2Q26: Gradual Recovery Ahead

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M

Update

August 11, 2026 11:31 AM GMT

Morgan Stanley & Co. International plc, Seoul Branch+

TK Corp | Asia Pacific

Young Suk Shin

Equity Analyst

2Q26: Gradual Recovery Ahead

Chan Park

Equity Analyst

What’s Changed

TK Corp (023160.KQ)

From

To

Price Target

W48,000

W26,000

AlphaSignals Earnings Reaction

Strengthens our thesis

Meaningful shortfall

Meaningful revision lower

TK Corp (023160.KQ, 023160 KS)

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

S. Korea Energy & Materials | S. Korea

Source: Company data, Morgan Stanley Research

While solid US LNG demand remains supportive, the prolonged

order gap in the Middle East, TK's core market, remains the key

drag. Until we see clear signs of an order and volume recovery,

earnings visibility will likely remain limited, leaving risk/reward

fairly balanced at current levels.

Key Takeaways

TK posted OP of W7bn (-23% QoQ, -6% YoY), below MSe and consensus, due to

a weaker product mix and a W17bn inventory and freight cost burden.

N. America rev +12% QoQ on solid LNG demand, but weakness in Middle East

weighed on overall revenue and mix of higher-margin stainless products.

Mgmt sees downside risk to 2026 fitting order/revenue guidance of W320bn/

W300bn as Middle East recovery remains slower than expected.

2Q26 results and 2H26 outlook: TK reported 2Q26 OP of W7bn (-23% QoQ, -6%

YoY), well below our W13-14bn estimate and consensus, as prolonged weakness in

the Middle East led to an unfavorable product mix, alongside W10bn of inventory

write-downs and W7bn of incremental freight costs. North America remained the

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 11, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (bn)

EV, curr (bn)

Avg daily trading value (bn)

Equal-weight

In-Line

W26,000

7

W24,400

W51,300-19,420

26

W631

W555

W10

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

EPS (W)**

Prior EPS (W)**

EPS (W)§

Revenue, net (W bn)

EBITDA (W bn)

ModelWare net inc (W

bn)

P/E

P/BV

RNOA (%)

ROE (%)

EV/EBITDA

Div yld (%)

FCF yld ratio (%)**

Leverage (EOP) (%)

2,410

…