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I read Korean regulatory filings (DART) every day, and one form keeps producing numbers that look better than they are. Yesterday's post here was about book values. This one is about a disclosure rule the US doesn't have.
When a Korean listed company signs a supply or sales contract above a fixed share of last year's revenue, it has to file the contract within a day, with the counterparty, the amount, the dates, and one line the SEC never asks for: the contract's value as a percentage of the company's revenue. The cut-off depends on the board and the company's size, but the shape is always the same. You get a filing that says "this contract is 21.6% of what we sold last year."
That's useful. It's also where it gets odd.
This week I went through ten of these filings. Two examples:
- SK Oceanplant, a shipbuilder, filed a ₩592.9bn contract for six crude tankers. 61.41% of 2025 revenue. The buyer's name is sealed until February 2027 under a confidentiality provision. That part is also normal in Korea.
- Doosan Fuel Cell filed a ₩501.4bn contract to supply fuel cells for US data centers. 110.25% of 2025 revenue. The customer is its own affiliate, and the filing says so.
Now the odd part. When a company amends an old contract, the filing keeps the revenue base of the original filing. So:
- IS Dongseo, a construction company, raised a redevelopment contract to ₩480.3bn this week. The filing says 49.82% of revenue. The revenue year is 2019, because the original contract was filed in 2020.
- Kumho E&C raised its share of a Seoul subway extension to ₩167.9bn. 9.18% of revenue. The base year is 2020.
- Semifive, a chip design house, raised an AI chip contract ceiling to ₩18.2bn. 16.31% of revenue, against fiscal 2024.
None of these are errors. They follow the form. But a US reader who takes "49.82% of revenue" at face value is comparing a 2026 contract with a company that was a different size seven years ago.
Two more things I'd flag for anyone reading these:
1. The percentage uses the parent's consolidated revenue unless the filing is about a subsidiary, in which case it's the subsidiary's revenue. SNT Holdings filed a ₩128.2bn power-plant order this week at 21.14% of revenue. That's the subsidiary SNT Energy's revenue, not the parent's.
2. Affiliate orders are filed the same way as outside orders. Hanwha Engine's ₩128.9bn engine order at 9.4% of revenue is from Hanwha Ocean, its sister company.
Figures are from the DART filings; the Korean originals govern. No position in any of the names above.
What I'd like to know from people who read other markets: does any other exchange make companies state a contract's size relative to sales at filing time? The US 8-K "material definitive agreement" item leaves materiality to the company and has no number in the trigger.
(Written with AI help. I pulled the figures from the filings myself and checked them; the drafting used an AI model.)