KOSDAQElectronic Components091440

HanWool Materials Science

₩2,795▼ 3.95%2026-10-02 close

Market Cap

₩103.3B

Turnover

₩900M

Volume

310,000 shares

Shares out.

37M

PER

—

PBR

3.2×

EPS

-₩965

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Optical Transport Core, Semiconductor Materials Bet

As telecom equipment revenue has declined for four straight years, the start of semiconductor materials production at subsidiary JKM stands as the test case for an earnings turnaround.

1
2025 revenue fell to KRW 13.4 billion year over year, while the operating loss widened to KRW 24.6 billion, marking a fourth consecutive year of losses.
2
Subsidiary JK Materials (JKM) has begun in-house production of photoresist materials such as PSM (photosensitive material) and polymer at its Sejong campus.
3
The company has stated it expects first shipments from the Sejong campus as early as October to November, pending customer approval processes.
4
The company strengthened control over affiliate Hanwool Semiconductor via a share acquisition through a subsidiary, partially easing overhang concerns.
5
The debt ratio rose from 92.1% in 2023 to 229.2% in 2025, increasing financial structure burden.

Business structure

Hanwool Materials Science is a telecommunications equipment specialist whose core business is developing and manufacturing optical transport equipment including DCS, Channel MUX, MSPP, PTN, and POTN systems.

The company supplies products to the telecom carrier market centered on KT as well as the public sector including railways and local governments, and has experience building public and special-purpose networks for the Ministry of National Defense and the National Police Agency.

It is pursuing revenue diversification through collaboration with newer operators such as LG Uplus.

In terms of business mix, the telecom segment's revenue share expanded from 65.2% in 2022 to 86.5% in 2024 before adjusting to 75.1% in 2025, while the materials segment's share rose rapidly from 2.6% to 17.1% over the same period.

The company's new growth driver is the semiconductor materials business of subsidiary JK Materials (JKM), in which it holds a majority stake.

JKM has developed photosensitive materials (PSM) and polymers for semiconductor patterning processes, along with back-end packaging materials such as PSPI and PBO, and has built dedicated production facilities at its Sejong campus.

The company has also expanded control over affiliate Hanwool Semiconductor, a machine-vision inspection equipment maker, seeking synergies across the group.

In the telecom equipment market, responding to high-capacity transmission demand from 5G and data center expansion is key, while in semiconductor materials, localization and supply chain diversification trends are central competitive variables.

Earnings trend

Quarterly revenue · Operating profit

₩1.6B-₩5.4B25Q2₩2.9B-₩4.5B25Q3₩5.9B-₩8B25Q4₩1.5B-₩3.6B26Q1₩2.7B-₩3.5B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩23B-₩9.4B2022₩37.6B-₩4.1B2023₩17.3B-₩12.9B2024₩13.4B-₩24.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.6B	-₩5.4B	−329.3%
2025Q3	₩2.9B	-₩4.5B	−155.3%
2025Q4	₩5.9B	-₩8B	−134.4%
2026Q1	₩1.5B	-₩3.6B	−238.8%
2026Q2	₩2.7B	-₩3.5B	−129.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩23B	-₩9.4B	-₩14.9B	−40.6%	−90.1%	165.7%
2023	₩37.6B	-₩4.1B	-₩5.7B	−10.8%	−25.9%	92.1%
2024	₩17.3B	-₩12.9B	-₩19.6B	−74.7%	−46.8%	170.1%
2025	₩13.4B	-₩24.6B	-₩33.8B	−183.1%	−99.9%	229.2%

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

Annual revenue rebounded from KRW 23.0 billion in 2022 to KRW 37.6 billion in 2023, but then declined for two straight years to KRW 17.3 billion in 2024 and KRW 13.4 billion in 2025.

Over the same period, the operating loss narrowed from KRW 9.4 billion in 2022 to KRW 4.1 billion in 2023, only to widen sharply again to KRW 12.9 billion in 2024 and KRW 24.6 billion in 2025, pushing the operating margin down to -183.1%.

Net loss attributable to owners also widened from KRW 19.6 billion in 2024 to KRW 33.8 billion in 2025, with losses persisting across all four years.

On a quarterly basis, fourth-quarter 2025 revenue rose to KRW 5.9 billion but the operating loss also grew to KRW 8.0 billion, while first-quarter 2026 revenue plunged to KRW 1.5 billion, exposing a revenue structure with significant seasonal volatility.

Second-quarter 2026 revenue recovered to KRW 2.7 billion from the prior quarter, but the company still posted an operating loss of KRW 3.5 billion and a net loss attributable to owners of KRW 7.4 billion, extending the loss streak through the trailing four quarters (Q3 2025 through Q2 2026).

Operating cash flow also deteriorated alongside widening losses, moving from negative KRW 6.2 billion in 2022 to negative KRW 14.3 billion in 2024 and negative KRW 14.6 billion in 2025.

The debt ratio rose from 92.1% in 2023 to 229.2% in 2025, and total equity including owners' equity fell from KRW 47.8 billion in 2024 to KRW 36.6 billion in 2025, reflecting a continuing pattern of losses eroding capital.

The company attributed the widening 2025 operating loss to inventory valuation losses, increased R&D spending at consolidated subsidiaries, and equity-method investment losses from affiliates.

Industry analysis

In the telecom infrastructure market, demand for high-capacity optical transport equipment is expected to expand amid rising AI traffic and data center buildouts.

Independent research firm Value Finder assessed in an April 30, 2026 report that demand for optical transport equipment is expected to expand as data center capacity grows and AI traffic increases.

Having built a track record with major carriers such as KT and SK is cited as a strength, but the telecom equipment market has a structural characteristic in which revenue is tied to the order cycles of large domestic carriers.

In the semiconductor materials segment, demand for localization of photoresist and packaging materials among domestic chipmakers is gaining attention.

Samsung Electronics and SK Hynix have largely sourced PSPI, an HBM packaging material, from suppliers such as Japan's Asahi Kasei, and successful mass production by JKM is seen as opening the possibility of localizing that material.

However, the photo materials market has high entry barriers and requires lengthy quality verification, meaning new entrants must go through numerous certification and approval processes before displacing existing supply chains.

Outlook

JKM completed construction of Manufacturing Building 1 at its Sejong campus in March 2026 and received an approval notice from a Process Safety Management (PSM) review in July, completing preparations for mass production.

Starting in early August, it began in-house production of some PR core material items that had previously been produced through outside contract manufacturing, and the company stated that full shipments are expected as early as October to November following customer supply procedures.

On August 10, it also obtained usage approval for Manufacturing Building 2, which will house a large-scale polymer production line, moving the integrated front-end photo materials production system encompassing photosensitive materials and polymers into its final stage of setup.

Over the medium to long term, the company plans to expand its product lineup into PSPI and PBO used in advanced packaging such as HBM, with a stated goal of growing into a comprehensive semiconductor materials company spanning front-end to back-end processes.

In December 2025, the company's CEO stated that if standalone operating profit is achieved in 2026, the company expects to be removed from investment-alert designation in March 2027, marking JKM's production ramp-up as a variable that could affect not only earnings but also the stock's listing status.

In the telecom equipment segment, revenue diversification through expanded collaboration with newer operators such as LG Uplus is also being pursued.

Valuation

PER

—

PBR

3.2×

ROE

-84.7%

EPS

-₩965

BPS

₩861

Dividend per share

₩0

The company's shares trade at a premium to net asset value, which can be interpreted as partly reflecting growth expectations for the new semiconductor materials business. There has been no recent dividend payment history, leaving no basis to assess dividend yield.

On the earnings side, losses have persisted for four consecutive years, making profit-based valuation metrics difficult to apply, and losses have continued on a trailing four-quarter basis as well.

A key point to watch is how the market re-rates the shares if JKM's semiconductor materials production ramps up and is meaningfully reflected in revenue and earnings.

Conversely, if production ramp-up is delayed or customer approvals stall, expectations for the new business could recede, potentially weakening the basis for the premium to net assets.

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

Start of semiconductor materials production

JKM has begun in-house production of PR core materials at its Sejong campus, and the company stated it expects first shipments as early as October to November.

With usage approval for Manufacturing Building 2, it has also secured a polymer production line, moving closer to an integrated front-end photo materials production system. If production scales up steadily, it could become a new growth pillar beyond the existing telecom equipment-centered revenue structure.

Opportunity in HBM packaging materials localization

Domestic semiconductor makers have largely relied on Japanese suppliers for PSPI, an HBM packaging material. If JKM succeeds in mass-producing related materials, it would be positioned to address supply chain diversification demand.

However, this remains at an early commercialization stage, and further verification is needed before it contributes meaningfully to revenue.

Overhang resolution through governance realignment

Hanwool Materials Science strengthened its control as the largest shareholder of affiliate Hanwool Semiconductor by acquiring its shares through a subsidiary. The company explained that this share transfer resolved much of the market's concern over potential overhang selling pressure.

Efforts to combine telecom equipment and semiconductor materials capabilities across affiliates are also continuing.

Bear factors

Four straight years of losses and shrinking equity

Operating and net losses continued every year from 2022 through 2025, with the operating loss widening to KRW 24.6 billion in 2025. Total equity fell from KRW 47.8 billion in 2024 to KRW 36.6 billion in 2025, reflecting a continuing pattern of losses eroding capital. If this trend continues, the need for further capital raising could arise.

Structural weakness in telecom equipment revenue

Annual revenue declined for two consecutive years, from KRW 37.6 billion in 2023 to KRW 13.4 billion in 2025. The company cited weakened front-end industry investment and delayed order intake as factors behind the revenue decline.

The structure in which telecom equipment revenue depends on the order cycles of large domestic carriers remains unchanged.

Risk of production delays and approval hurdles in the new business

JKM's semiconductor materials business is still in the early production stage, and revenue realization could be delayed if customer Process Change Notification (PCN) approval procedures are not completed.

The company itself had previously indicated production and shipment by the end of a given month, only to later revise the shipment outlook to October-November, underscoring that delays relative to plan cannot be ruled out.

Risk factors

Financial structure and investment-alert designation risk

The debt ratio rose from 92.1% in 2023 to 229.2% in 2025, increasing financial burden. The CEO has stated an expectation of removal from investment-alert designation in March 2027, contingent on achieving standalone operating profit in 2026, meaning failure to meet that target could affect the stock's listing status.

Operating cash flow has also been negative for several consecutive years, which could sustain the need for external funding.

Commercialization uncertainty in the new business

JKM's semiconductor materials are still in the early stage of commercial production, and the scale and timing of revenue contribution remain uncertain. If customer approval procedures and quality verification do not proceed as planned, shipment schedules could be further delayed.

Given the large capital expenditure already made, prolonged production delays could lead to delayed investment recovery.

Dependence on front-end industry order intake

Telecom equipment revenue is heavily dependent on the investment and order cycles of a small number of large carriers such as KT. The company cited weakened front-end industry investment and delayed orders as reasons for the weak 2025 results. As long as this dependence structure persists, revenue volatility is likely to continue.

What to watch next

October-November 2026
Check whether customer approval (PCN) for items produced at JKM's Sejong campus is completed and whether first commercial shipments occur. Whether the company's stated timeline is actually met is the key point to watch.
Mid-November 2026
Check the Q3 2026 earnings disclosure for whether JKM's semiconductor materials revenue is actually reflected, and whether the telecom equipment segment shows revenue recovery.
Q4 2026
Check the progress of stabilizing operations at the Manufacturing Building 2 polymer production line, and customer verification progress for back-end materials such as PSPI and PBO for HBM.
March 2027
Check whether the company achieves its targeted standalone operating profit for 2026 and the resulting outcome of the review for removal from investment-alert designation.

Overall view

Hanwool Materials Science is a company in transition, where telecom equipment revenue has declined alongside four consecutive years of losses while subsidiary JKM's semiconductor materials business emerges as a new growth pillar.

In 2025 the company posted revenue of KRW 13.4 billion, an operating loss of KRW 24.6 billion, and a net loss attributable to owners of KRW 33.8 billion, with the debt ratio rising to 229.2%, increasing financial pressure.

JKM has sequentially progressed through production milestones including the completion of Manufacturing Building 1 in March 2026, a PSM approval notice in July, the start of in-house production in August, and usage approval for Manufacturing Building 2, with the company stating it expects first shipments in October to November.

The CEO has set a goal of removal from investment-alert designation by March 2027, contingent on achieving standalone operating profit in 2026, marking JKM's production performance as a variable affecting both earnings and listing status.

The telecom equipment segment remains dependent on the order cycles of a small number of large carriers such as KT, and the new business is still in an early commercialization stage with schedule risk tied to customer approval processes.

Investors will need to watch whether semiconductor materials revenue is actually reflected in upcoming quarterly results, along with the trajectory of financial structure improvement.

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.