PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩450 per share · Prices as of the 2026-10-02 close
Baiksan saw sharp profit declines in 2025 due to yield problems from its Indonesia plant relocation, but quarterly results have shown gradual improvement in 2026 as yields recover and key customer orders increase.
2025 revenue rose slightly to KRW 504.9 billion, but operating profit fell sharply to KRW 53.6 billion, with operating margin dropping from 15.4% to 10.6% year over year.
Quarterly operating margin bottomed at 6.5% in Q4 2025 before recovering to 9.7% in Q1 2026 and 12.9% in Q2 2026.
The automotive interior segment is viewed as a structural growth driver as polyurethane synthetic leather replaces PVC and animal-welfare trends reduce demand for natural leather.
The company has repeatedly disclosed treasury share buybacks and cancellations as part of its shareholder return policy.
Shinhan Investment Securities set a target price of KRW 20,000 in a July 14, 2026 report, projecting yields would stabilize at 85-90% by Q3 2026.
Baiksan, founded in 1986 and listed on the KOSPI in 1999, is a specialized manufacturer of synthetic (artificial) leather. The company produces synthetic leather using polyurethane resin and nonwoven foaming agents, focusing on products for sports footwear, automotive interiors, and electronics cases.
It holds an estimated 25% market share among global sports brands such as NIKE, ADIDAS, and REEBOK, with more than 80% of revenue derived from footwear-grade synthetic leather supplied to these brands.
Beyond its domestic base, Baiksan operates local subsidiaries in Indonesia, China, and Vietnam, and has recently established BAIKSAN AMERICA LLC. Through its earlier acquisition of Choisin Trading, the company expanded into supplying functional PU-film fabrics for bags and tents to outdoor equipment makers.
The automotive interior segment is regarded as a long-term growth pillar as PU synthetic leather replaces PVC across an expanding range of application areas and vehicle models.
On the Korea Exchange, Baiksan is classified under the KOSPI chemicals sector, though the FICS classification places it in textiles and apparel, reflecting its practical positioning as a materials/textile business.
This overseas manufacturing footprint mirrors the broader industry pattern in which global sports brands shifted production bases to Southeast Asia and China around the 1990s.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩122.1B | ₩14.3B | 11.7% |
| 2025Q3 | ₩134.4B | ₩12.9B | 9.6% |
| 2025Q4 | ₩114.2B | ₩7.4B | 6.5% |
| 2026Q1 | ₩130.1B | ₩12.7B | 9.7% |
| 2026Q2 | ₩126.5B | ₩16.3B | 12.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩475.9B | ₩50.3B | ₩45.3B | 10.6% | 25.4% | 88.1% |
| 2023 | ₩417.7B | ₩53.1B | ₩41.3B | 12.7% | 20.0% | 68.8% |
| 2024 | ₩497B | ₩76.5B | ₩60.7B | 15.4% | 24.5% | 82.9% |
| 2025 | ₩504.9B | ₩53.6B | ₩33.5B | 10.6% | 13.0% | 71.4% |
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
Consolidated revenue for 2025 came to KRW 504.92 billion, up 1.6% from KRW 496.96 billion in 2024, but operating profit fell about 30% to KRW 53.6 billion from KRW 76.5 billion. As a result, operating margin declined from 15.4% in 2024 to 10.6% in 2025, returning to roughly the same level seen in 2022 (10.6%).
Net income attributable to owners also dropped 44.9%, from KRW 60.7 billion in 2024 to KRW 33.5 billion in 2025.
On a quarterly basis, margins deteriorated steadily from 11.7% in Q2 2025 (revenue KRW 122.1 billion, operating profit KRW 14.3 billion) to 9.6% in Q3 (KRW 134.4 billion / KRW 12.9 billion) and 6.5% in Q4 (KRW 114.2 billion / KRW 7.4 billion).
Margins then recovered to 9.7% in Q1 2026 (KRW 130.1 billion / KRW 12.7 billion) and 12.9% in Q2 2026 (KRW 126.5 billion / KRW 16.3 billion). The Q2 2026 operating margin of 12.9% was the highest of the four most recent quarters.
Notably, in Q1 2026 net income attributable to owners (KRW 13.0 billion) exceeded operating profit (KRW 12.7 billion), suggesting a non-operating item may have contributed to the quarter's bottom line.
Equity steadily grew from KRW 180.2 billion in 2022 to KRW 260.6 billion in 2025, while the debt ratio eased from 88.1% to 71.4% over the same period, pointing to a gradually strengthening balance sheet. Operating cash flow declined from KRW 56.2 billion in 2024 to KRW 38.4 billion in 2025 but remained positive.
Synthetic leather is a material used across multiple downstream industries including sports footwear, automotive interiors, and bags and apparel, closely tied to the outsourced production structures of global sports brands.
The historical shift of production bases by Nike, Reebok, and Adidas to Southeast Asia and China was driven by OEM sourcing changes aimed at cost reduction, a trend that Korean materials companies including Baiksan followed by expanding their own overseas manufacturing footprint.
In the automotive sector, demand for synthetic leather is estimated to be growing at an annual rate of more than 10% as polyurethane leather replaces PVC and animal-welfare trends reduce demand for natural hides.
For the nine months through Q3 2025, cumulative revenue rose 7.5% year over year even as operating profit fell 18.2% and net income declined 34.7%, a period in which raw material and production cost pressures outpaced top-line growth.
In Q1 2026 as well, revenue fell 3.1% and operating profit fell 33.4% year over year, reflecting a temporary slowdown in footwear demand from key customers.
Against this backdrop, Baiksan is seen as having maintained its share within customer supply chains through quality and delivery reliability, while diversifying away from footwear dependence through the newer automotive interior demand axis.
In a July 14, 2026 report, Shinhan Investment Securities set a target price of KRW 20,000 for Baiksan, projecting that the production yield problems stemming from the Indonesia plant relocation in April-May 2025 would stabilize at 85-90% by Q3 2026 and mostly normalize from Q4 2026.
The same report anticipated profitability improvement in the second half as orders from key customer Nike increase.
It noted that the automotive interior segment continued to post strong year-over-year growth through the first four months of 2026, with tangible results from a new North American customer expected by year-end.
The Indonesia plant transition, which involved a full relocation of personnel and equipment to a new facility four times the size of the original, reportedly caused yields to fall to around 80%.
During this period, the company continued treasury share buybacks and cancellations, including the October 2025 cancellation of 463,100 shares (2.2% of shares outstanding, valued at KRW 6.575 billion), followed by a similar share cancellation decision disclosed in June 2026.
The pace of yield normalization, customer order growth, and continuity of shareholder return policy stand out as key variables for gauging the speed of earnings recovery going forward.
Baiksan's share price is being formed at a stage where quarterly results are gradually improving in 2026, following a 2025 marked by a sharp decline in net income. The stock trades below its net asset value per share, placing it in a discount range relative to book value.
Relative to earnings, the stock has traded within a single-digit-range multiple band that has persisted over the past several years. Because the company has repeatedly conducted treasury share buybacks and cancellations, the effect of this shareholder return policy on valuation also merits attention.
While 2025 profit did not turn negative, it contracted sharply from the prior year before showing signs of recovery in the first half of 2026, meaning the direction of upcoming quarterly results is likely to be an important reference point for valuation assessment 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
Shinhan Investment Securities projected that production yields at the Indonesia plant would stabilize at 85-90% by Q3 2026 and mostly normalize from Q4 2026. Operating margins in Q1 and Q2 2026 already recovered to 9.7% and 12.9%, respectively, from 6.5% in Q4 2025. Continued yield normalization could ease cost pressures and support further margin recovery.
Automotive interior demand is estimated to be growing at over 10% annually, driven by the substitution of PU synthetic leather for PVC and animal-welfare trends.
Shinhan Investment Securities noted this segment maintained high growth year over year through April 2026, with a new North American customer's results expected to become visible by year-end. This could serve as a diversification axis that reduces dependence on sports footwear.
Baiksan canceled 463,100 treasury shares—2.2% of shares outstanding—in October 2025, and disclosed a similar share cancellation decision in June 2026. Repeated treasury buybacks and cancellations reduce shares outstanding and can be viewed as an indication of the company's commitment to shareholder returns.
More than 80% of revenue is concentrated among a small number of global brands such as Nike and Adidas, making results highly sensitive to their order fluctuations. In Q1 2026, revenue and operating profit fell 3.1% and 33.4% year over year, respectively, reflecting a slowdown in footwear demand from key customers. A recurrence of inventory adjustments or order cuts by specific brands could increase earnings volatility.
During the April-May 2025 full relocation of personnel and equipment to the new Indonesia plant, production yields reportedly fell to around 80%. As a result, 2025 operating margin dropped sharply to 10.6% from 15.4% in 2024, and net income attributable to owners fell 44.9%. If yield recovery is delayed beyond current guidance, margin pressure could persist longer than expected.
Synthetic leather manufacturing is exposed to fluctuations in raw material prices such as polyurethane, and with production bases spread across Indonesia, Vietnam, and China, the company is also affected by currency movements and local labor cost changes.
This was evident in the nine months through Q3 2025, when revenue grew even as operating profit and net income fell 18.2% and 34.7%, respectively, due to raw material and production cost pressures.
If the yield problems from the full relocation to the new Indonesia plant are not fully resolved, additional cost burdens could continue. There is also a possibility that the Q3-Q4 2026 normalization timeline projected by Shinhan Investment Securities could be delayed. The pace of new line stabilization remains a key variable for future margin recovery.
Since most revenue depends on orders from global sports brands, results are highly sensitive to their inventory policies and shifts in consumer spending. The simultaneous decline in Q1 2026 revenue and operating profit reflects a temporary slowdown in demand from key customers.
If order reductions or supply chain restructuring by specific brands persist, the pace of earnings recovery could be delayed.
Fluctuations in the prices of petrochemical-based raw materials such as polyurethane directly affect synthetic leather manufacturing costs.
Operating multiple overseas production bases in Indonesia, Vietnam, and China also exposes the company to currency movements and rising local labor costs, both of which can affect profitability.
Q3 2026 earnings disclosures should be checked to see whether they align with Shinhan Investment Securities' target of yield stabilization at 85-90%.
This is a point to check whether the anticipated results from the new North American customer, expected by year-end per brokerage forecasts, actually materialize.
The extent to which Indonesia plant yields achieve the projected 'mostly normalized' state, and the resulting recovery in operating margin, should be confirmed.
Alongside the finalized 2026 annual earnings disclosure, it will be worth checking whether dividend payouts and treasury share cancellations continue as part of the shareholder return policy.
Baiksan experienced a clear earnings slowdown in 2025, with operating margin falling from 15.4% to 10.6% and net income declining 44.9%, driven by production yield problems from the Indonesia plant relocation.
However, quarterly operating margin has since recovered from 6.5% in Q4 2025 to 12.9% in Q2 2026, and Shinhan Investment Securities projected that yields would mostly normalize during Q3-Q4 2026.
The automotive interior segment is regarded as a structural growth axis, supported by the substitution of PVC with synthetic leather and animal-welfare trends, with results from a new North American customer also expected to become visible by year-end.
On the other hand, the concentration of most revenue among a small number of global sports brands heightens sensitivity to shifts in customer demand. The company has continued its shareholder return policy through repeated treasury share buybacks and cancellations.
Overall, whether production normalization and customer order recovery proceed on the projected timeline stands as the key point to watch for gauging the future direction of earnings.
Report written 2026-09-05 · Data as of 2026-09-04
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