PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩220 per share · Prices as of the 2026-10-02 close
LMS posted two consecutive quarters of net profit attributable to owners in Q1 and Q2 2026, with operating profit also improving in Q2, but the company still carries a multi-year annual loss pattern since 2022 and customer concentration risk, leaving the durability of the rebound to be confirmed.
Owners' net profit was positive for two straight quarters in 2026, and Q2 operating profit also turned positive at about KRW 1.67 billion
2025 consolidated revenue rose year over year to KRW 69.57 billion, but the operating loss widened to KRW 9.62 billion, the largest in the 2022-2025 period
The top two customers accounted for about 84% of revenue as of Q3 2025, leaving customer diversification as an ongoing challenge
As Korea's display market share continues to shift toward China, IR-cut filters and automotive display film are cited as new growth drivers
The stock trades below the company's book value per share
Founded in 1999 and based in Pyeongtaek, Gyeonggi Province, LMS is a KOSDAQ-listed electronic components company that produces display and optical component materials. Its core product is the prism sheet, a brightness-enhancement film used in LCD backlight units to concentrate light and increase screen brightness.
The company is reported to have long shared the smartphone small and composite prism sheet market roughly evenly with 3M of the United States. More recently it has been expanding its IR-cut filter business for camera modules, a segment expected to see continued growth as multi-camera adoption spreads.
It is also developing materials targeting new applications such as AMOLED, Mini LED, and fingerprint recognition. Revenue is concentrated among a small number of clients, with the top two customers accounting for about 84% of sales as of Q3 2025.
One major former customer, which had accounted for a large share of optical film revenue, sold its polarizer material business to a Chinese company in 2023, reducing its purchases from LMS.
In the competitive landscape, domestic peers Miraenanotech, Sangbo, and Shinwha Intertek compete in the optical film market, while 3M continues to hold a strong global position.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩18B | -₩3.5B | −19.3% |
| 2025Q3 | ₩17.8B | -₩2.7B | −14.9% |
| 2025Q4 | ₩18.9B | -₩2B | −10.8% |
| 2026Q1 | ₩22.3B | -₩800M | −3.7% |
| 2026Q2 | ₩26.7B | ₩1.7B | 6.3% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩98.9B | ₩1.5B | ₩300M | 1.5% | 0.3% | 136.9% |
| 2023 | ₩75.8B | -₩8.6B | -₩13.1B | −11.4% | −15.8% | 90.2% |
| 2024 | ₩67.7B | -₩3.7B | -₩4.6B | −5.4% | −6.0% | 102.7% |
| 2025 | ₩69.6B | -₩9.6B | -₩12.1B | −13.8% | −16.7% | 106.3% |
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
LMS's consolidated revenue fell for three straight years, from KRW 98.90 billion in 2022 to KRW 75.76 billion in 2023 and KRW 67.71 billion in 2024, before rebounding modestly to KRW 69.57 billion in 2025.
Profitability, however, worsened: the 2025 operating loss reached KRW 9.62 billion (operating margin -13.8%), the largest of the 2022-2025 period, while owners' net loss widened to KRW 12.13 billion.
In 2022 the company was profitable, with revenue of KRW 98.90 billion, operating profit of KRW 1.46 billion, and net profit of KRW 0.27 billion, but from 2023 onward declining revenue combined with cost pressure to produce three consecutive years of losses.
Indeed, weaker demand for the core prism sheet product together with rising cost burdens has been cited as the reason for the shrinking gross margin and widening operating loss.
On a quarterly basis, losses persisted from Q2 2025 (revenue KRW 18.05 billion, operating loss KRW 3.48 billion, net loss KRW 6.20 billion) through Q4 2025 (revenue KRW 18.95 billion, operating loss KRW 2.04 billion, net loss KRW 4.23 billion), but Q1 2026 revenue jumped to KRW 22.35 billion, narrowing the operating loss to KRW 0.84 billion and turning net profit positive at KRW 3.69 billion.
In Q2 2026, revenue expanded further to KRW 26.68 billion, operating profit turned positive at KRW 1.67 billion, and net profit reached KRW 3.76 billion, extending the streak to two consecutive profitable quarters.
That said, full-year 2025 operating cash flow was sharply negative at KRW -23.10 billion, in stark contrast to the solid cash generation of 2022-2024 (+KRW 10.25 billion, +KRW 13.85 billion, and +KRW 6.01 billion respectively), and the trailing four-quarter sum of owners' net profit (Q3 2025-Q2 2026) came in positive only because the weak Q1 2025 quarter drops out of the window while the 2026 recovery is included — a distinction that should be interpreted separately from the calendar-year results.
The LCD display industry, LMS's core end market, is in a structurally declining phase. Korea's global display market share fell to 30.6% in Q1 2025 from 36.8% in 2020, a drop of 6.2 percentage points, while China's share rose from 36.7% to 54.1% over the same period, a gain of 17.4 percentage points.
Chinese manufacturers are simultaneously pursuing price competitiveness and expanded technology investment, emerging as the largest potential competitor to Korea's display industry.
Against this backdrop, LCD continues to be replaced by OLED in premium TV and smartphone markets, weakening the structural demand base for LCD backlight-unit optical films including prism sheets.
In one instance, a major customer, after a semiconductor supply issue, shifted focus toward premium OLED TV sales over quasi-premium LCD TVs, reducing related optical film purchases.
By contrast, IR-cut filters used in camera modules are considered a relatively resilient growth area supported by expanding multi-camera adoption in smartphones. The automotive display film market is also expected to grow over the long term alongside the expansion of digital cockpits in vehicles.
Still, these newer businesses are understood to contribute less to revenue than the legacy prism sheet business, and domestic peers Miraenanotech, Sangbo, and Shinwha Intertek face similar industry pressure, pointing to continued restructuring pressure across the sector.
Through three board resolutions between September and December 2025, the company decided on a rights offering of 3 million common shares, disclosing that the proceeds would be used as operating capital for labor and raw material costs in the optical film business.
This can be read as a commitment to continued investment in the core segment where recent performance has improved, but it also carries the potential for equity dilution from the new share issuance.
The double-digit revenue rebound and return to operating profit in Q1 and Q2 2026 can be viewed as positive signals, though no specific annual guidance or new order disclosures from the company have been confirmed.
Expansion of IR-cut filters for multi-camera applications and entry into new areas such as AMOLED, Mini LED, and fingerprint recognition are cited as pillars of revenue diversification, but segment-level revenue contributions have not yet been publicly confirmed.
Going forward, key items to watch will be whether the profit turnaround of the past two quarters continues as a trend rather than a one-off in Q3 2026 results, and whether the rights-offering proceeds are deployed as planned.
With two consecutive quarters of net profit now confirmed, price-related metrics that had been difficult to calculate during the loss-making stretch are beginning to regain relevance. The stock trades below the company's book value per share, which can be viewed as a discount relative to asset value.
A cash dividend appears to have been maintained for fiscal year 2025 as well; sustaining dividends even during net-loss periods is a point worth noting from a shareholder-return perspective, but given the volatility of earnings, whether this continues will depend on the durability of the profit recovery.
Still, with three of the past four years (2022-2025) ending in net losses, whether the recent earnings recovery is a trend or a temporary rebound is something that will need to be judged from future quarterly results.
Peer optical film makers face similar industry pressures, so relative comparisons should also take into account the broader sector's valuation backdrop.
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
LMS posted owners' net profit of KRW 3.69 billion in Q1 2026 and KRW 3.76 billion in Q2 2026, and Q2 also saw operating profit turn positive at KRW 1.67 billion. Revenue also expanded meaningfully, from KRW 18.05 billion in Q2 2025 to KRW 26.68 billion in Q2 2026. This can be interpreted as a sign of emerging from the loss-making phase that had persisted since 2022.
IR-cut filters are cited as an area of continued growth potential, supported by expanding multi-camera adoption in smartphones. The company is also developing materials for new applications such as AMOLED, Mini LED, and fingerprint recognition. These efforts represent an ongoing attempt to move beyond a revenue structure centered on prism sheets.
The current share price trades below the company's book value per share. If the recent earnings recovery continues, the gap between asset value and earnings trends could be cited as a factor for re-evaluation. This, however, is a factual observation and does not imply any particular price direction.
Korea's global display market share fell from 36.8% in 2020 to 30.6% in Q1 2025, while China's share rose from 36.7% to 54.1% over the same period.
The ongoing substitution of LCD by OLED in premium product segments continues to weaken the structural demand base for LCD optical films including prism sheets, and new businesses have not yet fully offset this decline.
As of Q3 2025, the top two customers accounted for about 84% of revenue. A major former customer previously sold its polarizer material business to a Chinese company in 2023, reducing related purchases from LMS.
This heavy reliance on a small number of customers leaves revenue vulnerable to shifts in those clients' business strategies or order volumes.
The company recorded net losses in three of the four years from 2022 to 2025 (2023, 2024, and 2025). 2025 operating cash flow was -KRW 23.10 billion, sharply contrasting with the solid cash generation of 2022-2024.
Whether the recent two-quarter profit turnaround will fully reverse this multi-year loss pattern remains to be confirmed.
As the shift from LCD to OLED continues, changes in major customers' product portfolios directly affect the company's revenue. With the top two customers accounting for about 84% of sales, changes in a particular client's order policy can have an outsized impact on results.
Newer businesses such as IR-cut filters and automotive film still contribute relatively little to revenue, making it difficult for them to offset this concentration in the near term.
Owners' equity shrank from KRW 96.63 billion in 2022 to KRW 72.84 billion in 2025, and the debt ratio rose to 106.3% in 2025 from 90.2% in 2023. The sharp deterioration in 2025 operating cash flow, to -KRW 23.10 billion, is also worth monitoring.
The company has resolved on a 3-million-share rights offering as of late 2025, and further equity dilution could recur if additional capital raises become necessary.
In the optical film market, domestic peers Miraenanotech, Sangbo, and Shinwha Intertek compete, while 3M continues to hold a strong position globally. The expanding share of Chinese display makers could intensify price competition across the component supply chain. Heightened competition may also translate into cost pressure and margin compression in newer business areas.
Q3 2026 earnings disclosure (preliminary or quarterly report) will show whether the profit turnaround of the past two quarters continues as a trend.
It will be worth checking how the deployment of proceeds from the 3-million-share rights offering resolved in late 2025 is reflected in quarterly filings.
The FY2026 annual report will provide the final confirmation of whether full-year results turned profitable.
Investors should watch for additional disclosures or IR materials on the revenue contribution of newer businesses such as IR-cut filters and automotive display film.
LMS, which recorded net losses in three of the four years since 2022, showed signs of a turnaround with two consecutive profitable quarters in Q1 and Q2 2026.
Revenue expanded to KRW 26.68 billion in Q2 2026 and operating profit turned positive at KRW 1.67 billion, but it should also be noted that full-year 2025 results showed an operating loss of KRW 9.62 billion and an owners' net loss of KRW 12.13 billion, the largest of the past four years.
High revenue concentration among the top two customers and the structural decline of the LCD industry remain unresolved challenges, and the sharp deterioration in 2025 operating cash flow is also worth watching.
New businesses such as IR-cut filters and automotive display film are cited as pillars of diversification, but their segment-level contributions have not yet been confirmed.
The company resolved on a 3-million-share rights offering in late 2025 to continue investing in its core segment, though this also carries the potential for equity dilution.
Whether the recent earnings recovery proves to be a lasting trend or a temporary rebound will need to be confirmed through results in the coming quarters.
Report written 2026-09-05 · Data as of 2026-09-04
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