PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩210 per share · Prices as of the 2026-10-02 close
Hanchang Industrial, a niche materials maker of zinc powder, zinc phosphate, lithium bromide and zeolite, has posted four consecutive quarters of sequentially expanding profit through Q2 2026 after a brief loss in Q3 2025.
Zinc powder accounts for more than half of sales, followed by LiBr, zeolite and zinc phosphate, in a small-scale capital-intensive niche that large conglomerates rarely enter.
Operating margin fell to 2.3% in 2023, rebounded to 9.3% in 2024, and eased slightly to 8.0% in 2025 even as revenue rose to KRW 98.6 billion.
The company posted an operating loss in Q3 2025 but revenue and profit expanded sequentially through Q4 2025 and Q1-Q2 2026.
The debt ratio declined from 38.4% in 2023 to 19.1% in 2025, indicating a more stable balance sheet.
The shipbuilding sector holds a substantial order backlog, but forecasts of a 2026 decline in global newbuilding orders highlight exposure to downstream industry cycles.
Hanchang Industrial, established in 1985, manufactures and sells functional materials including zinc powder, zinc phosphate, lithium bromide (LiBr) and zeolite. Its core products, zinc powder and zinc phosphate, serve as key raw materials for anti-corrosion paints used on ships, containers and steel structures.
LiBr is used as an absorbent in absorption chillers and heaters within centralized heating and cooling systems for large buildings. Zeolite is a molecular sieve material that selectively adsorbs nitrogen to separate oxygen, applied in industrial vacuum pressure swing adsorption (VPSA) oxygen generators.
Company profile data indicates zinc powder accounts for 58.33% of total sales, LiBr 25.41%, zinc phosphate 4.7% and zeolite 6.71%.
The zinc powder and zinc phosphate markets are capital-intensive but small in scale, a combination that has helped Hanchang Industrial maintain a stable position for over four decades where large conglomerates rarely enter.
Past reporting indicated the company sources its main raw material, zinc oxide, from Hanil Chemical Industrial, an affiliate founded by the same founding family.
As of end-June 2023, ownership data showed the CEO as largest shareholder together with related parties holding more than half of total shares, reflecting an owner-centered governance structure. The company has reportedly maintained a debt-free management tradition built on accumulated retained earnings.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩34.3B | ₩6.8B | 19.9% |
| 2025Q3 | ₩21.3B | -₩200M | −0.8% |
| 2025Q4 | ₩21.1B | ₩400M | 1.9% |
| 2026Q1 | ₩21.2B | ₩700M | 3.1% |
| 2026Q2 | ₩28.9B | ₩2.2B | 7.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩99.3B | ₩7.1B | ₩6.1B | 7.2% | 9.9% | 21.4% |
| 2023 | ₩67B | ₩1.6B | ₩1.6B | 2.3% | 2.5% | 38.4% |
| 2024 | ₩94.6B | ₩8.8B | ₩6.8B | 9.3% | 10.1% | 28.9% |
| 2025 | ₩98.6B | ₩7.9B | ₩6.6B | 8.0% | 9.1% | 19.1% |
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
Annual revenue fell sharply from KRW 99.3 billion in 2022 to KRW 67.0 billion in 2023, then recovered for two straight years to KRW 94.6 billion in 2024 and KRW 98.6 billion in 2025. Operating profit dropped from KRW 7.1 billion in 2022 to KRW 1.6 billion in 2023, with operating margin falling from 7.2% to 2.3%.
In 2024, operating profit rose to KRW 8.8 billion as revenue recovered, lifting operating margin to 9.3%. In 2025, revenue expanded further to KRW 98.6 billion, but operating profit was KRW 7.9 billion with margin easing slightly to 8.0%.
Net profit attributable to owners followed a similar pattern: KRW 6.1 billion in 2022, KRW 1.6 billion in 2023, KRW 6.8 billion in 2024 and KRW 6.6 billion in 2025.
On a quarterly basis, Q2 2025 was the strongest in the recent window with revenue of KRW 34.3 billion, operating profit of KRW 6.8 billion and net profit of KRW 5.3 billion. Revenue then dropped sharply to KRW 21.3 billion in Q3 2025, swinging to an operating loss of KRW 175 million and a net loss of KRW 103 million.
Performance subsequently recovered sequentially through Q4 2025 (revenue KRW 21.1 billion, operating profit KRW 397 million), Q1 2026 (revenue KRW 21.2 billion, operating profit KRW 667 million) and Q2 2026 (revenue KRW 28.9 billion, operating profit KRW 2.22 billion).
The debt ratio fell from 38.4% in 2023 to 19.1% in 2025, while operating cash flow declined from KRW 12.7 billion in 2023 to KRW 6.1 billion in 2025.
Zinc powder and zinc phosphate demand is directly tied to anti-corrosion paint needs in shipbuilding, construction and steel structures, making the business sensitive to downstream industry conditions. FnGuide projected that the zinc powder and zinc phosphate market would be sustained by economic growth trends.
Korean shipbuilders hold an order backlog of more than three years, with delivery slots already filled through 2028, supporting near-term construction volumes.
However, the Export-Import Bank of Korea's research institute forecast that a global economic slowdown and weak shipping market conditions would make improvement difficult even in 2026, and that global newbuilding order volume would decline from 2025 levels.
LiBr demand tends to be sensitive to the domestic construction cycle. Zeolite demand is expected to grow as fossil fuel depletion and environmental concerns increase the importance of combustion efficiency, boosting demand for oxygen generation equipment.
In terms of competitive positioning, zinc powder and zinc phosphate remain a small-scale, capital-intensive niche that large conglomerates rarely enter, which is seen as having helped Hanchang Industrial maintain a stable position.
The company disclosed on August 13 that first-half 2026 revenue reached KRW 50.2 billion, operating profit KRW 2.9 billion and net profit KRW 3.6 billion.
These figures represented year-on-year declines of 10.56% in revenue and 62.27% in operating profit, which the company attributed to delayed demand recovery in some industries and heightened external geopolitical uncertainty.
The company stated that production and factory operations were proceeding stably as planned and that it expects sales growth from expanded second-half sales. Its second-half strategy includes expanding sales of key products while securing new overseas demand sources to strengthen its export base.
Looking at the quarterly trajectory, revenue and profit have expanded sequentially from the Q3 2025 trough through Q2 2026. On the industry side, some analysts have noted that shipbuilding steel plate prices have entered a stabilizing downward phase, which could ease cost pressure somewhat.
Conversely, if global newbuilding orders continue to decline and shipping market conditions remain weak, the pace of recovery in zinc powder demand for anti-corrosion paint could be constrained.
Recent performance can be summarized as a sharp earnings decline in 2023, followed by recovery in 2024-2025, a brief loss in Q3 2025, and sequentially expanding profit through Q2 2026.
According to one market data aggregator, the five-year average price-to-earnings ratio is around 13 times and the average price-to-book ratio is around 0.7 times. The company appears to have maintained annual cash dividends consistently even as profit levels fluctuated.
The stabilizing debt ratio and strengthening balance sheet may be a relevant reference point for assessing valuation relative to net assets. How this valuation picture evolves will depend on the durability of the earnings recovery and how the shipbuilding and construction industry cycles develop.
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
Revenue and operating profit have expanded sequentially for four straight quarters from the Q3 2025 trough through Q2 2026. Operating profit accelerated from KRW 667 million in Q1 2026 to KRW 2.22 billion in Q2 2026, indicating a quickening pace of recovery.
The company has stated it expects further improvement in the second half through expanded sales and a strengthened export base.
The debt ratio fell from 38.4% in 2023 to 19.1% in 2025, indicating a more stable balance sheet. The company is reported to have maintained a debt-free management tradition based on accumulated retained earnings. Equity attributable to owners also grew steadily from KRW 61.8 billion in 2022 to KRW 72.5 billion in 2025.
Zinc powder and zinc phosphate are considered a capital-intensive niche that is difficult for large conglomerates to enter due to the small market size. Hanchang Industrial is reported to have maintained a stable position in this market for over four decades. This barrier to entry may lower the risk of market share erosion from new competitors.
The Export-Import Bank of Korea's research institute forecast that improvement in the newbuilding market would be difficult in 2026 due to a global economic slowdown and weak shipping conditions. Global newbuilding order volume was also expected to decline from 2025 levels.
A prolonged slowdown in new orders could constrain the pace of recovery in zinc powder demand for anti-corrosion paint.
LiBr, used in heating and cooling equipment for large buildings, is reported to be sensitive to the construction cycle. A contraction in domestic construction investment could negatively affect LiBr sales. Since LiBr is the second-largest product by sales weight, its impact on overall performance could be significant.
Quarterly performance has shown large swings, as illustrated by the shift from a KRW 6.8 billion operating profit in Q2 2025 to a KRW 175 million operating loss in Q3 2025. First-half 2026 revenue and operating profit also fell 10.56% and 62.27% year-on-year, respectively. This volatility makes it difficult to judge the company's overall trajectory from any single quarter's results.
Past reporting indicated the company sources its main raw material, zinc oxide, from Hanil Chemical Industrial, an affiliate founded by the same founding family. This reliance on a related-party transaction is a factor worth examining in terms of price negotiation leverage and supply stability. Fluctuations in international zinc-related raw material prices could also affect costs.
Revenue is concentrated in a small number of downstream industries such as shipbuilding, construction and energy, making performance highly dependent on those industry cycles.
If global newbuilding orders decline and domestic construction investment contracts simultaneously, multiple product lines could see synchronized sales slowdowns. This concentration risk could persist without further demand diversification.
Disclosure data as of end-June 2023 showed the largest shareholder and related parties holding more than half of total shares, reflecting an owner-centered structure. While this can support consistency in management decisions, it may also raise issues in aligning interests with minority shareholders. Given its small market capitalization on KOSDAQ, attention to liquidity and price volatility is warranted.
The Q3 2026 earnings release will show whether the company's guidance for expanded second-half sales translated into actual revenue and profit improvement.
Progress on securing new overseas customers and strengthening the export base, along with any change in export mix, warrants monitoring.
Whether shipbuilding newbuilding orders, particularly for LNG carriers, resume will be worth tracking for its link to zinc powder demand in anti-corrosion paint.
It will be worth checking whether a dividend decision is disclosed for fiscal year 2026 and whether the continuity of dividend policy is maintained.
Hanchang Industrial is a niche materials maker specialized in a small set of products—zinc powder, zinc phosphate, LiBr and zeolite—whose performance is directly tied to demand from the shipbuilding, construction and energy industries.
Earnings fell sharply in 2023, recovered in 2024, and in 2025 revenue reached a record level even as operating margin eased slightly, showing a different pattern each year.
After a brief loss in Q3 2025, the company has seen profit expand sequentially for four consecutive quarters through Q2 2026, and management has stated it expects further improvement from expanded second-half sales and a strengthened export base.
A declining debt ratio and consistent cash dividends are positive financial signals, but forecasts of slowing new shipbuilding orders, LiBr sales sensitivity to the construction cycle, and reliance on a related-party raw material supplier warrant attention.
The owner-centered governance structure and small-cap liquidity characteristics also merit consideration. On balance, the durability of the earnings recovery and how downstream industry cycles evolve will be the key variables shaping the company's future trajectory.
Report written 2026-09-05 · Data as of 2026-09-04
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