PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩721 per share · Prices as of the 2026-10-02 close
Cheil Abrasives showed a joint improvement in revenue and operating profit in Q2 2026, but net income has repeatedly diverged sharply from operating profit in recent years, warranting a closer look at earnings quality.
Q2 2026 revenue reached KRW 21.60 billion with operating profit of KRW 2.07 billion, the highest quarterly operating margin in the trailing four-quarter window.
Full-year 2025 revenue fell year-on-year to KRW 78.90 billion, yet net income attributable to owners jumped to KRW 13.63 billion.
The company maintains stable long-term unit-price contracts with major national-infrastructure industry clients including POSCO, HD Hyundai Heavy Industries, and HD Hyundai Mipo Dockyard.
iM Securities noted in a February 2026 report that the company's payout ratio of 52% and 125.3% year-on-year dividend growth met the requirements for separate dividend income taxation treatment.
The company established a new Vietnam subsidiary in 2025, continuing its overseas business expansion.
Cheil Abrasives was founded in 1955 as Cheil Grinding Wheel Industrial and listed on the KOSPI market in 2005 as a specialized manufacturer of industrial abrasive grinding wheels.
Its core products consist of three lines: resinoid abrasive wheels used in basic material industries, vitrified abrasive wheels used in precision machining for automobiles, ships, and aircraft, and CBN (superabrasive) wheels used for high-precision grinding operations.
Its customer base is centered on large steel and shipbuilding companies including POSCO, HD Hyundai Heavy Industries, and HD Hyundai Mipo Dockyard, with which it maintains steady business relationships through supply and unit-price contracts.
General abrasive wheels are used in grinding operations for steel, automobiles, machinery, and ships, while CBN wheels are deployed in high-performance applications, with long-term dealings continuing with POSCO, Hyundai Motor, and others.
Because its downstream industries are concentrated in national base industries such as steel, shipbuilding, and construction, demand is considered to show low volatility and limited substitution risk from new products.
The company operates three domestic production sites and at least one overseas site, and maintains subsidiaries and sales corporations in Vietnam, Indonesia, and China (Shanghai) to serve overseas markets. In 2025 it established a new Vietnam subsidiary, further expanding its overseas operations.
Itooza describes Cheil Abrasives as the number-one domestic abrasive wheel maker, though other data sources classify it among the top three, indicating some variance across ranking sources.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩19.3B | ₩800M | 4.4% |
| 2025Q3 | ₩20.8B | ₩1.6B | 7.6% |
| 2025Q4 | ₩19.9B | ₩900M | 4.6% |
| 2026Q1 | ₩19.5B | ₩1.5B | 7.9% |
| 2026Q2 | ₩21.6B | ₩2.1B | 9.6% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩83.4B | ₩5.1B | ₩2.2B | 6.1% | 2.4% | 13.0% |
| 2023 | ₩85.2B | ₩7.9B | ₩10.9B | 9.3% | 11.4% | 11.3% |
| 2024 | ₩82B | ₩5.8B | ₩6B | 7.0% | 6.0% | 17.0% |
| 2025 | ₩78.9B | ₩4.2B | ₩13.6B | 5.4% | 12.5% | 11.4% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Consolidated revenue in 2025 came to KRW 78.90 billion, down 3.8% from KRW 81.97 billion in 2024, while operating profit fell 26.3% to KRW 4.24 billion from KRW 5.75 billion.
In contrast, net income attributable to owners rose sharply to KRW 13.63 billion from KRW 5.99 billion, moving in the opposite direction of operating profit.
This divergence has recurred in prior years: in 2023, operating profit grew 53.9% to KRW 7.89 billion, yet net income nearly quadrupled to KRW 10.90 billion, while in 2024 both operating profit and net income declined together, by roughly 45% for the latter, showing inconsistent year-to-year direction.
On a quarterly basis, Q2 2025 saw revenue of only KRW 19.25 billion and operating profit of KRW 0.84 billion, yet owners' net income reached KRW 10.20 billion, suggesting non-operating factors had a substantial impact on results.
Indeed, on a nine-month cumulative basis through Q3 2025, revenue fell 2.7% and operating profit fell 37.1% year-on-year, while net income rose 166.2%, underscoring a recent disconnect between core operating performance and bottom-line results.
From Q3 2025 through Q2 2026, quarterly revenue moved through KRW 20.78 billion, KRW 19.88 billion, KRW 19.50 billion, and KRW 21.60 billion, while operating profit moved through KRW 1.57 billion, KRW 0.90 billion, KRW 1.54 billion, and KRW 2.07 billion.
Notably, Q2 2026 posted the highest revenue and operating profit of the trailing four quarters along with the highest operating margin, a signal that could point to a recovery in the core business.
Net income of KRW 2.28 billion in the same quarter tracked relatively closely with the rise in operating profit, unlike Q2 2025, indicating that operating performance was more fully reflected in the bottom line this time.
Cheil Abrasives' downstream industries are concentrated in national base industries such as steel, shipbuilding, automobiles, and construction, giving it relatively low volatility from individual customers and a market structure in which abrasive wheels are difficult to substitute with new products.
Major customers such as POSCO, HD Hyundai Heavy Industries, HD Hyundai Mipo Dockyard, and Hyundai Motor are leading firms in their respective industries, and long-term unit-price contracts with them provide a stable revenue base.
At the same time, this implies high customer concentration, meaning results are structurally tied to the capital expenditure and utilization cycles of those downstream industries.
The domestic abrasive wheel industry is understood to be an oligopolistic market with a small number of manufacturers, and while some sources describe Cheil Abrasives as the number-one domestic maker, others rank it among the top three, indicating variance across data sources.
The company has expanded its ability to serve overseas markets through production and sales subsidiaries in Vietnam, Indonesia, and China (Shanghai), and continued this expansion with a new Vietnam subsidiary established in 2025.
The abrasives industry has entry barriers centered on a small number of capital-intensive manufacturers, but overall industry volume growth is also limited when downstream industry growth stalls. The revenue stagnation or mild decline seen in recent years may be linked to the capex cycles of its downstream industries.
The company has not disclosed publicly available numerical revenue or profit guidance, and its outlook is likely to hinge mainly on downstream demand and the progress of its overseas subsidiary expansion. The Vietnam subsidiary established in 2025, together with the existing Indonesia subsidiary (PT.
Cheil Abrasive Indonesia) and the Shanghai sales corporation in China, forms an axis for expanding its overseas production and sales network, and future utilization rates and local revenue contribution are worth monitoring.
The fact that Q2 2026 revenue and operating profit reached the highest levels of the trailing four quarters could be read as an early sign of core-business recovery, though a single quarter is insufficient to confirm a trend reversal.
Because the capex and order cycles of major steel and shipbuilding customers may affect this company's revenue with a lag, conditions in those industries can serve as a leading indicator.
On the dividend front, the payout ratio and dividend growth rate have risen markedly in recent periods, making the size of future dividends—once annual results are finalized—worth watching.
However, given the history of net income swinging sharply due to non-operating factors from year to year, both operating profit and net income trends should be examined together when assessing future earnings.
Cheil Abrasives' price-to-earnings ratio is forming in a range below its five-year average band, and its price-to-book ratio also comes in below its five-year average, according to itooza data.
The stock trades at a discount to net asset value, which may be related to the fact that net income has moved in the opposite direction from operating profit in several past years, making it harder for the market to assign a stable valuation multiple.
On the dividend side, iM Securities noted in a February 2026 report that a payout ratio of 52% and a year-on-year dividend growth rate of 125.3% met the requirements for separate dividend income taxation, and also noted a treasury share ratio as high as 32.2%.
However, a high treasury share ratio can also mean a more limited float, so price volatility tied to trading volume is worth watching. Because net income has repeatedly been driven by one-off or non-operating factors in recent years, it may help to reference operating-profit-based metrics alongside valuation multiples.
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 2026-08-23
Q2 2026 revenue of KRW 21.60 billion and operating profit of KRW 2.07 billion each marked the highest levels of the trailing four quarters. Operating margin also reached its highest point in this window, pointing to improving core profitability.
Net income of KRW 2.28 billion tracked relatively closely with the rise in operating profit, which can be read positively from an earnings-quality perspective.
The company maintains long-term unit-price contracts with major steel and shipbuilding clients including POSCO, HD Hyundai Heavy Industries, and HD Hyundai Mipo Dockyard, giving it relatively low demand volatility. The difficulty of substituting abrasive wheels with new products can also serve as an entry barrier. This customer base can be viewed as a factor that reduces the risk of a sharp revenue collapse.
iM Securities noted in a February 2026 report that the company's payout ratio of 52% and year-on-year dividend growth of 125.3% met the requirements for separate dividend income taxation. Its treasury share ratio was also noted at a high 32.2%, representing a resource that could be used for shareholder returns. However, the sustainability of dividends may depend on the stability of future net income.
Annual operating margin declined for three consecutive years, from 9.3% in 2023 to 7.0% in 2024 and 5.4% in 2025. While margin improved in Q2 2026, it remains to be confirmed whether this represents a trend reversal or a one-quarter phenomenon. Revenue itself also declined from KRW 85.24 billion in 2023 to KRW 78.90 billion in 2025.
Both 2023 and 2025 saw net income rise abnormally relative to operating profit, and on a nine-month cumulative basis through Q3 2025, net income rose 166.2% even as revenue and operating profit both declined.
This recurring pattern makes it harder to judge underlying profitability from operating results alone, and leaves uncertainty about whether such non-operating gains will recur. Investors need to weigh operating profit alongside net income to assess earnings quality.
According to iM Securities data, the treasury share ratio stood at 32.2%, meaning the number of shares actually traded in the market could be relatively limited. Combined with the company's small market capitalization, this could amplify price volatility in response to changes in trading volume. Lower liquidity can also mean a larger price impact from large trades.
Because major customers are concentrated in capex-intensive industries such as steel, shipbuilding, and construction, reduced investment or lower utilization in those industries could directly affect Cheil Abrasives' revenue.
High dependence on specific customers also makes changes in individual clients' ordering policies a risk factor.
Producing abrasive wheels requires various raw materials including abrasive grains and bonding agents, and fluctuations in these raw material or energy costs can affect the cost structure. If cost increases cannot be fully passed on to selling prices, margins could come under pressure.
Operating overseas subsidiaries in Vietnam, Indonesia, and China involves various variables including local regulations, exchange rate fluctuations, and rising labor costs.
Currency translation of overseas revenue and assets can affect consolidated results, and the possibility of delays in ramping up utilization at newly established subsidiaries cannot be ruled out.
The Q3 2026 quarterly report is expected around this time, and it will be worth checking whether the revenue and operating profit improvement seen in Q2 continues.
Watch for year-end board resolutions on dividend policy and record-date disclosures, to see whether the recently elevated payout ratio and growth rate are maintained.
Check for disclosures on additional capital injections, capacity expansion, or utilization at the Vietnam subsidiary established in 2025 and the existing Indonesia and China subsidiaries, to gauge the pace of overseas expansion.
This is when finalized full-year 2026 results and the final dividend amount will be disclosed; given recent net income volatility, it will be worth checking whether the gap between operating profit and net income recurs.
Cheil Abrasives is a specialized abrasive wheel manufacturer with a stable revenue structure built on long-term contracts with major national-infrastructure clients in the steel and shipbuilding industries.
In Q2 2026, revenue and operating profit both reached the highest levels of the trailing four quarters, signaling a possible recovery in the core business, but annual operating margin has declined for three consecutive years since 2023.
At the same time, both 2023 and 2025 saw net income move sharply in the opposite direction from operating profit, indicating that non-operating factors have had a considerable influence on results.
On the dividend side, the payout ratio and dividend growth rate have risen markedly, reportedly meeting the requirements for separate dividend income taxation, and the treasury share ratio was also found to be high.
Overseas business is expanding to include a new Vietnam subsidiary alongside existing operations in Indonesia and China, though no specific numerical guidance has been disclosed.
On balance, assessing this company requires weighing the recent quarter's margin improvement signal together with the recurring divergence between net income and operating profit and its likelihood of continuing.
Report written 2026-09-05 · Data as of 2026-09-04
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