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
Kyungchang Industrial swung to a net loss in 2025 but posted two consecutive profitable quarters in early 2026, signaling a recovery trend.
2025 revenue rose to KRW 705.3 billion year on year, but operating margin fell to 1.0% and owners' net income turned negative.
Owners' net income turned positive for two straight quarters in 1Q26 and 2Q26, indicating an earnings recovery.
The company is expanding its electrification parts business through contract production of Hyundai Mobis drive modules and Hyundai Transys reducers.
The debt ratio rose to 313.2% in 2025, the highest level in the past four years.
Changes in powertrain demand tied to Hyundai Motor Group's North American hybrid and EREV expansion strategy are a key variable for future earnings.
Kyungchang Industrial began in 1961 in Daegu as a bicycle parts maker, incorporated in 1977, and listed on KOSDAQ in 1994 as an auto parts specialist. Its core product is automatic transmission (Auto T/M) parts, alongside control cables, reserve tanks, pedals, and levers used in vehicle drivetrain and control systems.
Together with Infac, its control cables reportedly cover a substantial portion of Hyundai Motor's demand for passenger cars, small and mid-size buses, and trucks under 3 tons, while reserve tanks are said to be supplied across nearly all Hyundai Motor, Hyundai Mobis, and SsangYong Motor vehicle lines.
The company reportedly has a high revenue dependence on the Hyundai Motor Group. It has extended its transmission-focused capabilities into electrification, taking on contract manufacturing of Hyundai Mobis drive modules and Hyundai Transys reducers.
Overseas, since 2017 it has supplied pedal lever and auto lever components to BYD through its Chinese affiliate, Kyung Chang Technology.
As of March 2025, the company stated that a North American plant, which had begun mass production the prior year, was expected to ramp up to an annual capacity of about 400,000 units, though subsequent progress requires separate confirmation. The company currently has eight affiliates and supplies parts to automakers on an OEM basis.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩184.4B | ₩2B | 1.1% |
| 2025Q3 | ₩173.4B | -₩2.5B | −1.4% |
| 2025Q4 | ₩179.4B | ₩4.3B | 2.4% |
| 2026Q1 | ₩171.6B | ₩4.5B | 2.6% |
| 2026Q2 | ₩186.5B | ₩8.4B | 4.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩615.6B | ₩19.2B | ₩20.6B | 3.1% | 17.0% | 270.5% |
| 2023 | ₩667.3B | ₩21B | ₩9.1B | 3.2% | 6.8% | 238.0% |
| 2024 | ₩638B | ₩9.6B | ₩2.8B | 1.5% | 2.1% | 242.9% |
| 2025 | ₩705.3B | ₩7.3B | -₩20.8B | 1.0% | −18.9% | 313.2% |
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
Consolidated 2025 revenue rose 10.6% year on year to KRW 705.3 billion from KRW 638.0 billion in 2024, while operating profit fell 23.8% to KRW 7.3 billion from KRW 9.6 billion. Operating margin declined to 1.0% in 2025, a clear downtrend from 1.5% in 2024, 3.2% in 2023, and 3.1% in 2022.
Owners' net income swung to a loss of KRW 20.8 billion, contrasting with profits of KRW 2.8 billion in 2024 and KRW 9.1 billion in 2023.
By quarter, 3Q25 posted an operating loss of KRW 2.5 billion and an owners' net loss of KRW 2.6 billion, and although 4Q25 operating profit turned positive at KRW 4.3 billion, the owners' net loss widened sharply to KRW 20.0 billion, suggesting a large one-off charge was booked.
Subsequently, 1Q26 operating profit reached KRW 4.5 billion with owners' net income of KRW 2.9 billion, and 2Q26 operating profit rose to KRW 8.4 billion with owners' net income of KRW 5.6 billion, marking two consecutive profitable quarters.
Consolidated operating cash flow improved to KRW 23.4 billion in 2025 after a net outflow of KRW 3.2 billion in 2024, though it remains well below the KRW 74.1 billion recorded in 2023.
The debt ratio, which had stabilized at 238.0% in 2023 and 242.9% in 2024 after 270.5% in 2022, rose again to 313.2% in 2025, indicating an increased financial burden. Overall, revenue growth coexisted with profit weakness through 2025, while a recovery in profitability has become visible in the first half of 2026.
The downstream automotive market moved through an EV chasm (demand slowdown) phase in 2023-2024, and by 2026 recovery speeds are diverging by region. Hyundai Motor CEO Jose Munoz stated at the 2026 CEO Investor Day in August that the company no longer sees a chasm, only differing paces across markets.
In particular, hybrid demand has surged in North America, prompting Hyundai Motor Group to convert its Georgia Metaplant into a mixed EV-hybrid production line.
The group has set a goal of adding more than ten hybrid models in North America by 2030, raising the hybrid sales mix to 50%, and lifting parts localization from roughly 60% currently to 80%.
Kyungchang Industrial is directly exposed to this electrification transition through its contract manufacturing of Hyundai Mobis drive modules and Hyundai Transys reducers, tying its performance closely to automakers' powertrain strategy shifts.
Historical data indicates that the transmission parts revenue share, once above 70% in 2018, has trended lower over time, consistent with automakers' gradual reduction of internal combustion engine models.
The company has stated a policy of building growth momentum through expanded BYD supply and operation of its North American plant.
As of March 2025, it explained that a North American plant, which had begun mass production the prior year, was expected to ramp up to an annual capacity of about 400,000 units from that year, though subsequent progress needs to be separately confirmed.
Hyundai Motor Group has signaled the launch of its first EREV model in the first half of 2027 and plans to locally produce the Santa Fe EREV in North America, which is expected to shift component demand as powertrain diversification proceeds.
Expansion of North American mixed-line production, including the planned relocation of Kia Sportage Hybrid production to the Georgia plant, is underway, making the allocation of related parts volume an important variable for future results.
The electrification segment (drive modules and reducers) appears to be growing in revenue terms alongside rising eco-friendly vehicle sales, though profitability improvement remains to be validated.
The stock currently trades at a discount to net asset value, with the price-to-book ratio sitting below 1x. This can be interpreted as reflecting financial burdens such as the 2025 swing to an owners' net loss and the rise in the debt ratio.
That said, owners' net income has turned positive for two consecutive quarters in 1Q26 and 2Q26, an earnings recovery trend that may influence how the market interprets valuation going forward.
No recent dividend payment has been confirmed, so the sustainability of the earnings recovery, rather than dividend appeal, stands out as the key variable for assessment.
Within the KOSDAQ auto parts sector, the stock has tended to trade at a discount to net assets, and both upcoming quarterly results and changes in financial structure warrant continued attention.
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
The company is expanding its electrification parts business through contract manufacturing of Hyundai Mobis drive modules and Hyundai Transys reducers. This structure allows related revenue to grow as automakers continue their eco-friendly vehicle transition. Customer and regional diversification is also underway through BYD supply and a North American plant.
Both operating profit and owners' net income were positive for two consecutive quarters in 1Q26 and 2Q26. This marks a clear recovery following the large net loss in 4Q25. Quarterly revenue has also trended up, rising from around KRW 171.6 billion to KRW 186.5 billion.
The company continues efforts to reduce reliance on the Hyundai Motor Group through pedal lever supply to BYD and mass production of transmission parts for the North American market. Expanded operation of the North American plant could also help mitigate tariff risk. However, the actual pace of new volume expansion still requires confirmation.
The 2025 operating margin fell to 1.0%, sharply down from the roughly 3% level seen in 2022-2023. In the fourth quarter, a large net loss occurred despite positive operating profit, suggesting a heavy one-off cost burden. Whether the margin recovery is structural requires confirmation over additional quarters.
The debt ratio rose sharply from 242.9% in 2024 to 313.2% in 2025. Operating cash flow even recorded a net outflow in 2024. Continued electrification investment could add further pressure to the financial structure.
Hyundai Motor Group is flexibly adjusting its EV, hybrid, and EREV mix based on market conditions, which could also shift the allocation of contract manufacturing volume. Heavy dependence on specific models means production plan changes could directly affect results.
The company reportedly has high revenue dependence on the Hyundai Motor Group, so changes in production policy or volume allocation could directly affect results, a structural risk typical of parts suppliers with concentrated customer exposure.
As North American production expands, the company could be exposed to changes in tariff policy and exchange rate fluctuations. As Hyundai Motor Group strengthens its US localization strategy, related supply chain conditions warrant ongoing monitoring.
If an event similar to 4Q25, where a large net loss occurred despite positive operating profit, recurs, earnings volatility could increase. Further disclosure is needed to confirm the nature and recurrence likelihood of such charges.
Third-quarter 2026 earnings disclosure will show whether the first-half earnings recovery trend continues.
Progress on Hyundai Motor Group's Georgia Metaplant conversion to hybrid mixed-line production, and related drive module and reducer volume changes, should be checked.
The launch of Hyundai's new EREV models such as the Santa Fe EREV and the start of North American production should be checked for related parts orders.
Debt ratio and borrowing trends, along with North American plant utilization disclosed in filings or IR materials, should be continuously monitored for changes in financial structure.
Kyungchang Industrial faced declining operating margins and a large owners' net loss in 2025 despite revenue growth, but has shown signs of recovery with two consecutive profitable quarters in 1Q26 and 2Q26.
In its electrification segment, the company is expanding contract manufacturing of Hyundai Mobis drive modules and Hyundai Transys reducers, while also pursuing customer and regional diversification through BYD and a North American plant.
However, the debt ratio rose to 313.2% in 2025, and the possibility of a large one-off charge recurring, as seen in 4Q25, remains a source of earnings volatility.
Changes in powertrain demand tied to Hyundai Motor Group's North American hybrid and EREV expansion strategy stand as a key variable that could affect future contract manufacturing volume.
The stock trades at a discount to net asset value, which can be seen as reflecting recent financial pressure alongside earnings volatility. Overall, this stock sits at a juncture where growth potential from the electrification transition coexists with financial and profitability risks.
Report written 2026-09-05 · Data as of 2026-09-04
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