KOSPIRetail & Consumer001120

LX International

₩43,900▲ 3.42%2026-10-02 close

Market Cap

₩1.7T

Turnover

₩6.3B

Volume

140,000 shares

Shares out.

38.8M

PER

12.1×

PBR

0.5×

EPS

₩3,328

Dividend Yield

4.96%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,000 per share · Prices as of the 2026-10-02 close

Report overview

Resources and Logistics Recover Together; Indonesian Policy Is the Swing Factor

After a profit decline in 2025, nickel, palm, trading and logistics improved simultaneously in the first half of 2026, lifting the quarterly operating margin above 2 percent, yet a large share of earnings still hinges on Indonesian resource policy and the ocean freight cycle.

1
Annual operating profit swung with the cycle from 965.5 billion won in 2022 to 433.1 billion in 2023, 489.2 billion in 2024 and 292.2 billion in 2025, with the operating margin falling from 5.1 percent to 1.7 percent.
2
Operating profit was 108.9 billion won in the first quarter of 2026 and 117.8 billion in the second, pushing the quarterly margin into the 2 percent range; the company said second-quarter revenue of 4.7763 trillion won and operating profit of 117.8 billion rose 24.7 percent and 114.2 percent year on year.
3
The improvement was driven by higher prices and volumes at the AKP nickel mine in Indonesia, higher palm oil prices, a recovery in IT component and petrochemical trading, and rising ocean freight rates as measured by the SCFI.
4
In the fourth quarter of 2025 the company posted operating profit of 55.5 billion won but a net loss attributable to owners of 53.4 billion, showing how non-operating items such as asset impairments amplify bottom-line volatility.
5
Indonesia's reduced 2026 nickel mining quota (RKAB) and tighter export controls may support prices while constraining volumes, making policy direction the key variable for the resources division.

Business structure

LX International is a diversified trading and investment company organized into three segments: resources, trading and new growth, and logistics.

The resources segment runs coal operations in Indonesia, China and Australia while expanding into future minerals such as nickel, a core battery raw material, and operates three palm plantations in Indonesia that supply crude palm oil to local and global markets.

The three plantations have reported annual output of 91,000 tonnes, 58,000 tonnes and 41,000 tonnes respectively, or roughly 190,000 tonnes in total.

In nickel, the anchor asset is a 60 percent controlling stake in the AKP mine near the Morowali industrial park on Sulawesi, acquired through a 133 billion won board-approved investment in 2023, with in-situ ore resources of 51.4 million tonnes and verified mineable reserves of 36 million tonnes.

The company has stated a target of lifting the mine's annual output to 3.7 million tonnes by 2028 and holds off-take rights over the entire production volume.

The trading and new growth segment centers on nickel, coal and palm oil trading linked to its own resource assets, alongside industrial and metal materials and eco-friendly materials supply chains.

On the logistics and infrastructure side, it acquired about 51 percent of an Indonesian bulk shipping company and consolidated a new local entity, Trans Global Terminal.

Revenue and profit weightings differ sharply: in 2022 the resources segment generated 1.3 trillion won of revenue with 343.8 billion won of operating profit, a 26.4 percent margin, while logistics and trading and new growth, which account for most of revenue, posted a 3.6 percent margin.

The company has been described as having the highest coal exposure among Korean trading houses and has maintained a policy of gradually reducing that share. Its largest shareholder is LX Holdings with a 27.47 percent stake.

Earnings trend

Quarterly revenue · Operating profit

₩3.8T₩55B25Q2₩4.5T₩64.8B25Q3₩4.3T₩55.5B25Q4₩4.2T₩108.9B26Q1₩4.8T₩117.8B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩18.8T₩965.5B2022₩14.5T₩433.1B2023₩16.6T₩489.2B2024₩16.7T₩292.2B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩3.8T	₩55B	1.4%
2025Q3	₩4.5T	₩64.8B	1.4%
2025Q4	₩4.3T	₩55.5B	1.3%
2026Q1	₩4.2T	₩108.9B	2.6%
2026Q2	₩4.8T	₩117.8B	2.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩18.8T	₩965.5B	₩515.2B	5.1%	22.8%	154.2%
2023	₩14.5T	₩433.1B	₩117.1B	3.0%	5.2%	160.0%
2024	₩16.6T	₩489.2B	₩175.7B	2.9%	6.6%	169.0%
2025	₩16.7T	₩292.2B	₩141.8B	1.7%	5.1%	163.8%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Annual results mirror the resource and freight cycle.

Revenue fell from 18.7595 trillion won in 2022 to 14.5143 trillion in 2023, then recovered to 16.6376 trillion in 2024 and 16.7063 trillion in 2025, but operating profit slid from 965.5 billion won in 2022 to 433.1 billion in 2023, 489.2 billion in 2024 and 292.2 billion in 2025, with the operating margin narrowing from 5.1 percent to 1.7 percent.

Net profit attributable to owners was also volatile, at 515.2 billion won in 2022, 117.1 billion in 2023, 175.7 billion in 2024 and 141.8 billion in 2025.

For the first nine months of 2025, revenue slipped 0.2 percent and operating profit fell 40.1 percent year on year, as logistics profitability was constrained by slowing growth and falling ocean freight rates while trading and new growth suffered from demand stagnation and oversupply.

Quarterly, operating profit was 55.0 billion won in the second quarter of 2025 on revenue of 3.8302 trillion, 64.8 billion in the third on 4.5077 trillion and 55.5 billion in the fourth on 4.3201 trillion, keeping margins in the 1 percent range, and the fourth quarter produced a net loss attributable to owners of 53.4 billion won despite positive operating profit.

Hana Securities noted in a December 2025 report that one-off maintenance costs at the GAM mine could be recognized in the resources division, and a Mirae Asset Securities report pointed to asset impairment charges and the revaluation of minority equity investments as factors weighing on non-operating income.

Into 2026, operating profit reached 108.9 billion won in the first quarter on revenue of 4.2113 trillion and 117.8 billion in the second on 4.7763 trillion, a combined 226.8 billion won for the half and a quarterly margin back above 2 percent.

First-quarter operating profit was still 6.8 percent lower than a year earlier, while second-quarter revenue and operating profit rose 24.7 percent and 114.2 percent year on year on higher AKP nickel prices and volumes, firmer palm oil markets, a recovery in IT component and petrochemical trading, and a 39.1 percent year-on-year rise in the Shanghai Containerized Freight Index.

Cash flow and the balance sheet moved less sharply: operating cash flow eased from 723.7 billion won in 2024 to 694.4 billion in 2025, the debt-to-equity ratio rose from 154.2 percent in 2022 to 163.8 percent in 2025, and total equity at end-2025 stood at 3.5357 trillion won, of which 2.7720 trillion was attributable to owners.

Industry analysis

Where the resources cycle stands is largely set by Indonesian policy. The Indonesian government set the 2026 nickel ore mining quota at roughly 260 million to 270 million tonnes, sharply below the approximately 379 million tonnes approved for 2025.

The International Nickel Study Group projected the global market shifting from a 283,000-tonne surplus in 2025 to a 32,000-tonne deficit in 2026.

In addition, in May 2026 Indonesia announced export controls channeling nickel ore and some intermediate products through a designated state-owned enterprise, with the measure due to take effect in September and a sovereign-fund affiliate consolidating export information for strategic items.

In June 2026, however, reports emerged that the quota might be raised to around 360 million tonnes, a proposal described as not confirmed by the government.

A senior official at the Ministry of Energy and Mineral Resources stressed in June that no easing of the quota had been discussed and said approved volumes stood at about 250 million to 260 million tonnes.

A similar tightening is under way in coal, where 2026 approved mining volumes were expected to fall by roughly a quarter from the prior year. Logistics moved in the opposite direction.

The Shanghai Containerized Freight Index rose 39.1 percent year on year in the second quarter of 2026, supporting logistics earnings, and Shinhan Investment expected the profit benefit from higher spot rates to show up most strongly in the third quarter as contract rates reset with a lag.

On competitive positioning, its purchase of a controlling stake in an overseas nickel mine has been cited as the first such case by a Korean company.

Outlook

The company's stated direction is portfolio expansion in resources plus geographic diversification. LX International said it continues to pursue additional acquisitions of promising future minerals such as nickel and bauxite.

It also outlined plans to diversify businesses and regions and secure new revenue sources in order to reduce earnings volatility from commodity price swings.

In nickel, the target of lifting AKP mine annual output to 3.7 million tonnes by 2028 remains in place, meaning available capacity utilization will depend on the quota environment.

Brokerage forecasts broadly agreed on the direction of improvement: six houses publishing August 2026 reports projected 2026 operating profit of 428.0 billion to 511.2 billion won, 46.5 to 74.9 percent above the 292.2 billion won recorded in 2025.

Hana Securities said that while Indonesian production restrictions in the resources division need to ease, profit growth in logistics alone should sustain solid earnings.

Eugene Investment, by contrast, cut its 2026 operating profit estimate by 19.4 percent from 580.0 billion to 468.0 billion won, explaining that a shrinking war premium would leave second-half results below its previous forecast.

On shareholder returns, the company said it would maintain a return policy commensurate with its earnings power and would pursue announcing a formalized dividend policy within the year.

Forecasts also flagged that resources earnings could vary with production volumes and mining costs, so the second-half checklist narrows to the durability of logistics profits and Indonesian policy.

Valuation

PER

12.1×

PBR

0.5×

ROE

4.2%

EPS

₩3,328

BPS

₩82,634

Dividend per share

₩2,000

The shares trade at a meaningful discount to book value per share, a multiple level often seen among diversified trading houses whose profits swing with commodity and freight cycles.

On earnings, profit declined from the 2022 peak before turning back toward recovery in the first half of 2026, and the most recent four quarters, from the third quarter of 2025 through the second quarter of 2026, include the fourth-quarter 2025 net loss, so net-income-based multiples look heavier than the operating profit trend suggests.

On dividends, one analysis noted that the cash payout ratio against net profit attributable to owners rose from 20.9 percent in 2022 to 36.9 percent in 2023 and 40.9 percent in 2024, with 2025 estimated around the 60 percent range, while the corporate value enhancement plan disclosed by the company listed a 2025 payout ratio of 50.7 percent.

Hana Securities said in April 2026 that it applied a 0.84 times price-to-book multiple, the upper end of the 2022 band, to estimated 2026 book value per share to set a target price of 66,000 won, and in its August report it maintained that figure without restating the formula.

Over the same period Shinhan Investment and Mirae Asset Securities kept their target price unchanged, while Eugene Investment, Heungkuk Securities and Samsung Securities cut theirs.

The divergence was attributed to differing views on how long logistics and resources profits will persist and how much Indonesian policy uncertainty should be reflected in valuation.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Margins Recovered as All Three Segments Improved Together

Operating profit of 108.9 billion won in the first quarter of 2026 and 117.8 billion in the second marked two straight quarters above 100 billion won, well above the quarterly average implied by 2025's full-year 292.2 billion.

The second-quarter operating margin was about 2.5 percent, roughly 1.0 percentage point higher than about 1.4 percent a year earlier.

Because higher commodity prices, better AKP nickel pricing and volumes, a trading recovery in IT components and petrochemicals, and rising freight rates all contributed, the improvement was not dependent on a single item.

A Resource Portfolio Shifting From Coal Toward Nickel

The company said that, starting with its nickel acquisition, it would keep securing assets under review to shift the core of its resources business from coal to battery minerals such as nickel.

The AKP mine is an operating asset located near nickel smelting complexes with existing haul roads, stockyards and port infrastructure, and the company holds off-take rights over all of its output.

Management has said it continues to pursue additional acquisitions of promising future minerals including nickel and bauxite.

Rising Payout Ratio and a Move to Formalize Policy

For 2025 the company kept its year-end dividend at the same level as the prior year even as profitability weakened.

Its disclosed corporate value enhancement plan marked it as qualifying as a high-dividend company under the relevant tax law, listing a 2025 payout ratio of 50.7 percent and dividend amounts of about 71.9 billion won for both 2025 and 2024.

The company said it would maintain shareholder returns commensurate with earnings power and pursue a formalized dividend policy within the year. Separately, largest shareholder LX Holdings has been reported to have steadily bought LX International shares on the open market over the past two years.

Bear factors

Earnings Remain Highly Cycle-Dependent

Operating profit shrank to about a third of its level in three years, from 965.5 billion won in 2022 to 292.2 billion in 2025, while the operating margin fell from 5.1 percent to 1.7 percent.

In 2025, logistics profitability was constrained by slowing growth and falling ocean freight rates, and trading and new growth deteriorated on demand stagnation and oversupply. Because the first-half 2026 improvement was large, sensitivity is equally large if freight and commodity prices move the other way.

Resource Profits Concentrated on Indonesian Policy

The 2026 nickel mining quota was cut to roughly 260 million to 270 million tonnes from about 379 million tonnes in 2025. Indonesia shortened RKAB approval cycles from three years to one, approved far lower 2026 quotas and revised the HPM benchmark ore pricing formula.

Hana Securities said Indonesian production restrictions in the resources division need to be resolved. With nickel, coal and palm assets all located in Indonesia, a single policy change can affect all three at once.

A Track Record of Non-Operating Losses Hitting the Bottom Line

In the fourth quarter of 2025 the company posted operating profit of 55.5 billion won but a net loss attributable to owners of 53.4 billion, and as a result the four most recent quarters combined show 119.7 billion won of net profit attributable to owners against 347.0 billion won of operating profit.

In the past, goodwill impairment at LX Glass produced a one-off non-recurring loss that pushed the payout ratio sharply higher, with goodwill impairment meaning the subsidiary's fair value had fallen below book value.

The debt-to-equity ratio rose from 154.2 percent in 2022 to 163.8 percent in 2025, leaving a thinner financial cushion than before.

Risk factors

Commodity Price and Freight Rate Volatility

Nickel, coal, palm oil and container freight rates all act as earnings variables at once. In the second quarter of 2026 a 39.1 percent year-on-year rise in the SCFI supported results, while Eugene Investment explained that a shrinking war premium would leave second-half earnings below its earlier estimates. If price indicators reverse, margins may not hold at first-half 2026 levels.

Regulatory and Policy Risk

Indonesia is due to implement in September a measure channeling exports of nickel ore and some intermediates through a designated state-owned enterprise, with a sovereign-fund affiliate consolidating export data for strategic items.

The energy ministry operates an RKAB revision process, so approved volumes can change during the year. Hana Securities noted in a December 2025 report that production cuts to comply with quotas could temporarily slow nickel profits. The core risk is a combination in which prices and volumes move in opposite directions.

Asset Impairment and Investment Execution

A Mirae Asset Securities report pointed to asset impairment charges and revaluation of minority equity investments as factors affecting non-operating income. With the company pursuing further acquisitions in nickel and bauxite, valuation gains or losses may recur depending on purchase prices and market conditions.

The AKP mine's 3.7 million tonne output target for 2028 depends on quotas, mining costs and local operational stabilization, so progress against plan needs monitoring.

What to watch next

Late October to early November 2026
Third-quarter 2026 results. Since Shinhan Investment expected the logistics profit benefit from higher freight rates feeding into contract prices to peak in the third quarter, the actual scale of the logistics gain and the trend in resource mining costs should be checked together.
Fourth quarter of 2026
Whether the formalized dividend policy the company said it would pursue within the year is announced, and its contents. Whether the basis is net profit attributable to owners and whether one-off items are excluded will determine how predictable future returns are.
From September 2026 onward
How Indonesia's nickel export control regime, due to start in September, is implemented and whether the reported proposal to raise the RKAB quota is actually approved. A higher quota would restore volumes but could weaken price support, so both directions of impact matter.
Second half of 2026 to first half of 2027
Whether disclosures appear on new mineral asset acquisitions such as nickel and bauxite, and their size. If deals close, the resource profit contribution should be assessed alongside changes in borrowings and the debt-to-equity ratio.
Around February 2027
Confirmed full-year 2026 results and the year-end dividend decision. Key items are whether actual results land within the 428.0 billion to 511.2 billion won range of brokerage operating profit forecasts for 2026 and whether the profit recovery versus 2025 translates into dividend size.

Overall view

The first half of 2026 was a period in which all three of LX International's pillars, resources, trading and logistics, improved at the same time.

After three years of compressed margins that culminated in 2025 operating profit of 292.2 billion won and a 1.7 percent margin, quarterly operating profit of 108.9 billion won in the first quarter and 117.8 billion in the second brought the margin back above 2 percent.

The company cited higher AKP nickel prices and volumes, firmer palm oil markets, a recovery in IT component and petrochemical trading, and a 39.1 percent year-on-year rise in the SCFI.

That said, non-operating items have swung the bottom line materially, as with the 53.4 billion won net loss attributable to owners in the fourth quarter of 2025, and the debt-to-equity ratio has risen to 163.8 percent from 2022 levels.

On the industry side, Indonesia's 2026 nickel quota has been cut sharply from 2025 and the global balance is forecast to shift from surplus to deficit, meaning prices and volumes may move in different directions.

Brokerages themselves diverged on how long logistics and resource profits will last and how much Indonesian policy uncertainty to reflect.

What remains to be verified is the actual size of the third-quarter logistics gain, the final direction of Indonesian policy, and the specific formula in the dividend policy promised within this year. This report is for information purposes only.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.