PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩600 per share · Prices as of the 2026-10-02 close
Changhae Ethanol, the leading domestic ethanol producer, has sustained an earnings recovery through 2024-2025 on stable soju-linked demand and expanding non-beverage applications.
The company holds the top market share (around 20%) among nine domestic ethanol producers, underpinned by stable demand from soju production.
2025 revenue declined year-on-year, but the operating margin reached 13.0%, the highest of the past four years.
Following a net loss attributable to owners in 2023, the company returned to profit in 2024 and continued to improve through 2025.
Operating cash flow rose steadily from about KRW 3.1 billion in 2022 to KRW 20.3 billion in 2025, reflecting improving financial health.
Policy discussions on mandatory SAF blending are underway, with ethanol-based ATJ technology emerging as an industry talking point.
Founded in 1966 and renamed to its current identity in 2004, Changhae Ethanol's core business is ethanol (jujeong) production, organized into five segments spanning ethanol, energy, engineering, trading, and other activities including feed manufacturing.
Roughly 90% of domestically produced ethanol is used as the primary raw material for soju, and Korea's ethanol industry consists of nine producers making fermented and refined ethanol.
Through past acquisitions including Hite Jinro Ethanol, the company strengthened its market position and now holds roughly 20% share among the nine domestic producers, making it the industry leader.
The ethanol industry is closely tied to the soju market while also carrying a heavy liquor tax burden, giving it an important role within the national tax system as a regulated sector.
Beyond soju-related demand, the company has been expanding into non-beverage applications such as preservatives, disinfectants, and cosmetics ingredients.
It recently acquired an equity stake in PT Organic Feed Indonesia, incorporating it as a subsidiary in connection with sourcing overseas raw materials such as tapioca chips and diversifying its feed business.
Ongoing R&D through its technology institute supports quality and process competitiveness, which contributes to cost structure and yield improvements.
A joint sales mechanism through the Korea Alcohol & Liquor Industry Association also characterizes the sector, linking individual companies' sales volumes to their market share.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩32B | ₩5.3B | 16.4% |
| 2025Q3 | ₩28B | ₩4B | 14.3% |
| 2025Q4 | ₩32.4B | ₩2.5B | 7.8% |
| 2026Q1 | ₩28.3B | ₩4.3B | 15.0% |
| 2026Q2 | ₩31.1B | ₩4.4B | 14.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩109.4B | ₩9.8B | ₩77,564,011 | 8.9% | 0.1% | 44.2% |
| 2023 | ₩116.4B | ₩14.6B | -₩3.8B | 12.5% | −3.1% | 49.4% |
| 2024 | ₩137.5B | ₩17.4B | ₩12.5B | 12.6% | 9.4% | 39.3% |
| 2025 | ₩122.3B | ₩15.9B | ₩13.3B | 13.0% | 9.3% | 33.6% |
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 122.3 billion, down from KRW 137.5 billion in 2024, yet the operating margin reached 13.0%, the highest level in the 2022-2025 span.
Revenue rose to KRW 116.4 billion in 2023 with an operating margin of 12.5% from KRW 109.4 billion and 8.9% in 2022, but the company recorded a net loss attributable to owners of about KRW 3.8 billion that year, likely reflecting non-operating items.
In 2024, revenue grew 18.1% and operating profit rose 19.2%, with net income attributable to owners turning positive at KRW 12.5 billion. In 2025, despite a revenue decline, disciplined margin management lifted net income attributable to owners to KRW 13.3 billion, an increase from the prior year.
On a quarterly basis, revenue and operating profit moved from KRW 32.0 billion/KRW 5.3 billion in Q2 2025 to KRW 28.0 billion/KRW 4.0 billion in Q3, and KRW 32.4 billion/KRW 2.5 billion in Q4, with the operating margin dipping into the 7% range before recovering to the 14-15% range in Q1 2026 (KRW 28.3 billion/KRW 4.3 billion) and Q2 2026 (KRW 31.1 billion/KRW 4.4 billion).
Such quarterly margin swings are likely influenced by input timing, grain price and FX volatility, and production scheduling. Net income attributable to owners over the most recent four quarters (Q3 2025-Q2 2026) totaled KRW 12.6 billion, broadly in line with the full-year 2025 figure.
Operating cash flow expanded steadily from KRW 3.1 billion in 2022 to KRW 8.2 billion in 2023, KRW 15.2 billion in 2024, and KRW 20.3 billion in 2025, supporting a qualitative improvement in earnings. The debt ratio also declined from 49.4% in 2023 to 33.6% in 2025, pointing to a more stable balance sheet.
Korea's ethanol industry is closely linked to the soju market, with roughly 90% of domestically produced ethanol used as the primary raw material for soju.
Nine domestic producers make fermented and refined ethanol, and the sector carries strong regulatory characteristics due to a high liquor-tax burden and a joint sales system operated through the Korea Alcohol & Liquor Industry Association.
Changhae Ethanol holds a competitively advantageous position with roughly 20% market share, making it the industry leader. Recently, demand for non-beverage applications such as preservatives, disinfectants, and cosmetics ingredients has grown, somewhat easing reliance on the soju market.
Separately, the sustainable aviation fuel (SAF) market is drawing attention amid carbon-reduction policies in aviation and shipping, and Korea is preparing to introduce mandatory SAF blending for international flights.
Industry participants have argued that existing feedstocks such as used cooking oil alone cannot meet expanding SAF supply needs, making alcohol-to-jet (ATJ) technology worth active consideration.
However, this remains at an industry-wide discussion stage, and Changhae Ethanol's specific involvement in any SAF-related project has not been officially confirmed.
Growth in Southeast Asian bioethanol feedstock demand and domestic ethanol makers' efforts to secure stable raw material supplies are also expected to support continued growth in feedstock markets such as tapioca chips.
According to the company's business reports, ethanol prices are influenced by raw material harvest conditions, imported grain prices, and FX movements, with fermented and refined ethanol prices having been raised in both 2022 and 2023.
Whether future cost-driven price adjustments occur remains a key variable for margin trends going forward. The continuation of the recent quarterly margin recovery will depend on raw material cost stabilization and production efficiency gains.
The incorporation of PT Organic Feed Indonesia is interpreted as an effort to diversify overseas raw material sourcing, and whether this subsidiary's contribution to the feed segment expands is a point to monitor going forward.
If the SAF blending mandate under industry-wide discussion is finalized with concrete implementation details, it could open new demand opportunities for domestic ethanol producers, though this remains at the policy-preparation stage, and the company's direct participation or any related revenue contribution has not been confirmed.
The trend of expanding non-beverage demand (disinfectants, cosmetics ingredients, etc.) easing reliance on the soju market is likely to continue, but its pace and scale require ongoing confirmation through future disclosures.
Overall, the company's recent performance has emphasized margin and cash flow improvement over top-line growth, making the persistence of this trend a key point to watch in upcoming quarters.
The share price has historically traded closer to the lower end of past trading ranges rather than the upper end, and has often changed hands at a discount to net asset value.
On the earnings side, the shift from a net loss in 2023 to profitability in 2024 and continued improvement through 2025 is a relevant reference point for valuation assessment. Regarding dividends, the company has a track record of consistent cash dividend payments, which aligns with its improving cash flow trend.
That said, real-time metrics such as share price, market capitalization, and dividend yield change daily, so the latest figures displayed on screen should be referenced alongside this commentary.
Rather than making an absolute call on whether the stock is cheap or expensive relative to peers, it is more reasonable to examine the quality of earnings, the direction of cash flow improvement, and how the price-to-book relationship has been evolving.
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
Changhae Ethanol maintains the top position with roughly 20% share among Korea's nine ethanol producers, and with 90% of domestic ethanol used as soju feedstock, its demand base is relatively stable.
This is further supported by growing non-beverage demand from preservatives, disinfectants, and cosmetics ingredients, gradually diversifying the revenue base. This structure is cited as a factor that can help buffer against economic swings.
The operating margin rose from 8.9% in 2022 to 13.0% in 2025, and operating cash flow grew sharply from KRW 3.1 billion to KRW 20.3 billion over the same period. The debt ratio also declined from 49.4% in 2023 to 33.6% in 2025, indicating improving financial stability. Recent quarters also show margins recovering back into double digits after a temporary Q4 dip.
Korea is preparing to introduce a mandatory SAF blending system for international flights, and the industry has raised the need for ATJ technology to convert ethanol into aviation fuel. If these discussions materialize, they could open new demand opportunities for companies with domestic ethanol production capacity.
However, this remains an early-stage, industry-wide policy issue, and the company's direct involvement has not yet been confirmed.
2025 revenue of KRW 122.3 billion declined from KRW 137.5 billion in 2024, and quarterly revenue has fluctuated within a KRW 28.0-32.4 billion range. Given the regulated nature of the industry, sales volumes are tied to market share and a joint sales system, making rapid top-line growth structurally difficult. This remains a constraint on growth despite the earnings improvement.
The operating margin in Q4 2025 fell sharply to around 7.8% from the mid-14% range in the prior quarter. This illustrates how quarterly results can swing depending on raw material costs, grain price and FX movements, and production schedules.
While margins recovered back to the mid-14% range in Q1-Q2 2026, this volatility itself remains a source of forecasting uncertainty.
In 2023, despite positive operating profit, the company posted a net loss attributable to owners of about KRW 3.8 billion, showing that non-operating factors can have a significant impact on net income.
In addition, the ethanol industry is highly dependent on policy factors such as the liquor tax system, government pricing policy, and the joint sales structure through the Korea Alcohol & Liquor Industry Association. These structural factors are variables that can affect performance regardless of the company's own efforts.
Raw materials for ethanol production include a portion of imported grain, exposing the business to international grain price and FX fluctuations. If input costs rise sharply without a timely pass-through to selling prices, margins can come under pressure. The ethanol price increases seen in 2022 and 2023 can be viewed as responses to such cost pressures.
The ethanol industry is subject to liquor tax law and is incorporated into a joint sales system through the Korea Alcohol & Liquor Industry Association, making it sensitive to government policy changes.
Changes to liquor-related tax policy or sales regulations could directly affect individual companies' sales volumes and profitability. This represents an external variable that is difficult for the company to control on its own.
Core end-demand for ethanol is concentrated in the soju market, so long-term changes in drinking culture or demographic structure that alter soju consumption patterns could affect demand over time.
While diversification into non-beverage uses is underway, it does not yet appear sufficient to fully offset soju-linked demand. The long-term direction of this demand structure shift is a factor that requires ongoing monitoring.
Check the Q3 2026 earnings disclosure to see whether the recently recovered double-digit operating margin trend continues.
Monitor whether and when ethanol selling prices are adjusted in response to raw material cost and FX movements.
Check whether the detailed implementation of the SAF 1% mandatory blending system for international flights is finalized and whether domestic ethanol producers' participation becomes concrete.
The annual general shareholders' meeting and FY2026 business report will confirm full-year results and dividend policy.
Changhae Ethanol maintains its revenue base on two pillars: soju-linked demand and expanding non-beverage applications, underpinned by its leading position in Korea's ethanol market.
Following a net loss in 2023, earnings recovered through 2024-2025, with operating margin and operating cash flow improving alongside a more stable balance sheet.
However, 2025 revenue declined from the prior year, and quarterly volatility such as the Q4 margin dip suggests earnings consistency still warrants monitoring.
On the industry side, new demand possibilities such as the SAF mandatory blending discussion have emerged, but these remain at an early stage, and the company's specific involvement has not been confirmed.
The regulated industry's high dependence on policy and taxation, along with raw material and FX volatility, are risk factors that require ongoing observation. It is reasonable to form a view by tracking upcoming quarterly results together with policy developments.
Report written 2026-09-05 · Data as of 2026-09-04
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