PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩250 per share · Prices as of the 2026-10-02 close
Nongshim Group affiliate Youlchon Chemical returned to annual profitability in 2025 and extended its earnings recovery into the first half of 2026, driven by expansion of its battery pouch film business.
Consolidated operating profit of KRW 8.5 billion and net profit of KRW 4.2 billion in 2025 marked a turnaround after three consecutive years of losses from 2022 to 2024.
Second-quarter 2026 revenue reached KRW 156.1 billion with operating profit of KRW 9.5 billion, sharply higher than prior quarters, reflecting the ramp-up of the new Poseung plant.
The debt-to-equity ratio rose for four straight years from 95.7% in 2022 to 135.3% in 2025, indicating increasing financial leverage.
The company is the sole supplier of 183-micrometer high-formability pouch film to LG Energy Solution and has set a 2030 revenue target of KRW 700 billion for the pouch film business.
In its 2026 value-up plan, the company disclosed a policy of maintaining a dividend payout ratio of at least 40% of consolidated net income.
Youlchon Chemical is a chemical materials affiliate of Nongshim Group operating two core segments built on coating technology: packaging and electronic materials.
The packaging segment produces OPP and CPP films and shrink films for food and industrial flexible packaging, with Nongshim and CJ CheilJedang as its main customers.
The electronic materials segment produces PET film, optical film, and release film for displays, semiconductors, and batteries, along with aluminum lithium-ion battery pouch film (LiBP).
Electronic materials revenue grew from KRW 91.2 billion in 2023 to KRW 165.8 billion in 2025, lifting its share of total revenue from 22% to 34.2% over the same period.
The company expects the electronic materials revenue share to rise to 40-50% in 2026 as its new Poseung plant reaches commercial operation and pouch film demand from energy storage system (ESS) applications grows.
The battery pouch film localizes a market once dominated by Japanese suppliers such as Showa Denko, with LG Energy Solution as the largest customer, accounting for 19.6% of 2025 revenue.
The company has secured pouch production capacity capable of meeting about 40% of domestic demand and is preparing to expand supply relationships with Samsung SDI and SK On.
However, the electronic materials segment posted losses for three consecutive years from 2023 to 2025 given its early-stage investment profile, leaving profitability improvement as an ongoing task relative to the packaging business.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩119.7B | ₩1.1B | 0.9% |
| 2025Q3 | ₩116.8B | -₩2.3B | −2.0% |
| 2025Q4 | ₩116.1B | -₩500M | −0.4% |
| 2026Q1 | ₩127.2B | ₩600M | 0.4% |
| 2026Q2 | ₩156.1B | ₩9.5B | 6.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩508.9B | -₩4.6B | -₩4.1B | −0.9% | −1.2% | 95.7% |
| 2023 | ₩414.5B | -₩16.2B | -₩19.1B | −3.9% | −6.2% | 121.7% |
| 2024 | ₩457.1B | -₩18.4B | -₩8.5B | −4.0% | −2.9% | 125.3% |
| 2025 | ₩485.4B | ₩8.5B | ₩4.2B | 1.8% | 1.4% | 135.3% |
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
Youlchon Chemical posted an operating loss of KRW 4.6 billion on revenue of KRW 508.9 billion in 2022, followed by losses in 2023 (revenue KRW 414.5 billion, operating loss KRW 16.2 billion) and 2024 (revenue KRW 457.1 billion, operating loss KRW 18.4 billion), extending losses for three straight years.
In 2025, revenue rose to KRW 485.4 billion with operating profit of KRW 8.5 billion and net profit of KRW 4.2 billion, marking a turnaround to profitability.
Quarterly results showed volatility, with an operating profit of KRW 1.1 billion in the second quarter of 2025 followed by losses of KRW 2.3 billion and KRW 0.5 billion in the third and fourth quarters.
In the first quarter of 2026, operating profit was a modest KRW 0.6 billion while net profit reached a relatively larger KRW 1.5 billion, likely reflecting partial settlement of costs related to the terminated Ultium Cells supply contract.
In the second quarter of 2026, revenue jumped to KRW 156.1 billion from the prior quarter, with operating profit expanding to KRW 9.5 billion and net profit reaching KRW 5.8 billion, the most pronounced improvement among recent quarters.
This improvement appears linked to the ramp-up of the Poseung plant and growing demand for ESS pouch film. The annual operating margin worsened from -0.9% in 2022 to the -3% to -4% range in 2023-2024 before turning to 1.8% in 2025.
Operating cash flow rose sharply from a range of KRW 8.4-15.4 billion in 2022-2024 to KRW 27.1 billion in 2025, also indicating improved cash generation.
The battery pouch film market has long been dominated by Japanese suppliers such as Showa Denko, and demand for domestic localization is growing as Korean battery makers expand pouch-type cell production.
LG Energy Solution's pouch battery roadmap progresses from the second-generation JF2 to third-generation JF3 in 2027 and fourth-generation JF4 after 2029, providing a continuing demand base for material suppliers.
Beyond electric vehicle demand, pouch battery demand for energy storage systems (ESS) has been rising, with LG Energy Solution expanding ESS production sites in the United States, Poland, and China.
Planned U.S. tariffs on Chinese ESS systems and components could be relatively favorable for the domestic pouch material supply chain.
The packaging segment remains a stable business anchored to affiliate volume from Nongshim and others, though growth potential is limited, with expanding U.S. export share cited as an additional growth driver.
The electronic materials segment continues to show quarter-to-quarter earnings volatility tied to new facility investment burdens, customer inventory adjustments, and production line approval processes, suggesting stable profitability will take additional time to establish.
In its 2026 value-up plan, the company disclosed a policy of boosting profit-generating capacity through expanded overseas sales in the electronic materials segment and a strengthened profitability-focused management system.
Specifically, it plans to bring a new energy materials plant online, scale back low-margin display materials, and restructure the business toward ESS demand and semiconductor process materials.
The battery pouch business targets an expansion of more than 240% by 2028 versus 2025, with a longer-term goal of over KRW 700 billion in pouch film revenue alone by 2030.
On capacity, the Poseung plant has increased pouch film production capacity from 30 million square meters to 70 million square meters, compared with the Ansan plant's annual revenue scale of KRW 70-80 billion, with further expansion planned to bring total capacity to 110 million square meters.
The company stated it expects pouch film-centered electronic materials revenue to grow at an average annual rate of 50% from 2025 through 2028. On governance, the company disclosed a target to raise its corporate governance core indicator compliance rate from 33.3% to 40%.
Its dividend policy calls for maintaining a payout ratio of at least 40% of consolidated net income within distributable profit limits.
Youlchon Chemical turned profitable in 2025 after three consecutive years of losses from 2022 to 2024, and has continued to show quarterly improvement into 2026.
As this earnings recovery remains at an early stage, the market appears to be weighing both the durability of the recovery and whether the electronic materials segment can achieve stable profitability.
The share price relative to net asset value stands in a different phase compared with earlier periods when diversification expectations were more prominently priced in, and the company's disclosed policy of maintaining a payout ratio of at least 40% offers a reference point for gauging future dividend direction.
The four consecutive years of rising debt ratio is a factor worth considering alongside any assessment of the share price relative to net assets.
Investors may wish to weigh the sustainability of earnings, the pace of profitability improvement in the electronic materials segment, and the trajectory of financial leverage together.
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
Youlchon Chemical localized battery pouch film once dominated by Japanese firms and is the sole supplier of 183-micrometer high-formability pouch film to LG Energy Solution. It has secured production capacity covering about 40% of domestic demand and is preparing to expand supply to Samsung SDI and SK On. Growing demand for ESS pouch batteries is cited as an additional growth opportunity.
Both consolidated operating profit and net profit turned positive in 2025, and quarterly improvement continued into the first half of 2026. Operating cash flow also rose sharply to KRW 27.1 billion in 2025, showing that the earnings recovery has translated into improved cash generation as well.
The packaging segment operates on stable volume from Nongshim, CJ CheilJedang, and other affiliate customers, with expanding U.S. export share also underway. This provides a stable cash-generating base that supports investment burdens in the newer electronic materials business.
The debt-to-equity ratio rose for four consecutive years, from 95.7% in 2022 to 135.3% in 2025. This reflects borrowing burdens tied to new plant investment and business expansion, and concerns about financial soundness have been raised in the market.
The electronic materials segment posted losses for three consecutive years from 2023 to 2025. While revenue has grown, achieving profitability remains an unresolved task, and the timing of segment-level breakeven is uncertain.
Quarterly results showed significant swings in 2025, with operating profit in the second quarter followed by renewed losses in the third and fourth quarters. Volatility tied to external factors such as customer inventory adjustments and production line approval processes may continue.
The debt ratio has risen for four consecutive years to 135.3%, and the business requires continuous capital investment for new plants. Concerns about financial soundness tied to upcoming bond maturities have been raised in the market, warranting attention to future borrowing structure and repayment plans.
The electronic materials segment has high revenue dependence on LG Energy Solution, which accounted for 19.6% of 2025 revenue. The packaging segment also relies heavily on affiliate volume from Nongshim, meaning demand or policy changes at specific customers can directly affect results.
Price fluctuations in raw materials for the packaging segment, such as PP resin, base paper, and aluminum foil, can translate into cost pressure. Given the export-oriented structure, currency fluctuations are also a factor that can affect results.
The third-quarter 2026 earnings disclosure should be checked to see whether the second-quarter improvement continues and whether the electronic materials segment achieves stable segment-level profitability.
Progress and utilization of the expansion plan to raise pouch film production capacity to 110 million square meters should be monitored.
Any changes in pouch film specifications or additional order wins tied to the next-generation JF3 pouch battery transition should be checked.
This is the point to check how the policy of maintaining a payout ratio of at least 40% is reflected in the actual dividend decision.
Youlchon Chemical is in a transitional phase, expanding its electronic materials business centered on battery pouch film while maintaining a stable packaging business anchored to Nongshim Group affiliates.
The company turned profitable in 2025 after three consecutive years of losses, and improvement continued into the first half of 2026, though the electronic materials segment remains in cumulative losses and quarterly results remain volatile.
The four-year rise in the debt ratio is a factor to watch from a financial structure perspective.
The company has set medium-to-long-term targets of expanding the pouch business 240% by 2028 and reaching KRW 700 billion in pouch film revenue by 2030, alongside a disclosed policy of maintaining a dividend payout ratio of at least 40%.
Key points to watch going forward include whether the improvement continues in third-quarter results, when the electronic materials segment achieves stable profitability, and the direction of financial leverage management.
Report written 2026-09-05 · Data as of 2026-09-04
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