PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩40 per share · Prices as of the 2026-10-02 close
Consolidated revenue and operating profit showed a clear recovery in the first half of 2026, while participation in a solid-state battery material national R&D project has added share-price volatility separate from the core chemical business.
Consolidated operating profit reached about KRW 3.3 billion in Q1 2026 and KRW 7.8 billion in Q2 2026, a marked improvement from the weak quarters of 2025.
Core products are glycol ether (GE), surfactants (EOA), and specialty emulsifiers (EM), supplied to semiconductor, electronics, coatings, and household product industries.
As lead agency of a Korean government-funded project with LG Chem and the Korea Research Institute of Chemical Technology, the company is developing solid polymer electrolyte materials for lithium-metal batteries, and related news has repeatedly driven share-price volatility.
In 2025, a strong won-dollar rate and Chinese oversupply of chemical products pressured export prices, pulling the annual operating margin down to 1.7%.
The debt ratio steadily declined from 47.7% in 2022 to 36.7% in 2025, indicating a stabilizing balance sheet.
Founded in 1976 and listed on the KOSPI in 2003, Hannong Chemical is a precision chemicals manufacturer with three core product lines: glycol ether (GE), surfactants (EOA), and specialty emulsifiers (EM).
GE is used as a raw material for semiconductor cleaning agents, aircraft, automobiles, and coatings, while EOA serves the electronics, personal care, cosmetics, and metal industries, and EM is applied in adhesives, paints, and epoxy for industrial precision chemicals.
The specialty emulsifier (EM) segment is understood to have accounted for about 9.9% of company revenue in 2024. The company has been gradually expanding the share of higher value-added advanced chemical products such as functional monomers (FM) and glymes.
Major customers include LG Chem, Chemtronics, and Lotte Chemical, and the company supplies a diverse product range to more than 400 clients. Chairman Kim Eung-sang and related parties hold roughly 47% of outstanding shares, with total shares issued at 15,637,042 common shares.
More recently, the company has pursued solid polymer electrolyte materials for solid-state batteries as a new growth driver and serves as the lead agency for a related Korean government-funded R&D project.
Production facilities are located in Gunsan, North Jeolla Province, and there have been local government announcements related to new investment in areas such as Seosan.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩53B | ₩1.6B | 3.0% |
| 2025Q3 | ₩51.2B | ₩200M | 0.3% |
| 2025Q4 | ₩47.9B | ₩1.2B | 2.4% |
| 2026Q1 | ₩59.4B | ₩3.3B | 5.6% |
| 2026Q2 | ₩72.4B | ₩7.8B | 10.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩239.4B | ₩4.5B | ₩8.6B | 1.9% | 5.6% | 47.7% |
| 2023 | ₩212.4B | -₩2.4B | ₩12.4B | −1.1% | 7.6% | 46.0% |
| 2024 | ₩247.5B | ₩6.1B | ₩4.5B | 2.5% | 2.7% | 41.3% |
| 2025 | ₩214.5B | ₩3.6B | ₩3.9B | 1.7% | 2.2% | 36.7% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21
Annual results have shown notable volatility.
Revenue was KRW 239.4 billion with operating profit of KRW 4.5 billion (1.9% margin) in 2022, then revenue fell to KRW 212.4 billion in 2023 with an operating loss of KRW 2.4 billion (-1.1% margin); yet net income rose to KRW 12.4 billion, suggesting a separate non-operating factor that year.
In 2024, revenue recovered to KRW 247.5 billion and operating profit improved to KRW 6.1 billion (2.5%), though net income fell to KRW 4.5 billion. In 2025, results softened again with revenue of KRW 214.5 billion, operating profit of KRW 3.6 billion (1.7%), and net income of KRW 3.9 billion.
On a quarterly basis, operating profit dropped to about KRW 0.17 billion in Q3 2025 and the company posted a net loss of roughly KRW 0.26 billion in Q4 2025, extending the weak trend.
However, Q1 2026 revenue rebounded to KRW 59.4 billion with operating profit of KRW 3.3 billion and net income of KRW 3.3 billion, and Q2 2026 revenue reached KRW 72.4 billion with operating profit of KRW 7.8 billion and net income of KRW 5.9 billion, marking a clear quarter-over-quarter improvement.
As a result, the trailing four-quarter (Q3 2025 through Q2 2026) sum of owners' net income was roughly KRW 9.6 billion, which could be read as an early signal of annual earnings recovery. Whether this improvement reflects a one-off benefit or a structural margin gain will require confirmation from subsequent quarters.
On the balance sheet side, the debt ratio steadily declined from 47.7% in 2022 to 36.7% in 2025, and operating cash flow remained stable in the KRW 17–28 billion range each year between 2022 and 2025.
The precision chemicals industry has faced a triple squeeze in recent years: a strong won-dollar exchange rate, trade friction, and oversupply of chemical products from China.
Strengthened protectionism and Chinese petrochemical capacity expansion pushed down export prices, which is understood to have weighed on overall industry performance in 2025.
Downstream demand for semiconductor cleaning agents is closely tied to the semiconductor cycle, while automotive, coatings, and electronics demand track domestic and global economic conditions.
Meanwhile, in the battery materials space, solid-state batteries have drawn growing market attention as a next-generation technology addressing the safety and energy-density limits of conventional lithium-ion batteries.
Domestic battery cell makers such as SK On and Samsung SDI, along with global automakers, have successively unveiled solid-state battery commercialization roadmaps, stirring expectations across the value chain.
However, observers note that the actual timing and pace of solid-state battery mass production will depend on individual companies' R&D outcomes and market conditions, warranting a cautious approach from investors.
In its core precision chemicals business, Hannong Chemical competes with a range of small and mid-sized rivals, while in solid-state materials it remains at the pre-commercialization stage as a participant in a government-funded research project.
The company appears to be pursuing next-generation growth drivers through R&D, new market entry, and management efficiency initiatives, including development of colloid material technologies. Given that GE demand is tied to the semiconductor industry, a recovery in the chip cycle could directly support revenue.
In solid-state battery materials, as lead agency of a Ministry of Trade, Industry and Energy-funded project, the company is developing solid polymer electrolyte synthesis and commercialization technology for lithium-metal batteries together with LG Chem and the Korea Research Institute of Chemical Technology; this is a multi-year research effort that will likely take time to reach commercialization.
The clear quarter-over-quarter improvement in consolidated results in the first half of 2026 can be read as reflecting a higher mix of value-added products and some demand recovery, but whether this trend continues into the second half will require confirmation from subsequent quarterly results.
Whether Chinese chemical oversupply and protectionist trends ease will also be key to any recovery in export prices. Given local government announcements tied to new investment areas such as Seosan, any further concrete plans for capacity expansion or capital investment are also worth monitoring.
The current share price trades at a modest premium to net asset value, which can be seen as partly reflecting the recovery trend in first-half 2026 quarterly results.
The price-to-earnings ratio, when compared with the weak-earnings period of 2023–2025, can be interpreted as having adjusted to account for the recent quarterly earnings recovery.
The dividend yield sits on the lower side, suggesting a policy weighted toward reinvestment and balance-sheet stabilization rather than shareholder returns.
Because recurring news flow related to the solid-state battery theme has repeatedly influenced the share price, there have been periods where valuation is difficult to explain solely by core chemical business results.
Whether upcoming quarterly results sustain the improvement seen in the first half of 2026 is likely to be an important variable for valuation going forward.
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 2026-08-21
Consolidated operating profit in Q1 and Q2 2026 reached about KRW 3.3 billion and KRW 7.8 billion respectively, a sharp improvement from the weak Q3–Q4 2025 (KRW 0.17 billion, then a loss). Revenue also rose for consecutive quarters to KRW 59.4 billion and KRW 72.4 billion. If this trend continues, margin improvement beyond the 2025 full-year operating margin of 1.7% may be possible.
The debt ratio steadily fell from 47.7% in 2022 to 36.7% in 2025, and operating cash flow stayed stable at KRW 17–28 billion annually. Solid cash generation relative to revenue scale provides financial flexibility in a chemicals sector prone to earnings volatility.
As lead agency of a Ministry of Trade, Industry and Energy project, the company is developing solid polymer electrolyte materials for lithium-metal batteries with LG Chem and the Korea Research Institute of Chemical Technology.
Solid-state batteries have drawn market attention as domestic and global battery cell makers and automakers unveil commercialization roadmaps, and participation in the related material supply chain can be seen as a long-term business diversification opportunity.
Annual operating profit swung from KRW 4.5 billion in 2022, to a loss of KRW 2.4 billion in 2023, to KRW 6.1 billion in 2024, and KRW 3.6 billion in 2025 — both sign and magnitude changed sharply each year. This volatility reflects high sensitivity to exchange rates, raw material costs, and downstream industry cycles.
A combination of a strong exchange rate, trade friction, and Chinese chemical oversupply pushed down export prices in 2025, contributing to weaker results. If China's petrochemical capacity expansion continues, pricing competition pressure could persist.
Observers note that the actual timing and pace of solid-state battery mass production depends on individual companies' R&D progress and market conditions, warranting a cautious approach. Share-price volatility tied to related news has repeatedly diverged from core chemical business fundamentals.
The petroleum-based precision chemicals industry is directly exposed to swings in global oil prices and exchange rates. A prolonged period of a strong exchange rate could increase raw material procurement cost burdens.
As Chinese petrochemical capacity expansion and protectionist measures proceed simultaneously, downward pressure on export prices could recur. Price competition with numerous domestic and overseas precision chemicals rivals could also pressure margins.
Solid-state battery materials remain at the government-funded R&D stage, and technical and market uncertainties persist through to potential commercialization. A significant time lag could occur before the new business is reflected in visible revenue.
Q3 2026 preliminary earnings are expected to be disclosed around this time, offering a check on whether the revenue and operating profit recovery seen in Q1–Q2 continues.
Progress on the Ministry of Trade, Industry and Energy-funded project (solid polymer electrolyte for lithium-metal batteries) and any disclosed research milestones with LG Chem and the Korea Research Institute of Chemical Technology warrant monitoring.
Changes in global semiconductor industry indicators and their impact on glycol ether (GE) demand and earnings should be tracked.
Whether Chinese petrochemical oversupply eases, any shifts in protectionist policy, and the KRW/USD exchange rate trend should be checked for their impact on export price recovery.
Hannong Chemical is a precision chemicals maker centered on glycol ether, surfactants, and specialty emulsifiers, and through 2025 it experienced a weak stretch with operating margins stuck in the low single digits amid a strong exchange rate and Chinese oversupply.
However, consolidated Q1 and Q2 2026 results showed a clear improvement in revenue and operating profit, suggesting entry into a recovery phase.
At the same time, recurring news about participation in a national R&D project for solid-state battery polymer electrolyte materials has repeatedly influenced the share price, acting as a volatility factor separate from core chemical business fundamentals.
On the balance sheet side, positive elements are visible, including a declining debt ratio and stable operating cash flow.
Still, whether the recent earnings improvement reflects a structural margin recovery or a temporary factor requires further confirmation from upcoming quarterly results, and external variables such as Chinese oversupply and exchange-rate swings remain significant influences.
The solid-state material business remains at an R&D stage requiring time before commercialization, so the timing of any meaningful revenue contribution from this new business also warrants continued observation.
Report written 2026-09-05 · Data as of 2026-09-04
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