PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩200 per share · Prices as of the 2026-10-02 close
Avatec, which layers an MLCC business on top of its core display glass-slimming and ITO coating operations, posted double-digit operating margins in the second half of 2025 before margins eased again in the first half of 2026.
Consolidated operating margin improved to 7.6% in 2025 from 6.9% in 2024, but quarterly margins slid to 4.5% in Q1 2026 and 2.0% in Q2 2026.
At an October 2025 investor briefing, the company confirmed resumed MLCC supply to a solar-inverter customer and new supply to three affiliates of a domestic IT conglomerate.
The company said it plans to expand into automotive LCD ITO coating as an outsourced dry-process business starting in 2026.
A KRW 90 billion, four-line MLCC capacity expansion announced in 2023 has been delayed, leaving the company still running a single line.
The debt ratio has steadily declined from 9.6% in 2022 to 7.4% in 2025, maintaining a stable financial structure.
Avatec is a KOSDAQ-listed electronic component maker built around two businesses: display panel Glass Slimming and ITO coating, and multilayer ceramic capacitors (MLCC).
The core display segment generates most of its revenue from etching processes that thin panels and from ITO & metal coating processes that manage static electricity and protect image quality.
Its main customers are affiliates of LG Display and LG Electronics, and it also continues to run a hybrid-substrate etching business for IT-oriented OLED panels.
The company has stated it plans to launch a new business starting in 2026 that converts automotive LCD ITO coating into an outsourced dry-process operation previously performed in-house by customers.
The MLCC business, which began mass production in 2019, targets applications across automotive electronics, mobile devices, displays, and renewable energy (solar).
At an October 2025 investor briefing, the company said it had resumed MLCC supply to an Israel-based solar inverter maker (previously identified in media reports as SolarEdge Technologies) and had agreed to newly supply three affiliates of a domestic IT conglomerate.
However, revenue from that solar customer had reached KRW 20.5 billion (27.1% of sales) in 2023 before the relationship was halted, causing MLCC sales to collapse to just KRW 300 million (0.4% of sales) in 2024, illustrating the volatility that comes with customer concentration.
MLCC capacity expansion plans worth KRW 90 billion across four additional lines have been delayed, leaving the company still operating a single line with monthly capacity of about 120 million units (1.44 billion units annually).
In the competitive landscape, the MLCC market is dominated by large players such as Murata of Japan and Samsung Electro-Mechanics and Samwha Capacitor of Korea, positioning Avatec as a smaller, later-entrant player focused on niche applications like solar and automotive electronics.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩18.4B | ₩1.3B | 7.2% |
| 2025Q3 | ₩22.8B | ₩3.3B | 14.5% |
| 2025Q4 | ₩21.7B | ₩2.7B | 12.4% |
| 2026Q1 | ₩17B | ₩800M | 4.5% |
| 2026Q2 | ₩16.9B | ₩300M | 2.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩73.2B | -₩5.4B | -₩4.3B | −7.3% | −3.2% | 9.6% |
| 2023 | ₩75.8B | ₩2.2B | ₩4.8B | 2.9% | 3.4% | 5.5% |
| 2024 | ₩84.5B | ₩5.8B | ₩8.9B | 6.9% | 6.1% | 6.5% |
| 2025 | ₩80.9B | ₩6.1B | ₩6.9B | 7.6% | 4.6% | 7.4% |
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
Consolidated 2025 revenue came in at KRW 80.94 billion, slightly down from KRW 84.55 billion in 2024, yet operating profit actually rose to KRW 6.15 billion, lifting the operating margin to 7.6%.
This extends a recovery trend that began after a 2022 operating loss of KRW 5.35 billion (margin of -7.3%), followed by operating profit of KRW 2.2 billion in 2023 and KRW 5.8 billion in 2024.
Net income attributable to owners, however, fell to KRW 6.92 billion in 2025 from KRW 8.90 billion in 2024; the decline in net income despite higher operating profit suggests 2024's bottom line likely benefited from a relatively larger non-operating item.
On a quarterly basis, Q3 2025 revenue reached KRW 22.82 billion with operating profit of KRW 3.3 billion (margin of about 14.5%), the strongest margin of the recent quarters, and Q4 2025 sustained a double-digit margin with revenue of KRW 21.73 billion and operating profit of KRW 2.69 billion.
That momentum reversed sharply in Q1 2026, when revenue fell to KRW 16.97 billion and operating profit to KRW 767 million (margin near 4.5%), and margin compression continued into Q2 2026 with revenue of KRW 16.91 billion and operating profit of just KRW 336 million (margin near 2.0%).
Net income in Q2 2026, however, came in at KRW 1.31 billion, well above operating profit, indicating that non-operating items cushioned the bottom line.
Summed over the trailing four quarters (Q3 2025 through Q2 2026), owners' net income totaled KRW 8.01 billion, exceeding the full-year 2025 figure of KRW 6.92 billion, underscoring how much the second-half 2025 recovery contributed to that trailing window.
On cash flow, 2025 operating cash flow of KRW 9.87 billion exceeded net income, though it was down from KRW 16.21 billion in 2024. The balance sheet remained stable, with the debt ratio declining from 9.6% in 2022 to 7.4% in 2025.
The display component industry faces structural stagnation in the maturing LCD segment, while OLED applications are expanding beyond mobile into IT and automotive uses.
Avatec is attempting to diversify its revenue base by extending the etching expertise built in LCD slimming and ITO coating into IT-OLED hybrid-substrate etching and an outsourced automotive ITO coating business.
The MLCC market remains an oligopoly led by large players such as Murata of Japan and Samsung Electro-Mechanics and Samwha Capacitor of Korea, positioning Avatec as a smaller, later-entrant player focused on niche applications such as solar inverters and automotive electronics.
Demand for solar-inverter-related MLCC collapsed in 2023-2024 amid weak performance at the relevant customer, before supply volumes began to recover from the second half of 2025.
Meritz Securities, in an April 27, 2026 report, projected that Q1 2026 solar-inverter-related revenue would decline modestly on a quarterly basis due to a high base from the prior quarter's surge, and that display and related MLCC sales would also soften amid weak set demand.
The same brokerage, in a November 27, 2025 report, said it expected growing demand for automotive-grade MLCC supplied to a Tier-2 customer in addition to expanding solar-inverter volumes, alongside ongoing promotional efforts targeting global automakers and data-center customers.
At the October 2025 investor briefing, the company confirmed resumed MLCC supply to a solar-inverter customer and new supply to three affiliates of a domestic IT conglomerate.
It also outlined plans to secure a new revenue stream starting in 2026 by converting automotive LCD ITO coating into an outsourced dry-process business.
MLCC line expansion, originally targeted to reach a five-line system by 2026, has been delayed; a representative of affiliate Avaco attributed the delay to a combination of factors.
The company currently appears to be prioritizing utilization improvement on its single existing line rather than accelerating new capacity. In the display segment, the ongoing IT-OLED hybrid-substrate etching business means revenue contribution will likely vary with customers' new panel launch schedules.
Meritz Securities, in an April 27, 2026 report, cited a "scarcity premium" from being a constrained MLCC supplier and a glass-substrate business as mid-to-long-term re-rating factors, maintaining a Buy rating and raising its target price to KRW 16,000. This reflects the brokerage's own outlook and is distinct from the company's official guidance.
Avatec's shares once traded at a price-to-book ratio above 2 times back in 2021, when expectations around its OLED and MLCC growth businesses were running high, but valuation appeal subsequently faded as depreciation and R&D cost burdens grew alongside deteriorating profitability.
More recently, after a profit recovery in the second half of 2025, operating margins softened again in the first half of 2026, and the stock's relationship to book value has been running below the multiples seen during that earlier growth-expectation phase.
On dividends, the company has paid a cash dividend annually, though the size tends to track earnings volatility rather than sitting at a fixed absolute level. Market capitalization is also relatively small within KOSDAQ, which can limit trading liquidity and amplify volatility in valuation metrics.
As a result, investors will likely want to keep tracking whether the recent shift in earnings direction persists, alongside how the relationship between book value and market value evolves.
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
At the October 2025 IR meeting, the company announced the resumption of supply to its solar inverter customer and the securing of new supply contracts with three domestic IT conglomerate affiliates.
This could serve as an opportunity to alleviate the customer concentration risk that had caused the MLCC revenue share to plunge to 0.4% in 2024. Indeed, the operating margin improved to double digits in Q3-Q4 2025, making the earnings rebound visible.
From 2026, the company plans to expand into automotive LCD ITO coating as a dry-process-based outsourcing business, while continuing its IT OLED hybrid substrate etching business. This represents a new revenue source that could ease the structural stagnation of LCD-centered display revenue. Both businesses leverage existing etching and coating technology assets, making execution risk relatively low.
Financial stability has been maintained, with the debt ratio declining from 9.6% in 2022 to 7.4% in 2025, and 2025 operating cash flow of KRW 9.871 billion exceeded net income. This provides a foundation for continuing new business investment without relying on external funding.
The operating margin, which had improved to around 14.5% in Q3 2025, rapidly declined to 4.5% in Q1 2026 and 2.0% in Q2 2026. This resulted from the combination of a base effect from solar inverter volume and weak set demand, suggesting that the earnings recovery has not yet reached a stable trajectory.
As shown by the precedent where the MLCC revenue share, which had grown to 27% in 2023, plunged to 0.4% in 2024 due to a transaction suspension, the company's performance is structurally vulnerable to shifts in demand from specific customers. If the solar inverter company's earnings weakness recurs, a similar shock could repeat.
The plan announced in 2023 to expand four production lines at a cost of KRW 90 billion has been delayed, and the company still operates on a single-line system. If line expansion does not proceed as planned, production capacity constraints could act as a ceiling on growth during a demand recovery period.
The display segment is highly dependent on the LG Display and LG Electronics affiliates, while MLCC revenue is concentrated on a specific solar inverter company and a few IT conglomerate affiliates. Order fluctuations from specific customers could directly impact performance.
Amid the continuing structural contraction of the LCD market, the MLCC market is oligopolized by major players such as Murata and Samsung Electro-Mechanics, meaning that Avatec, as a smaller latecomer, may continue to face challenges to its price and order competitiveness.
Given the precedent of a delay in the MLCC line expansion plan, if the pace of future investment fails to align with the pace of market demand recovery, it could lead to either lost opportunities or excess investment risk. Exchange rates and raw material cost fluctuations are also variables that could affect profitability.
Check the Q3 quarterly report filing to see whether the operating margin recovers from the deceleration seen in Q1-Q2 2026.
Watch disclosures and IR updates for signs of resumed MLCC line expansion and changes in supply volumes to solar-inverter and automotive customers.
Confirm whether the planned automotive LCD ITO dry-coating outsourcing business begins recognizing actual revenue.
Review the 2026 annual business report filing to reassess the revenue mix shift between the MLCC and display segments.
Avatec is a small-to-mid-cap KOSDAQ electronic component maker that has layered an MLCC business on top of its core display glass-slimming and ITO coating operations.
It turned from an operating loss in 2022 to a profit trajectory through 2023-2025, with the operating margin improving to 7.6% in 2025, though margins weakened again in the first half of 2026, showing that the direction of earnings has swung significantly from quarter to quarter.
The MLCC business has shown attempts to broaden its customer base across solar inverter, automotive, and IT conglomerate affiliates, but given a past history of sharp revenue swings tied to a single customer, tangible progress on diversification warrants continued observation.
In the display segment, new revenue sources such as IT-OLED etching and outsourced automotive ITO coating are on the horizon, placing the business at an early stage of structural change.
The balance sheet remains relatively stable, supported by a low debt ratio and positive operating cash flow, but the pace of execution on already-delayed investment plans such as MLCC line expansion remains a variable that will shape the future growth path.
Investors will likely want to continue monitoring upcoming quarterly results and disclosures related to MLCC customers and line expansion to gauge whether the earnings recovery proves durable.
Report written 2026-09-05 · Data as of 2026-09-04
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