity ratio of 0.37 indicates a conservative capital structure, with a manageable level of leverage. However, the negative net cash position after subtracting total debt suggests that the company may need to access external financing in the future, which could increase its exposure to interest rate and credit risks. The company's dilution risk is assessed as low, with no significant dilution sources identified in recent filings or disclosures.

Recent events and disclosures indicate that Hansol Chemical has not experienced any major operational or financial disruptions in the near term. The company's recent financial performance has been stable, with consistent revenue and profit figures. Analysts have provided a range of price targets, with a mean of 344,687.50 KRW and a median of 372,500.00 KRW, suggesting a generally positive outlook among market participants. The company has not issued any new shares recently, and there are no indications of upcoming equity offerings or share buybacks.

Free cash flow is projected to surge 131.0% year-over-year to 95.1 billion KRW in FY2026.

Net income is forecast to grow 20.1% year-over-year to 147.3 billion KRW in FY2026.

The company faces high credit risk, signaling potential difficulties in meeting financial obligations or debt servicing.

Return on equity of 3.7% trails the 3.9% median for the specialty chemicals peer group.

Debt-to-equity ratio of 0.37 is higher than the 0.23 median, indicating elevated leverage relative to peers.

Medium liquidity risk suggests potential challenges in converting assets to cash to meet short-term obligations.

Revenue CAGR of 3.6% over four years indicates modest top-line growth compared to profit expansion.

Revenue KRW 222.44B, +17,8% YoY; Operating income −23,2% YoY.

• ▍Revenue KRW 222.44B, +17,8% YoY
• ▍Operating income −23,2% YoY
• ▍Net income −28,9% YoY
• ▍Free cash flow −49,4% YoY
• ▍Net margin 7.4%

Revenue KRW 230.04B, +20,7% YoY; Operating income +32,0% YoY.

• ▍Revenue KRW 230.04B, +20,7% YoY
• ▍Operating income +32,0% YoY
• ▍Net income +45,0% YoY
• ▍Free cash flow +123,0% YoY
• ▍Net margin 19.7%

Revenue KRW 221.92B, +11,5% YoY; Operating income +39,9% YoY.

• ▍Revenue KRW 221.92B, +11,5% YoY
• ▍Operating income +39,9% YoY
• ▍Net income +34,7% YoY
• ▍Free cash flow +730,9% YoY
• ▍Net margin 22.1%

Revenue KRW 209.57B, +5,9% YoY; Operating income +22,6% YoY.

• ▍Revenue KRW 209.57B, +5,9% YoY
• ▍Operating income +22,6% YoY
• ▍Net income +14,6% YoY
• ▍Free cash flow +34,8% YoY
• ▍Net margin 17.4%

Revenue KRW 188.80B; Operating income KRW 20.11B.

• ▍Revenue KRW 188.80B
• ▍Operating income KRW 20.11B
• ▍Net margin 12.3%

Revenue KRW 190.61B; Operating income KRW 36.99B.

• ▍Revenue KRW 190.61B
• ▍Operating income KRW 36.99B
• ▍Net margin 16.4%

Revenue KRW 199.08B; Operating income KRW 35.12B.

• ▍Revenue KRW 199.08B
• ▍Operating income KRW 35.12B
• ▍Net margin 18.3%

Revenue KRW 197.87B; Operating income KRW 34.04B.

• ▍Revenue KRW 197.87B
• ▍Operating income KRW 34.04B
• ▍Net margin 16.0%

Revenue KRW 883.97B, +13,9% YoY; Operating income +22,9% YoY.

• ▍Revenue KRW 883.97B, +13,9% YoY
• ▍Operating income +22,9% YoY
• ▍Net income +20,1% YoY
• ▍Free cash flow +131,0% YoY
• ▍Net margin 16.7%

Revenue KRW 776.36B, +0,6% YoY; Operating income +1,7% YoY.

• ▍Revenue KRW 776.36B, +0,6% YoY
• ▍Operating income +1,7% YoY
• ▍Net income +16,4% YoY
• ▍Free cash flow +282,9% YoY
• ▍Net margin 15.8%

Revenue KRW 771.65B, −12,8% YoY; Operating income −32,4% YoY.

• ▍Revenue KRW 771.65B, −12,8% YoY
• ▍Operating income −32,4% YoY
• ▍Net income −32,1% YoY
• ▍Free cash flow −128,5% YoY
• ▍Net margin 13.7%

Revenue KRW 885.47B, +15,2% YoY; Operating income −5,2% YoY.

• ▍Revenue KRW 885.47B, +15,2% YoY
• ▍Operating income −5,2% YoY
• ▍Net income +4,6% YoY
• ▍Free cash flow +36,9% YoY
• ▍Net margin 17.5%