KOSPISteel & Metals010130

Korea Zinc

₩1,083,000▲ 1.31%2026-10-02 close

Market Cap

₩22.5T

Turnover

₩10.1B

Volume

9,348 shares

Shares out.

20.9M

PER

24.5×

PBR

2.2×

EPS

₩49,888

Dividend Yield

1.64%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩20,000 per share · Prices as of the 2026-10-02 close

Report overview

Record Earnings Alongside an Unresolved Governance Battle

Strong precious metal prices and by-product recovery drove a record first half, while a boardroom vote fight and an 11-trillion-won U.S. smelter project are unfolding at the same time.

1
First-half 2026 consolidated revenue was about 12.44 trillion won with operating profit of roughly 1.33 trillion won, a record half-year that already exceeded the full-year 2025 operating profit of 1.23 trillion won.
2
Silver and gold led the improvement: the company said first-half silver sales reached about 4.11 trillion won, nearly triple a year earlier, while gold sales rose 58.5% to about 1.23 trillion won (EBN, August 2026).
3
At an extraordinary general meeting on September 9, 2026, shareholders vote on a charter amendment to expand separately elected audit committee members, the election of four directors by cumulative voting, and one independent director to serve on the audit committee.
4
Project Crucible, a 7.4 billion dollar integrated smelter in Tennessee, targets site preparation this year, construction in 2027 and phased output from 2029, and has been placed on the U.S. federal fast-track permitting program.
5
Profits recovered but the balance sheet got heavier: the debt-to-equity ratio rose from 25.7% in 2023 to 97.2% in 2024 and 83.7% in 2025, and 2025 operating cash flow was negative 628.2 billion won.

Business structure

Korea Zinc is an integrated non-ferrous smelter centered on the Onsan smelter in Ulsan, producing zinc and lead as its core output while also recovering gold, silver and copper, rare metals such as indium, bismuth and germanium, and semiconductor-grade sulfuric acid.

According to local media, Onsan is configured to produce base metals such as zinc, lead and copper alongside critical minerals like indium and germanium in a single complex (Korea Political Economy News, April 2026).

The product mix shifts sharply with prices: for the first half of 2026 the company reported sales of about 4.11 trillion won in silver, 1.56 trillion won in zinc, 1.23 trillion won in gold and 717 billion won in lead, meaning precious metals outweighed base metals (EBN, August 2026).

Smaller high-value lines were disclosed for the same period, including 30 billion won of indium, 40 billion won of bismuth and 71 billion won of semiconductor sulfuric acid.

Overseas, the group holds the Australian smelter Sun Metals Corporation and renewable developer Ark Energy, plus the U.S. entities Crucible Zinc and e-waste processor PedalPoint.

Customers span the steel and automotive chain through galvanizing and die-casting, electronics and semiconductors, and precious metal distribution, while feedstock combines purchased mine concentrate with recycled inputs such as spent batteries and scrap printed circuit boards.

Competitive position hinges on raw material access and by-product recovery rates; while some European smelters curtailed output as treatment charges turned negative, the company has kept running on the strength of its multi-metal recovery structure.

On governance, chairman Choi Yoon-birm's camp and largest shareholder Young Poong together with MBK Partners each hold roughly 40%, leaving board composition a live variable separate from operations.

Earnings trend

Quarterly revenue · Operating profit

₩3.8T₩258.9B25Q2₩4.2T₩273.4B25Q3₩4.8T₩428.5B25Q4₩6.1T₩746.1B26Q1₩6.4T₩587.1B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩11.2T₩919.2B2022₩9.7T₩659.9B2023₩12.1T₩723.5B2024₩16.6T₩1.2T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩3.8T	₩258.9B	6.8%
2025Q3	₩4.2T	₩273.4B	6.6%
2025Q4	₩4.8T	₩428.5B	9.0%
2026Q1	₩6.1T	₩746.1B	12.3%
2026Q2	₩6.4T	₩587.1B	9.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩11.2T	₩919.2B	₩619.6B	8.2%	7.0%	31.7%
2023	₩9.7T	₩659.9B	₩432.4B	6.8%	4.7%	25.7%
2024	₩12.1T	₩723.5B	₩300.8B	6.0%	4.2%	97.2%
2025	₩16.6T	₩1.2T	₩775B	7.4%	7.2%	83.7%

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

On confirmed figures, 2025 consolidated revenue was 16.59 trillion won with operating profit of 1.23 trillion won (7.4% margin) and net profit attributable to owners of 775.0 billion won, well above 2024's revenue of 12.05 trillion won, operating profit of 723.5 billion won (6.0%) and attributable net profit of 300.8 billion won.

Revenue and operating profit were 9.70 trillion won and 659.9 billion won (6.8%) in 2023 and 11.22 trillion won and 919.2 billion won (8.2%) in 2022, so the numbers show a recovery in profit after the 2023-2024 trough.

The quarterly path is sharper: from 3.83 trillion won of revenue and 258.9 billion won of operating profit (6.8%) in the second quarter of 2025, margins stepped up to 4.77 trillion won and 428.5 billion won (9.0%) in the fourth quarter of 2025 and 6.07 trillion won and 746.1 billion won (12.3%) in the first quarter of 2026.

The second quarter of 2026 set a revenue record at 6.37 trillion won, but operating profit slipped to 587.1 billion won (9.2%), so top line and margin moved in different directions.

For the four quarters from the third quarter of 2025 through the second quarter of 2026, the combined totals were roughly 21.4 trillion won of revenue, about 2.04 trillion won of operating profit and 984.6 billion won of attributable net profit.

The gap between operating and net profit also stands out: the third quarter of 2025 delivered 273.4 billion won of operating profit but only 72.2 billion won of attributable net profit, and in the second quarter of 2026 attributable net profit of 348.6 billion won trailed operating profit of 587.1 billion won, implying that financing costs, currency effects and taxes absorbed a meaningful share of earnings.

Cash flow diverged from the income statement: operating cash flow swung from inflows of 820.9 billion won in 2023 and 515.8 billion won in 2024 to an outflow of 628.2 billion won in 2025, while liabilities grew from 2.40 trillion won in 2023 to 9.21 trillion won in 2025, lifting the debt-to-equity ratio from 25.7% to 83.7%.

The company attributed the record first half of 2026 to technical innovation, pre-emptive investment, valuable metal recovery capability and a broad product portfolio.

Industry analysis

The non-ferrous cycle is best summarized as tight raw material supply against firm metal prices.

Treatment charges for zinc concentrate imported into China stayed in negative territory from April 2026 and were assessed at minus 100 dollars per ton in late July, while zinc rose to around 3,700 dollars per ton, a four-year high (Investing.com metals commentary, August 2026).

Negative treatment charges mean smelters must effectively pay miners for concentrate, squeezing core margins, though one analysis argued that including sulfuric acid and by-product revenue changes the profit picture (Hanwha Investment and Securities industry report, June 2026).

Precious metals follow a different supply logic: the same report noted silver is expected to remain in deficit in 2026 and that much of mined silver emerges as a by-product of lead, zinc and copper mining.

That structure favors operators with heavy by-product recovery, but it also means earnings volatility rises when precious metal prices correct.

End demand is mixed, as weakness in China's steel industry, the largest zinc outlet, weighs on prices, and slowing construction and auto demand is cited as a structural constraint (Steel and Metal News, November 2025).

Competitively, with European smelters trimming utilization on concentrate scarcity and energy costs, integrated smelters with multi-metal recovery and critical mineral capability stand out in relative terms.

At the same time, critical minerals are now a policy target in several countries, layering regulatory and trade variables on top of industry fundamentals.

Outlook

The nearest confirmed event is the extraordinary general meeting in Seoul on September 9, 2026.

The agenda covers a charter amendment to expand separately elected audit committee members, the election of four directors by cumulative voting and one independent director to join the audit committee; reports noted that under the revised Commercial Act large listed companies must seat at least two separately elected audit committee members by September 10 (Aju Business Daily, July 2026).

The items return after similar proposals were voted down at the March annual meeting, and the vacancies created by four independent directors resigning in June will also be filled. Growth is anchored in the United States.

Project Crucible involves 7.4 billion dollars to build an integrated smelter processing about 1.1 million tons of feedstock a year, ultimately producing 13 non-ferrous metals including 11 critical minerals plus semiconductor-grade sulfuric acid, on a roadmap of site preparation this year, construction next year and completion in 2029 (The Guru, June 2026).

The project was designated for the U.S. federal fast-track permitting program, which reports say should shorten approval timelines, and the company has been negotiating power supply with the Tennessee Valley Authority.

In Australia, Ark Energy's Richmond Valley project, with 2,200 MWh of storage and 200 MW of generation, targets commercial operation in 2029; it obtained grid connection approval in May 2026 and the board approved funding in July.

On shareholder returns, the value-up plan announced in October 2024 set a target of a total return ratio above 40% for 2024 through 2026, and disclosed dividends totaled about 102 billion won for the second quarter of 2026 and roughly 204 billion won for the first half.

The company has not published specific full-year revenue or profit guidance, so second-half results will likely hinge on precious metal prices, currency and treatment charge terms.

Valuation

PER

24.5×

PBR

2.2×

ROE

10.5%

EPS

₩49,888

BPS

₩556,218

Dividend per share

₩20,000

The earnings multiple reflects the recent recovery in profits, but it sits toward the upper part of the range smelting businesses have historically commanded.

On a price-to-book basis the shares trade at a premium to net assets, which can be read as pricing in both the core margin recovery and expectations for the U.S. critical minerals project.

That said, attributable net profit over the past four quarters did not fully track the rise in operating profit, and 2025 operating cash flow turned to an outflow, which makes it hard to judge the company on an earnings multiple alone.

Dividends are paid quarterly and a total shareholder return target above 40% for 2024 through 2026 is in place, though the current dividend yield is not far above the domestic market average.

Brokerage views diverge: Shinhan Investment cut its target price to 1.60 million won from 1.90 million won in a July 2026 report, while iM Securities presented 1.95 million won in a May 2026 report (per Newspim report briefings).

Alongside the live metrics on the screen card, it is worth tracking how precious metal prices and currency moves flow into quarterly profit.

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

Margin gains from precious metal and by-product recovery

The operating margin moved from 6.8% in the second quarter of 2025 to 12.3% in the first quarter of 2026 and 9.2% in the second quarter, above the 6-8% annual range of prior years.

The company reported first-half silver sales of about 4.11 trillion won, roughly triple a year earlier, and gold sales of about 1.23 trillion won, up 58.5% (EBN, August 2026). Even with treatment charges negative, the multi-metal recovery structure appears to have defended profitability.

Management also said smaller high-value lines such as indium, bismuth and semiconductor sulfuric acid came in ahead of plan.

A large project aligned with U.S. critical minerals policy

Project Crucible is a 7.4 billion dollar plan to process about 1.1 million tons of feedstock a year and, once complete, to produce 13 non-ferrous metals including 11 critical minerals locally (The Guru, June 2026).

Reports say its designation under the U.S. federal fast-track permitting program should shorten approval timelines.

The company disclosed that chairman Choi Yoon-birm personally discussed power supply with the Tennessee Valley Authority and permitting steps with a federal senator and Commerce and State Department officials. Management has also framed feedstock sourcing through its e-waste unit PedalPoint as a complementary piece.

Quarterly dividends and a stated return target

In its October 2024 value-up plan the company set a target of a total shareholder return ratio above 40% for 2024 through 2026. Dividends totaled about 102 billion won for the second quarter of 2026 and roughly 204 billion won for the first half, with a payment date of September 4.

An established quarterly dividend makes the return stream easier to track through earnings swings. Whether the target is met, however, can only be confirmed after the full-year 2026 accounts.

Bear factors

A control battle now in its third year

The dispute between chairman Choi Yoon-birm's camp and the Young Poong-MBK Partners alliance is in its third calendar year.

A proposal to elect a separately chosen audit committee member was voted down at the March 2026 annual meeting, and in June four independent directors whose duties had been suspended by a court decision resigned, leaving board vacancies.

In August, disclosures on control-related litigation were amended several times (Daily Union, August 2026). Board composition and litigation timelines keep feeding back into management decisions.

Negative treatment charges and feedstock cost pressure

Treatment charges for zinc concentrate imported into China stayed negative from April 2026 and were assessed at minus 100 dollars per ton in late July (Investing.com, August 2026). That means smelters bear a cost to secure concentrate, hitting core margins directly.

Weakness in China's steel industry, the largest zinc outlet, is cited as downward pressure on metal prices. If unfavorable feedstock terms persist, the offset from precious metal recovery could narrow.

Balance sheet load and heavy capital commitments

Liabilities grew from 2.40 trillion won in 2023 to 9.21 trillion won in 2025, lifting the debt-to-equity ratio from 25.7% to 83.7%. Operating cash flow was an outflow of 628.2 billion won in 2025, reversing inflows of 820.9 billion won in 2023 and 515.8 billion won in 2024.

Reports also describe a structure in which the U.S. operating entity borrows roughly 7 trillion won including policy finance, with Korea Zinc guaranteeing about 8.39 trillion won, and Young Poong has raised concerns about dilution of shareholder value and financial risk (Kyunghyang Shinmun, December 2025). The lag between spending scale and payback remains a financial variable.

Risk factors

Commodity price and currency swings

With silver and gold now a larger share of profit, corrections in precious metal prices feed straight into quarterly results. Revenue hit a quarterly record of 6.37 trillion won in the second quarter of 2026, yet operating profit fell to 587.1 billion won from 746.1 billion won in the prior quarter.

The gap between operating profit and attributable net profit has varied widely by quarter, so currency and financing costs can move the bottom line. Timing differences between input and selling prices also affect inventory valuation.

Regulatory and legal proceedings

Reports indicate that a Fair Trade Commission examiner sent an examination report to Korea Zinc in April 2026, beginning sanction proceedings over circular shareholding created through overseas affiliates (TheBell, June 2026).

Civil and criminal proceedings involving the chairman and chief executive, along with minority shareholder suits, have also been reported.

Auditor key audit matters reportedly include impairment testing of subsidiary investments and goodwill and valuation of level 3 financial instruments, flagged as accounting estimate uncertainty. Outcomes could reshape the governance balance and the recognition of contingent liabilities.

Execution risk on mega projects

Project Crucible targets construction in 2027 and phased output from 2029, requiring power infrastructure, permits and feedstock to line up simultaneously.

The company has outlined plans to recycle about 620,000 tons of smelting by-products held in five ponds at the site to recover critical minerals, but actual recovery rates and costs can only be verified after start-up.

The Richmond Valley project in Australia is likewise in construction toward 2029 commercial operation. Schedule slippage or cost inflation could push back the payback timeline.

What to watch next

September 9, 2026
The extraordinary general meeting votes on the charter amendment to expand separately elected audit committee members, the election of four directors by cumulative voting and one independent director for the audit committee. The charter change needs a special resolution and the audit committee election applies a 3% voting cap on the largest shareholder, so the outcome will reshape the board balance.
October to early November 2026
Third-quarter results and the quarterly dividend decision come into view. Key points are whether the 9.2% operating margin of the second quarter of 2026 holds and how precious metal prices and currency moves flow through non-operating items into net profit.
Fourth quarter of 2026
This is the window to check site preparation progress at Project Crucible, readiness for 2027 construction and the status of fast-track permitting. The signing of a final joint venture agreement with the U.S. government and firmer terms on guarantees and borrowings are also worth monitoring.
Second half of 2026 to early 2027
The conclusion of the Fair Trade Commission's circular shareholding sanction process and the progress of control-related litigation. Both could affect the voting structure or recognition of contingent liabilities, serving as a gauge for the direction of governance risk.
First quarter of 2027
Time to check the 2027 annual zinc concentrate treatment charge settlement together with the full-year 2026 accounts and dividend decision. Whether the 2024-2026 target of a total shareholder return ratio above 40% was actually met can also be assessed then.

Overall view

Korea Zinc's recent results show a clear recovery in confirmed figures.

After 2025 revenue of 16.59 trillion won and operating profit of 1.23 trillion won, the company posted operating profit of 746.1 billion won (12.3% margin) in the first quarter of 2026 and 587.1 billion won (9.2%) in the second, and said first-half revenue of about 12.44 trillion won and operating profit of roughly 1.33 trillion won marked a record half-year.

The driver was expanded silver and gold sales, and the multi-metal recovery structure appears to have defended profits even with zinc concentrate treatment charges in negative territory.

On the other side sit a rising debt-to-equity ratio, from 25.7% in 2023 to 83.7% in 2025, a swing to negative operating cash flow in 2025, and the scale of guarantees tied to the U.S. project.

Governance remains unresolved, making the audit committee and director elections at the September 9, 2026 extraordinary meeting and the Fair Trade Commission process the key items for the coming quarter.

Project Crucible, the growth axis, is progressing toward 2029 output, but the lag between spending and payback persists. In short, the earnings power created by precious metal prices and feedstock terms needs to be weighed alongside governance and balance sheet burdens. This report is for information purposes and contains no buy or sell recommendation.

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.