KOSPIAutomotive010580

SM Bexel

₩2,250▼ 1.32%2026-10-02 close

Market Cap

₩250.9B

Turnover

₩700M

Volume

310,000 shares

Shares out.

110M

PER

—

PBR

2.7×

EPS

-₩8

Dividend Yield

0.00%

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

Report overview

Auto Parts and Battery Dual Business Facing Earnings Volatility

SM Bexel, which runs both an automotive parts segment and a primary/specialty battery segment, is expanding into drone and defense battery packs even as multi-year revenue has contracted.

1
2025 consolidated revenue of KRW 150.3bn is down from KRW 202.7bn in 2023, with operating margin falling from 4.7% to 1.0%
2
After operating losses in 2025Q3-Q4, the company returned to operating profit in 2026Q1-Q2, though 2026Q2 posted a net loss to owners despite the operating profit
3
The battery segment is expanding beyond primary alkaline cells into defense ampoule cells and lithium-ion battery packs for drones and robots
4
A new Battery Pack Solutions Team was launched in July 2026 to develop smart-BMS battery packs for drones, robots, and mobility applications
5
Major shareholder ownership stands around 88% amid continued affiliate open-market purchases, leaving a relatively small free float

Business structure

SM Bexel is an SM Group manufacturing affiliate operating both an automotive parts segment and a battery segment. According to a 2026Q1 disclosure, the automotive segment accounted for roughly 53.6% of revenue and the battery segment about 46.4%, splitting the business nearly evenly.

The automotive segment's main products are water pumps, auto parts, aluminum cylinder heads, and TCCM, with Hyundai Motor, Kia, Hyundai Mobis, and Hyundai Wia as key customers.

The battery segment is led by alkaline cells, followed by manganese cells and small-format ampoule cells used in defense applications, supplied to customers including Korea Defense Industry (KDI), Seobwon, Coupang, the military welfare unit, Emart, and Lotte Mart.

Since 2024 the company has supplied miniature ampoule cells for the Cheonmu unguided rocket system to KDI, completing the first phase of that supply by 2026Q1.

More recently, the company has expanded into lithium-ion battery packs and smart battery management systems (BMS) targeting drones, robots, and mobility, partnering with drone maker Volorand on delivery and agricultural spraying drone battery packs and supplying main and backup power packs for Soombi's cargo air vehicle (CAV).

The automotive segment is exposed to cost and pricing pressure typical of OEM parts supply, while the battery segment is pursuing differentiation through defense and specialty-use cells.

Because the two segments contribute similarly to revenue, both the auto production cycle and defense/specialty battery order flow affect overall results simultaneously.

Earnings trend

Quarterly revenue · Operating profit

₩39.3B₩1.3B25Q2₩36.4B-₩200M25Q3₩32.3B-₩300M25Q4₩36.6B₩500M26Q1₩36.1B₩800M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩136.8B₩3.4B2022₩202.7B₩9.5B2023₩172.5B₩5.2B2024₩150.3B₩1.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩39.3B	₩1.3B	3.3%
2025Q3	₩36.4B	-₩200M	−0.6%
2025Q4	₩32.3B	-₩300M	−1.1%
2026Q1	₩36.6B	₩500M	1.3%
2026Q2	₩36.1B	₩800M	2.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩136.8B	₩3.4B	₩9.2B	2.5%	13.8%	123.3%
2023	₩202.7B	₩9.5B	₩700M	4.7%	1.0%	55.3%
2024	₩172.5B	₩5.2B	₩1.1B	3.0%	1.7%	57.4%
2025	₩150.3B	₩1.6B	₩1.7B	1.0%	2.4%	42.8%

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

Earnings analysis

Annual revenue rose from KRW 136.8bn in 2022 to KRW 202.7bn in 2023, then contracted for two straight years to KRW 172.5bn in 2024 and KRW 150.3bn in 2025. Operating margin also declined steadily from 4.7% in 2023 to 3.0% in 2024 and 1.0% in 2025, showing a marked thinning of profitability.

Net income attributable to owners fell sharply from KRW 9.22bn in 2022 to KRW 0.69bn in 2023, then gradually recovered to KRW 1.12bn in 2024 and KRW 1.65bn in 2025; the elevated 2022 net income, well above that year's operating profit of KRW 3.42bn, suggests a one-off item may have been at play.

The debt ratio improved from 123.3% in 2022 to 55.3% in 2023, 57.4% in 2024, and 42.8% in 2025, pointing to a strengthening balance sheet.

On a quarterly basis, the company was profitable through 2025Q2 (revenue KRW 39.3bn, operating profit KRW 1.29bn, net income to owners KRW 1.16bn) before swinging to consecutive losses in 2025Q3 (revenue KRW 36.4bn, operating loss KRW 0.21bn, net loss KRW 0.23bn) and 2025Q4 (revenue KRW 32.3bn, operating loss KRW 0.35bn, net loss KRW 0.07bn).

It returned to profit in 2026Q1 (revenue KRW 36.6bn, operating profit KRW 0.49bn, net income KRW 0.41bn), and operating profit improved further in 2026Q2 (revenue KRW 36.15bn, operating profit KRW 0.76bn), yet the company posted a net loss to owners of KRW 0.95bn that quarter, a divergence between operating and net results.

This suggests a separate drag from non-operating items, and the trailing four-quarter sum (2025Q3-2026Q2) of net income to owners remains negative at roughly KRW -0.84bn. Operating cash flow also swung widely, dropping from KRW 23.3bn in 2023 to KRW 0.23bn in 2024 before recovering to KRW 6.2bn in 2025.

Industry analysis

The automotive parts business follows a typical Tier-1 supplier structure tied to production volumes at Hyundai Motor, Kia, Hyundai Mobis, and Hyundai Wia, with earnings sensitive to raw material costs and foreign exchange, and limited pricing power.

In the battery segment, the household and industrial alkaline/manganese primary battery market appears mature, while defense-use specialty cells (ampoule batteries) and lithium-ion battery packs for drones and robots stand out as relatively growing niches.

Drone usage is expanding in domestic agriculture and logistics, but the associated battery packs remain heavily dependent on Chinese products, a gap that domestic-localization players cite as an opportunity.

In defense, the track record of supplying the Cheonmu system via Korea Defense Industry (KDI) could serve as a barrier to entry, though a follow-on order has not yet been confirmed.

The drone and robot battery pack market remains at an early stage, still centered on joint development and field testing with individual drone makers such as Volorand and Soombi, making the timing of any transition to mass-production revenue a key point to watch.

Competitively, the company is positioned less as a large-scale battery cell manufacturer and more as a small-to-midsize player differentiating through pack design, BMS integration, and specialty-application capability.

Outlook

The company launched a Battery Pack Solutions Team in July 2026 and outlined plans to sequentially develop customized battery packs for industrial drones, robot vacuum cleaners, serving robots, and humanoid robots.

Through its partnership with Volorand, it has set a target of supplying roughly 200 smart battery packs for agricultural spraying drones by the end of the year, while its delivery-drone battery pack has already completed about 1,000 flight field tests.

In August, it disclosed development of main and backup power battery packs for Soombi's 100kg-class cargo air vehicle (CAV), extending its reach into mid-to-large drone power systems.

In defense, the first phase of miniature ampoule cell supply for the Cheonmu unguided rocket system to KDI, ongoing since 2024, was completed in 2026Q1, and the company has stated it will pursue follow-on orders and expand its defense specialty-cell portfolio, though no such contract has yet been confirmed.

Management has also mentioned plans to extend battery pack applications to small purpose-built vehicles (PBVs) and mobility scooters for those with limited mobility.

No new capacity expansion or order disclosures have been identified for the automotive segment, suggesting it will continue to track existing OEM customers' production plans.

Overall, since the new drone, defense, and robotics businesses remain at an early revenue stage, it will take time before they can be established as a growth pillar alongside the existing operations.

Valuation

PER

—

PBR

2.7×

ROE

-1.2%

EPS

-₩8

BPS

₩632

Dividend per share

₩0

Because earnings over the trailing four quarters have remained in loss territory, conventional profit-based valuation metrics are difficult to apply meaningfully at this time.

The stock trades at a premium to net asset value, a relationship worth interpreting alongside the volatility in annual results, which moved from profit to margin compression and losses before a modest return to profit.

No recent cash dividend payment has been identified in disclosures, limiting the relevance of dividend-related metrics.

While the debt ratio has declined over multiple years, pointing to an improved balance sheet, the divergence between operating profit and net loss seen in 2026Q2 warrants attention to the quality of reported earnings.

Since revenue from new businesses such as drone and defense battery packs has not yet scaled meaningfully, how the current price level reflects the existing business trajectory versus expectations for these newer ventures is likely to be assessed differently by individual investors.

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

Bull factors

Expanding Defense and Specialty Cell Portfolio

The company has been supplying ultra-compact ampoule batteries for Cheonmu guided missiles to KDI since 2024, and is set to complete the first-phase volume in Q1 2026, securing a track record of mass production and quality assurance for defense-use specialty batteries.

The company stated its plan to expand its defense portfolio through follow-on orders, military battery packs, and power sources for communication equipment. Having already built a track record in the defense supply chain, which has high entry barriers, can be seen as a strength relative to competitors.

New Drone and Robot Battery Pack Business Launch

In July 2026, the company established a Battery Pack Solution Team and began developing smart BMS battery packs for drones, robots, and mobility applications.

It is accumulating actual field test results by developing and supplying drone battery packs for delivery and pest control with Volorand, and CAV battery packs with Soombee. Specific milestones, such as a target of supplying about 200 units within the year, also serve as criteria for assessing progress.

Improved Balance Sheet and Return to Quarterly Profit

The debt ratio has steadily declined from 123.3% in 2022 to 42.8% in 2025, improving financial soundness. After posting operating losses for two consecutive quarters in the second half of 2025, the company turned to operating profit in Q1 and Q2 of 2026.

With the automotive and battery divisions sharing revenue in a balanced manner, dependence on any single business is not excessively high.

Bear factors

Multi-Year Decline in Revenue and Margins

Annual revenue declined for two consecutive years, from KRW 202.7 billion in 2023 to KRW 150.3 billion in 2025, while the operating margin also fell sharply from 4.7% to 1.0% over the same period.

With new businesses not yet contributing significantly to revenue and the existing business continuing to contract, the timing of an overall earnings rebound remains uncertain.

Divergence Between Operating Profit and Net Income

In Q2 2026, despite an improvement in operating profit to KRW 0.76 billion, the company recorded a net loss attributable to controlling shareholders of KRW 0.95 billion, as non-operating income and expense factors undermined the quality of earnings.

The cumulative net income attributable to controlling shareholders over the most recent four quarters (Q3 2025–Q2 2026) also remains in deficit. Such earnings volatility makes it difficult to forecast quarterly performance.

OEM Dependence and Cost Pressure in Auto Parts

The automotive division has high revenue dependence on a small number of clients such as Hyundai Motor and Kia, making its performance vulnerable to changes in finished vehicle production plans, raw material prices, and exchange rates.

As a Tier-1 supplier with limited pricing power, there is a structural limitation in fully passing on increased costs.

Risk factors

Earnings Volatility Risk

A pattern of large swings in quarterly earnings over short periods has repeated, including operating losses in Q3–Q4 2025, a turn to profit in Q1–Q2 2026, and yet a net loss in Q2 2026.

There are also periods (such as 2022) where one-off items appear to have significantly affected net income, making it difficult to assess the sustainability of earnings. Whether such volatility eases in future quarters is a point to watch.

Industry and Competition Risk

In the domestic drone and pest control market, a significant portion of battery packs relies on Chinese products, so domestically produced products may face challenges in price competitiveness.

The auto parts division is directly exposed to production adjustments by automakers as well as fluctuations in raw material prices and exchange rates. Follow-on orders in the defense division are not confirmed until contracts are signed, which could create a gap between expectations and the actual timing of order wins.

Ownership Structure and Liquidity Risk

As the largest shareholder's stake and related holdings have risen to around 88%, with affiliates continuing on-market purchases, the free float ratio is relatively low.

In September 2025, there was a case of short-term volatility unrelated to business fundamentals, such as the stock hitting the daily upper limit due to a theme-driven issue related to Lithium Americas.

In stocks with limited liquidity, it is necessary to keep in mind the possibility that such theme-driven volatility could recur.

What to watch next

Mid-November 2026 (expected 2026Q3 earnings disclosure)
Check whether the 2026Q2 divergence between operating profit and net income persists into Q3, and how the automotive and battery segments' revenue trends diverge.
Q4 2026 (year-end)
This is when actual delivery against the roughly 200-unit target for agricultural drone battery packs with Volorand can be verified.
From Q4 2026 onward
Continue to watch for disclosures on whether a follow-on order for Cheonmu-related ampoule cells to KDI materializes.
H2 2026 through 2027
Whether the products the Battery Pack Solutions Team is developing for industrial drones, robot vacuums, serving robots, and humanoids convert into actual mass-production supply contracts will be the benchmark for the new business's revenue contribution.
Disclosures from Q4 2026 onward
Check whether disclosures on major shareholder open-market purchases and ownership changes continue, and how they affect the free float.

Overall view

SM Bexel operates automotive parts and battery (primary/specialty cell) segments that split revenue roughly evenly, and has seen both revenue and operating margin contract since 2023.

After two consecutive quarters of operating losses in the second half of 2025, the company returned to operating profit in the first half of 2026, though 2026Q2 posted a net loss to owners despite improved operating profit, warranting attention to earnings quality.

A multi-year decline in the debt ratio, pointing to improved financial stability, is a positive factor.

On the new business front, the company is pursuing follow-on orders based on its track record supplying defense-use ampoule cells, and since launching a Battery Pack Solutions Team in July 2026 it has begun sequentially disclosing collaborative results with Volorand and Soombi on drone, robot, and mobility battery packs.

That said, these new businesses' revenue contribution remains at an early stage, and with major shareholder ownership concentrated around 88% limiting free float, and a history of thematic price spikes unrelated to fundamentals, both business fundamentals and market supply-demand factors merit attention.

Overall, the pace of recovery in the existing businesses and the timing of any revenue conversion from new ventures stand out as points to watch going forward.

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.