KOSDAQAutomotive151860

KG Eco Solution

₩5,400▲ 2.08%2026-10-02 close

Market Cap

₩254.7B

Turnover

₩1.1B

Volume

190,000 shares

Shares out.

47.6M

PER

1.9×

PBR

0.2×

EPS

₩3,017

Dividend Yield

2.68%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩150 per share · Prices as of the 2026-10-02 close

Report overview

Holding Company Transition, Bio-Marine Fuel as New Bet

KG Eco Solution, the intermediate holding company overseeing KG Steel and KG Mobility, posted operating profit across all business segments in the second quarter of 2026, with the new bio-marine fuel business and recovering auto exports emerging as key variables for future earnings.

1
An intermediate holding company spanning bioenergy, steel/port, and automobile manufacturing, holding 45.00% of KG Steel and 54.35% of KG Mobility.
2
Consolidated operating margin fell from 7.2% in 2022 to 2.5% in 2025, before all business segments turned operating profitable together in the second quarter of 2026.
3
Entry into the bio-marine fuel (BMF) business, with the Ulsan plant expansion completed and a 2026 revenue target of KRW 187.5 billion presented.
4
Subsidiary KG Mobility is pursuing an export recovery led by the Torres EVX and expanding local production in Vietnam and Saudi Arabia.
5
In June 2026, KG Group announced a policy to return 50% of net income to shareholders over the next five years across six listed affiliates, including KG Eco Solution.

Business structure

KG Eco Solution was formed through a 2013 corporate spin-off and later converted into the group's intermediate holding company spanning bioenergy, steel/port, and automobile manufacturing after absorbing KG Mobility (formerly SsangYong Motor) in 2023 and KG Steel in 2024.

The ownership chain runs from KG Zeroin through KG Chemical to KG Eco Solution and down to KG Mobility and KG Steel, and as of 2025 KG Eco Solution held a 45.00% stake in KG Steel and a 54.35% stake in KG Mobility.

The bioenergy segment produces bio-heavy oil for power generation from animal and vegetable fats and fatty acid esters, with annual production capacity of 210,000 kiloliters.

The steel and port segment is run through subsidiary KG Steel, covering cold-rolled steel production and port facility operations, and the company is also reviewing a data center business using idle land at its Incheon and Dangjin plants.

The automobile manufacturing segment is handled by subsidiary KG Mobility, which competes in domestic and export markets with an SUV and pickup-focused lineup including the Musso, Torres, Actyon and Korando.

In 2026, KG Steel acquired a 52.5% stake in used-car distribution platform K Car for roughly KRW 394.6 billion and renamed the unit KG Mobility Platform, pursuing an integrated mobility system linking new-car manufacturing with used-car distribution, financing and payments.

With Hyundai and Kia dominating the domestic passenger vehicle market, KG Mobility is differentiating through its SUV/pickup specialization and overseas knock-down assembly business, while the bioenergy segment is expanding beyond the limited domestic power-generation market into overseas marine fuel markets such as bio-marine fuel.

Earnings trend

Quarterly revenue · Operating profit

₩1.8T₩48.3B25Q2₩2.1T₩58.8B25Q3₩2T₩8.7B25Q4₩2T₩32.8B26Q1₩2.2T₩51.7B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩4.9T₩356.2B2022₩7.3T₩309.8B2023₩7.3T₩226.5B2024₩7.6T₩191.3B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.8T	₩48.3B	2.7%
2025Q3	₩2.1T	₩58.8B	2.8%
2025Q4	₩2T	₩8.7B	0.4%
2026Q1	₩2T	₩32.8B	1.7%
2026Q2	₩2.2T	₩51.7B	2.4%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩4.9T	₩356.2B	₩488.6B	7.2%	59.6%	96.6%
2023	₩7.3T	₩309.8B	₩66.4B	4.3%	7.4%	106.0%
2024	₩7.3T	₩226.5B	₩76.3B	3.1%	5.6%	110.0%
2025	₩7.6T	₩191.3B	₩82.4B	2.5%	5.8%	99.5%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21

Earnings analysis

KG Eco Solution's consolidated revenue rose for three straight years, from KRW 4.9442 trillion in 2022 to KRW 7.2572 trillion in 2023, KRW 7.2849 trillion in 2024, and KRW 7.5772 trillion in 2025, while operating margin steadily declined from 7.2% in 2022 to 4.3% in 2023, 3.1% in 2024, and 2.5% in 2025.

Operating profit itself fell by nearly half, from KRW 356.2 billion in 2022 to KRW 191.3 billion in 2025, reflecting intensified price competition in automobile manufacturing combined with rising costs in the steel and bioenergy segments.

Net income attributable to owners was unusually large at KRW 488.6 billion in 2022 due to one-off acquisition-related factors, and once that effect faded it settled into a relatively stable range of KRW 66.4 billion in 2023, KRW 76.3 billion in 2024, and KRW 82.4 billion in 2025.

On a quarterly basis, revenue reached KRW 2.0691 trillion with operating profit of KRW 58.8 billion in the third quarter of 2025, before revenue slipped to KRW 1.9546 trillion and operating profit plunged to KRW 8.7 billion in the fourth quarter of 2025, a drop attributed mainly to one-off costs in the steel segment.

The first quarter of 2026 showed a recovery with revenue of KRW 1.9696 trillion and operating profit of KRW 32.8 billion, and the second quarter of 2026 improved further to revenue of KRW 2.1503 trillion, operating profit of KRW 51.7 billion, and owners' net income of KRW 50.7 billion.

Regarding the second-quarter 2026 results, the company noted that its stand-alone bio business segment's revenue increased 41.0% year over year while sustaining an operating profit, and that automobile, steel and other segments all posted operating profit together.

Summing the most recent four quarters (third quarter of 2025 through second quarter of 2026), owners' net income totals roughly KRW 126.6 billion, showing a recovery trend since the fourth-quarter 2025 trough despite quarter-to-quarter volatility.

Industry analysis

The domestic completed-vehicle market has stagnated while exports show a recovery led by electrified new models. In April 2026, KG Mobility sold 3,382 units domestically and 6,130 units in exports, lifting total sales 6.5% year over year, with Torres EVX exports surging 739.4% over the same period.

However, with Hyundai and Kia dominating the domestic passenger vehicle market, KG Mobility is differentiating through its SUV/pickup specialization and by expanding overseas knock-down assembly bases in Turkey, Vietnam and Saudi Arabia.

In the steel segment, amid continued weak domestic demand, KG Steel is pursuing non-steel revenue sources such as data center leasing and operation. The bioenergy segment's domestic power-generation market profitability has weakened as low-priced Chinese bio-heavy oil imports coincide with rising feedstock costs.

In response, the company is shifting its focus toward the bio-marine fuel market to address tightening International Maritime Organization decarbonization regulations, and according to global market researcher FACT.MR, the bio-marine fuel market is projected to grow from $7.6 billion in 2024 to $15.5 billion by 2035, a compound annual growth rate of 7.3%.

Outlook

The company has set bio-marine fuel revenue targets of KRW 187.5 billion for 2026, KRW 300 billion for 2028, and KRW 700 billion for 2030, and reportedly completed the Ulsan plant expansion needed for this, moving into full-scale operation after trial runs earlier this year.

KG Mobility plans to begin operating a new Vietnam plant with 15,000-unit annual capacity in September, is expanding overseas knock-down bases including local Musso production in Saudi Arabia, and intends to launch the new SE10 model in early next year as part of a plan to roll out seven eco-friendly SUV-focused models through 2030.

KG Steel is pursuing a KRW 40 billion production facility rationalization investment aimed at increasing annual output of color-coated and tin-plated steel by 300,000 tons, while continuing to review a data center business on idle land in Incheon and Dangjin.

Following the 2026 completion of the K Car acquisition, the group is also building an integrated mobility system linking KG Mobility's vehicle manufacturing with K Car's used-car distribution network and the group's financial and payment infrastructure.

At a June 2026 press briefing, KG Group stated its intention to allocate 50% of net income to shareholder returns over the next five years across six listed affiliates including KG Eco Solution, alongside expanded dividends, strengthened treasury share policy, and more frequent investor relations activity.

The fiscal 2025 year-end dividend was KRW 150 per share, up 25% from KRW 120 the prior year, extending a ten-year consecutive dividend record.

Valuation

PER

1.9×

PBR

0.2×

ROE

8.7%

EPS

₩3,017

BPS

₩35,822

Dividend per share

₩150

Because of its holding company structure, KG Eco Solution's market valuation reflects both the consolidated performance and equity value of subsidiaries KG Steel and KG Mobility, and the stock has tended to trade at a discount to net asset value.

A report from around August 2025 assessed the price-to-earnings ratio as similar to the industry average level, with the price-to-book ratio sitting at a relatively low level versus net assets.

Since then, operating profit and owners' net income have shown a recovery trend in the first half of 2026 after bottoming in the fourth quarter of 2025, but how this earnings recovery will be reflected in market valuation multiples remains something to monitor going forward.

The company and its parent group stated in June 2026 that they intend to allocate 50% of net income to shareholder returns over five years, a factor that will shape dividend yield and shareholder-return appeal.

Whether the dividend expansion announcement translates into actual valuation multiple changes is something to watch alongside the progress of the governance restructuring.

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 2026-08-21

Bull factors

Bio-Marine Fuel as a New Growth Axis

With bio-marine fuel demand rising amid tightening International Maritime Organization decarbonization regulations, the company completed its Ulsan plant expansion and set a 2026 revenue target of KRW 187.5 billion.

The strategy aims to offset declining profitability in the existing bio-heavy oil business by entering the new marine fuel market, with a 2030 revenue target raised to KRW 700 billion. Global shipping industry demand for regulatory compliance is cited as the growth driver for this business.

Auto Export Recovery and Overseas Production Expansion

KG Mobility's exports are recovering, led by the Torres EVX, while the company expands overseas knock-down bases including the new Vietnam plant and local production in Saudi Arabia. The strategy of offsetting domestic market stagnation with export diversification is showing positive impact on results.

The 2026 acquisition of K Car is also driving efforts to build an integrated mobility system linking new-car sales, used-car distribution and financing.

Expanded Shareholder Return Policy

In June 2026, KG Group announced a policy to allocate 50% of net income to shareholder returns over the next five years across six listed affiliates including KG Eco Solution. The fiscal 2025 year-end dividend rose 25% from the prior year to KRW 150 per share, extending a ten-year consecutive dividend record.

If dividend expansion is paired with strengthened treasury share policy, market attention to shareholder value enhancement could increase.

Bear factors

Declining Profitability Trend

Consolidated operating margin has declined over multiple years from 7.2% in 2022 to 2.5% in 2025, and operating profit plunged to KRW 8.7 billion in the fourth quarter of 2025 due to one-off costs in the steel segment.

While a recovery emerged in the first half of 2026, persistent cost pressures across the automobile, steel and bioenergy segments remain a burden.

Domestic Market Stagnation and Rising Costs

The automobile manufacturing segment's domestic sales are declining amid market stagnation, and the bioenergy segment's profitability has weakened as low-priced Chinese bio-heavy oil imports coincide with rising feedstock costs. While export and new business growth partly offset this, dependence on the domestic market remains.

Governance-Related Friction

During KG Eco Solution's conversion into a holding company, conflicts with some minority shareholders emerged over articles of incorporation amendments and exchangeable bond issuance, with reports of petitions filed through a shareholder activism platform.

As governance restructuring tied to expanding the second-generation owner's role within the group continues, alignment of interests with general shareholders remains an ongoing point of attention.

Risk factors

Subsidiary Earnings Dependence Risk

KG Eco Solution's consolidated results are substantially driven by the business performance of KG Mobility and KG Steel. Volatility in vehicle sales or a deterioration in steel market conditions could directly affect the holding company's consolidated results.

Raw Material and Regulatory Risk

The bioenergy segment is exposed to fluctuations in feedstock fat and fatty acid prices and inflows of low-priced Chinese products, while the bio-marine fuel business's viability could depend on changes in global shipping regulations such as those from the International Maritime Organization. The steel and automobile segments are also sensitive to raw material prices and exchange rate movements.

Governance Restructuring Risk

As KG Group continues its restructuring related to resolving circular shareholding and the second-generation owner succession, concerns about conflicts of interest with general shareholders could resurface during intra-group capital transactions such as articles amendments or exchangeable bond issuances.

What to watch next

September 2026
Check whether the new Vietnam plant (15,000-unit annual capacity) begins operation as planned and monitor initial production and export volumes.
Mid-November 2026 (expected Q3 report filing)
Verify in the third-quarter 2026 consolidated results whether the profitable trend continues across the bio, automobile and steel segments.
Q4 2026 to early 2027
Check whether the 2026 bio-marine fuel revenue target of KRW 187.5 billion is met and confirm the launch timing of KG Mobility's new SE10 model.
Early 2027
At the announcement of the fiscal 2026 year-end dividend, check whether the five-year 50% net-income shareholder return policy is actually implemented starting from its first year.

Overall view

KG Eco Solution operates as an intermediate holding company overseeing KG Steel and KG Mobility, having seen revenue grow since 2022 while operating margin has continued to decline.

Results were significantly disrupted by one-off steel segment costs in the fourth quarter of 2025, but the first half of 2026 showed signs of recovery as all business segments posted operating profit together.

The new bio-marine fuel business and expansion of auto exports and overseas production have been presented as future growth pillars, and in June 2026 KG Group announced a five-year policy to return 50% of net income to shareholders, signaling intent to enhance shareholder value.

However, friction with general shareholders during governance restructuring, heavy dependence on subsidiary performance, and exposure to raw material, currency and global shipping regulation changes remain variables to watch.

The upcoming third-quarter results, the start of Vietnam plant operations, and progress toward the bio-marine fuel revenue target are likely to serve as important checkpoints for assessing the company's future direction.

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.