KOSPIConstruction & Materials108670

LX Hausys

₩33,350▲ 1.06%2026-10-02 close

Market Cap

₩298.6B

Turnover

₩700M

Volume

20,000 shares

Shares out.

PER

9.9×

PBR

0.4×

EPS

₩3,619

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

Earnings Rebound Meets Structural Industry Headwinds

LX Hausys posted a sharp operating profit recovery in H1 2026 on B2C and overseas strength, but a structural recovery in its core B2B building materials business remains uncertain.

1
Q2 2026 revenue of KRW 939.7bn and operating profit of KRW 54.9bn, up 14.7% and 329.0% year-on-year
2
FY2025 closed with revenue of KRW 3.179tn, operating profit of KRW 13.06bn, and an owners' net loss of KRW 43.9bn
3
B2C/remodeling demand in building materials and the auto-materials/industrial film segment drove the earnings improvement
4
No dividend was paid for FY2025, while the debt ratio has trended down from 218.5% (2022) to 160.1% (2025)
5
Brokerages flag raw material/freight volatility and loan regulations as risks to sustaining H1 profitability into H2

Business structure

LX Hausys is a building materials and automotive materials specialist that was spun off from LG Chem's industrial materials division in 2009 and is listed on the KOSPI.

More than 70% of revenue comes from the building/decoration materials segment, which includes windows, flooring, wallpaper and artificial marble, with the remainder coming from the auto-materials and industrial film segment.

The building/decoration materials business produces PVC and aluminum window frames, functional glass, flooring, wallpaper and Himacs artificial marble, supplying both new-build construction (B2B) and direct consumer/remodeling channels (B2C).

The auto-materials and industrial film segment manufactures automotive fabrics and parts along with decor, interior and appliance films, supplying North American automakers among others.

The domestic building materials competitor is KCC, which has expanded into silicone and coatings; together the two are referred to as the "Big 2" of Korea's building materials industry.

While KCC has diversified into non-building-materials businesses such as silicone, LX Hausys generates most of its revenue from its core building materials business and is focused on the B2C and remodeling market.

Overseas, the U.S. subsidiary contributes a meaningful share of revenue centered on Estone artificial marble and automotive fabric sales, while the Tianjin, China unit was sold in 2025 and removed from the consolidation scope.

Earnings trend

Quarterly revenue · Operating profit

₩819.5B₩12.8B25Q2₩812.7B₩22.1B25Q3₩765.2B-₩28.9B25Q4₩814.7B₩45.9B26Q1₩939.7B₩54.9B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩3.6T₩14.9B2022₩3.5T₩109.8B2023₩3.6T₩97.5B2024₩3.2T₩13.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩819.5B	₩12.8B	1.6%
2025Q3	₩812.7B	₩22.1B	2.7%
2025Q4	₩765.2B	-₩28.9B	−3.8%
2026Q1	₩814.7B	₩45.9B	5.6%
2026Q2	₩939.7B	₩54.9B	5.8%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩3.6T	₩14.9B	-₩117.1B	0.4%	−15.0%	218.5%
2023	₩3.5T	₩109.8B	₩61.8B	3.1%	7.4%	186.3%
2024	₩3.6T	₩97.5B	₩44.3B	2.7%	5.1%	170.6%
2025	₩3.2T	₩13.1B	-₩43.9B	0.4%	−5.3%	160.1%

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

Earnings analysis

On an annual basis, LX Hausys moved from revenue of KRW 3.611tn, operating profit of KRW 14.9bn and an owners' net loss of KRW 117.7bn in 2022, to revenue of KRW 3.526tn, operating profit of KRW 109.8bn and net profit of KRW 61.8bn in 2023, before revenue slipped slightly to KRW 3.572tn with operating profit of KRW 97.5bn and net profit of KRW 44.3bn in 2024.

In 2025, revenue fell 11% year-on-year to KRW 3.179tn, operating profit dropped sharply to KRW 13.06bn, and the company swung back to an owners' net loss of KRW 43.9bn.

On a quarterly basis, operating profit was KRW 12.8bn in Q2 2025 and KRW 22.1bn in Q3 2025, before turning to an operating loss of KRW 28.9bn in Q4 2025, which weighed heavily on the full-year result.

Performance then recovered clearly, with revenue of KRW 814.7bn and operating profit of KRW 45.9bn in Q1 2026, followed by revenue of KRW 939.7bn and operating profit of KRW 54.9bn in Q2 2026, lifting first-half cumulative operating profit sharply from a year earlier.

The company stated that cost reductions and a U.S. subsidiary tariff refund were partly reflected as one-off factors in the Q2 result. The recovery has been attributed to expanded B2C retail sales tied to a rebound in domestic home sales transactions and steady growth in the auto-materials and industrial film segment.

The large impairment charges and net loss recorded in 2025, however, reflect a combination of factors including deteriorating profitability in the building materials segment and asset value adjustments.

Annual operating cash flow remained positive throughout the period, at KRW 195.3bn in 2025, KRW 184.0bn in 2024, KRW 371.3bn in 2023 and KRW 72.0bn in 2022, despite swings in reported profit.

Industry analysis

Korea's building materials industry is a domestically driven, local business in which quality and on-time delivery capabilities required by construction companies for new-build housing are important.

As the domestic construction downturn has persisted, new housing starts and pre-sales have declined, weighing on B2B-driven demand for building materials, a trend that has also weighed on furniture makers such as Hanssem and Hyundai Livart.

By contrast, window replacement and other remodeling/renovation demand tied to an aging housing stock and rising interest in energy efficiency has held up relatively better than new-build demand.

As a result, major players including LX Hausys are focusing on premium windows, flooring and artificial marble along with expanding B2C channels.

Competitor KCC has diversified its portfolio by expanding into silicone and coatings, whereas LX Hausys has taken the opposite approach of concentrating on strengthening its core building materials business.

In the North American market, mortgage rates remain elevated and tighter tariff policy has added to uncertainty, making the pace of any housing market recovery a factor that requires ongoing monitoring.

Government-led policies to expand housing supply are cited as a factor that could provide a medium-to-long-term positive influence on the building materials industry.

Outlook

The company has stated that it plans to defend profitability in the second half by leaning on eco-friendly green products and its flagship LX Z:IN showrooms.

However, domestic housing market uncertainty is expected to continue due to loan regulations, interest rate burdens and delays in new housing supply, while raw material prices and ocean freight volatility tied to geopolitical factors such as tensions in the Middle East are also cited as burdens.

Hana Securities noted in an August 2026 report that second-half profitability could be weaker than in the first half, with concerns over year-end loan curbs and property tax policy potentially weighing on interior renovation demand.

The company recently participated in the '2026 Korea Build Week' and the North American 'KBIS 2026' trade show, showcasing premium windows, flooring and Estone artificial marble as part of an effort to expand sales of higher-value-added products and overseas customer reach.

Its Himacs Terrazzo artificial marble won a main award at the 2026 Red Dot Design Award, continuing a track record of recognized design competitiveness.

On the ESG front, the company published its 15th ESG report while reporting reduced greenhouse gas emissions, and was included for a second consecutive year as a member of S&P Global's 2026 Sustainability Yearbook.

No cash dividend was paid for fiscal year 2025, and market observers view any resumption of dividends as contingent on the durability of the earnings recovery.

Valuation

PER

9.9×

PBR

0.4×

ROE

4.1%

EPS

₩3,619

BPS

₩92,472

Dividend per share

₩0

LX Hausys's earnings trajectory has shifted from a loss in 2025 to profitability in the first half of 2026, and this directional change is being incorporated into the market's valuation discussion.

Some brokerage reports have noted that the stock trades at a book-value multiple below the historical average for the construction materials sector.

On dividends, no payout was made for fiscal year 2025, breaking a recent dividend track record, and whether the company can restore the financial capacity for shareholder returns is seen as key to any resumption.

Brokerages have continued to revise target prices and earnings estimates, citing uncertainty from raw material and currency volatility as well as loan regulations affecting the second-half outlook.

Taken together, how the current trading multiple should be interpreted remains contingent on the durability of the earnings recovery and the timing of any rebound in the building materials cycle.

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

B2C/Remodeling-Driven Earnings Improvement

Operating profit rose sharply year-on-year in both Q1 and Q2 of 2026, confirming a recovery over two consecutive quarters. Expanded B2C retail sales tied to a rebound in domestic home sales transactions was the key driver.

The company has also continued a strategy of expanding premium product sales aimed at remodeling and renovation demand, which has held up better than new-build demand. Whether this recovery is overly dependent on one-off factors and a transaction-volume rebound remains something to watch.

Stable Growth in Non-Building-Materials Segment

The auto-materials and industrial film segment has continued to grow steadily, supported by increased SUV-centric production at North American automakers and expanded industrial film exports.

In Q2 2026, this segment posted revenue of KRW 284.0bn and operating profit of KRW 18.2bn, offsetting a substantial portion of weakness in the building materials segment. This represents a revenue source that is relatively independent of the domestic construction cycle.

That said, the company's overall structure remains heavily dependent on the building materials segment in absolute terms.

Improving Financial Structure and Cash Generation

The debt ratio has steadily declined from 218.5% in 2022 to 160.1% in 2025. Operating cash flow has remained positive every year, even in years with a reported net loss. The company has also been streamlining inefficient overseas assets, including the sale of its Tianjin, China subsidiary.

If this financial improvement trend continues, it could create room for a future review of shareholder return policy.

Bear factors

Structural Weakness in B2B Building Materials

As declines in new housing starts and pre-sales have persisted, key B2B building material items such as PF insulation have suffered from falling utilization rates and fixed-cost burdens. Some brokerages have suggested that a rebound in B2B revenue next year may be difficult as long as construction starts remain weak.

The building materials segment's swing to a loss in 2025 is not unrelated to this dynamic. The B2C recovery has not been sufficient to fully offset B2B weakness.

Raw Material, Currency and Freight Volatility

Geopolitical factors such as tensions in the Middle East have driven up and added volatility to prices of key chemical raw materials such as PVC, MMA and phenol, as well as ocean freight rates. Because cost pressures tend to be reflected with a lag, this is seen as a potential negative for second-half profitability.

Brokerages have cited this as a reason for expecting a stronger-first-half, weaker-second-half pattern for annual earnings. Currency fluctuations could also affect export-oriented businesses such as decor film.

Housing Policy and Loan Regulation Risk

Concerns have been raised that tighter loan regulations, interest rate burdens and policies such as property taxes could slow interior renovation and housing transaction demand in the second half.

If temporary policy effects, such as the expiration of the multiple-homeowner capital gains tax surcharge grace period, fade, the durability of the recent transaction volume rebound could weaken. The absence of a dividend for fiscal year 2025 also remains a burden from a shareholder return perspective.

If delays in new housing supply persist, the timing of any recovery in building materials demand could also be pushed back.

Risk factors

Industry/Demand Risk

As Korea's construction downturn persists, declining new housing starts and pre-sales are weighing on B2B-driven demand for building materials. Remodeling and renovation demand is partially offsetting this, but it is difficult to fully compensate for weakness in the new-build market.

Weak performance is appearing across the building materials and furniture industries simultaneously, making it hard to gauge the timing of any industry-wide rebound.

Raw Material/Currency Risk

Prices of key chemical raw materials such as PVC, MMA and phenol have become more volatile due to geopolitical factors including tensions in the Middle East. Rising ocean freight rates could also add to cost burdens, and because cost pass-through occurs with a lag, this could affect second-half earnings.

Fluctuations in the KRW/USD exchange rate also affect the profitability of export-oriented businesses such as decor film and auto materials.

Financial/Shareholder Return Risk

While the debt ratio has been improving, it remains elevated in the 160% range. No cash dividend was paid for fiscal year 2025, breaking the recent dividend track record, and any resumption is expected to depend on the durability of the earnings recovery.

The possibility of recurring one-off costs, such as the tangible asset impairment charges recorded in 2025, cannot be ruled out.

What to watch next

Late October to early November 2026
Expected timing of Q3 preliminary earnings disclosure; it will be important to check whether profit improvement in the B2C and auto-materials segments is sustained once the Q2 one-off tariff refund effect fades.
During Q4 2026
It will be worth confirming whether loan regulation and property tax policy variables are actually implemented, and tracking domestic housing transaction volume trends to gauge the direction of interior/remodeling demand.
Q4 2026 to early 2027
Tracking the trajectory of key chemical raw material prices (PVC, MMA, phenol) and ocean freight rates will help assess how second-half margin concerns are actually reflected in reported earnings.
February to March 2027
Disclosure of any year-end dividend decision for fiscal year 2026 is expected around this time, which will indicate whether shareholder returns resume following the FY2025 dividend suspension.

Overall view

LX Hausys followed a full-year loss in 2025 with a clear operating profit recovery in two consecutive quarters, Q1 and Q2 of 2026.

This recovery has been underpinned by expanded B2C retail sales tied to a rebound in domestic housing transactions and steady growth in the auto-materials and industrial film segment, along with cost reductions and a partial one-off tariff refund effect.

However, the core B2B building materials business continues to face delayed structural recovery amid weak new-build construction starts, and brokerages have flagged concerns that raw material, currency and freight volatility along with loan regulation policy could weigh on second-half profitability.

On the financial side, there are improving signals such as a steadily declining debt ratio and consistently positive operating cash flow, but no dividend was paid for fiscal year 2025, breaking the recent shareholder return track record.

Ultimately, the key points to watch are whether the profit improvement can be sustained without one-off factors beyond Q3, and when a structural rebound in the B2B building materials segment might materialize. This report is intended for informational purposes and does not include a buy or sell recommendation.

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.