KOSPIAutomotive041650

Sangsin Brake

₩2,180 0.00%2026-10-02 close

Market Cap

₩46.8B

Turnover

₩5,493,267

Volume

2,521 shares

Shares out.

21.5M

PER

9.1×

PBR

0.2×

EPS

₩242

Dividend Yield

2.27%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩50 per share · Prices as of the 2026-10-02 close

Report overview

Sangsin Brake: Past the Losses, Gradual Recovery

Sangsin Brake has posted four consecutive quarters of net profit since a large net loss in the second quarter of 2025, even as full-year 2025 revenue fell and operating profit swung to a loss versus 2024.

1
Owner net loss bottomed at KRW 13.3 billion in Q2 2025, followed by four straight quarters of owner net profit from Q4 2025.
2
Full-year 2025 revenue fell 6.3% year over year to KRW 542.3 billion, and operating profit swung to a loss of KRW 1.4 billion.
3
The August 2025 Korea-US trade agreement cut US tariffs on autos and auto parts from 25% to 15%.
4
In August 2026 the company guaranteed RMB 52.8 million in debt for its Chinese subsidiary, creating a contingent liability tied to an overseas unit.
5
The debt ratio eased from 175.1% in 2022 to 154.5% in 2025 but remains elevated.

Business structure

Founded in 1975, Sangsin Brake is a specialized manufacturer of automotive braking systems, with headquarters and production facilities in Dalseong-gun, Daegu.

Its business is organized into a braking division that supplies new-vehicle (OE) and replacement (RE) brake pads, linings, and shoe assemblies, and an equipment division that makes and sells dedicated friction-material production and testing equipment.

The company began supplying brake products to Hyundai Motor in 1979, establishing domestic automakers as its core customer base, listed on KOSDAQ in 2001, and moved its listing to the KOSPI market in 2004.

In 2002 it set up a local subsidiary and production plant in China, giving it an overseas manufacturing base, and it continues to serve the Chinese market through affiliates such as Sichuan Sangsin Brake System Co., Ltd.

In the OEM/OES market for new vehicles, price competitiveness, the ability to respond quickly to automaker model changes, and quality competitiveness are cited as the key success factors, while in the aftermarket, product specialization by customer segment and distribution-network build-out matter most.

In the equipment division, competitors such as Beyontech and a few others are cited, and because a large share of equipment-related revenue comes from a limited pool of customers, maintaining long-term relationships with them is important.

More recently, the company has been trying to broaden its braking-centered business structure through the development of higher value-added new equipment and business diversification.

Earnings trend

Quarterly revenue · Operating profit

₩142.9B-₩4.1B25Q2₩135.6B-₩3B25Q3₩119.8B₩2.9B25Q4₩130.3B₩2.2B26Q1₩149.9B₩900M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩489B₩14.1B2022₩575.5B₩27.5B2023₩578.6B₩20.6B2024₩542.3B-₩1.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩142.9B	-₩4.1B	−2.8%
2025Q3	₩135.6B	-₩3B	−2.2%
2025Q4	₩119.8B	₩2.9B	2.4%
2026Q1	₩130.3B	₩2.2B	1.7%
2026Q2	₩149.9B	₩900M	0.6%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩489B	₩14.1B	₩700M	2.9%	0.4%	175.1%
2023	₩575.5B	₩27.5B	₩14.1B	4.8%	6.9%	166.7%
2024	₩578.6B	₩20.6B	₩16.3B	3.6%	7.2%	154.1%
2025	₩542.3B	-₩1.4B	-₩11.9B	−0.3%	−5.6%	154.5%

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

Earnings analysis

Sangsin Brake's consolidated revenue rose from KRW 489.0 billion in 2022 to KRW 575.5 billion in 2023 (up 17.7%), edged up further to KRW 578.6 billion in 2024 (up 0.5%), then fell to KRW 542.3 billion in 2025 (down 6.3%).

Operating profit improved from KRW 14.1 billion (margin 2.9%) in 2022 to KRW 27.5 billion (4.8%) in 2023, eased to KRW 20.6 billion (3.6%) in 2024, and turned into a full-year operating loss of KRW 1.4 billion in 2025.

Owner net profit likewise rose from KRW 0.7 billion in 2022 to KRW 14.1 billion in 2023 and KRW 16.3 billion in 2024, before swinging to a net loss of KRW 11.9 billion in 2025.

By quarter, the loss was widest in the second quarter of 2025, with an operating loss of KRW 4.1 billion and an owner net loss of KRW 13.3 billion, and losses continued in the third quarter with an operating loss of KRW 3.0 billion and a net loss of KRW 2.6 billion.

From the fourth quarter onward the company turned profitable, with operating profit of KRW 2.9 billion and net profit of KRW 4.1 billion, followed by operating profit of KRW 2.2 billion and net profit of KRW 2.6 billion in the first quarter of 2026, and operating profit of KRW 0.9 billion and net profit of KRW 0.6 billion in the second quarter, extending the run to four consecutive profitable quarters.

However, the second-quarter 2026 operating margin was only about 0.6% on revenue of KRW 149.9 billion, lower than in the preceding quarters, suggesting the pace of profit recovery has slowed.

Full-year 2025 operating cash flow remained solid at KRW 38.4 billion despite the net loss, a clear improvement from negative KRW 7.2 billion in 2022. The debt ratio trended down from 175.1% in 2022 to 154.5% in 2025.

Industry analysis

In 2025 the auto industry faced weaker exports amid a difficult external environment, and Sangsin Brake's core braking division was also affected as automaker production volumes declined.

Under a presidential proclamation issued in March 2025, the United States imposed a 25% tariff on imported vehicles starting April 3, 2025, and extended a 25% tariff to auto parts starting May 3, 2025.

Following bilateral trade talks, Korea and the United States agreed that from August 1, 2025 the US would lower its tariff on Korean autos and auto parts from 25% to 15%.

Separately, the US runs an import-adjustment offset program that lets automakers offset part-tariff costs by a share of the MSRP of vehicles assembled domestically, set at 3.75% for vehicles assembled between April 2025 and April 2026, stepping down to 2.5% for the following year through April 2027.

The global brake pad market itself is a mature, slow-growing market, with one market research estimate putting its size at roughly USD 0.11 billion in 2026, growing to about USD 0.12 billion by 2035.

Because the company operates a local subsidiary and plant in China, it is also exposed to conditions in China's commercial and passenger vehicle markets; industry data cited a Chinese heavy-duty vehicle brake pad market of roughly RMB 7.32 billion in 2025, having grown at a compound annual rate of about 10.9% from 2021 to 2025.

Given its heavy reliance on domestic automakers, changes in production and sales volumes at major customers such as Hyundai Motor flow through directly to the company's results.

Outlook

According to FnGuide, Sangsin Brake's consolidated revenue fell 9.5% year over year in the first quarter of 2026 and operating profit fell 20.7%, while net profit turned positive; this comparison uses a separate market data source and may not follow the same calculation basis as the confirmed quarterly figures used elsewhere in this report.

The same source projects that Korean auto exports will turn higher in 2026 as tariff uncertainty eases and eco-friendly vehicle exports strengthen, and credits the company's push into higher value-added new equipment and business diversification as a way to broaden its growth base.

On August 20, 2026 the company disclosed that it would guarantee RMB 52.8 million (about KRW 10.97 billion) of Hana Bank borrowings owed by its Chinese affiliate, Sichuan Sangsin Brake System Co., Ltd. (against underlying debt of RMB 44 million), for a guarantee period running from August 24, 2026 to August 20, 2027.

The filing noted that this guarantee equaled about 5.0% of consolidated shareholders' equity as of the end of 2025, below the threshold that would classify it as a large-scale transaction.

The US tariff-offset ratio for auto parts is scheduled to step down from 3.75% to 2.5% between May 2026 and April 2027, meaning the indirect relief part suppliers receive through automakers could shrink further over time.

The company has also continued its practice of declaring a year-end cash dividend, including a decision announced in December 2025.

Valuation

PER

9.1×

PBR

0.2×

ROE

2.2%

EPS

₩242

BPS

₩11,373

Dividend per share

₩50

The current share price trades at a discount to book value per share, meaning the market is pricing the stock below its net asset value on the balance sheet.

On the earnings side, the direction has shifted from a full-year operating and net loss in 2025 to four consecutive quarters of profit from the fourth quarter of 2025 onward, though quarterly profit remains modest in size, so whether this trend has settled onto a stable trajectory will require confirmation from upcoming quarters.

On dividends, the company has a track record of declaring a year-end cash dividend, but its dividend yield is assessed as relatively low compared with other parts makers in the sector.

As a small-cap stock with a modest market capitalization, its share price can be more sensitive to changes in trading volume than larger peers. How investors weigh its valuation going forward will likely depend on whether the earnings recovery proves durable and how tariff and currency variables evolve.

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

Bull factors

From Losses to Four Straight Profitable Quarters

The owner net loss that widened to KRW 13.3 billion in the second quarter of 2025 narrowed to a KRW 2.6 billion loss in the third quarter before turning to a KRW 4.1 billion profit in the fourth quarter.

The company then posted owner net profit of KRW 2.6 billion in the first quarter of 2026 and KRW 0.6 billion in the second quarter, extending the streak to four consecutive profitable quarters.

Operating profit also recovered to KRW 2.9 billion in the fourth quarter of 2025 and KRW 2.2 billion in the first quarter of 2026, pointing to a broader improvement in the profit-and-loss structure.

Cash Generation Held Up Even in a Loss-Making Year

Full-year 2025 brought an operating loss of KRW 1.4 billion and an owner net loss of KRW 11.9 billion, yet operating cash flow for the same year remained positive at KRW 38.4 billion. That compares favorably with 2022, when operating cash flow was negative at KRW 7.2 billion.

The persistence of cash inflows despite the reported loss suggests the influence of non-cash items such as depreciation.

Reduced Tariff Burden After the Korea-US Trade Agreement

The United States imposed a 25% tariff on imported vehicles from April 2025 and extended it to auto parts from May 2025, but bilateral trade talks led to a reduction in the US tariff on Korean autos and parts from 25% to 15% starting August 1, 2025.

The US also runs a separate offset program that lets automakers assembling vehicles domestically offset part-tariff costs by a share of vehicle MSRP, which could indirectly ease some of the tariff burden felt by parts suppliers.

Bear factors

Revenue Decline and a Slower Margin Recovery

Full-year 2025 consolidated revenue fell 6.3% year over year to KRW 542.3 billion from KRW 578.6 billion in 2024, and the annual operating margin swung to -0.3% from 3.6% a year earlier.

Net profit continued into 2026, but the second-quarter operating margin was only about 0.6% on revenue of KRW 149.9 billion, a slower pace of recovery than in the preceding quarters. Revenue growth and margin improvement have not yet moved together, which remains a point to watch in coming results.

Elevated Debt Ratio and Contingent Liabilities Overseas

The consolidated debt ratio stood at 154.5% at the end of 2025, down from 175.1% in 2022 but still well above 100%.

In August 2026 the company guaranteed RMB 52.8 million (about KRW 10.97 billion) of Hana Bank borrowings for its Chinese affiliate, Sichuan Sangsin Brake System Co., Ltd., adding a contingent liability tied to its overseas operations.

Swings in the RMB exchange rate or in the Chinese subsidiary's funding situation could indirectly affect the parent's financial structure.

The Time-Limited Nature of Tariff Relief

The US tariff-offset ratio for auto parts was 3.75% for vehicles assembled between April 2025 and April 2026, and is scheduled to step down to 2.5% for the following year through April 2027. The offset program itself is set to end after April 30, 2027, so the relief it provides could diminish over time. How US trade policy is reset after that point could again alter the cost structure for parts exports.

Risk factors

Currency and Trade Policy Risk

Movements in the won-dollar and won-yuan exchange rates directly affect export profitability and the won value of liabilities tied to the Chinese subsidiary.

The US tariff on autos and parts was cut from 25% to 15% in August 2025, but the offset ratio is due to end after April 2027, leaving the subsequent trade-policy direction undetermined. A renewed shift in the trade environment could again affect the export-exposed braking division's revenue and costs.

Customer Concentration Risk

Since beginning supply to Hyundai Motor in 1979, Sangsin Brake has relied on domestic automakers as its core customers, so changes in their production and sales volumes flow directly into its revenue. The 2025 revenue decline is understood to have been affected by lower automaker production volumes.

With such reliance on a limited customer base, production disruptions or market-share shifts at automakers can add to earnings volatility.

Credit and Financial Risk at Overseas Subsidiaries

Per an August 2026 disclosure, the company guaranteed RMB 52.8 million of Hana Bank borrowings owed by its Chinese affiliate, Sichuan Sangsin Brake System Co., Ltd. (against underlying debt of RMB 44 million), with the guarantee running through August 20, 2027.

If the overseas subsidiary's operations or local financing conditions were to deteriorate, the parent could ultimately have to bear the contingent liability. Such offshore guarantee structures can also affect the consolidated debt ratio.

What to watch next

Mid-November 2026
Watch for the third-quarter 2026 earnings disclosure to see whether the recent revenue and profit recovery continues.
Late December 2026
Check whether the company again announces a year-end cash dividend decision, following the pattern of its December 2025 announcement.
April 30, 2027
Track the step-down of the US auto-parts tariff offset ratio from 3.75% to 2.5% and the program's scheduled expiration, and assess any resulting change in cost burden.
August 20, 2027
Confirm whether the debt guarantee for Sichuan Sangsin Brake System Co., Ltd. is renewed, repaid, or triggered at maturity.

Overall view

Sangsin Brake moved from a large owner net loss in the second quarter of 2025, through a narrower loss in the third quarter, to a return to profit in the fourth quarter, and has now recorded owner net profit for four consecutive quarters through the second quarter of 2026.

However, the operating margin slipping to about 0.6% in the second quarter of 2026 shows that the pace of profit recovery has not yet fully stabilized.

On a full-year 2025 basis, revenue fell 6.3% and operating profit swung to a loss, so the return to quarterly profit does not by itself signal a full restoration of prior profitability levels.

Externally, the August 2025 Korea-US trade agreement lowered the tariff on autos and parts from 25% to 15%, and the US tariff-offset program has provided some temporary relief on the cost side.

At the same time, that offset ratio is scheduled to decline and eventually expire after April 2027, leaving medium-term trade-policy uncertainty in place.

The company also carries contingent liabilities tied to its Chinese affiliate's debt guarantee and overseas operations, and its debt ratio remains elevated at 154.5%. Whether the revenue and margin recovery continues in coming quarters, alongside how trade policy evolves, will be important to monitor.

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.