123890KRXThe short version
Korea Asset In Trust Co., Ltd.
Korea Asset In Trust develops apartment projects on land it does not own, charging a percentage of pre-sale proceeds — and, in its highest-fee product, lending the construction cost into the trust accounts it manages.
Between April and August 2026 the shares closed as high as ₩2,765 and as low as ₩2,065, finishing at ₩2,325 on 7 August — about a quarter of reported book value.
Mkt cap $202.0MP/E FY26E 4.8×
$1.65
Close, 7 August 2026
$141.0m
FY2025 revenue
$525.0m
Advanced into its own trust accounts
8.8%
Share of sector revenue, from 19.5% in 2017
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Snapshot
Korea Asset In Trust Co., Ltd. in numbers
Price
$1.65as of 2026-08-07
Mkt cap
$202.0M
| Year to Dec (USD) | 2023 | 2024 | 2025 | 2026E |
|---|---|---|---|---|
| Sales | 183.9M | 160.8M | 145.0M | 147.7M |
| EBIT | 82.9M | 36.8M | 24.3M | – |
| EBIT margin | 45.0% | 22.9% | 16.8% | – |
| EPS | 0.75 | 0.22 | 0.29 | 0.34 |
| P/E | 2.2× | 7.6× | 5.8× | 4.8× |
| FCF yield | −86.8% | −114.5% | 71.4% | – |
Consensus: Yahoo Finance analyst estimatesDerived from run data; ratios use the latest price.
IThe business
The product
A licensed trustee paid a percentage of apartment pre-sale proceeds on land it does not own.
Posted fee rates by trust product
| Product | Rate | Charged on |
|---|---|---|
| Borrowing-type land trust | 3.5% | Pre-sale proceeds |
| Trust-format redevelopment | 2.5% | Pre-sale proceeds |
| Completion-guarantee land trust | 1.5% | Pre-sale proceeds |
| Management-type land trust | 0.5% | Pre-sale proceeds |
| Collateral trust | 0.2% | Secured limit |
FY2025 rate card. A seventeen-fold spread between the top and bottom product means the mix of mandates matters more than the count.
- The mechanism. A landowner or an owners' union transfers legal title; the company arranges the permits, appoints the contractor, runs the pre-sale, collects the money and hands back the surplus.
- The expensive product lends too. In a borrowing-type land trust the trustee funds the construction cost out of its own balance sheet, which is why it is paid 3.5% rather than 0.5%.
- Revenue is amortisation. A land-trust fee is spread evenly across a three-to-four-year trust period, so reported fees are contracts signed years earlier — and the base only arrives if the units sell.
The revenue engine
Interest from lending into its own trust accounts has overtaken the fees for managing them.
Fee income and interest income ($m)
Consolidated. The lines crossed in FY2024; group revenue fell only 3.9% across the four years, but the composition moved much further.
- Fees halved. Fee and commission income fell 47%, from $100.4m to $43.6m — 56% of revenue in FY2021 against 31% in FY2025 — while interest income rose 77% to $76.1m.
- The assets stayed. Land-trust principal was $7.32bn at end-FY2025, yet land-trust fee income divided by it fell from 0.83% to 0.39%: the fee base is pre-sale proceeds, and pre-sales stalled.
- The crossover, stated plainly. In FY2025 the company earned $35.5m of interest lending into its own trust accounts against $28.5m of land-trust fees for managing them.
Where the profit sits
Two-thirds of FY2025 operating profit came from the finance subsidiary, not the trust licence.
FY2025 operating income by segment ($m)
Korea Asset Capital$16.1M68%
Trust company$6.2M26%
Other and eliminations$1.3M6%
Group operating income of $23.6m. The trust company's margin was 6.2%; the subsidiary's was 41.1%.
- The trust company runs at break-even. It turned $100.9m of FY2025 revenue into $6.2m of operating income; in the March 2026 quarter, on a separate basis, $36.5m of revenue produced $66,000.
- The subsidiary does the earning. Korea Asset Capital, the wholly-owned specialist lender, turned $39.1m of revenue into $16.1m, on $474.7m of assets and $319.8m of its own equity.
- Share of the licensed field. Among the fourteen trust companies the regulator licenses, its share of sector operating revenue fell from 19.5% in 2017 to 8.8% in 2025, the lowest in the series.
IIThe record
The record
Operating profit went from $116.1m in 2022 to $23.6m in 2025, both engines failing at once.
Operating profit by source ($m)
Fee franchise = fee income less fee, selling and administrative expense. Lending spread = interest income less interest expense and credit-loss provisions.
- Operating leverage in reverse. Selling and administrative expense was $36.5m in FY2021 and $29.3m in FY2025: a headcount that underwrites and supervises projects does not scale down with the fee.
- Provisions ate the spread. Credit-loss provisions of $31.0m, $52.3m and $45.5m across FY2023 to FY2025 consumed most of the interest the loan book produced.
- FY2025's profit rise is not operating. Net income rose 32% to $34.1m on $22.5m of non-operating income, $18.4m of it a litigation award — 78% of operating income, with no similar claims disclosed.
The statements
Cash flow tracks the loan book, not the income statement: −$221.5m in FY2024, +$140.3m in FY2025.
Operating cash flow and net income ($m)
Consolidated. For a lender this is the expected shape — but it is not the shape of the fee business the company describes itself as.
- The swing is the book, not the business. Operating cash flow was minus $189.9m in FY2023 and minus $221.5m in FY2024 as advances went out, then plus $140.3m in FY2025 as recoveries exceeded them.
- Borrowed to fund it. Consolidated borrowings went from $254.1m at end-2023 to $419.3m at end-2024 and $399.7m at end-2025, and equity fell from 81.2% of the parent's average balance sheet to 64.4%.
- What the regulator sees. Of $995.0m of assets subject to supervisory classification at end-FY2025, $488.5m — 49% — was substandard or below, against 31% two years earlier.
IIIThe story now
What is happening now
The advance book is finally shrinking, and the reserve held against what is left keeps rising.
Trust-account loans: gross balance and allowance rate
| Period | Gross ($m) | Allowance rate |
|---|---|---|
| FY2021 | 219.7 | 14.3% |
| FY2022 | 177.0 | 16.4% |
| FY2023 | 361.0 | 11.2% |
| FY2024 | 557.0 | 13.2% |
| FY2025 | 553.8 | 20.1% |
| 1Q26 | 525.0 | 25.3% |
Coverage was thinnest exactly while the book was being built.
- What the book is. Money the trustee advanced into trust accounts it manages, to fund construction on units that had not sold — the loan inside the 3.5% product from the first card.
- The build. Between the start of FY2023 and the end of FY2024 the group advanced $656.1m into trust accounts and took $221.0m back, lifting the gross balance from $177.0m to $557.0m.
- The turn. In the March 2026 quarter it advanced $49.9m and recovered $94.8m — a net $44.9m repayment — while adding $18.2m to the allowance.
The carry
In FY2025 the advance book's interest did not cover the reserve added against it.
Operating income and interest expense ($m)
Interest is charged inside operating expenses, so operating income is struck after it. The two lines crossed in FY2025.
- In FY2025 Korea Asset In Trust's trust-account loan book produced $35.5m of interest income and absorbed a $36.8m increase in its own allowance, while the group's interest expense for the year was $27.4m against $23.6m of operating income — a funding bill incurred on the $175.5m of borrowings the parent raised in 2024, the year the same advance book grew from $361.1m to $556.9m and parent cash fell to $1.6m.
- What it costs a holder. Netted with the group interest bill, the FY2025 combination is $28.8m — $0.24 a share, 3.9% of the $6.25 book value per share and the same 3.9% of consolidated equity.
- The strongest facts against it. At group level the sign flips: the capital arm's $34.0m of loan interest against a $5.7m allowance build takes lending revenue to $69.5m against a combined $42.5m build. Write-offs were $0.2m against a $44.0m charge, and the March quarter returned $44.9m net.
The pivot
The order book rebuilding the fee line is priced at roughly a third of the old rate.
Contracted fees as a share of the projects' total cost
Borrowing-type land trust contracts by signing vintage. The step down came in one move, between the 2024 and 2025 vintages.
- The repricing. The fee franchise earned $63.8m of operating profit in FY2021 and $13.0m in FY2025; the 2025 vintage rebuilding it carried $41m of fees on $1,299m of project cost, 3.1% against 7.4% a year earlier.
- What it scales to. Intake feeding 2026 to 2028 is 43% below that feeding 2022 to 2024, putting the fee line near $44m a year — where FY2025 sits — against $83m averaged over 2022 to 2024.
- The strongest facts against it. Project cost is not the fee base; the obligation book shrank rather than grew, from $399.1m drawn on four HUG-route sites at end-2022 to $39.9m at 31 March 2026, so the 100% redevelopment share is residual; and the largest named schemes are in Seoul and Gyeonggi.
Korea Asset In Trust's fee franchise contributed $63.8m of operating profit in FY2021 and $13.0m in FY2025, and the 2025 order vintage rebuilding it carried $41m of contracted borrowing-type fees against $1,299m of total project cost — 3.1% against 7.4% on the 2024 vintage, because redevelopment is priced at 2.5% of pre-sale proceeds against 3.5% conventional — while at 31 March 2026 the group's entire guarantee and completion-obligation book was four redevelopment sites with $126.5m of limits and $46.5m drawn.
The other side
Almost none of the provisioning has been realised as loss, and the cash has started coming back.
$44.9m
Net recovery from the advance book, 1Q26$94.8m recovered against $49.9m advanced
0.4%
FY2025 write-offs against the credit charge$0.2m written off against $44.0m charged
$22.9m
Credit-loss charge, 1Q263.6 times the year-ago quarter, and above every quarter of 2025
A−
Korea Ratings grade, cut 2 May 2026Outlook first moved to negative in April 2025
The May 2026 rating action post-dates the last filing in the corpus and is sourced from the Korean financial press.
- Provisions have not been tested. Across FY2023 to FY2025 the group charged $122.7m of credit losses against loan receivables and wrote off $13.8m — 11% of what it provided.
- Partly presentation. The IFRS allowance rose from $103.3m to $148.8m in FY2025 while the regulatory reserve fell from $115.5m to $81.1m, so total loss-absorbing provisions rose 3.6%.
- One thing genuinely tightened. Loans assessed individually for impairment rose from $100.3m to $287.6m — the stricter treatment — and the allowance rate on the advance book followed to 25.28%.
IVThe price
The price
Book value per share is up 27% since 2021 and the price down 44%: 0.26 times book.
Share price and book value per share ($)
December closing-price midpoints; 2026 is the 7 August close against 31 March book. The multiple has been lower in every year since 2021.
- The arithmetic. $1.65 on 122,373,926 shares is $202.0m of market value against $764.8m of consolidated equity at 31 March 2026.
- Not company-specific. The only other listed pure-play trust company trades at 0.25 times book after an operating loss of $14.4m in 2025, against this company's $23.6m of operating profit.
- What that says about returns. On a zero-growth identity, 0.26 times book at a 10% cost of equity is a permanent 2.6% return; the five-year adjusted average is about 5.4%.
What it could be worth
A stress well beyond anything recognised still leaves book value near three times the price.
Value per share on disclosed bases ($)
Book value, 31 March 2026
$6.2
After both disclosed stresses
$4.9
5.4% through-cycle return at 10% cost of equity
$3.4
Broker target, September 2025
$2.2
The stresses mark the subsidiary's book at the parent's 25.28% rate and lift the advance-book allowance to 40% — $159.8m together, 20.9% of equity.
- The asset reading. Closing the $562.8m gap between book and market out of the credit books alone takes a cumulative 75.3% loss on $960.1m of gross property-development credit.
- The returns reading. A 5.4% through-cycle return at a 10% cost of equity justifies roughly half the discount on its own, with no asset-quality claim attached; the rest has to be an opinion about recovery.
- What is not stretched. Borrowings were $412.9m against $109.2m of cash and $106.3m of undrawn committed lines, and the net operating capital ratio stood at 364% against a 150% minimum.
What the wait pays
A 6.45% yield paid partly out of paid-in capital, and one broker note from September 2025.
Dividend record
| Year | Per share | Payout | Disclosed yield |
|---|---|---|---|
| FY2023 | $0.17 | 20.8% | 6.8% |
| FY2024 | $0.07 | 32.7% | 3.6% |
| FY2025 | $0.10 | 37.2% | 5.7% |
Paid without a break since 2015. On the 7 August 2026 close of $1.65 the same $0.10 is a 6.45% yield.
- Where the money came from. $41.4m of share premium was moved into distributable retained earnings to fund the FY2025 dividend. $48.9m of that reservoir remains — about four more payments.
- Coverage. One broker still follows the stock — a $2.20 target published on 30 September 2025 and never refreshed, struck at 0.35 times forward book on an implied 5.1% return on equity.
- Alignment. MDM and its principals hold 54.24% of votes and the same share of economics, there is no equity compensation, and no director or bloc member has bought in the open market.
What to watch
A balance sheet at a quarter of its own book, where the advances decide whether that book is real.
- 01The advance book and its allowance rate, each quarter: the March 2026 combination — a $44.9m fall in the gross balance with the rate rising to 25.28% — repeating is the workout converging; the balance turning up again is not.
- 02The HUG-route line in each quarterly contingency note. A drawn balance climbing back through $142m would say the completion obligation is being rebuilt at scale rather than run off.
- 03The FY2026 statement of appropriation, due March 2027: whether the dividend again required a transfer out of the remaining $48.9m of share premium, or whether separate-basis profit covered it.
- 04The $71m secured facility maturing on 3 August 2026 — whether it is replaced, at what rate, and whether the replacement again takes assignment of the trust cost-reimbursement claims.
This distils a guided study built chapter by chapter from the company's filings, its quarterly decks and the sector's regulator-collected data.
Compiled from the full report · 2026-08-10 · For information, not investment advice.