PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,871 per share · Prices as of the 2026-10-02 close
Novatec's applied-magnet revenue has declined for four straight years and posted an operating loss in the second quarter of 2026, even as net income surged on non-operating items.
Annual revenue fell for four consecutive years, from KRW 110.5 billion in 2022 to KRW 55.6 billion in 2025.
The company posted an operating loss in three consecutive quarters from Q4 2025 through Q2 2026.
Q2 2026 net income attributable to owners was KRW 23.2 billion, unusually large relative to the quarter's revenue of KRW 9.5 billion and operating loss of KRW -0.15 billion.
The company declared a record cash dividend of KRW 2,871 per share (KRW 27 billion in total) for fiscal 2025, continuing a year-on-year increase in total dividends since 2022.
The debt ratio stood at 6.6% at end-2025, reflecting a very conservative balance sheet.
Novatec is an applied-permanent-magnet specialist using neodymium (NdFeB), samarium cobalt (SmCo) and ferrite materials, listed on KOSDAQ in 2018.
Its core products are shield magnets and core magnets for smartphones and tablets, along with Motor Position Sensor (MPS) magnets and Electric Power Steering (EPS) magnets for automotive applications.
Headquartered in Korea, the company operates production subsidiaries in Vietnam (Novatec Vina, Novacos Vina), China (Ningbo Novatec, Novatec Kesheng) and Laos.
Its principal customer base consists of makers of premium smart devices such as smartphones and tablets, and the company has received an A-grade in Samsung Electronics' supplier evaluation, underscoring its reliance on Korea's largest smart-device maker.
More recently, the company has been shifting toward automotive-grade products to capture growing demand for EPS magnets tied to the spread of electric and autonomous vehicles.
Domestic competitors include Daebo Magnetics, and intensifying competition across the electronics and secondary-battery equipment industries remains a common pressure across the sector.
The company itself notes that revenue from its core shield and core magnets fluctuates significantly depending on the timing of customers' new product launches.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩12.1B | ₩2.2B | 17.9% |
| 2025Q3 | ₩13.9B | ₩2.2B | 15.9% |
| 2025Q4 | ₩12.4B | -₩1.1B | −9.2% |
| 2026Q1 | ₩11.2B | -₩22,180,469 | −0.2% |
| 2026Q2 | ₩9.5B | -₩200M | −1.6% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩110.5B | ₩26.5B | ₩16.6B | 24.0% | 12.9% | 9.6% |
| 2023 | ₩92.4B | ₩25.6B | ₩29.7B | 27.7% | 19.2% | 6.6% |
| 2024 | ₩65.8B | ₩12.6B | ₩17.3B | 19.2% | 10.4% | 7.3% |
| 2025 | ₩55.6B | ₩6.7B | ₩17.7B | 12.1% | 11.2% | 6.6% |
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
Annual revenue contracted for four straight years, from KRW 110.5 billion in 2022 to KRW 92.4 billion in 2023, KRW 65.8 billion in 2024 and KRW 55.6 billion in 2025. The operating margin also declined steadily, from 27.7% in 2023 to 19.2% in 2024 and 12.1% in 2025.
By contrast, net income attributable to owners rose from KRW 16.6 billion in 2022 to KRW 29.7 billion in 2023, then held around KRW 17.3-17.7 billion in 2024-2025, suggesting non-operating items partly offset the decline in operating profit.
On a quarterly basis, the company posted operating losses of KRW -1.15 billion in Q4 2025, KRW -0.02 billion in Q1 2026 and KRW -0.15 billion in Q2 2026, marking three consecutive quarters of operating losses and a clear weakening in core profitability.
Yet net income attributable to owners over the same period was KRW 3.96 billion in Q3 2025, KRW 2.65 billion in Q4 2025 and KRW 4.04 billion in Q1 2026, before jumping to KRW 23.2 billion in Q2 2026.
Recording KRW 23.2 billion in net income in a quarter with only KRW 9.5 billion in revenue and an operating loss of KRW -0.15 billion points to a large, likely one-off non-operating gain (such as investment valuation or disposal gains), the exact source of which requires further confirmation from footnotes in the half-year or third-quarter report.
Over the trailing four quarters (Q3 2025-Q2 2026), combined revenue was roughly KRW 47.0 billion and combined net income attributable to owners was roughly KRW 33.9 billion, highlighting significant quarter-to-quarter earnings volatility.
On the cash flow side, operating cash flow in 2025 was KRW 13.4 billion, broadly in line with the net income figure for the year.
Novatec's end markets are split between small IT devices such as smartphones and tablets and automotive electronic components.
The smart-device segment is highly dependent on global IT demand cycles and customers' new-product launch schedules, and intensifying competition within the electronics industry has been cited as a factor behind the recent revenue decline.
The company itself states that revenue from its core products closely tracks the timing of customers' new product introductions.
In the automotive segment, however, growth in electric and autonomous vehicles is expected to boost demand for EPS (Electric Power Steering) magnets, providing a potential growth avenue that could reduce reliance on smart devices.
In Korea's applied-magnet market, Daebo Magnetics is cited as a key competitor, which itself appears to be facing both a downturn in secondary-battery-related demand and litigation issues.
Within related electronic component markets such as compact camera modules, automotive-related demand is expected to grow relatively faster than mobile demand, a trend that aligns with Novatec's stated strategy of expanding into automotive components.
The company is also pursuing global sales expansion through its Vietnam subsidiary, which can be read as an effort to diversify away from dependence on any single customer or region.
The company has cited growing EPS magnet demand tied to the expansion of electric and autonomous vehicles as a growth opportunity, and stated it is pursuing global sales expansion through its Vietnam subsidiary.
In early 2026, the company disclosed a plan to dispose of 300,000 treasury shares via after-hours block trading to fund new facility investment, indicating that capital spending related to automotive and new business areas is under way.
The company also disposed of a portion of its treasury shares through employee bonuses and block deals to expand its float, stating that proceeds would be returned to shareholders through higher dividends.
Indeed, the fiscal 2025 year-end dividend was set at KRW 2,871 per share, totaling KRW 27 billion, the largest in the company's history, extending a trend of rising total dividends from KRW 2.0 billion in 2022 to KRW 5.0 billion in 2023 and KRW 13.9 billion in 2024.
However, with operating losses persisting for three consecutive quarters, whether profitability in the core smart-device magnet business can recover remains a key variable for future results.
Whether the large net income recorded in Q2 2026 stems from a one-off item or a more sustainable source of income is something that will need further confirmation through upcoming disclosures.
Relative to net asset value, the stock has traded in a range that appears low compared with its multi-year trading band.
However, given that the recent surge in trailing four-quarter net income was driven more by non-operating items than by operating profit, whether this level of net income will recur going forward remains uncertain.
On the dividend side, the recent year-end dividend was the largest in company history, signaling a stronger shareholder-return stance, though whether this trend continues will depend on the quality of future earnings.
Overall, revenue and operating profit have shown a multi-year contraction while net income has diverged in direction on the back of non-operating factors, a gap that warrants careful interpretation.
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 debt ratio stood at just 6.6% at end-2025, indicating a very high level of financial stability. Equity attributable to owners has been maintained at a steady KRW 158.9 billion at end-2025, providing a sizable buffer against external shocks.
This sound balance sheet supports the company's capacity to pursue new facility investment or expand shareholder returns.
Demand for EPS magnets is expected to grow alongside the expansion of the electric and autonomous vehicle market. The company is working to increase the share of automotive-grade products to reduce its reliance on smart devices. Global sales expansion through its Vietnam subsidiary is also part of this diversification strategy.
The fiscal 2025 year-end dividend was set at a record KRW 2,871 per share, totaling KRW 27 billion, with total dividends rising every year since 2022.
To address a float structure characterized by a high controlling shareholder stake and sizable treasury holdings, the company disposed of some treasury shares via employee bonuses and block deals. It has stated that proceeds from this would be returned to shareholders through expanded dividends.
Annual revenue fell by roughly half, from KRW 110.5 billion in 2022 to KRW 55.6 billion in 2025. Over the same period, the operating margin declined from 24.0% to 12.1%. The company attributes this to intensifying competition in the electronics industry and shifts in the timing of customers' new product launches.
The company posted operating losses for three consecutive quarters from Q4 2025 through Q2 2026. Profitability in its core magnet business has weakened noticeably, in contrast to the resilience of net income.
Confirming when operating profit returns to a normal trajectory will be an important point to watch going forward.
Revenue from smart-device magnets is heavily dependent on the new-product launch schedule of a small number of large customers. Competition appears to be intensifying across the electronics and secondary-battery equipment industries, including from domestic rival Daebo Magnetics. Exposure to fluctuations in downstream industry demand remains high.
The KRW 23.2 billion net income recorded in Q2 2026 diverges sharply from the same quarter's operating loss and revenue scale, suggesting a substantial portion may stem from one-off non-operating items. Reliance on such non-recurring gains can reduce the predictability of future results. The precise source needs further confirmation through footnotes in the half-year and third-quarter reports.
Revenue from smart-device magnets is heavily influenced by customers' new product launch timing and competitive conditions in the electronics industry. A slowdown in global IT demand could reproduce past declines in revenue and profitability. Diversification into automotive components is under way but its revenue contribution has not yet been verified.
With production and processing subsidiaries in Vietnam, China and Laos, the company is exposed to currency fluctuations and changes in trade and tariff policy across these jurisdictions. Global supply chain realignment or tighter trade restrictions could affect production and logistics costs.
The governance structure, characterized by a high controlling shareholder stake, has also been cited as a factor relevant to float and governance-related risk.
Check the Q3 2026 report to see whether operating profit returns to positive and how the exact cause of the Q2 2026 net income surge (composition of non-operating items) is explained.
When full-year 2026 results and the year-end dividend are announced, monitor whether the trend of rising total dividends continues and whether earnings quality (the share of non-operating versus operating income) improves.
Track major smart-device customers' new product launch schedules and resulting order volume changes to gauge whether revenue can rebound.
Continue to watch for disclosures on new orders or customer wins related to EPS magnets for electric and autonomous vehicles.
Check for any additional treasury share disposals or block deal disclosures aimed at expanding the float, and monitor any resulting changes in governance structure.
As an applied-permanent-magnet specialist, Novatec has seen shield-magnet and core-magnet revenue for smart devices decline for four consecutive years, alongside a steadily falling operating margin.
From Q4 2025 through Q2 2026, the company recorded operating losses in three straight quarters, signaling a clear weakening in core profitability.
In contrast, net income attributable to owners held up relatively well, and in Q2 2026 in particular, net income diverged sharply from revenue and operating results, suggesting a significant impact from non-operating factors.
The balance sheet remains very sound, with a debt ratio of 6.6%, and the fiscal 2025 year-end dividend was set at a record level, confirming a strengthening shareholder-return trend.
Growth avenues cited include rising demand for EPS magnets in electric and autonomous vehicles and diversification of global sales through the Vietnam subsidiary.
Whether core operating profit recovers, and whether the non-operating factors supporting net income prove sustainable, remain matters that will need to be confirmed through future disclosures.
Report written 2026-09-05 · Data as of 2026-09-04
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