KOSPIChemicals011790

Skc

₩107,000▲ 2.10%2026-10-02 close

Market Cap

₩5.3T

Turnover

₩67.7B

Volume

630,000 shares

Shares out.

49.6M

PER

—

PBR

—

EPS

-₩16,232

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

Copper Foil Losses Narrow, Glass Substrate Validation Is the Gate

Revenue has climbed to record quarterly levels and operating losses have narrowed, yet SKC was still in the red at the operating line through the second quarter of 2026, and the earnings path now hinges on the copper foil cost-base shift and on customer validation of the Absolics glass substrate.

1
Confirmed second-quarter 2026 results were revenue of KRW 645.4bn and an operating loss of KRW 14.4bn, versus KRW 496.6bn and a KRW 28.7bn loss in the prior quarter, meaning higher sales and a smaller deficit.
2
By segment, chemicals is profitable and semiconductor materials supportive, while copper foil remains the loss driver: the company disclosed second-quarter chemicals revenue of KRW 317.8bn with KRW 30.5bn operating profit, copper foil revenue of KRW 254.0bn with a KRW 30.8bn operating loss, and semiconductor materials revenue of KRW 72.9bn with KRW 21.3bn operating profit.
3
Copper foil completed its shift to a lower-cost base with the Malaysia No. 2-1 and 2-2 lines, but start-up costs and depreciation capped profitability, and management set 2027 as the target for the Malaysia plant to turn operating-profit positive.
4
For glass substrates, the embedding product has entered early package-level reliability testing in Taiwan and a non-embedding track is running in parallel, but the company has not formally fixed a mass-production date.
5
The KRW 1,164.7bn rights offering completed in June 2026 improved the balance sheet, but it also brought share-count dilution alongside continuing funding needs for the new business.

Business structure

SKC is a materials group built around chemicals (propylene oxide and propylene glycol), battery materials (copper foil), semiconductor materials, and a new business in glass substrates for semiconductor packaging.

Battery materials sit at affiliate SK Nexilis, and copper foil is an ultra-thin copper film used on the anode side of EV batteries that affects energy density and charging efficiency.

In the second quarter of 2026 the chemicals business posted revenue of KRW 317.8bn and operating profit of KRW 30.5bn; output and volumes fell, but higher propylene glycol and propylene oxide prices, a richer product mix and cost cuts supported earnings.

Copper foil revenue in the same quarter was KRW 254.0bn, a record for any quarter. Semiconductor materials posted revenue of KRW 72.9bn and operating profit of KRW 21.3bn, with test socket sales for AI data centers reported up 66% year on year.

The test socket operation is run by ISC, which joined the group after SKC acquired a stake in 2023.

In glass substrates, wholly owned Absolics has completed what is described as the world's first dedicated glass substrate mass-production plant in Covington, Georgia, while copper foil output centers on Malaysia and the domestic Jeongeup plant.

The company has reshaped its portfolio through successive divestitures of chemicals, film and front-end semiconductor materials assets, and has said there are no further divisions left to sell.

Competition is thus split between Chinese producers and Lotte Energy Materials in copper foil, and Samsung Electro-Mechanics, LG Innotek and overseas substrate makers in glass substrates.

Earnings trend

Quarterly revenue · Operating profit

₩467.3B-₩70.2B25Q2₩506B-₩52.8B25Q3₩428.3B-₩107.6B25Q4₩496.6B-₩28.7B26Q1₩645.4B-₩14.4B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩3.1T₩220.3B2022₩1.6T-₩216.3B2023₩1.7T-₩276.8B2024₩1.8T-₩305B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩467.3B	-₩70.2B	−15.0%
2025Q3	₩506B	-₩52.8B	−10.4%
2025Q4	₩428.3B	-₩107.6B	−25.1%
2026Q1	₩496.6B	-₩28.7B	−5.8%
2026Q2	₩645.4B	-₩14.4B	−2.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩3.1T	₩220.3B	-₩68.4B	7.0%	−4.0%	185.2%
2023	₩1.6T	-₩216.3B	-₩275.5B	−13.8%	−19.5%	178.6%
2024	₩1.7T	-₩276.8B	-₩443.5B	−16.1%	−37.8%	194.4%
2025	₩1.8T	-₩305B	-₩734.4B	−16.6%	−88.3%	232.7%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-05

Earnings analysis

On confirmed figures, 2025 revenue was KRW 1,840.0bn with an operating loss of KRW 305.0bn (operating margin -16.6%) and a net loss attributable to owners of KRW 734.4bn.

Revenue rose three years running, from KRW 1,570.8bn in 2023 to KRW 1,721.6bn in 2024 and KRW 1,840.0bn in 2025, yet operating losses widened in parallel from KRW 216.3bn to KRW 276.8bn and KRW 305.0bn, showing that volume recovery did not translate into profit recovery.

In 2022, before the divestitures, revenue was KRW 3,138.9bn with operating profit of KRW 220.3bn (7.0% margin), so today's revenue base and margin structure belong to a materially reshaped company.

Quarterly, results deteriorated from revenue of KRW 467.3bn and a KRW 70.2bn operating loss in the second quarter of 2025 to KRW 506.0bn and KRW 52.8bn in the third and KRW 428.3bn and KRW 107.6bn in the fourth, then improved for two straight quarters to KRW 496.6bn and a KRW 28.7bn loss in the first quarter of 2026 and KRW 645.4bn with a KRW 14.4bn loss in the second.

The fourth quarter of 2025 was a quarter that absorbed one-off costs and asset impairments, and the KRW 542.2bn net loss attributable to owners in that quarter heavily damaged the full-year result.

Even as operating losses narrowed in 2026, net losses continued at KRW 81.6bn in the first quarter and KRW 90.7bn in the second, indicating that financing costs on borrowings and non-operating items still weigh on the bottom line.

Summing the four quarters from the third quarter of 2025 through the second quarter of 2026 gives a net loss attributable to owners of roughly KRW 805.1bn.

On cash flow, 2025 operating cash flow was negative KRW 567.6bn, a larger outflow than 2023 (negative KRW 234.7bn) and 2024 (negative KRW 199.7bn), and the debt-to-equity ratio stood at 232.7% at end-2025.

That said, the company reported second-quarter EBITDA of KRW 29.1bn, a second consecutive quarter in the black, and a debt-to-equity ratio falling from 233% at end-2025 to 156% at the end of the second quarter of 2026, helped by the rights offering (the 2026 interim figures are provisional pending confirmed annual filings).

Industry analysis

The copper foil industry has endured years of oversupply and price erosion as EV demand slowed while Chinese capacity expanded.

Yuanta Securities estimates the global surplus in EV battery copper foil narrowing to about 80,000 tonnes in 2026 and 60,000 tonnes in 2027, and analysts point to Chinese industrial restructuring, North American market growth and US tariff barriers easing the glut, with major Chinese producers having raised prices since the second half of last year.

Demand is rotating from EVs toward energy storage: SKC projects the global ESS market growing from 390GWh in 2025 to 920GWh in 2030.

The company assesses that AI-driven demand is lifting both ESS battery foil and semiconductor circuit foil, and that as many producers convert capacity to circuit foil the battery foil market is shifting toward a seller's market.

Still, copper prices have surged and copper foil makers typically use price-linked contracts with battery customers, so raw-material moves do not translate directly into margin gains. The glass substrate end market runs on different dynamics.

Glass substrates replace conventional plastic-based substrates, offering a flatter surface and less thermal deformation, which suits large-area, highly integrated AI chip packaging.

The competitive gap is closing: Samsung Electro-Mechanics formed a joint venture with Sumitomo Chemical Group and Dongwoo Fine-Chem in November 2025 to secure glass core supply and targets full mass production between the second half of 2026 and 2027.

Domestically, Samsung Electro-Mechanics and LG Innotek are chasing SKC with mass-production targets from 2027 onward.

Outlook

Management's stated path to profit recovery runs through the copper foil cost base and utilization.

SKC said it entered full-capacity operation in Malaysia at the end of July 2026 and plans to lift the Malaysian share of production from 61% and of sales from 50% on a first-half cumulative basis to above 90% for both in the second half.

CFO Park Dong-joo said on the July 27, 2026 earnings call that, factoring in fixed-cost coverage from stabilizing full-capacity Malaysian operations, the Malaysia plant is being run with a target of turning operating-profit positive from next year.

However, the company flagged additional depreciation from the No. 2-2 line, and because fixed costs rise alongside output, higher sales do not automatically translate into profit. For glass substrates, the validation stage is decisive.

After substrate-level in-house testing of embedding samples from the Georgia plant and preliminary electrical characterization in Japan, SKC has begun early package-level reliability evaluation in Taiwan, with results potentially available within this year.

The non-embedding product is participating in a program with supplier selection scheduled for the second half, and depending on the outcome the company is preparing to start proof-of-concept work within the year.

On funding, roughly KRW 600bn of the rights-offering proceeds is earmarked as a first tranche for the glass substrate business, covering customer evaluation and qualification, yield improvement and equipment upgrades, with further investment and capacity additions to be decided based on customer evaluation results and demand, and on August 21, 2026 SKC disclosed that Absolics had approved a KRW 401.1bn rights offering to fund glass substrate commercialization, with proceeds concentrated on evaluation, qualification, yield gains and selective equipment upgrades.

In semiconductor materials, expansion of the first Vietnam plant and a new second plant are reported to be at the planning stage.

On timing, it is worth noting that the company has not officially confirmed a 2027 mass-production schedule and has stated only that customer reliability evaluation and sample supply are under way.

Valuation

PER

—

PBR

—

ROE

-48.9%

EPS

-₩16,232

BPS

—

Dividend per share

₩0

Even summing the last four quarters, the result attributable to owners is a net loss, so earnings-based multiples cannot be computed and are not displayed on the data card.

That leaves the net-asset-based multiple and the pace of operating recovery as the reference points, and because the net-asset multiple differs widely depending on the calculation basis (an in-house figure based on owners' equity versus the exchange-published basis), readers should check which basis they are looking at.

The June 2026 rights offering raised equity and share count together, so per-share metrics are not directly comparable with historical series. No cash dividend is being paid, which limits any income-oriented approach and distinguishes the stock from dividend-paying large-cap chemical names.

Directionally, operating losses have narrowed for two consecutive quarters from the trough in the fourth quarter of 2025, and earnings-based metrics will only regain meaning once the operating line turns positive.

For reference, Meritz Securities analyst Noh Woo-ho said in May 2026 that as SKC's earnings improvement becomes clearer, pessimism tied to operating losses would be dispelled, and that future results in the glass substrate business would determine the direction of the share price.

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 2026-09-05

Bull factors

Narrowing losses and a return to positive EBITDA

On confirmed figures, the operating loss narrowed for two straight quarters from KRW 107.6bn in the fourth quarter of 2025 to KRW 28.7bn in the first quarter of 2026 and KRW 14.4bn in the second, while revenue rose from KRW 428.3bn to KRW 645.4bn over the same span.

The company reported second-quarter EBITDA of KRW 29.1bn, a second consecutive positive quarter. It also stated that the debt-to-equity ratio fell from 233% at end-2025 to 156% at the end of the second quarter of 2026. A phase of rising revenue alongside shrinking losses is the starting point of the bull case.

ESS demand and a rising North American sales mix

Second-quarter 2026 copper foil revenue of KRW 254.0bn was a quarterly record, with ESS volumes up 76% and EV volumes up 28% quarter on quarter, and the North American sales share expanding to 67%.

SK Nexilis is reported to supply ESS copper foil to LG Energy Solution, and rising ESS battery output at that customer drove volume growth. The company projects the global ESS market growing from 390GWh in 2025 to 920GWh in 2030. A demand pillar separate from the EV cycle widens the scope for utilization improvement.

First-mover glass substrate infrastructure and semiconductor materials earnings

Absolics has completed what is described as the world's first dedicated glass substrate mass-production plant in Covington, Georgia, and it has produced quality-compliant 'good die' samples in package-level reliability testing of the embedding product, aiming to move quickly into proof-of-concept work with customers.

In addition, semiconductor materials posted second-quarter 2026 revenue of KRW 72.9bn and operating profit of KRW 21.3bn, with AI data center test socket sales reported up 66% year on year. Having a profit source inside the group that partly offsets new-business spending provides a structural buffer.

Bear factors

Fifteen straight quarters of operating losses and cumulative net losses

Through the second quarter of 2026 the company had not escaped fifteen consecutive quarters of losses. On confirmed figures, net losses attributable to owners widened from KRW 275.5bn in 2023 to KRW 443.5bn in 2024 and KRW 734.4bn in 2025, and the sum of the last four quarters is roughly KRW 805.1bn.

Operating cash flow in 2025 was also negative at KRW 567.6bn. Regardless of how fast operating losses shrink, the erosion of equity from accumulated losses sits at the core of the bear case.

Glass substrate delays and closing competition

Commercialization was originally slated for June 2024, slipped to 2025 mass production as plant completion was delayed, and was then revised again to qualification completion in 2026.

More recently the target has reportedly moved from end-2026 to 2027 on changes in customer requirements, giving rivals such as Samsung Electro-Mechanics and LG Innotek time to catch up. The company has not officially confirmed a 2027 mass-production schedule. If the timeline slips again, the basis for a first-mover premium weakens.

Rising fixed costs and further funding needs

The Malaysia No. 2-1 line that started up in the second quarter generated about KRW 5bn of depreciation, and the No. 2-2 line starting in the second half will add more.

Cumulative funds injected into Absolics reach KRW 417.4bn, with a further KRW 589.6bn - half the rights-offering proceeds - earmarked, and in August 2026 Absolics itself approved a KRW 401.1bn rights offering. Continued funding into a pre-profit business can re-expand the financial burden.

Risk factors

Policy and subsidy risk

Of the USD 75m secured under the US CHIPS Act, USD 40m has been received, but the remaining USD 35m is conditional on investment in a second plant, and with no such plan the company itself has said receipt may be difficult. Not receiving the balance could lengthen the payback period on the US business.

Shifts in US tariff and trade policy could also affect costs and logistics in a copper foil business now more exposed to North America.

Price and cost risk

Copper foil prices fell for years amid aggressive Chinese capacity additions, damaging profitability across the industry. SKC has been cautious, saying the market is indeed moving in a supplier-friendly direction but that price increases require thorough discussion with customers.

Copper prices reaching roughly three-decade highs affect both working capital and price negotiations. If price increases are delayed, higher utilization alone may not restore margins.

Technology and customer validation risk

Glass substrates remain a field without an established large-scale mass-production precedent globally, and commentators note that market confidence could waver if yield improvement falls short of expectations.

Absolics plans to make further investments in line with customer evaluation results and staged milestones, concentrating first on securing the quality level customers require before considering large-scale expansion. Negative or delayed validation would push back the payback timing on funds already committed. Conversely, progress on validation can be tracked step by step through filings and earnings calls.

What to watch next

Early November 2026
Per Investing.com's calendar, the next earnings release is scheduled for November 3, 2026. In third-quarter results, watch the copper foil segment's operating line, whether the second-half target of over 90% Malaysian production and sales share is met, and whether EBITDA stays positive.
Fourth quarter of 2026 (within the year)
Results from the early package-level reliability evaluation of embedding glass substrates under way in Taiwan may arrive within this year, and the company is discussing a swift move into proof-of-concept work with customers. Whether the evaluation is passed and proof-of-concept formally begins is the first gate on the commercialization timeline.
During the second half of 2026
Watch the outcome of the second-half supplier selection program in which the non-embedding product is participating, and whether proof-of-concept work begins within the year. Also trackable through filings are the execution of the roughly KRW 600bn first tranche of glass substrate investment from the rights offering and the payment schedule for the KRW 401.1bn Absolics rights offering approved in August.
January to February 2027
Alongside full-year 2026 results, management's guidance on the target for the Malaysia plant to turn operating-profit positive in 2027 should be updated. This is the point to check the direction of annual operating income, the debt ratio and operating cash flow, together with 2027 copper foil volume and ESS mix guidance.
Date to be determined (upon disclosure)
The remaining USD 35m of US CHIPS Act support is conditional on second-plant investment, and the company has said receipt may prove difficult. How that balance is resolved, and any decision on glass substrate capacity expansion, will shape capital allocation in the US business, so related disclosures are worth monitoring.

Overall view

SKC stands mid-transition: revenue is recovering while the bottom line is still in deficit.

On confirmed figures, from 2025 revenue of KRW 1,840.0bn and an operating loss of KRW 305.0bn, the loss narrowed to KRW 28.7bn in the first quarter of 2026 and KRW 14.4bn in the second, with second-quarter revenue reaching KRW 645.4bn.

The segment mix has chemicals and semiconductor materials generating profit while copper foil still loses money, and management has set 2027 as the target for the Malaysia plant to turn operating-profit positive.

The growth narrative rests on the Absolics glass substrate, where early package-level reliability evaluation is under way with results potentially available this year, even as the commercialization target has slipped repeatedly and rivals have gained time to close the gap.

Financially, the company's account of a lower debt ratio after the rights offering coexists with the cumulative net losses and cash outflows in the confirmed statements.

Three things therefore need checking: copper foil utilization and pricing, whether glass substrate validation is passed, and the scale of further funding for the new business. This report is for information only and contains no buy or sell opinion and no price target.

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.