Rifa

Ihwa Industrial, founded in 1950, operates a distribution business for organic and inorganic chemicals, including textile dyestuffs and food additives.

Its main subsidiaries are Sammyeong Trading, Younghwa Enterprise, and Ihwa Trading, with Younghwa Enterprise holding numerous commercial properties in core Seoul metropolitan area locations over a long period.

Revenue is primarily generated from sales of dyestuff products and chemical ('hwaseongpum') products, followed by food additive sales and rental income.

Its affiliate, Ihwa Industrial Gas, supplies industrial gases such as oxygen and nitrogen to a diverse customer base spanning aviation, medical, steel, petrochemical, laser, and basic industries.

This gas unit has obtained GMP certification and a medical gas manufacturing license from the Ministry of Food and Drug Safety, allowing it to manufacture and supply medical-grade gases.

The domestic industrial gas market is dominated by larger players such as Linde Korea, Air Products Korea, Air First, and DIG Airgas, positioning Ihwa Industrial Gas as a relatively smaller participant.

Dyestuff and chemical distribution is a traditional B2B business closely tied to domestic textile manufacturing activity, where stable trading relationships and margin management matter more than growth.

Overall, Ihwa Industrial combines a core chemical distribution business with two secondary income sources—real estate leasing and industrial gas—forming a diversified operating structure.

Consolidated revenue in 2025 was KRW 46.26bn, down from KRW 49.49bn in 2024, and operating profit swung back to a loss of KRW 0.16bn after a KRW 0.77bn profit the prior year.

Net income attributable to owners was negative for three consecutive years—KRW -1.79bn in 2025, KRW -0.63bn in 2024, and KRW -2.08bn in 2023—while 2022 posted a positive owners' net income of KRW 0.77bn despite an operating loss of KRW 0.88bn, a divergence likely driven by non-operating items.

On a quarterly basis, a solid 2Q25 (operating profit KRW 0.87bn, owners' net income KRW 0.31bn) gave way to losses in 3Q25 (KRW -0.54bn, KRW -0.49bn) and a much larger loss in 4Q25 (operating loss KRW 1.12bn, net loss KRW 1.83bn).

The company then returned to profitability for two consecutive quarters, with 1Q26 operating profit of KRW 0.79bn and net income of KRW 0.51bn, followed by 2Q26 operating profit of KRW 1.13bn and net income of KRW 0.63bn.

Even so, the sum of owners' net income over the most recent four quarters (3Q25 through 2Q26) remained negative at roughly KRW -1.18bn, as the large 4Q25 loss offset much of the first-half 2026 recovery.

Operating cash flow improved meaningfully, moving from KRW -4.98bn in 2022 to KRW 2.36bn in 2023, KRW 0.90bn in 2024, and KRW 3.55bn in 2025, suggesting underlying cash generation has been recovering even as reported net income stayed negative in most years.

The debt ratio edged up from 27.9% in 2022 to 31.6% in 2025 but remains at a level that does not suggest significant balance-sheet strain.

The dyestuff and organic/inorganic chemical distribution business is closely tied to the scale of domestic textile manufacturing, a mature sector experiencing structurally low growth as production shifts overseas and imports substitute for domestic output.

This market features numerous small and mid-sized distributors competing primarily on price and supply chain stability.

The industrial gas segment benefits from a broader demand base spanning semiconductors, steel, petrochemicals, and healthcare, but the market is led by large global players such as Linde Korea, Air Products Korea, and Air First, leaving smaller suppliers like Ihwa Industrial Gas to serve niche customer segments.

Policy attention toward listed companies' non-operating (investment) real estate has grown recently.

A joint survey by Seoul Economic Daily and Trustone Asset Management covering 2,554 KOSPI and KOSDAQ listed companies found aggregate investment real estate value of KRW 107.89 trillion, with Ihwa Industrial ranking among the higher cases at 4.88 times its market capitalization.

At the April 2026 National Economic Advisory Council meeting, President Lee Jae-myung raised the issue of corporate non-business-use real estate, stating officials should "consider ways to impose a substantial holding burden,

No specific earnings guidance from the company has been identified, but the return to operating and net profit in both 1Q26 and 2Q26 can be read as a sign of recovery from the weak second half of 2025.

That said, the possibility of another large quarterly loss like 4Q25 cannot be ruled out, so it would be premature to conclude that quarterly volatility has structurally declined.

The government's discussion on non-business-use real estate policy has not yet advanced to concrete legislation, and the timing and substance of any follow-up measures remain a key watch item.

If related regulations or tax rules are finalized, Ihwa Industrial—given its large investment real estate holdings—could face greater pressure to divest, monetize, or restructure those assets. Conversely, if the policy discussion softens or is delayed, the current asset-holding strategy could persist unchanged.

Contribution from the industrial gas segment may vary with demand growth in semiconductor, battery, and hydrogen-related end markets, though no publicly disclosed capacity expansion or new contract schedule has been confirmed.

Since the core chemical distribution business remains heavily dependent on domestic textile production activity, raw material prices, foreign exchange movements, and customer demand trends remain key variables for future results.