Joongang Advanced Materials

Joongang Cheomdan Sojae is a small-cap KOSDAQ company with a long history in PVC building materials (windows, door frames, ducts), pre-sale agency services, and telecom equipment such as railcar communication gear.

The company has built competitiveness in the retail PVC window and duct market through diverse products, manufacturing facilities and accumulated know-how, while holding a strong position in the railcar and public-sector segments of the telecom equipment business.

In 2025, the telecom equipment segment accounted for KRW 16.5 billion, or 83.5% of consolidated revenue, while PVC and building materials contributed KRW 3.2 billion, or 16.1%.

Since 2023 the company has added a lithium-salt distribution business tied to secondary battery materials, but this materials segment generated only KRW 52 million, less than 0.3% of total sales.

The core of the lithium-salt initiative is EDL, a joint venture with Enchem in which Joongang Cheomdan Sojae holds a 50% stake, pursuing a large-scale lithium-salt project centered on the Saemangeum national industrial complex.

The company has stated a goal of localizing import-dependent LiPF6 lithium salt while building 50,000 tons of self-owned production capacity to become a global top-tier player.

In December 2025, electrolyte maker Enchem raised its stake to 14.53% and became the sole controlling shareholder, reinforcing integration of the Enchem-Joongang Cheomdan Sojae-EDL lithium salt-to-electrolyte value chain.

Although the stock is classified under the semiconductor sector on KOSDAQ, its actual revenue base is derived from building materials, telecom equipment and battery-material distribution, creating a gap between the sector label and the underlying business.

Annual revenue moved from KRW 29.06 billion in 2022 to KRW 26.30 billion in 2023, KRW 18.69 billion in 2024, and KRW 19.81 billion in 2025, contracting before a modest rebound.

Operating profit/loss swung from -KRW 5.42 billion in 2022 to +KRW 47 million in 2023 (a brief turn to profit), -KRW 7.80 billion in 2024, and -KRW 4.56 billion in 2025, with 2023 the only profitable year among the four.

Net income was negative in all four years, and the 2024 net loss of -KRW 76.83 billion was far larger than that year's operating loss of -KRW 7.80 billion, suggesting non-operating items had a substantial impact. The 2025 net loss narrowed sharply to -KRW 5.50 billion versus the prior year.

On a quarterly basis, revenue of KRW 5.01 billion with an operating loss of -KRW 1.02 billion and net loss of -KRW 3.50 billion in 2025Q2 worsened to KRW 4.15 billion in revenue, -KRW 1.11 billion operating loss and -KRW 4.66 billion net loss in Q3, before Q4 revenue rose to KRW 7.31 billion, the operating loss narrowed to -KRW 0.81 billion, and net income turned positive at +KRW 4.67 billion.

In 2026Q1, revenue fell to KRW 2.33 billion and the operating loss widened to -KRW 2.32 billion, yet the net loss shrank sharply to -KRW 0.10 billion, while Q2 posted revenue of KRW 4.90 billion, an operating loss of -KRW 1.04 billion, and a net loss of -KRW 2.11 billion.

Over the trailing four quarters (2025Q3-2026Q2), the combined net loss attributable to owners was roughly KRW 2.2 billion, reflecting high quarter-to-quarter volatility and recurring non-recurring items.

On the cash-flow side, 2025 operating cash flow turned positive at +KRW 3.45 billion, a marked improvement from the large outflows of -KRW 11.16 billion and -KRW 21.18 billion in 2022 and 2023, though 2026Q1 saw roughly KRW 1.4 billion flow out again, indicating the recovery in core cash generation has not fully settled.

Meanwhile total equity rose steadily from KRW 21.11 billion in 2022 to KRW 103.81 billion in 2025, a change driven mainly by capital raises and conversion of convertible instruments rather than retained profit, as shares outstanding more than tripled from 36.67 million at end-2022 to 111.09 million at end-2025.

In the building-materials segment, ongoing declines in construction investment continue to weigh on demand for PVC windows and related products.

The telecom equipment segment also faces pressure as the domestic network-equipment market has moved into a phase of completed investment and subscriber saturation, squeezing revenue.

Still, telecom infrastructure demand is expected to persist steadily on network quality upgrades and rising data traffic, so the market is not disappearing outright.

By contrast, the secondary battery materials industry is in a growth phase, with demand for lithium-salt base materials expected to rise alongside EV market expansion.

Lithium salt (LiPF6) has historically been highly import-dependent domestically, and localization efforts are being supported by EDL's selection for a national strategic industry materials/parts/equipment investment support program.

However, lithium-salt production remains at the pre-mass-production stage, and the global supply chain is heavily influenced by Chinese producers, meaning localization and stable mass production will take time to establish.

The PVC building-materials and telecom equipment businesses the company operates in are mature markets with intense competition and limited room for new demand, whereas the secondary battery materials segment carries comparatively greater growth potential, giving the portfolio a distinctly split character.

The company has stated that its current businesses are characterized by revenue concentrated in the second half of the year, and that despite weak first-half sales, second-half performance needs to be monitored.

EDL is building a lithium-salt (LiPF6) production plant in the Saemangeum industrial complex, and a company representative said trial operation is planned to begin in the first half of 2027.

Once trial operation leads to mass production, the company expects both an improvement in equity-method gains/losses and the start of lithium-salt distribution revenue for Joongang Cheomdan Sojae.

Financially, as of the end of 2026Q1 consolidated liabilities stood at KRW 23.6 billion, equity at KRW 103.8 billion, and the debt ratio at about 22.8%, suggesting no immediate funding strain, though KRW 16.1 billion of current liabilities consists of current portions of long-term borrowings due within a year that will require management.

The company has extended KRW 11.9 billion in loans to EDL and provided a joint guarantee of KRW 12.0 billion together with Enchem and others to fund the Saemangeum plant, and has recently extended the maturity of some loans to EDL to 2027.

Separately, in response to KOSDAQ's new penny-stock delisting rule, the company decided on a 10-for-1 share consolidation, with the record date on September 14, effectiveness on September 15, trading halted from September 11 to October 1, and re-listing scheduled for October 2.

Whether the stock stabilizes after the consolidation is seen in the market as ultimately depending on a recovery in core profitability and EDL's actual mass-production and revenue results.