PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩205 per share · Prices as of the 2026-10-02 close
SJM is diversifying from its core automotive exhaust bellows business into plant piping, EV cooling components, and aerospace parts, and after a 2025 earnings slowdown, both operating profit and net income showed a clear rebound in the first half of 2026.
FY2025 revenue was KRW 201.4bn (-0.2% YoY), operating profit KRW 11.3bn (-20.5% YoY), and owner net income KRW 12.1bn (-41.7% YoY), a slowdown from the prior year.
After posting an operating loss of KRW -0.16bn in Q4 2025, the company posted improved operating profit and net income in both Q1 and Q2 2026.
The company is expanding from automotive bellows (exhaust noise/vibration parts) into plant expansion joints, EV cooling technology (ZLTube), and gimbal joints for the KF-21 fighter jet.
SJM established a new subsidiary in India in 2025 to expand its global production footprint.
The debt ratio has stayed in the 19-30% range, relatively low for the sector, with steady annual operating cash inflows.
SJM is an auto parts specialist established in 2010 through a spin-off from SJM Holdings, operating through two segments: an automotive division and a plant division.
The automotive division manufactures flexible coupling (bellows) parts installed at the front of the exhaust system to reduce engine noise and vibration, with recent strength in higher-value commercial vehicle products.
The plant division produces expansion joints used in construction, petrochemical, and shipbuilding applications; its LNG carrier expansion joint was the first to be localized domestically and, according to a 2023 report, held an estimated 85% global market share at that time.
Revenue is split roughly 90% automotive and 10% plant, leaving the company heavily dependent on the automotive segment.
In recent years SJM has built proprietary EV cooling technology called ZLTube through its investment in SJM ECS (formerly MH Technology Development), and has stated it supplies related cooling components to Hyundai Motor and BMW.
In aerospace, the company partnered with Korea Aerospace Industries (KAI) to localize gimbal joints for the KF-21 fighter jet, extending into defense-related components. In 2025, SJM established a new subsidiary in India to diversify its production footprint, adding to existing overseas bases in China and South Africa.
As a smaller specialized parts maker, its bargaining power versus major automakers is limited, but the strategy of diversifying into plant and aerospace revenue streams is aimed at reducing dependence on the automotive cycle.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩48.7B | ₩4.8B | 9.8% |
| 2025Q3 | ₩50B | ₩3.1B | 6.2% |
| 2025Q4 | ₩49.5B | -₩200M | −0.3% |
| 2026Q1 | ₩53.1B | ₩3.1B | 5.9% |
| 2026Q2 | ₩52.5B | ₩4.7B | 8.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩180.2B | ₩7.1B | ₩4.9B | 3.9% | 2.8% | 30.0% |
| 2023 | ₩198.9B | ₩13.2B | ₩17.6B | 6.7% | 9.3% | 26.5% |
| 2024 | ₩201.9B | ₩14.2B | ₩20.8B | 7.1% | 9.6% | 25.4% |
| 2025 | ₩201.4B | ₩11.3B | ₩12.1B | 5.6% | 5.2% | 19.0% |
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
Consolidated revenue for FY2025 was KRW 201.415bn, down 0.2% from KRW 201.912bn in FY2024, while operating profit fell 20.5% to KRW 11.315bn and owner net income dropped 41.7% to KRW 12.124bn.
This reflects the impact of accelerating electrification and a broader slowdown, as automakers reduced internal combustion engine mix in favor of hybrid and electric vehicles, though the commercial vehicle segment helped sustain revenue through higher-value products.
Looking at the multi-year trend, revenue rose from KRW 180.2bn in 2022 to KRW 198.9bn in 2023 and KRW 201.9bn in 2024, with the operating margin improving from 3.9% to 6.7% to 7.1% over the same period as profitability recovered, before slipping back to 5.6% in 2025.
On a quarterly basis, Q4 2025 revenue was KRW 49.526bn but the company posted an operating loss of KRW 0.164bn, marking a quarterly swing into the red.
This was followed by a clear recovery in Q1 2026, with revenue of KRW 53.106bn, operating profit of KRW 3.143bn, and owner net income of KRW 6.564bn, and the improvement continued in Q2 2026 with revenue of KRW 52.531bn, operating profit of KRW 4.690bn, and owner net income of KRW 6.084bn.
As a result, owner net income summed over the most recent four quarters (Q3 2025 through Q2 2026) reached KRW 17.993bn, recovering above the full-year 2025 level.
The wide swing between Q3 2025 net income of KRW 5.228bn and Q4 2025 net income of just KRW 0.118bn, along with the gap between operating profit and net income in several quarters, suggests one-off items such as foreign currency translation effects influenced reported results.
The global auto industry continues to undergo a structural shift toward electrification, with internal combustion engine mix declining as hybrid and electric vehicles expand.
According to industry data found in research, the electric and hybrid vehicle mix is projected to reach 67% by 2030, posing a structural challenge for SJM given its core exhaust bellows business.
That said, the company has maintained relatively stable revenue in higher-value commercial vehicle bellows, and has diversified into plant, shipbuilding, and aerospace revenue streams to reduce reliance on the automotive cycle alone.
The plant division's LNG carrier expansion joint, the first such product localized domestically, is tied to the shipbuilding order cycle rather than the auto cycle.
In EV cooling, the company is pursuing a new business built on ZLTube technology that maximizes cooling performance for batteries, drive motors, and air compressors, and is in the process of expanding supply to automakers.
In aerospace, participation in domestic defense projects such as the KF-21 is broadening the revenue base, although this remains small relative to the automotive and plant segments.
As a small-cap automotive parts stock listed on the KOSPI, the company also faces relatively limited trading liquidity and information coverage.
The company has positioned EV cooling and aerospace parts localization as its main growth pillars.
Through SJM ECS, which holds the ZLTube technology, the company has stated that it supplies related cooling components to Hyundai Motor and BMW, making the pace of future supply expansion a key indicator of new business progress.
In aerospace, the company has worked with Korea Aerospace Industries (KAI) to localize gimbal joints for the KF-21 fighter jet, and the progress of any mass-production contracts for these parts is worth monitoring.
The India subsidiary established in 2025 was set up to diversify the production footprint, and the timing of its startup and revenue contribution are points to watch going forward.
With operating profit and net income improving for two consecutive quarters in the first half of 2026, whether this trend continues into the second half is a key question.
However, no specific revenue or profit guidance from the company was identified in available sources, meaning future results will need to be confirmed sequentially through quarterly disclosures.
Because the plant division is tied to the shipbuilding order cycle, shipbuilding and LNG-related order trends are also worth tracking.
The current share price reflects the profit recovery pattern seen over the past several years, and the price-to-book ratio sits below 1x, indicating the stock trades at a discount to net asset value.
The price multiple relative to earnings is closer to the lower end of the trading band formed over recent years, a pattern that should be considered alongside the shift from the 2022-2024 profit recovery to the 2025 slowdown and the renewed improvement in the first half of 2026.
The company has a history of paying annual cash dividends, though continuation and sizing of future dividends will need to be confirmed through board and shareholder meeting disclosures. Given the stock's small-cap characteristics and limited trading volume, valuation metrics may also show relatively larger swings.
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
The company is diversifying its revenue base into LNG carrier expansion joints, EV cooling technology (ZLTube), and KF-21 aerospace parts, which reduces exposure to a single automotive-cycle risk.
The LNG carrier expansion joint business in particular is tied to the shipbuilding order cycle and can move independently of the auto cycle. Expansion into aerospace and defense has potential to become a stable long-term revenue base.
After posting an operating loss in Q4 2025, both operating profit and net income showed clear improvement in Q1 and Q2 2026. The four-quarter trailing sum of owner net income also shows a recovery on an annualized basis, partly attributed to a focus on higher-value products such as commercial vehicle parts.
The debt ratio improved from 30.0% in 2022 to 19.0% in 2025, reflecting stronger financial soundness. Operating cash flow also expanded from KRW 9.3bn in 2022 to KRW 34.4bn in 2025, strengthening cash-generating capacity that could support new business investment and dividend payments.
As seen in the sharp drop from Q3 2025 net income of KRW 5.2bn to just KRW 0.12bn in Q4 2025, along with a swing to an operating loss, quarterly results show considerable volatility.
One-off items such as foreign currency translation effects can create gaps between operating profit and net income, making it difficult to judge trends from a single quarter alone.
With roughly 90% of revenue coming from the automotive division, the company is heavily exposed to structural risk tied to automaker production volumes and the pace of electrification.
If the decline in internal combustion engine mix continues, demand for the core exhaust bellows product could shrink over the long term.
As a small-cap KOSPI stock, trading volume and market information access can be limited, which may lead to greater price volatility or information asymmetry risk.
The pace of automaker electrification and shifts in production volumes directly affect the automotive division's revenue. If the decline in internal combustion engine mix proceeds faster than expected, demand pressure on bellows products could intensify.
Given the export-oriented business structure, foreign currency translation effects can influence quarterly results, and a gap between operating profit and net income has indeed been observed in past quarters. Rising raw material prices such as steel could also add cost pressure.
New businesses such as ZLTube EV cooling components and KF-21 aerospace parts remain small in scale relative to the automotive and plant segments, so any delay in commercialization or expansion of mass-production contracts could push back the timing of the growth narrative's realization.
The Q3 2026 quarterly report disclosure should be checked to see whether revenue, operating profit, and net income continue the improvement trend seen in the first half of the year.
The confirmed full-year 2026 results and dividend proposal will be disclosed, so both the annual earnings direction and dividend continuity should be checked.
Any disclosure regarding mass-production contracts or orders related to the localized KF-21 gimbal joint should be checked to assess progress in commercializing the aerospace business.
It is worth checking for news of expanded supply to automakers beyond Hyundai and BMW, or the start of mass production, to gauge the pace of new business growth.
The timing of the India subsidiary's operational start-up, established in 2025, and its scale of revenue contribution should be monitored.
SJM is a small-cap auto parts maker diversifying from its core automotive exhaust bellows business into plant piping, EV cooling, and aerospace components.
In 2025, revenue, operating profit, and net income all slowed from the prior year amid accelerating electrification and a broader economic slowdown, with the company posting a quarterly operating loss in Q4.
However, operating profit and net income improved in both Q1 and Q2 2026, and the four-quarter trailing sum of net income has recovered above the full-year 2025 level.
The company continues to pursue a strategy of reducing dependence on the automotive cycle through ZLTube EV cooling technology, localization of KF-21 aerospace parts, and the establishment of a new India subsidiary, though these new businesses remain small in scale and their eventual contribution will need to be confirmed through future disclosures.
Improvements in financial soundness, such as a lower debt ratio and expanding cash flow, are positive factors, but quarterly earnings volatility and high revenue dependence on the automotive segment remain points to monitor closely.
Investors should continue to track upcoming quarterly earnings disclosures and any order or contract news related to the new businesses to assess whether the diversification strategy translates into actual results.
Report written 2026-09-05 · Data as of 2026-09-04
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