PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close
Hanil Chemical, the leading domestic zinc oxide producer, posted improved revenue and a return to operating profit in Q2 2026 after several loss-making quarters, though the annual picture still hinges on confirming a sustained turnaround.
Q2 2026 revenue reached KRW 38.3 billion with operating profit of KRW 1.5 billion, ending five consecutive quarters of operating losses.
Full-year 2025 revenue was KRW 124.4 billion with an operating loss of KRW 12.0 billion and a controlling-interest net loss of KRW 18.3 billion, wider than the prior year.
The core product, zinc oxide, serves as a base material for tires, rubber, paint, and ferrite industries, with zinc price swings directly affecting earnings.
The debt ratio rose from 32.1% in 2022 to 46.9% in 2025, and operating cash flow has shown significant volatility in recent years.
The stock trades at a level below its net asset value on a book-value basis.
Hanil Chemical, founded in 1972, is a specialized manufacturer of zinc oxide with headquarters and production facilities in the Seokmun Industrial Complex in Dangjin, South Chungcheong Province.
Its core product, zinc oxide, is a white powder made from zinc ingots and zinc byproducts (dross), used as a base material across rubber manufacturing, paints, ceramics, feed, and cosmetics industries.
According to past disclosures found in search results, zinc oxide has historically accounted for over 85% of total revenue, with paint and recycled plastics making up the remainder.
Consolidated subsidiaries have included Hanil Green Tech (recycled plastics), Sindong Paint Industry (paints), and Hanil Eco Solution, alongside a China-based operation, Hanil Hwagong.
Major customers include Korea's three major tire makers—Hankook Tire, Kumho Tire, and Nexen Tire—along with various chemical processors, supporting a stable supply chain. The company has claimed to maintain over 60% market share in the domestic zinc oxide market, positioning it as the industry leader.
It has also pursued development of higher value-added products such as UV-blocking zinc oxide. Given this structure, earnings tend to move in tandem with zinc raw material prices and demand from the tire and automotive sectors.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩31.3B | -₩2.8B | −9.0% |
| 2025Q3 | ₩30.2B | -₩4.7B | −15.5% |
| 2025Q4 | ₩30.9B | -₩2.1B | −6.9% |
| 2026Q1 | ₩35.2B | -₩800M | −2.3% |
| 2026Q2 | ₩38.3B | ₩1.5B | 3.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩156.3B | ₩4.9B | ₩4.3B | 3.1% | 3.7% | 32.1% |
| 2023 | ₩121.9B | -₩9.4B | -₩14.7B | −7.7% | −14.2% | 41.0% |
| 2024 | ₩125.3B | -₩6.6B | ₩5B | −5.2% | 4.6% | 33.0% |
| 2025 | ₩124.4B | -₩12B | -₩18.3B | −9.6% | −20.6% | 46.9% |
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
Full-year 2025 revenue was KRW 124.4 billion, slightly down from KRW 125.3 billion in 2024, while the operating loss widened to KRW 12.0 billion from KRW 6.6 billion the prior year.
Controlling-interest net income swung from a KRW 5.0 billion profit in 2024 to an KRW 18.3 billion loss in 2025, reflecting significant earnings volatility.
On a quarterly basis, operating losses continued through Q3 2025 (KRW -4.7 billion) and Q4 2025 (KRW -2.1 billion), with Q4 2025 showing a particularly large controlling-interest net loss of KRW 9.4 billion, suggesting one-off factors were involved.
Entering 2026, the Q1 operating loss narrowed to KRW 0.8 billion, and Q2 saw revenue of KRW 38.3 billion, operating profit of KRW 1.5 billion, and controlling-interest net profit of KRW 1.0 billion, marking a clear sequential improvement.
However, the trailing four-quarter sum of controlling-interest net income from Q3 2025 through Q2 2026 still stands at a loss of KRW 12.4 billion, meaning the company remains in loss territory on an annualized basis.
Compared to 2022, when revenue reached KRW 156.3 billion and operating profit was KRW 4.9 billion, the past three years (2023-2025) have seen revenue settle in the KRW 120 billion range alongside a delayed profitability recovery.
On the cash flow side, operating cash flow turned positive at KRW 2.8 billion in 2025 after being negative in both 2024 (KRW -7.4 billion) and 2023 (KRW -2.2 billion), indicating volatility in cash generation alongside earnings swings.
The debt ratio rose from 32.1% in 2022 to 46.9% in 2025, a modest deterioration in balance sheet stability metrics.
Zinc, the primary raw material for zinc oxide, is priced on international commodity markets via the London Metal Exchange (LME), and recent reports indicated zinc prices strengthened in the first half of 2026 before shifting toward a more moderate trajectory in the second half.
Market research pointed to LME inventory declines and mine supply disruptions as upward price drivers, while improving Chinese industrial activity and new mine startups such as Kipushi were cited as partial supply-easing factors.
The largest demand source for zinc oxide, the tire and rubber industry, is closely linked to automaker and major tire manufacturer demand, meaning domestic tire producers' production and export trends influence the company's results.
The paint segment operates through subsidiary Sindong Paint Industry and is characterized by sensitivity to broader construction and manufacturing sector conditions. The recycled plastics business is connected to ESG and circular economy trends, though its revenue contribution is reportedly relatively small.
Competitively, the company has claimed a leading position in the domestic zinc oxide market built on its long operating history, though its structural sensitivity to raw material price swings remains a persistent characteristic.
The company has shown consecutive improvement in operating results in Q1 and Q2 2026, emerging from five straight quarters of operating losses.
However, whether this improvement reflects temporary zinc price strength or a structural change in pricing and cost structure requires further confirmation through upcoming quarterly results.
Industry research suggests zinc prices are expected to shift from the sharp rally seen in the first half of 2026 to a more moderate trend in the second half, which could be either favorable on the cost side or unfavorable if price pass-through is delayed.
Development of higher value-added products such as UV-blocking zinc oxide is reportedly underway, though the timing and scale of any revenue contribution remain unconfirmed.
Profitability trends in non-core businesses such as paint and recycled plastics are also worth monitoring as part of the broader earnings recovery. Going forward, upcoming quarterly disclosures, zinc price trends, and demand conditions in the tire industry warrant continued attention.
Hanil Chemical's shares trade at a level below net asset value on a book-value basis, suggesting the market has applied a discount from an asset-value perspective.
On the profitability side, operating and net losses persisted through 2025, but the first half of 2026 has shown a directional shift toward operating and net profit. Dividend history in recent years has not been clearly established, making comparison to industry averages difficult.
Given past instances of sharp share price swings tied to zinc price movements, sensitivity to raw material prices should be factored into any valuation assessment. With a relatively small market capitalization and a low free-float ratio, price volatility tied to trading volume is also worth noting.
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
Operating profit reached KRW 1.5 billion in Q2 2026, ending the loss streak that began in Q2 2025. The Q1 operating loss also narrowed sharply to KRW 0.8 billion, confirming improvement over two consecutive quarters. Revenue also hit KRW 38.3 billion in Q2, the highest level among recent quarters. Whether this trend continues will need to be confirmed through subsequent quarterly results.
The company is reported to have maintained over 60% market share in the domestic zinc oxide market, built on its long operating history and quality assurance capabilities. It has secured a stable customer base including Korea's three major tire makers—Hankook Tire, Kumho Tire, and Nexen Tire. Business portfolio diversification through affiliates in paint and recycled plastics has also been pursued.
The current share price trades below the company's net asset value, indicating the market has taken a conservative view from an asset-value perspective. Given the company's historically high current ratio and relatively low debt ratio, market concerns over asset soundness have not been particularly pronounced.
Despite the Q2 2026 return to profit, the trailing four-quarter sum of controlling-interest net income from Q3 2025 through Q2 2026 still shows a loss of KRW 12.4 billion. The 2025 full-year operating loss was KRW 12.0 billion and the net loss was KRW 18.3 billion, both wider than in 2024.
It remains uncertain whether the short-term profit turnaround will translate into a full-year return to profitability.
Zinc, the primary raw material, has repeatedly fluctuated on the LME market due to variables such as mine supply, inventory levels, and Chinese demand. Research firms have suggested zinc prices in the second half of 2026 may shift from the sharp first-half rally to a more moderate trend.
There is a structural risk that margins could be squeezed if raw material price changes are not promptly reflected in selling prices.
The debt ratio rose from 32.1% in 2022 to 46.9% in 2025, while controlling-interest equity declined from KRW 118.1 billion in 2022 to KRW 88.9 billion in 2025. Operating cash flow was also volatile, turning negative in both 2023 and 2024. While sustained net losses have not triggered capital impairment, the equity buffer has thinned somewhat.
Zinc prices are heavily influenced by external factors including global supply chain issues, mine operating conditions, and shifts in Chinese demand. A sharp rise in raw material costs with delayed price pass-through could erode margins, while a sharp decline carries inventory valuation loss risk. This price volatility can lead to significant quarter-to-quarter earnings swings.
A slowdown in production or exports in the tire and automotive industries, the primary demand sources for zinc oxide, could lead to reduced sales volumes. A downturn in construction and manufacturing activity could also negatively affect the paint segment's revenue. The structural tendency for earnings to move in tandem with downstream industry cycles is likely to persist.
The relatively small market capitalization and reportedly low free-float ratio raise the possibility of amplified price volatility during periods of low trading volume.
Given past instances of sharp short-term price swings tied to specific thematic issues such as raw material narratives, investors should be mindful of volatility risk driven by thematic trading flows.
The Q3 2026 earnings disclosure will show whether the Q2 profit turnaround continued and how second-half zinc price trends were reflected in margins.
Continued monitoring of LME zinc price trends and inventory changes in the second half will help identify cost-side risks and opportunities.
The 2026 annual business report and audit report will provide final confirmation of whether the company returned to full-year profitability and how metrics like the debt ratio evolved.
Additional disclosures or IR materials on the commercialization progress of higher value-added products such as UV-blocking zinc oxide and their revenue contribution should be checked.
Hanil Chemical improved operating results for two consecutive quarters in Q1 and Q2 2026, breaking a five-quarter streak of operating losses, though the trailing four-quarter sum still shows a net loss.
Full-year 2025 results showed a slight revenue decline alongside wider operating and net losses compared to the prior year, reflecting significant earnings volatility.
The business structure exhibits a clear tendency for results to move in line with zinc prices and downstream industries such as tires and rubber, making the sustainability of the recent improvement a key point to watch going forward.
On the financial side, a gradual rise in the debt ratio and a decline in controlling-interest equity indicate a somewhat thinner capital buffer. The share price trades below net asset value, which may reflect ongoing uncertainty over earnings persistence.
Investors will need to assess upcoming Q3 earnings disclosures and zinc price trends to determine whether the recent improvement represents a structural shift or a temporary phenomenon.
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.