Korea Small Cap Gem #48: Daewon Sanup
Daewon Sanup’s net cash as percentage of market cap is 171%. This is one of the highest net cash/market cap ratios in the Korean stock market.
Daewon Sanup is one of the largest Korean automobile seat manufacturers. It is also one of the beneficiaries of the reduction in US auto tariffs to 15% (from 25% previously).
The company is trading at dirt cheap valuations. It is trading at P/E of 2.3x and P/B of 0.4x based on LTM financials.
Company Background
Established in 1968, Daewon San Up (005710 KS) is one of the largest automobile seat manufacturers in Korea. The company’s core products include automotive seats, seat components, and vehicle interior solutions. The company’s core business is design, manufacture and sale of automotive seats and seat components (including sponge/urethane), and it supplies major Korean auto companies notably Kia Corp and Hyundai Motors, while operating manufacturing and sales operations in several locations overseas including Vietnam, China, and Russia.
Major cost drivers include raw materials (urethane chemicals, textiles, metal frames), labour, energy and logistics. Margins for seat manufacturers such as Daewon Sanup are typically modest and sensitive to commodity prices (polyurethane, petrochemical derivatives) and labour costs.
Source: Daewon Sanup
