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
Nepes returned to full-year profitability in 2025 and posted a sharp improvement in owner-attributable net income in Q2 2026, evidencing the benefit of a recovering advanced packaging cycle.
2025 revenue of KRW 521.4bn (+12.3%) and operating profit of KRW 23.8bn (+598.4%) mark a clear turnaround
Q2 2026 owner net income of KRW 12.17bn was the highest in the trailing five quarters
The debt ratio eased from the 240% range in 2023 to 183.7% in 2025
The company unveiled an 8-layer RDL interposer, among other advanced packaging technologies, to address the AI semiconductor market
Quarter-to-quarter net income remains volatile, warranting further confirmation of sustained profitability
Founded in 1990 and listed on KOSDAQ in 1999, Nepes is a semiconductor back-end and electronic materials company whose core businesses are advanced packaging (back-end foundry) services supporting the miniaturization and performance enhancement of system semiconductors, and electronic materials for semiconductor and display manufacturing.
Its principal technology is flip-chip bumping-based advanced packaging including WLP (Wafer Level Package) and FOWLP/PLP (Fan-Out Wafer/Panel Level Package), applied to smartphone, server, and automotive chipsets.
Subsidiaries include Nepes Ark, a separately listed company specializing in system semiconductor back-end testing, and Nepes Laweh, along with overseas units in the United States and Indonesia.
According to a recently disclosed revenue breakdown, the semiconductor segment including WLP bumping accounts for roughly 73% of sales, secondary battery components such as lead tabs around 12%, electronic materials (chemicals) about 10%, with IC consumables and other items making up the remainder.
The secondary battery segment has become a distinct growth pillar through localization of lead tabs and expanded application in ESS and EV batteries. The electronic materials segment has grown sales through localizing chemicals such as developers used in semiconductor and LCD manufacturing.
Competitively, the company operates alongside domestic OSAT (outsourced semiconductor assembly and test) players such as Hana Micron, SFA Semicon, Doosan Tesna, and LB Semicon, with its relationship to Samsung Electronics' non-memory and foundry operations cited as an important part of its business.
In response to rising AI semiconductor demand, the company is also pursuing commercialization of new technologies such as fan-out RDL interposers for chiplet packaging and PoP (Package on Package).
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩130.9B | ₩8B | 6.1% |
| 2025Q3 | ₩137.5B | ₩10.8B | 7.8% |
| 2025Q4 | ₩123.7B | ₩1.3B | 1.1% |
| 2026Q1 | ₩134B | ₩10.9B | 8.1% |
| 2026Q2 | ₩153.7B | ₩14.6B | 9.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩588B | -₩6.7B | ₩77.6B | −1.1% | 31.2% | 188.5% |
| 2023 | ₩480.1B | -₩70B | -₩98.5B | −14.6% | −66.5% | 240.1% |
| 2024 | ₩464.3B | ₩3.4B | -₩62.2B | 0.7% | −56.5% | 242.7% |
| 2025 | ₩521.4B | ₩23.8B | ₩16.6B | 4.6% | 13.4% | 183.7% |
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
Nepes' annual results have swung markedly since 2022. In 2022, despite an operating loss of KRW 6.7bn on revenue of KRW 588.0bn, owner net income was positive at KRW 77.6bn, suggesting non-operating factors played a significant role.
In 2023, revenue fell to KRW 480.1bn and the operating loss widened to KRW 70.0bn, with owner net loss deepening to KRW 98.5bn, marking the trough of the downturn. In 2024, revenue recovered somewhat to KRW 464.3bn but operating profit was only KRW 3.4bn, and the owner net loss persisted at KRW 62.2bn.
In 2025, revenue rose to KRW 521.4bn (+12.3%) and operating profit jumped to KRW 23.8bn (+598.4%), with owner net income turning positive at KRW 16.6bn. On a quarterly basis, owner net income fell from KRW 7.0bn in Q2 2025 to KRW 3.1bn in Q3, then swung to a net loss of KRW 2.4bn in Q4.
Q1 2026 continued with a small net loss of about KRW 0.6bn, but Q2 2026 showed the clearest improvement in the trailing five quarters, with revenue of KRW 153.7bn, operating profit of KRW 14.6bn, and owner net income of KRW 12.2bn.
This quarterly volatility appears driven less by revenue seasonality than by a wide gap between operating profit and net income, pointing to meaningful non-operating effects such as foreign exchange, equity-method results, or minority interest allocation.
Notably, operating cash flow remained relatively stable at KRW 80–109bn per year from 2022 through 2025, in contrast to the greater volatility in reported earnings.
The OSAT (outsourced semiconductor assembly and test) industry in which Nepes operates is experiencing rising demand for advanced packaging as end markets such as AI servers, high-performance computing, smartphones, and automotive electronics increasingly require smaller, higher-performance chips.
Market commentary has suggested that improving foundry and non-memory results at large semiconductor makers including Samsung Electronics could translate into expanded orders for materials, parts, equipment, and back-end suppliers, a dynamic that could be favorable for back-end specialists such as Nepes.
That said, such optimistic views reflect market sentiment at a particular point in time and require further confirmation through actual order and utilization data.
Competitively, domestic OSAT players such as Hana Micron, SFA Semicon, Doosan Tesna, and LB Semicon compete in similar advanced packaging and test markets, alongside Taiwanese and Chinese back-end competitors globally.
Regarding Nepes' testing subsidiary Nepes Ark, Korea Investment & Securities stated in an April 2026 report that customer demand recovery and utilization improvement, particularly expanded outsourced testing volume from North American PMIC (power management IC) customers, would drive earnings growth.
While this view pertains to Nepes Ark, a separately listed subsidiary, its results consolidate into the group and can serve as a reference point for the broader industry direction.
In the electronic materials and secondary battery segments, cost competitiveness gained through localization continues to be cited as an ongoing growth driver.
Nepes unveiled 8-layer RDL interposer technology at the ECTC (Electronic Components and Technology Conference) held in the United States in 2024, demonstrating substrate-less chiplet packaging capability, and has since stated it is pursuing customer collaboration toward commercialization.
In the second half of 2025, the company signed a memorandum of understanding with the Gwangju Institute of Science and Technology (GIST) to strengthen heterogeneous integration packaging capabilities, positioning itself for an on-device AI semiconductor era.
The company was also selected in 2025 under the government-run 'Innovation Premier 1000' program in the semiconductor and display category administered by the Ministry of Trade, Industry and Energy, making it eligible for policy-financing support through the end of 2026.
Marking its 35th anniversary in 2025, the company adopted 'All hands on the AI Core' as its 2026 management slogan, emphasizing an AI-centered business strategy.
These moves are interpreted as an effort to diversify the business portfolio by pursuing localization strategies in electronic materials and secondary batteries alongside the core back-end semiconductor business.
However, no specific capacity expansion plans or medium-to-long-term revenue and profit guidance were found in available sources, warranting further confirmation through upcoming quarterly results and IR disclosures.
Nepes moved from consecutive net losses in 2023–2024 to profitability in 2025, and quarterly net income has continued to fluctuate through 2026 as the market gauges the durability of the earnings recovery.
In such an early-stage recovery, it is common for the price-to-earnings multiple to sit near or above the upper end of the historical trading band observed during prior profitable periods, as the market prices in forward expectations.
On a price-to-book basis, the shares trade at a level reflecting a substantial premium to net asset value, suggesting that expectations for continued earnings recovery are already meaningfully embedded in the price. The company currently pays no dividend, which limits peer comparison on a dividend-yield basis.
Whether this valuation level is appropriate will depend on the sustainability of quarterly earnings and confirmation of tangible revenue contribution from the advanced packaging and secondary battery segments 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 2026-09-04
Full-year 2025 operating profit rose 598.4% year on year and owner net income turned positive, while Q2 2026 owner net income of KRW 12.2bn was the largest in the trailing five quarters. Revenue also grew from KRW 521.4bn in full-year 2025 to KRW 153.7bn in the single Q2 2026 quarter, confirming a recovery trend.
Emerging from the large losses of the 2023–2024 downturn points to potential structural improvement in the business.
Nepes has unveiled new chiplet packaging technologies including an 8-layer RDL interposer and PoP, building a technology base to address expanding back-end demand in the AI semiconductor era. The company is also participating in building a heterogeneous integration packaging ecosystem through collaboration with GIST.
Selection under the government's Innovation Premier 1000 program provides an additional policy-support foundation.
Even during the volatile earnings years of 2022–2024, operating cash flow remained in the range of KRW 80–109bn annually. This indicates that actual cash-generating capacity was comparatively resilient relative to earnings volatility. Such cash flow can support balance-sheet improvement and fund future investment.
Owner net income posted losses of KRW 2.4bn in Q4 2025 and KRW 0.6bn in Q1 2026, showing that the return to profitability has not been consistent every quarter. The gap between operating profit and net income has been substantial, suggesting meaningful non-operating effects. This indicates that the durability of the profitability turnaround still requires further confirmation.
The year-end 2025 debt ratio of 183.7% improved from 2022 but remains elevated, close to the 200% level. The ratio had risen into the 240% range in 2023–2024, a period of substantial financial leverage. This could constrain financial flexibility in the event of higher interest burdens or adverse external shifts.
In this early-stage earnings recovery, both the price-to-earnings and price-to-book multiples are trading near the upper end of historical bands or at a substantial premium to net assets. This may mean that expectations for future earnings improvement are already largely reflected in the price.
Should quarterly results fall short of expectations, the possibility of a valuation adjustment cannot be ruled out.
Over the trailing five quarters, owner net income swung sharply from a KRW 7.0bn profit to a KRW 2.4bn loss and back to a KRW 12.2bn profit. Non-operating factors appear to materially affect results, limiting predictability. The next several quarterly reports will need to be reviewed to confirm earnings stability.
The company's semiconductor segment revenue is heavily dependent on the demand cycles of end markets such as smartphones, servers, and automotive. If revenue is concentrated with a small number of large customers, their inventory adjustments or order changes could directly affect results. The semiconductor industry is highly cyclical, with recurring upswings and downswings.
The year-end 2025 debt ratio of 183.7% remains elevated, meaning that rising interest rates or tighter financing conditions could increase interest expense burdens. During the past downturn (2023–2024), the ratio rose into the 240% range, and a recurrence of similar conditions could expand financial strain. This leverage could also constrain financing for new investment or capacity expansion.
The Q3 2026 earnings disclosure should be reviewed to see whether the clear Q2 improvement continues and whether net income volatility eases.
IR announcements and press coverage should be tracked for real customer adoption and mass-production commercialization progress of new technologies such as the 8-layer RDL interposer and PoP.
It should be confirmed whether utilization recovery at Nepes Ark and expanded orders from North American PMIC customers—both of which affect consolidated results—materialize in actual reported earnings.
This is a point to check the concrete outcomes of policy-financing support under the government's 'Innovation Premier 1000' program and whether follow-on support is extended.
The trend in the debt ratio and operating cash flow should be checked together at each disclosure to assess whether the improvement in financial leverage continues.
Nepes emerged from consecutive losses in 2023–2024 to return to profitability in 2025, and Q2 2026 showed the clearest earnings improvement in the trailing five quarters.
However, quarterly net income volatility remains substantial, as seen in the small losses posted in Q4 2025 and Q1 2026, suggesting non-operating factors continue to meaningfully affect results relative to operating profit.
Securing advanced packaging technologies such as the 8-layer RDL interposer, collaboration with GIST, and selection under a government support program can be viewed as factors strengthening the medium-to-long-term business foundation.
On the other hand, a debt ratio of 183.7% and a capital policy that pays no dividend remain areas warranting financial conservatism.
Whether the earnings recovery reflects structural improvement rather than one-off factors will need to be judged through the stability of net income over the coming quarters and the actual revenue contribution of new technologies. This report is for informational purposes only and does not constitute a buy or sell recommendation.
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.