KOSPIChemicals081000

Iljin Diamond

₩9,420▲ 2.50%2026-10-02 close

Market Cap

₩134.4B

Turnover

₩200M

Volume

20,000 shares

Shares out.

14.2M

PER

9.3×

PBR

0.3×

EPS

₩1,027

Dividend Yield

3.13%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩300 per share · Prices as of the 2026-10-02 close

Report overview

Core Business Losses, But Profit Recovery Emerging

Iljin Diamond has posted three straight years of operating losses in its core industrial diamond and tungsten carbide business, yet revenue and profit have shown a clear improving trend from the fourth quarter of 2025 through the second quarter of 2026.

1
Full-year 2025 operating loss stood at KRW 6.8 billion (operating margin -4.2%), marking a third consecutive year of operating losses since 2023.
2
In the second quarter of 2026, revenue reached KRW 55.0 billion, operating profit KRW 7.0 billion, and owners' net income KRW 7.8 billion — the strongest quarter in the latest five-quarter window.
3
Through subsidiary Iljin Hysolus (formerly Iljin Composite Materials), the company supplies hydrogen fuel tanks for Hyundai Motor's fuel-cell vehicles and hydrogen buses, and non-controlling interests account for roughly KRW 127.4 billion of consolidated equity.
4
The industrial synthetic diamond market has an oligopolistic structure dominated by a handful of global players, with applications expanding into higher-value areas such as semiconductors, automotive, aerospace, and energy.
5
As a small-cap stock with a market capitalization of roughly KRW 0.1 trillion, the company sits within the Iljin Group governance structure centered on largest shareholder Iljin Holdings.

Business structure

Iljin Diamond is a specialty materials company within the Iljin Group that began its business in 1987 through industry-academia collaboration with the Korea Institute of Science and Technology (KIST), developing Korea's first industrial synthetic diamond.

It subsequently grew into one of the world's three largest industrial diamond makers through the development of differentiated precision materials, building global sales and marketing infrastructure across Europe, Japan, the Americas, and China.

Its core business consists of industrial diamond powder and sintered compacts plus tungsten carbide materials, and it has expanded applications from traditional construction and machinery demand into higher value-added areas such as automotive, aerospace, energy, and semiconductors.

The company has also broadened into advanced materials for ultra-precision and hard-to-cut material processing, as well as diamond wire and related tool businesses, while pursuing entry into the Oil & Gas market.

In parallel, through subsidiary Iljin Hysolus (renamed from Iljin Composite Materials in April 2021), it operates a hydrogen fuel tank business. This subsidiary is regarded as a leading domestic supplier of Type 4 hydrogen fuel tanks for Hyundai Motor's Nexo fuel-cell vehicle and hydrogen buses and trucks.

The industrial diamond market is known to be an oligopoly involving a small number of global players including U.S.-based Diamond Innovations (formerly GE) and UK-based Element Six (formerly De Beers).

Iljin Holdings is the largest shareholder, situating the company within the group's holding-company governance structure.

Earnings trend

Quarterly revenue · Operating profit

₩38B-₩1.9B25Q2₩48.6B-₩3.6B25Q3₩45.8B₩1B25Q4₩47.8B₩400M26Q1₩55B₩7B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩186.8B₩3.3B2022₩154.5B-₩4.4B2023₩157.1B-₩4.6B2024₩162.4B-₩6.8B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩38B	-₩1.9B	−5.1%
2025Q3	₩48.6B	-₩3.6B	−7.4%
2025Q4	₩45.8B	₩1B	2.2%
2026Q1	₩47.8B	₩400M	0.9%
2026Q2	₩55B	₩7B	12.8%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩186.8B	₩3.3B	-₩6.7B	1.8%	−1.7%	13.5%
2023	₩154.5B	-₩4.4B	₩10B	−2.8%	2.5%	11.7%
2024	₩157.1B	-₩4.6B	₩12.9B	−3.0%	3.1%	12.2%
2025	₩162.4B	-₩6.8B	₩6.9B	−4.2%	1.7%	13.5%

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

On an annual basis, revenue declined from KRW 186.8 billion in 2022 to KRW 154.5 billion in 2023, before recovering for two consecutive years to KRW 157.1 billion in 2024 and KRW 162.4 billion in 2025.

Operating profit, however, moved from a KRW 3.3 billion surplus in 2022 to losses of KRW 4.4 billion in 2023, KRW 4.6 billion in 2024, and KRW 6.8 billion in 2025, with the loss widening for three straight years. The operating margin deteriorated from 1.8% in 2022 to -2.8% in 2023, -3.0% in 2024, and -4.2% in 2025.

Net income attributable to owners, by contrast, moved from a loss of KRW 6.7 billion in 2022 to profits of KRW 10.0 billion in 2023, KRW 12.9 billion in 2024, and KRW 6.9 billion in 2025, following a different trajectory from operating income — a pattern that appears to reflect non-operating factors within consolidated subsidiaries.

On a quarterly basis, revenue of KRW 38.0 billion and an operating loss of KRW 2.0 billion in the second quarter of 2025 was followed by revenue growth to KRW 48.6 billion in the third quarter, even as the operating loss widened to KRW 3.6 billion.

From the fourth quarter, however, the company swung to an operating profit of KRW 1.0 billion on revenue of KRW 45.8 billion, and this trend of simultaneous revenue and profit expansion became more pronounced with KRW 47.8 billion in revenue and KRW 0.4 billion in operating profit in the first quarter of 2026, followed by KRW 55.0 billion in revenue and KRW 7.0 billion in operating profit in the second quarter of 2026.

Owners' net income over the same period rose rapidly from KRW 1.2 billion in the third quarter of 2025 to KRW 4.1 billion in the first quarter of 2026 and KRW 7.8 billion in the second quarter of 2026.

Summing the latest four quarters (third quarter of 2025 through second quarter of 2026), owners' net income totaled approximately KRW 14.6 billion, suggesting the company has entered a recovery phase on an annualized basis.

Whether this trend reflects one-off factors or a structural improvement will require confirmation from subsequent quarterly results.

Industry analysis

Industrial synthetic diamond, valued for its extreme hardness, is used as a material for grinding and cutting tools, and high technical barriers have reportedly allowed a small number of global players to dominate most of the market in an oligopolistic structure.

Downstream demand is trending toward expansion from traditional construction and machining tools into higher value-added areas such as automotive, aerospace, energy, and semiconductors.

The global semiconductor market is projected to grow from about USD 659.7 billion in 2026 to USD 1,477.1 billion by 2034 at a compound annual growth rate of 10.6%, which could support demand for precision grinding and cutting materials used in semiconductor manufacturing processes.

That said, intensifying price competition in industrial diamond itself and competition from lower-cost producers remain persistent variables.

In the hydrogen fuel tank segment, growth potential can be traced to South Korea's 2019 Hydrogen Economy Roadmap, which targeted 6.2 million fuel-cell vehicles and 1,200 hydrogen refueling stations by 2040, though actual deployment speed depends on policy execution and automakers' production plans.

Subsidiary Iljin Hysolus holds a position as the exclusive domestic supplier of hydrogen tanks to Hyundai Motor, making it directly exposed to changes in the automaker's production plans for fuel-cell vehicles, buses, and trucks.

Overall, the company sits at the intersection of mature, competitive dynamics in its traditional materials business and policy-dependent growth potential in its newer hydrogen tank business.

Outlook

The key variable for assessing the company's forward path is whether the simultaneous improvement in revenue and profit that began in the fourth quarter of 2025 continues.

Revenue has risen for four consecutive quarters through the second quarter of 2026, and operating profit has remained positive for three consecutive quarters since turning positive in the fourth quarter of 2025 — an early signal of a potential recovery in the core business.

However, given three consecutive years of annual operating losses from 2023 through 2025, further confirmation is needed on whether quarterly improvement will translate into an annual swing to profit.

The hydrogen fuel tank segment remains a variable whose earnings contribution will depend on Hyundai Motor's production plans for fuel-cell vehicles, buses, and trucks, as well as the pace of execution of government hydrogen economy policy.

In the core industrial diamond and tungsten carbide business, expansion into higher value-added applications such as semiconductors and automotive is underway, but the speed and magnitude of translation into actual revenue and margin improvement remains to be observed.

The company filed a quarterly report in May 2026 that was subject to a correction request from the Korea Exchange citing insufficient disclosure, making it useful to track subsequent corrected filings and following quarterly reports for detail. No separate revenue or profit guidance, nor new capacity expansion plans, were identified in this research.

Valuation

PER

9.3×

PBR

0.3×

ROE

3.5%

EPS

₩1,027

BPS

₩29,660

Dividend per share

₩300

Net income attributable to owners moved from a loss in 2022 to profit from 2023 onward, and the recent four-quarter trend shows expanding profit size, which is worth keeping in mind when considering valuation direction.

The share price trades at a considerable discount to book value per share, a level that can be read as the market pricing the stock conservatively relative to recorded net asset value.

The multiple reflecting share price relative to earnings appears to be moving within the historical trading range this stock has occupied, and the recent quarterly profit improvement could shift where within that range the multiple now sits.

The company has maintained a policy of paying a steady annual cash dividend, though the absolute attractiveness of that dividend can vary from year to year depending on earnings volatility.

Because non-controlling interests tied to subsidiary Iljin Hysolus make up a substantial share of consolidated equity, there is a meaningful gap between owner-attributable metrics and total consolidated metrics, which is also worth factoring into any valuation interpretation.

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

Concurrent Quarterly Improvement in Revenue and Profit

Revenue and operating profit have expanded together for three consecutive quarters from the fourth quarter of 2025 through the second quarter of 2026.

In the second quarter of 2026 in particular, revenue of KRW 55.0 billion and operating profit of KRW 7.0 billion marked the best quarterly result in the latest five-quarter window.

Owners' net income also expanded rapidly over the same period, putting the company on a recovery trajectory on a trailing four-quarter basis.

Expansion into Higher Value-Added Applications

Beyond traditional construction and machinery demand, Iljin Diamond has expanded applications into higher value-added areas such as automotive, aerospace, energy, and semiconductors.

The company is also pursuing diamond wire and related tool businesses as well as entry into the Oil & Gas market, providing room for portfolio diversification. The semiconductor market's projected double-digit growth over the medium to long term is also a relevant variable for related materials demand.

Subsidiary's Exclusive Position in Hydrogen Fuel Tanks

Subsidiary Iljin Hysolus is known as a leading domestic supplier of Type 4 fuel tanks for Hyundai Motor's Nexo fuel-cell vehicle and hydrogen buses and trucks.

If the vehicle and refueling station deployment targets set out in the government's hydrogen economy roadmap are executed, there is potential for this subsidiary's earnings contribution to expand.

Since non-controlling interests tied to the subsidiary make up a substantial share of consolidated equity, the subsidiary's own growth trajectory and its effect on consolidated results warrant close attention.

Bear factors

Three Consecutive Years of Core Business Operating Losses

Iljin Diamond's operating profit posted losses for three consecutive years from 2023 through 2025, with the loss widening from KRW 4.4 billion to KRW 6.8 billion. The operating margin also deteriorated from -2.8% in 2023 to -4.2% in 2025.

While recent quarters have turned positive, it remains unconfirmed whether this will translate into an annual swing to profit.

Divergence Between Operating and Net Income

In years when consolidated operating income posted a loss, owners' net income has repeatedly remained positive, indicating a gap between the two metrics.

This suggests non-operating factors or the profit and loss structure of consolidated subsidiaries are influencing overall results, a variable distinct from actual improvement in core business profitability.

On a quarterly basis, there was also an instance where the operating loss widened even as revenue grew, underscoring meaningful short-term earnings volatility.

Dependence on Hydrogen Economy Policy and Demand

The hydrogen fuel tank business is known to have a high degree of supply dependence on a single customer, Hyundai Motor, meaning results can be heavily influenced by changes in the automaker's production plans.

The government's hydrogen economy roadmap targets were announced in 2019, and if actual deployment of fuel-cell vehicles and refueling stations falls short of those targets, growth expectations could be delayed.

Competition for market share against alternative powertrains such as battery electric vehicles also remains a long-term variable.

Risk factors

Small-Cap Liquidity and Governance Risk

As a small-cap stock with a market capitalization of roughly KRW 0.1 trillion, trading liquidity may be limited.

The company operates under the Iljin Group governance structure centered on largest shareholder Iljin Holdings, and the possibility that intra-group equity transactions or capital allocation decisions could diverge from minority shareholder interests cannot be ruled out.

The large share of non-controlling interests tied to a consolidated subsidiary also warrants care in interpreting owner-attributable metrics.

Cost and Currency Exposure

Given a diversified domestic and overseas revenue structure, currency fluctuations could affect results.

Changes in raw material prices such as those for tungsten carbide inputs could translate into cost pressure, and the widening operating losses over the past three years are presumed to be related to cost and expense burdens. Whether raw material prices stabilize could be a key factor in any margin recovery.

Intellectual Property and Overseas Litigation Risk

In the industrial diamond industry, there is a confirmed past instance in which U.S.-based US Synthetic filed patent infringement lawsuits against Iljin Diamond and Iljin Holdings, among others.

Given the intense technological competition among a small number of global players in this industry, the possibility of similar intellectual property disputes recurring cannot be ruled out. Overseas litigation can lead to cost burdens and business uncertainty.

What to watch next

Late October to mid-November 2026
Expected timing for the third-quarter 2026 preliminary earnings disclosure, which will help confirm whether the concurrent revenue and operating profit improvement seen through the second quarter continues.
Fourth quarter of 2026 to early 2027
Through the third-quarter report and any follow-up corrected disclosures, it will be useful to confirm segment-level revenue composition and Iljin Hysolus's specific earnings contribution.
Upcoming disclosures on Hyundai Motor's fuel-cell vehicle and hydrogen bus production plans
Since Hyundai Motor is Iljin Hysolus's key customer, any changes to its production plans for the Nexo, hydrogen buses, and hydrogen trucks could directly affect the subsidiary's results and warrant monitoring.
Future government budget or roadmap revisions related to hydrogen economy policy
Any adjustment to targets for fuel-cell vehicle and refueling station deployment could affect the medium- to long-term demand outlook for the hydrogen fuel tank business.

Overall view

Iljin Diamond is a company with a structure combining a mature core business in industrial diamond and tungsten carbide with a policy-dependent new business in hydrogen fuel tanks.

The core business posted operating losses for three consecutive years from 2023 through 2025 with the loss widening over time, yet revenue and operating profit have shown concurrent improvement for three straight quarters from the fourth quarter of 2025 through the second quarter of 2026.

Owners' net income has followed a different trajectory from consolidated operating income, a pattern that appears related to the subsidiary structure with a large non-controlling interest share.

The hydrogen fuel tank subsidiary, Iljin Hysolus, has a high degree of supply dependence on Hyundai Motor, meaning its results are heavily influenced by the automaker's production plans and the pace of government policy execution.

As a small-cap stock, liquidity may be limited, and its position within the Iljin Group governance structure is also worth considering.

Additional information from the upcoming third-quarter earnings disclosure, the subsidiary's earnings contribution, and any changes in Hyundai Motor's production plans should help clarify whether the recent improving trend is structural.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

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.