KOSDAQChemicals107600

Sebitchem

₩14,090▲ 5.46%2026-10-02 close

Market Cap

₩78B

Turnover

₩400M

Volume

30,000 shares

Shares out.

5.7M

PER

—

PBR

1.8×

EPS

-₩2,335

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

First Quarterly Profit in Three Years, Durability in Question

Sebitchem returned to quarterly operating and net profit for the first time in three years in Q2 2026, but the trailing four-quarter total still shows a net loss.

1
Q2 2026 revenue of KRW 17.4 billion with operating profit of KRW 0.9 billion and net profit of KRW 0.8 billion marked a quarterly swing to profit
2
Operating margin fell from 21.2% in 2022 to -24.5% in 2025 over four straight years before showing signs of bottoming
3
Business portfolio restructured around three pillars: semiconductor waste-acid recycling (AM-X), lithium carbonate (LiM-X), and black mass (BM-X)
4
Debt ratio rose from 41.9% in 2022 to 82.4% in 2025, while equity has declined for four consecutive years
5
The long-term supply relationship centered on LG Chem and Korea Precursor Co., along with the No.3 plant expansion, remains the key variable for future top-line growth

Business structure

Sebitchem began in 1993 as Dongyang Chemistry, building its foundation on a chemical division that recycles waste acid from semiconductor and display processes into phosphoric acid and sodium nitrate, a business regarded as the company's stable cash-generating core.

From 2017 the company expanded into a battery division that purifies and separates cathode active material from spent lithium-ion batteries, purchasing defective cathode material and using wet smelting to produce a nickel-cobalt-manganese precursor mixed solution supplied to precursor and cathode makers.

Known trading partners include LG Chem, L&F affiliate JH Chemical, and China-based EM-T, and in 2022 the company signed a ten-year supply agreement for precursor mixed solution with Korea Precursor Co., a joint venture between LG Chem and Kemco, securing a stable sales channel.

More recently the company has reorganized its business around three pillars: semiconductor waste-acid recycling (AM-X), a lithium carbonate product platform (LiM-X), and black mass from spent batteries (BM-X), pursuing feedstock diversification and a broader revenue base simultaneously.

In the first half of 2026, segment sales were reported at KRW 7.63 billion for AM-X, KRW 7.13 billion for LiM-X (up 79% year over year), and KRW 15.80 billion for BM-X, which expanded sharply from KRW 1.87 billion a year earlier, making black mass the fastest-growing segment.

The company said it lowered its cost ratio by shifting its feedstock supply system from process scrap toward spent-battery-based black mass.

In terms of competitive positioning, the number of listed domestic battery recycling companies such as SungEel HiTech is limited, and Sebitchem cites process simplification through liquid-phase separation technology as its competitive edge. The company's current chief executive is Lee Seung-jin.

Earnings trend

Quarterly revenue · Operating profit

₩10.8B-₩1.7B25Q2₩7.2B-₩3.1B25Q3₩10.5B-₩2.5B25Q4₩13.5B-₩500M26Q1₩17.4B₩900M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩48.1B₩10.2B2022₩46B-₩4.9B2023₩30.3B-₩6.2B2024₩38.4B-₩9.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩10.8B	-₩1.7B	−15.8%
2025Q3	₩7.2B	-₩3.1B	−43.8%
2025Q4	₩10.5B	-₩2.5B	−23.9%
2026Q1	₩13.5B	-₩500M	−3.5%
2026Q2	₩17.4B	₩900M	5.0%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩48.1B	₩10.2B	₩7.7B	21.2%	12.2%	41.9%
2023	₩46B	-₩4.9B	-₩1.2B	−10.7%	−1.9%	56.3%
2024	₩30.3B	-₩6.2B	-₩10.7B	−20.3%	−20.2%	77.6%
2025	₩38.4B	-₩9.4B	-₩18B	−24.5%	−39.8%	82.4%

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

Sebitchem's annual results have shown pronounced swings.

After peaking in 2022 with revenue of KRW 48.1 billion, operating profit of KRW 10.2 billion (operating margin of 21.2%), and net profit of KRW 7.7 billion, the company swung to an operating loss of KRW 4.9 billion (operating margin of -10.7%) on revenue of KRW 46.0 billion in 2023.

In 2024, revenue fell to KRW 30.3 billion while the operating loss widened to KRW 6.2 billion (-20.3%), and in 2025 revenue recovered somewhat to KRW 38.4 billion, but the operating loss grew to KRW 9.4 billion (-24.5%) and the net loss expanded to KRW 18.0 billion, marking a fourth consecutive year of net losses.

Owner's equity fell from KRW 63.1 billion in 2022 to KRW 45.4 billion in 2025, while the debt ratio jumped from 41.9% to 82.4% over the same period.

On a quarterly basis, the loss was widest in Q3 2025 with revenue of KRW 7.2 billion and an operating loss of KRW 3.1 billion, followed by a Q4 net loss that surged to KRW 10.4 billion despite revenue of KRW 10.5 billion, suggesting a one-off factor.

The loss then narrowed sharply in Q1 2026 to an operating loss of KRW 0.5 billion on revenue of KRW 13.5 billion, and in Q2 2026 the company posted revenue of KRW 17.4 billion, operating profit of KRW 0.9 billion, and net profit of KRW 0.8 billion, its first quarterly profit swing in three years.

However, the trailing four-quarter net result (Q3 2025 through Q2 2026) still totals a loss of KRW 12.9 billion, meaning additional quarters are needed to confirm whether the Q2 turnaround reflects a structural improvement.

Operating cash flow in 2025 was negative KRW 12.6 billion, a sharp reversal from positive KRW 1.0 billion in 2024, indicating expanded funding needs even as the profit and loss picture began to improve.

Industry analysis

Given the lifecycle of electric-vehicle batteries, the volume of spent batteries is on a structurally rising trend. According to SNE Research, the capacity of spent batteries generated is expected to grow from 44 GWh in 2025 to 3,339 GWh by 2040.

As a result, domestic players such as SungEel HiTech, DS Dansuk, and GS E&C (through its Energy Materials unit) have moved to expand capacity or enter the market, intensifying competition.

SungEel HiTech is known as the only domestic company handling both pretreatment and post-treatment, and it has moved to roughly triple its processing capacity through the startup of its No. 3 plant in Gunsan.

GS E&C has also entered the spent-battery recycling market through its Energy Materials subsidiary and is preparing to bring a plant online.

Sebitchem relies on post-treatment wet smelting and liquid-phase separation technology as its competitive edge, though its process scope is viewed by some as narrower than peers that cover both pretreatment and post-treatment.

Battery metal (nickel, cobalt, lithium) price cycles have a direct impact on revenue and margins across the industry, and in the past sharp swings in Chinese phosphoric acid prices materially affected the waste-acid recycling business as well.

Tightening regulations such as the EU Battery Regulation, which mandates the use of recycled content, are cited as a broadly favorable medium- to long-term environment for domestic recycling companies.

Outlook

In its H1 2026 results announcement, the company said the profit turnaround was not a one-off event but the result of building a sustainable earnings structure, and stated it would expand overseas partnerships and pilot projects based on innovation in its recycling processes.

Specifically, the company said it is advancing manufacturing process upgrades in its semiconductor recycling (AM-X) business while planning to begin commercializing monoammonium phosphate (MAP) in the second half of the year.

Its lithium carbonate platform (LiM-X) continued to show growth, with H1 2026 sales up 79% year over year. The company has also outlined, through IR materials, an ambition to become the first in Korea to pursue primary (non-rechargeable) battery recycling, suggesting an effort to expand beyond secondary batteries.

Past brokerage reports had discussed plans to raise precursor mixed-solution production capacity from roughly 10,000 tons in 2022 to around 30,000 tons by 2026 through the No. 3 plant expansion, projecting that related sales could exceed KRW 100 billion once the expansion was complete.

Whether this capacity timeline still holds as of the current period will need to be reconfirmed through upcoming disclosures.

The company is also pursuing diversification of both raw material sourcing and sales channels overseas, indicating a clear direction toward reducing dependence on any single customer or feedstock supply chain.

Valuation

PER

—

PBR

1.8×

ROE

-24.6%

EPS

-₩2,335

BPS

₩8,479

Dividend per share

₩0

Sebitchem has posted net losses for four consecutive years, steadily eroding its equity base, but the loss narrowed over the past two quarters before the company swung to a quarterly profit in Q2 2026, putting the current price-to-book multiple in a range that is difficult to compare directly with the valuation levels seen around the profitable years of 2022.

The current premium of the share price over net asset value can be read partly as reflecting market expectations about whether the profit turnaround will prove durable.

Based on the most recent confirmed data, the company has no dividend payment record, so there is no dividend yield to speak of on a shareholder-return basis.

Simple comparisons between the price-to-earnings band from the company's earlier stable-profit period and the current valuation during this loss-to-profit transition should be treated with caution, and whether upcoming quarterly results demonstrate continuity in the earnings recovery is likely to be the key variable for valuation going forward.

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

First Quarterly Profit Swing in Three Years

In Q2 2026, the company posted revenue of KRW 17.4 billion, operating profit of KRW 0.9 billion, and net profit of KRW 0.8 billion, swinging to a quarterly profit for the first time since H1 2023.

Securing a revenue base in semiconductor waste-acid recycling (AM-X), growth in lithium carbonate (LiM-X), and cost reduction from shifting feedstock toward spent-battery-based black mass all contributed.

The operating loss had already narrowed sharply to KRW 0.5 billion in Q1, indicating two consecutive quarters of improvement.

Long-Term Supply Chain Anchored by LG Chem

Sebitchem has a ten-year supply agreement for precursor mixed solution with Korea Precursor Co., a joint venture between LG Chem and Kemco, giving it a stable sales channel.

The company has also built a circular structure in which it repurchases defective cathode active material generated by LG Chem to secure raw materials. This structure, which stabilizes both feedstock sourcing and sales outlets simultaneously, is cited as a differentiating factor versus competitors.

Diversifying Business Portfolio

The company has reorganized its business around three pillars—semiconductor waste-acid recycling (AM-X), lithium carbonate (LiM-X), and black mass (BM-X)—and plans to commercialize monoammonium phosphate (MAP) in the second half of 2026.

It has also stated through IR materials an ambition to be the first in Korea to pursue primary battery recycling, indicating an ongoing effort to expand beyond a secondary-battery-centered business.

This diversified set of business lines can be seen as a factor that may reduce volatility stemming from reliance on any single product or customer.

Bear factors

Four Straight Years of Net Losses and Equity Erosion

After a profitable 2022, the company posted net losses for three straight years from 2023 to 2025, and owner's equity fell from KRW 63.1 billion in 2022 to KRW 45.4 billion in 2025. The debt ratio rose from 41.9% to 82.4% over the same period, weakening the financial buffer.

Despite the Q2 profit swing, the trailing four-quarter net result still totals a loss of KRW 12.9 billion, meaning the durability of the improvement remains unverified.

Intensifying Competition

SungEel HiTech, the only domestic company covering both pretreatment and post-treatment, is roughly tripling its processing capacity through its No. 3 plant in Gunsan.

DS Dansuk has also started its first recycling plant, and GS E&C is preparing to bring its Energy Materials subsidiary's plant into commercial operation in the second half. For post-treatment-focused Sebitchem, competition for feedstock such as black powder and black mass could intensify further.

Metal Price and Feedstock Supply Volatility

Sebitchem's revenue structure is sensitive to fluctuations in battery metal prices—nickel, cobalt, and lithium—as well as waste acid prices. In the past, sharp swings in Chinese phosphoric acid prices materially affected waste-acid recycling revenue.

As the company shifts feedstock toward spent-battery-based black mass and increases the share of overseas sourcing, it could be exposed to new variables such as exchange rates, logistics, and customs procedures.

Risk factors

Financial Soundness

With equity shrinking amid four consecutive years of net losses, the debt ratio rose to 82.4%, and 2025 operating cash flow turned sharply negative at KRW -12.6 billion. If the profit turnaround does not continue, the need for additional external funding could grow.

The pace of balance sheet improvement is something that needs to be continuously verified through upcoming quarterly results.

Industry and Price Risk

Battery metal price cycles and changes in the supply of spent batteries and black mass have a direct impact on results. As competitors including SungEel HiTech, DS Dansuk, and GS E&C continue to expand capacity, competition for feedstock and pressure on spreads could intensify.

The detailed implementation schedule of regulatory changes such as the EU Battery Regulation could also affect the timing of revenue recognition.

Governance and Management Risk

The company's chief executive has changed to Lee Seung-jin, so the continuity of strategy execution amid this management change warrants monitoring.

Multiple new businesses—primary battery recycling, MAP commercialization, and others—are being pursued simultaneously, which calls for scrutiny of resource allocation and execution capability. How the company balances the pace of business expansion against its financial capacity is an important variable to watch.

What to watch next

Mid-November 2026
The Q3 2026 quarterly report should be checked to see whether the Q2 profit swing continued into Q3 and whether revenue and operating profit improvements proved durable.
During H2 2026
It is worth checking, through disclosures and IR materials, whether the company's announced commercialization of monoammonium phosphate (MAP) begins and how much it contributes to early sales.
Upcoming disclosures on the No. 3 plant expansion after September 2026
It is worth confirming whether the previously discussed timeline for expanding precursor mixed-solution capacity toward a 30,000-ton target through the No. 3 plant's second phase is still on track.
Future disclosures on primary battery recycling
It is worth watching for disclosures on the specific timeline, investment size, and revenue contribution schedule of the primary battery recycling business the company said it is pioneering domestically.
Follow-up disclosures on feedstock diversification and overseas sales expansion
It is worth tracking whether the company's stated plans for overseas feedstock sourcing and global sales channel expansion result in specific contracts or memoranda of understanding.

Overall view

Sebitchem endured financial pressure from three consecutive years of net losses since 2022, with equity shrinking and the debt ratio rising, but in Q2 2026 revenue, operating profit, and net profit all improved, marking the company's first quarterly profit swing in three years.

The restructuring of its portfolio around three pillars—semiconductor recycling (AM-X), lithium carbonate (LiM-X), and black mass (BM-X)—along with a shift in its feedstock supply system, are cited as behind this improvement.

Still, the trailing four-quarter net result remains a loss, and the financial burden built up over four years of accumulated losses is not likely to be resolved quickly.

As competitors such as SungEel HiTech, DS Dansuk, and GS E&C continue to expand capacity, competition for feedstock and metal price volatility remain persistent variables.

The long-term supply chain centered on LG Chem and Korea Precursor Co., along with new initiatives such as MAP and primary battery recycling, form the core of the company's medium- to long-term growth story, but how the pace of executing these plans balances against financial capacity is likely to determine the direction of future results.

Ahead of any investment decision, an approach of continuously verifying the durability of this improvement through upcoming quarterly results and new-business disclosures is warranted.

Sources

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

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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.