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
The core automotive nonwoven fabric and yarn business continues to post operating profit, but 2025 saw a net loss due to equity-method losses from an affiliate, while the new US pallet venture remains in a pre-revenue investment stage.
2025 consolidated revenue rose to KRW 87.6 billion, but net income attributable to owners swung to a loss of KRW -4.96 billion due to equity-method losses.
Both Q1 2026 (operating profit KRW 2.03 billion) and Q2 2026 (KRW 2.60 billion) posted profits at both the operating and net income lines, extending a recovery trend.
The PU Foam business was divested, with the sale completed by end-2025, reshaping the current business structure around nonwoven fabric, yarn, and the overseas pallet venture.
In August 2026, a USD 10 million capital increase was pursued at the US pallet subsidiary GHA, with GH New Materials injecting an additional USD 6.07 million.
The debt-to-equity ratio rose from 58.1% in 2022 to 105.9% in 2025, and the company's credit rating was assessed at BB- (cash flow grade C-).
GH New Materials began in 1979 as Samchang Textile Chemical and adopted its current name in 2016, specializing in nonwoven fabric for automotive interiors.
Its core products are Floor Carpet, noise-blocking ISO Dash, and Seat Back materials, and it operates as a Tier-2 supplier providing fabric to Tier-1 processors rather than shipping directly to automakers.
As a Tier-2 supplier, it can supply multiple automakers' partner networks simultaneously, making it relatively less dependent on the performance of any single automaker.
Its business used to comprise nonwoven fabric, PU Foam, yarn, and an overseas pallet unit, having acquired a yarn business in 2018 to build backward integration and establishing the pallet segment in 2021.
Production sites consisted of nonwoven plants in Gumi and India, a PU Foam plant in Gyeongju, and a yarn plant in Pocheon.
However, the PU Foam business was divested with the sale decided in December 2024 and completed by end-2025, with related results now treated as discontinued operations, reshaping the current structure around nonwoven fabric, yarn, and the overseas pallet business.
The largest shareholder is NVH Korea, holding a 50.73% stake, within a group structure that is not entirely simple. The hybrid pallet venture is pursued through the US subsidiary GHA in North Carolina, jointly funded by GH New Materials (60.71%) alongside affiliates NVH Korea and KNSOL in proportion to their stakes.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩21.5B | ₩1.8B | 8.5% |
| 2025Q3 | ₩21.8B | ₩2.3B | 10.4% |
| 2025Q4 | ₩22.7B | ₩800M | 3.5% |
| 2026Q1 | ₩21.1B | ₩2B | 9.6% |
| 2026Q2 | ₩22.7B | ₩2.6B | 11.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩86.9B | ₩3.2B | ₩4.9B | 3.7% | 6.6% | 58.1% |
| 2023 | ₩88.8B | ₩4.7B | ₩2.1B | 5.3% | 2.7% | 103.7% |
| 2024 | ₩83.7B | ₩7.7B | ₩5.2B | 9.2% | 6.0% | 95.2% |
| 2025 | ₩87.6B | ₩6.8B | -₩5B | 7.8% | −6.1% | 105.9% |
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 2025 rose to KRW 87.6 billion from KRW 83.7 billion in 2024. Over the same period, operating profit fell to KRW 6.84 billion from KRW 7.67 billion, and the operating margin declined from 9.2% to 7.8%.
In contrast, net income attributable to owners swung from a profit of KRW 5.17 billion in 2024 to a loss of KRW -4.96 billion in 2025, primarily attributed to equity-method losses on an affiliate investment holding.
GH New Materials explained that net income declined due to equity-method losses on its affiliate investment holdings.
By quarter, Q4 2025 operating profit was a modest KRW 0.79 billion, yet net income attributable to owners posted a sharp loss of KRW -7.31 billion, highlighting significant volatility from non-operating items.
In 2026, however, the company posted two consecutive quarters of profit at both lines: Q1 operating profit of KRW 2.03 billion and net income of KRW 1.45 billion, followed by Q2 operating profit of KRW 2.60 billion and net income of KRW 1.07 billion.
Operating cash flow also improved, moving from KRW -2.07 billion in 2023 to KRW 1.30 billion in 2024 and KRW 3.67 billion in 2025. The debt-to-equity ratio rose from 58.1% in 2022 to 105.9% in 2025, reflecting greater borrowing amid business expansion and new venture investment.
Overall, the core nonwoven and yarn business maintains operating profitability, but non-operating items such as equity-method gains and losses continue to drive significant swings in net income.
Domestic automobile production in 2025 was 4.102 million units, down 0.6% from 4.128 million units in 2024, while domestic sales rose 3.3% but exports fell 1.7%. Domestic sales increased due to expanded penetration of electric and eco-friendly vehicles.
GH New Materials' nonwoven and yarn business is a classic materials supplier directly tied to this vehicle production trend.
However, as a Tier-2 supplier, it is less affected by the performance of any individual automaker and more influenced by total industry production volume, since it can supply the partner networks of all automakers rather than just one.
The company stated in its business report that non-automotive market sales and profitability improved, but operating profit declined from 2024 due to lower automotive production volume.
The company expects continued growth in the domestic and overseas automotive markets, and anticipates that non-automotive market sales will also increase if the end of the war in Ukraine eases the economic slowdown.
The company has previously described itself in corporate materials as the domestic leader in single-plant scale within the automotive interior nonwoven fabric market.
The company's top growth priority is the hybrid pallet business being pursued in North Carolina, United States.
Since establishing the GHA subsidiary in the second half of 2021, the project has proceeded through facility purchases and testing, with the business report stating a goal of mass production following 2025 testing.
In August 2026, a capital increase of USD 10 million in total was pursued at GHA, with GH New Materials injecting an additional USD 6.07 million corresponding to its 60.71% stake, while NVH Korea and KNSOL contributed USD 2.14 million and USD 1.79 million for their 21.43% and 17.86% stakes, respectively.
This increase raises GHA's capital from USD 19 million to USD 29 million, with proceeds intended to fund the facilities and operating capital needed to bring production online.
The hybrid pallet is a wood pallet coated with polyurea, using technology co-developed with BASF that the company says improves on the damage and bacterial contamination vulnerabilities of conventional wood pallets.
The company has stated that if revenue is generated from the US subsidiary, its overall sales are expected to increase, though the specific timing of revenue recognition has not yet been finalized in its filings.
In the core business, the pace of automotive production recovery and progress in non-automotive materials development are cited as key variables for future performance.
The price-to-book ratio trades at a discount relative to net asset value. This may reflect the market's cautious stance following the 2025 swing to a net loss attributable to owners and the wide quarter-to-quarter swings in net income.
An improving trend has emerged with two consecutive quarters of operating and net profit in the first half of 2026, though past quarterly results show repeated instances of net income being significantly swung by non-operating items such as equity-method gains and losses.
The company has not paid dividends recently, making dividend-based valuation metrics difficult to apply.
The new pallet segment remains in a pre-revenue investment stage, so the current share price level appears to be interpreted mainly on the basis of the cash-generating capacity of the core nonwoven and yarn business.
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 operating margin improved from 3.7% in 2022 to as high as 9.2% before settling at 7.8% in 2025, remaining in profitable territory throughout. Operating cash flow also improved markedly from negative in 2023 to KRW 3.67 billion in 2025.
In the first half of 2026, both Q1 and Q2 operating profit exceeded KRW 2 billion, extending the recovery trend.
Unlike Tier-1 suppliers that ship directly to automakers, Tier-2 suppliers can supply the partner networks of multiple automakers simultaneously, reducing dependence on any single automaker's performance. This mitigates the risk that a downturn at one specific customer directly hits the company's results.
The August 2026 USD 10 million capital increase at GHA is accelerating preparations to bring production online. If the hybrid pallet, using coating technology co-developed with BASF, converts into actual revenue, it could diversify the business away from dependence on the automotive cycle.
In 2025, despite an operating profit, net income attributable to owners turned to a loss of KRW -4.96 billion due to equity-method losses at an affiliate.
In Q4 2025, net income deteriorated to KRW -7.31 billion despite a modest operating profit of KRW 0.79 billion, and similar non-operating factors could recur in the future.
Domestic automobile production fell 0.6% to 4.102 million units in 2025, and exports also declined 1.7%. Since the nonwoven and yarn business is directly tied to vehicle production volume, continued production stagnation could constrain growth in the core business.
GHA was established in the second half of 2021, but has remained in preparation for years, with equipment purchases in 2023 and a target of mass production after 2025 testing.
With another capital injection occurring in August 2026, the actual timing of mass production and revenue recognition remains uncertain, and further capital calls could recur.
The debt-to-equity ratio rose from 58.1% in 2022 to 105.9% in 2025. Credit rating agency eCredible assessed the company's corporate credit rating at BB- and cash flow grade at C- as of April 2025, warranting attention to external financing conditions needed for new business investment.
The core cause of the 2025 net loss was an equity-method loss on an affiliate investment. If that affiliate's performance remains weak, it could again weigh on net income, remaining a source of volatility separate from operating results.
The hybrid pallet business has remained in a pre-revenue stage for years since its establishment, and requires repeated joint capital contributions from affiliates to bring production facilities online.
Execution risks remain around building US local production and distribution networks, securing customers, and regulatory compliance.
Check the Q3 2026 quarterly report to see whether operating and net profit continue the first-half profitable trend and whether equity-method income volatility recurs.
Watch for follow-up disclosures on the progress of GHA's hybrid pallet production facility startup and trial production.
The Ministry of Trade, Industry and Energy's September automotive industry trend release can be checked to see whether domestic vehicle production turns toward recovery.
The 2026 annual business and audit report filings will confirm full-year results following the PU Foam divestiture and the final impact of equity-method affiliate gains or losses.
As a Tier-2 supplier of automotive interior nonwoven fabric and yarn, GH New Materials has maintained relatively stable operating profitability since 2022.
However, in 2025 a non-operating factor—equity-method losses at an affiliate—drove net income attributable to owners into a loss, with a large net loss concentrated in a single quarter (Q4), reflecting significant earnings volatility.
With the business structure simplified following the PU Foam divestiture, the first half of 2026 showed signs of recovery with two consecutive quarters of profit at both the operating and net income lines.
The new US hybrid pallet venture, launched in 2021, has remained in preparation for years, and while an additional capital increase in August 2026 is accelerating facility startup, the actual timing of revenue recognition remains uncertain.
Stagnant domestic vehicle production, a rising debt ratio, and affiliate-related risk remain factors to monitor going forward. In sum, this stock can be characterized by a combination of a stable core business, an uncertain new venture, and earnings volatility driven by non-operating items.
Report written 2026-09-05 · Data as of 2026-09-04
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