KONEXChemicals217910

Sj-chem

₩299▲ 3.46%2026-10-02 close

Market Cap

₩4.2B

Turnover

₩425,354

Volume

1,632 shares

Shares out.

14M

PER

—

PBR

—

EPS

—

Dividend Yield

—

PER, PBR and dividend yield are calculated from the latest confirmed results (EPS, BPS, dividend per share) and the current share price · Prices as of the 2026-10-02 close

Report overview

Revenue Growth Overshadowed by Cost Pressures

SJ Chem's dual-business model in water treatment coagulants and recycled polypropylene delivered 11.8% revenue growth in 2024, but surging cost burdens drove an operating loss, making profitability restoration the company's defining challenge.

1
Dual-business model in water treatment coagulants and recycled PP positions the company as a potential beneficiary of structural growth driven by tightening environmental regulations
2
Despite 11.8% YoY revenue growth in 2024, operating profit turned negative and net losses expanded 845.7%, signaling a structural cost-side problem
3
Patent on automotive bumper paint-stripping equipment (No. 1800449) and Ministry of Environment green technology certification (No. GT-17-00187) provide technical differentiation in recycled PP
4
Global aluminum sulfate market projected at CAGR 5.45% through 2030, providing a favorable medium-to-long-term demand backdrop for the core coagulant business
5
KONEX listing with near-zero market cap and daily trading turnover of only a few hundred thousand won signal extreme illiquidity and impaired price discovery

Business structure

SJ Chem has operated in basic inorganic chemicals manufacturing in Iksan, Jeollabuk-do since its founding in 2003, with its business structured around two pillars.

The first is water treatment coagulants, specifically aluminum sulfate (alum) and sodium aluminate, which are widely used in municipal water purification and industrial wastewater treatment to coagulate and settle suspended impurities—a function with no easy substitute in standard purification processes.

The second pillar is recycled polypropylene (PP), produced by collecting, shredding, and reprocessing waste plastics from automobile bumpers and interior/exterior components.

The company holds a domestic patent (No. 1800449) on a paint-stripping device for automotive bumpers—a critical process step in recycled PP production—and has also filed an international patent in Japan (2017-56069). Its recycled PP manufacturing technology carries green technology certification (No.

GT-17-00187) from South Korea's Ministry of Environment, lending public credibility to its technical capabilities.

Both business segments are structurally positioned to benefit from tightening environmental regulations, but the company's near-zero market capitalization and absence of analyst coverage create significant information asymmetry.

As a small-scale manufacturer, SJ Chem faces structural disadvantages in raw material procurement leverage and cannot easily achieve economies of scale comparable to larger chemical or environmental companies.

Recent trends

For fiscal year 2024 on a standalone basis, SJ Chem's revenue grew 11.8% YoY, continuing its top-line expansion. However, operating profit reversed from positive to negative, and the net loss expanded by a striking 845.7% year-over-year, representing severe profitability deterioration.

According to reliable financial data aggregators including WiseReport, the primary driver of this profit squeeze was an increase in cost burdens, though the specific breakdown across raw materials, energy, and other cost lines requires verification against the original disclosure filings.

As of June 7, 2026, the stock closed at KRW 313, up 7.93% on the day, but daily trading turnover of only KRW 388,080 suggests that price movements may reflect isolated trades rather than genuine price discovery.

Per data compiled by Investing.com as of November 2025, the 52-week trading range was KRW 267–556, placing the current price near the lower bound of that range.

The structural characteristics of the KONEX market severely limit institutional and brokerage participation, amplifying price volatility in response to even modest supply-demand imbalances.

A daily trading value measured in the hundreds of thousands of won effectively classifies this stock as carrying illiquidity risk comparable to that of non-traded assets.

Outlook

The global aluminum sulfate market is projected to grow from $1.16 billion in 2023 to $1.68 billion by 2030 at a CAGR of 5.45%, while the broader industrial water treatment chemicals sector is expected to expand at a CAGR of 4.58% through 2035, providing a structurally favorable medium-to-long-term demand backdrop for SJ Chem's core coagulant business.

Tightening environmental regulations, urbanization, and rising demand for clean water collectively underpin structural growth in demand for aluminum sulfate and sodium aluminate over the medium term.

In recycled PP, accelerating ESG adoption and circular economy policy mandates are creating a medium-to-long-term tailwind for automotive plastic waste recycling.

In the near term, reversing the operating loss and restoring profitability is the overriding priority; whether the company achieves cost structure improvements or succeeds in passing cost increases through to customers will be the decisive variable for an earnings turnaround.

The company's small scale structurally limits its internal financing capacity for capacity expansion or new market development. If losses persist, the likelihood of meeting KOSDAQ transfer listing requirements diminishes, effectively blocking conventional paths to corporate value creation.

Bull factors

Structural Growth in Water Treatment Markets

The global water treatment chemicals market was valued at $31.24 billion in 2023 and is projected to grow at a CAGR of 4.26% through 2031, providing a reliable structural growth foundation.

Aluminum sulfate is a difficult-to-replace coagulant in water purification processes, with demand directly tied to the expansion of municipal and industrial water and wastewater treatment infrastructure.

South Korea's increasingly stringent water quality standards set by the Ministry of Environment further support structural demand growth for domestic water treatment chemicals. This favorable industry backdrop has the potential to sustain SJ Chem's top-line expansion trajectory over the medium term.

Recycled PP Technology Assets in a Circular Economy

The Ministry of Environment green technology certification (No. GT-17-00187) and the automotive bumper paint-stripping patent (No. 1800449) represent meaningful technological differentiators that create barriers to entry for similarly positioned competitors in the recycled PP space.

ESG commitments, carbon neutrality targets, and regulatory mandates for plastic waste recycling are set to drive medium-to-long-term growth in demand for recycled raw materials, particularly within the automotive supply chain.

The international patent filing in Japan (2017-56069) represents a latent option value pointing to potential technology extension into overseas markets. Should circular economy trends accelerate, the company's technology assets could become subject to higher valuations.

Sustained Top-Line Growth Momentum

Revenue grew 11.8% YoY on a standalone basis in 2024, maintaining a positive top-line trajectory attributable to rising water treatment chemical demand and expanded recycled PP sales.

If continued revenue growth is accompanied by cost efficiency improvements or a higher-margin product mix shift, the operating leverage effect on profitability recovery could emerge relatively quickly.

Given the company's small scale, even a modest return to operating profitability—regardless of the absolute magnitude—could serve as a sufficient catalyst for share price momentum.

Bear factors

Sharp Deterioration in Profitability

In fiscal 2024, operating profit reversed from positive to negative, and the net loss surged by 845.7% year-over-year. The fact that costs outpaced revenue growth suggests that the profitability problem may reflect structural weakness in the cost base, beyond typical cyclical headwinds.

If cost pressures persist, the timeline to return to profitability could extend well beyond current expectations, and for a small company with limited financial flexibility, a sustained loss trajectory poses a direct threat to financial health.

Without profitability improvement, corporate value enhancement paths such as a KOSDAQ transfer listing remain effectively blocked.

Extreme Market Illiquidity

With a daily trading turnover of only KRW 388,080 as of June 7, 2026, the liquidity environment is such that normal order execution is virtually impossible.

The KONEX market structure severely limits institutional participation, resulting in a retail-dominated supply-demand dynamic that amplifies price volatility in response to even minor external shocks.

In such an illiquid environment, even small individual orders can produce disproportionate price swings, making it difficult to exit positions at a desired price or time.

Structural Vulnerabilities of a Micro-Cap

As an ultra-micro-cap with near-zero market capitalization, the company is structurally disadvantaged relative to competitors in raw material procurement leverage, capital expenditure capacity, and R&D spending ability.

Achieving economies of scale comparable to large chemical or environmental companies is inherently difficult, and the company is likely to occupy a price-taker position in negotiations with key customers and suppliers.

The limited volume of disclosed information and complete absence of brokerage research coverage create information asymmetry that makes rational valuation particularly challenging.

Risk factors

Raw Material & Cost Risk

Fluctuations in the prices of aluminum-based raw materials and sulfuric acid for aluminum sulfate production, along with rising energy costs, directly impact the company's cost structure.

Given that increased cost burden was the primary driver of the 2024 operating loss, any further rise in raw material or energy costs risks expanding losses further.

As a small-scale manufacturer in a price-taker position, the company has limited ability to pass cost increases through to customers, leaving it with structurally thin buffers against cost volatility.

Market Liquidity & KONEX Risk

The KONEX market places certain restrictions on general investor access and features extremely low institutional participation, creating a persistent supply-demand imbalance.

In an environment of near-zero daily trading turnover, events such as changes in controlling shareholder stakes or equity capital raises could trigger disproportionately large price dislocations.

Furthermore, if the current loss-making trajectory persists, the risk of failing to meet KONEX listing maintenance requirements cannot be ruled out, potentially leading to delisting or forced liquidation scenarios.

Regulatory & Industry Structure Risk

The water treatment coagulant market has a high proportion of municipal and public procurement, making demand vulnerable to government budget cuts or shifts in public procurement policy.

In the recycled PP segment, the accelerating transition to electric vehicles may alter the composition and volume of end-of-life automotive plastics available as raw material, creating supply-side uncertainty.

Additionally, the growing involvement of large petrochemical and chemical companies in the recycled plastics space represents a potential competitive threat that could further disadvantage small operators like SJ Chem.

Overall view

SJ Chem operates in environmentally aligned businesses—water treatment coagulants and recycled PP—and the steady structural growth projected for the global water treatment chemicals market provides a medium-to-long-term demand foundation that warrants a positive assessment of the company's strategic direction.

However, fiscal 2024 results clearly showed that despite revenue growth, the company swung to an operating loss and posted a dramatically wider net loss, making it difficult to construct a performance-based constructive case until cost structure improvements become tangible and verifiable.

The near-zero market capitalization and daily trading turnover of only a few hundred thousand won represent extreme illiquidity that structurally impairs normal price discovery and constrains practical investment execution.

Information asymmetry inherent to KONEX micro-caps—compounded by the absence of institutional investors and limited public disclosure—makes rational valuation particularly challenging.

On balance, a Cautious stance is maintained until verifiable catalysts such as a return to operating profitability, demonstrable cost improvements, or a KOSDAQ transfer listing emerge.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-06-08 · Data as of 2026-06-05

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.