HanJungNCS

Founded in 1995, HanJung NCS changed its registered business purpose from automotive parts manufacturing to energy storage system (ESS) manufacturing in 2021, marking the start of a major business realignment.

Its core product is a liquid-cooling thermal management system for ESS batteries, with in-house production of cooling plates, manifolds, chillers, HVAC units, and immersion cooling modules supplied as an integrated package.

Its key customer is Samsung SDI, to which it supplies cooling components across the entire Samsung Battery Box (SBB) lineup on a near-exclusive basis, and it has recently begun production for next-generation SBB 1.5 and SBB 1.7 models.

In the automotive parts segment, the company produces EV cooling fan modules, active air flap modules, and air guard modules supplied to global OEMs such as Audi, Jaguar, and Volkswagen, and was officially registered as a first-tier supplier to LG Energy Solution in the fourth quarter of 2025.

Revenue mix is shifting rapidly: in first-half 2026, consolidated revenue of KRW 97.3 billion included KRW 94.3 billion from the ESS segment, or 96.9% of the total, while automotive parts and other revenue came to only KRW 2.1 billion and KRW 0.9 billion respectively.

Automotive parts revenue shrank rapidly from KRW 49.3 billion in 2024 to KRW 29.3 billion last year and KRW 2.1 billion in the first half of this year.

On the competitive front, the ESS cooling system revenue share has exceeded 80%, with EV and ESS customers each anchored by major domestic cell makers, and ESS revenue is concentrated with Samsung SDI.

Production facilities span a domestic plant in Yeongcheon, North Gyeongsang Province, production lines in China, and the newly built Indiana plant in the US, and the company was the first in Korea to commercialize a liquid-cooled ESS thermal management system and is a key partner supplying cooling components exclusively across the entire Samsung Battery Box lineup, having won Samsung SDI's manufacturing innovation award in 2022 and 2023.

On a confirmed consolidated basis, HanJung NCS posted revenue of KRW 88.5 billion, an operating loss of KRW 13.9 billion (operating margin of -15.7%), and a net loss attributable to owners of KRW 20.2 billion in 2022, followed by revenue of KRW 121.6 billion, an operating loss of KRW 12.7 billion (-10.4%), and a net loss of KRW 16.4 billion in 2023 — two consecutive years of large losses.

In 2024, revenue expanded to KRW 177.3 billion, with operating profit turning positive at KRW 9.6 billion (operating margin of 5.4%) and net income attributable to owners reaching KRW 17.3 billion, marking a swing to profitability.

However, in 2025 revenue slipped slightly by 1.1% to KRW 175.3 billion while operating profit fell sharply by 57.9% year-on-year to KRW 4.0 billion (operating margin of 2.3%), and net income attributable to owners also dropped significantly to KRW 4.1 billion.

On a quarterly basis, revenue and profit rose together through the second half of 2025, from Q2 revenue of KRW 36.4 billion and operating profit of KRW 0.4 billion, to Q3 revenue of KRW 45.9 billion and operating profit of KRW 1.5 billion, to Q4 revenue of KRW 59.9 billion, operating profit of KRW 2.7 billion, and net income attributable to owners of KRW 4.0 billion.

This improvement continued into Q1 2026 with revenue of KRW 54.7 billion, operating profit of KRW 1.4 billion, and net income attributable to owners of KRW 1.1 billion, but Q2 2026 saw revenue decline to KRW 42.6 billion with the company swinging back to an operating loss of KRW 6.9 billion and a net loss attributable to owners of KRW 2.3 billion.

Consolidated revenue for first-half 2026 rose 39.9% year-on-year to KRW 97.3 billion, but the operating loss for the same period was KRW 5.5 billion, marking a repeated loss even as full-year operating profit had turned positive despite a loss in the prior-year first half.

The company has previously explained that the concentration of development costs from expanding production models and preemptive hiring and training expenses ahead of the US plant launch weighed on operating profit, while net income was also affected by non-cash accounting factors such as valuation losses on convertible bond derivatives tied to the stock price.

Overall, results for 2025-2026 can be read as maintaining a profitable underlying trend while facing greater quarterly volatility as costs from the expanding US investment are recognized.

The North American ESS market is expected to grow on the back of surging power demand from AI data centers and expanding renewable energy deployment.

The North American ESS market is projected to grow due to AI data center power demand and renewable energy expansion, and tariffs on Chinese batteries along with the OBBBA are expected to boost demand for the company's cooling systems.

Demand in the North American ESS market is rising on the back of renewable energy and AI data center investment, but Chinese companies hold roughly 70% of the market, and since last year tariff hikes and tightened regulations on Chinese battery imports by the US government have created conditions for domestic Korean companies to expand their market share.

Core customer Samsung SDI supplies nickel-cobalt-aluminum (NCA)-based SBB 1.5 and lithium iron phosphate (LFP)-based SBB 2.0 in North America, is currently operating an NCA ESS cell line at the StarPlus Energy (SPE) plant, its joint venture with Stellantis, ahead of an LFP line launch expected in the fourth quarter of this year, with LFP-based SBB 2.0 to be supplied via the Hanjung America plant starting in 2027.

Competitively, the company is considered one of the few global companies, alongside Sungrow and Envicool, capable of mass-producing liquid-cooled (indirect) BESS systems.

On the other hand, despite the broader trend of expanding data center power demand, some US states and local governments have moved to advance moratoriums temporarily halting new large-scale data center construction, meaning regional permitting and grid issues could act as a variable on the pace of growth.

The upstream industry cycle remains in an early expansion phase, coinciding with the point at which domestic battery cell makers are beginning to shift production to North America, driving regionalization of the component supply chain.

The company's growth strategy centers on building a US local production base.

HanJung NCS announced in April that it broke ground on a production plant in Huntington, Indiana, a region that hosts Samsung SDI and other battery plants, with plans to leverage the Indiana plant, as a key partner of Samsung SDI, to serve the North American ESS supply chain and strengthen local supply capability.

The plant site spans about 538,000 square meters (roughly 163,000 pyeong), with the phase-one plant covering about 40,000 square meters (roughly 12,000 pyeong), targeting completion in the first half of 2027.

The new plant is planned to begin operations from June next year to supply StarPlus Energy, the Samsung SDI-Stellantis joint venture, a timeline later than the second-half-2026 start previously cited in some brokerage reports.

On the funding side, the company stated it has signed a total of $60 million in policy-bank loan commitments, including $40 million from the Korea Development Bank and $20 million from the Export-Import Bank of Korea, and more recently disclosed that it decided to issue KRW 80 billion in unsecured privately placed convertible bonds structured as perpetual hybrid capital, with KRW 60 billion earmarked for its US Indiana ESS subsidiary and KRW 20 billion for working capital to support production volumes.

On the domestic production side, brokerage forecasts suggest a new SBB 2.0 product launch is expected in the fourth quarter of this year, implying continued volume tied to Samsung SDI's new products, and the company has stated it is targeting KRW 1 trillion in revenue by 2030 built on its ESS business.

However, the Indiana subsidiary held about KRW 88 billion in assets as of the end of first-half 2026 but had not yet generated revenue, suggesting it will take more time before local revenue contribution materializes, and the key questions going forward are how quickly profitability and cash generation can be lifted alongside top-line growth, and whether US plant production and revenue expansion become visible before the perpetual bond's coupon step-up date.