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
Daebo Magnetic, a technology leader in electromagnetic filters (EMF) for secondary batteries, has posted losses for three straight years alongside a sharp reduction in equity, leaving an ownership-sale negotiation and overseas expansion as the key variables ahead.
The company is the only global producer of wet-type EMF equipment, supplying customers including LG Energy Solution, Samsung SDI, CATL, and BYD
Revenue and margins have contracted sharply, from KRW 108.6 billion in sales and a 24.4% operating margin in 2022 to KRW 26.1 billion and a -39.9% margin in 2025
A single-quarter net loss of KRW 29.6 billion in 2025Q4 drove owners' equity down from KRW 52.8 billion to KRW 18.0 billion
Ownership-sale negotiations with LX International have continued for years without a confirmed resolution
The company has established a U.S. subsidiary in Tennessee to address tariff risk and pursue the North American market
Daebo Magnetic manufactures and sells magnets and magnet-applied equipment, with its core product being the electromagnetic filter (EMF) used in secondary battery material and cell processes.
Filtration equipment is divided into dry-type systems for powder materials and wet-type systems for slurry materials, and the company is reportedly the only global producer capable of manufacturing wet-type EMF.
The company has a track record of supplying high-performance electromagnetic filters to global secondary battery and cathode material makers including LG Energy Solution, Samsung SDI, POSCO Future M, LG Chem, Ecopro BM, CATL, and BYD.
Company representatives have stated that Daebo Magnetic holds a 70% share of the global filtration equipment market for EV and energy storage system (ESS) battery manufacturing.
Beyond filtration equipment, the company also produces industrial magnet-application products such as magnetic separators that remove ferrous and non-ferrous metals from raw materials.
As part of business diversification, the company has cultivated a secondary battery material toll-processing business that dries, grinds, de-irons, and packages lithium hydroxide and lithium carbonate, with this segment's revenue share expanding from 1.1% in 2021 into double digits in subsequent years.
However, a Chinese production subsidiary established in 2022 failed to generate revenue and fell into full capital impairment, with liquidation subsequently considered. More recently, the company established a local subsidiary in Nashville, Tennessee, to build a North American production and supply base.
In terms of competitive positioning, high technical barriers in wet-type EMF limit alternative suppliers, though competition exists in dry-type EMF and adjacent magnetic separation equipment.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩2B | -₩2.8B | −138.1% |
| 2025Q3 | ₩5.8B | -₩1.9B | −32.6% |
| 2025Q4 | ₩4.6B | -₩4.5B | −98.4% |
| 2026Q1 | ₩1.1B | -₩1.9B | −163.3% |
| 2026Q2 | ₩2.3B | -₩2.1B | −89.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩108.6B | ₩26.5B | ₩21.9B | 24.4% | 27.5% | 26.7% |
| 2023 | ₩40B | ₩100M | -₩8.2B | 0.3% | −11.8% | 40.8% |
| 2024 | ₩28.4B | -₩9.8B | -₩15.8B | −34.5% | −29.8% | 55.4% |
| 2025 | ₩26.1B | -₩10.4B | -₩35.5B | −39.9% | −197.5% | 164.2% |
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
Daebo Magnetic's earnings peaked in 2022 and have declined markedly since. In 2022, revenue reached KRW 108.6 billion, operating profit was KRW 26.5 billion (a 24.4% operating margin), and net profit was KRW 21.9 billion, reflecting a strong tailwind from secondary battery demand.
In 2023, however, revenue plunged to KRW 40.0 billion, operating profit shrank to KRW 0.1 billion (a 0.3% margin), and the company swung to a net loss of KRW 8.2 billion.
In 2024, revenue fell further to KRW 28.4 billion, with an operating loss of KRW 9.8 billion (a -34.5% margin) and a net loss of KRW 15.8 billion, deepening the downturn.
By 2025, revenue slipped further to KRW 26.1 billion, with the operating loss widening to KRW 10.4 billion (a -39.9% margin) and the net loss expanding sharply to KRW 35.5 billion.
On a quarterly basis, the 2025Q4 net loss alone reached KRW 29.6 billion, accounting for the bulk of the full-year loss; given that quarter's revenue was only KRW 4.6 billion, the unusually large loss relative to sales suggests a substantial one-off item, likely an asset impairment.
Losses continued into 2026Q1 (revenue of KRW 1.1 billion, operating loss of KRW 1.9 billion, net loss of KRW 1.9 billion) and 2026Q2 (revenue of KRW 2.3 billion, operating loss of KRW 2.1 billion, net loss of KRW 2.3 billion).
Over the most recent four quarters (2025Q3 through 2026Q2), the cumulative net loss reached KRW 35.5 billion, showing that the large 2025Q4 loss continues to weigh heavily on recent results.
As a result of this loss accumulation, owners' equity fell from KRW 79.6 billion in 2022 to KRW 52.8 billion in 2024 and to KRW 18.0 billion in 2025, a roughly 78% decline over three years, while the debt ratio rose sharply from 26.7% to 164.2% over the same period.
Notably, operating cash flow remained slightly positive at KRW 1.3 billion in 2025, suggesting a meaningful gap between the reported net loss and actual cash outflow.
The electromagnetic filter (EMF) market is directly tied to secondary battery material and cell production, meaning demand is largely driven by capacity expansion at EV and ESS battery makers.
The de-ironing process is considered essential for removing trace iron content from cathode and anode materials to ensure battery safety and yield.
Industry attention has recently shifted toward next-generation battery technologies such as sodium-ion batteries, and China's CATL officially announced in a December 2025 conference that it plans to deploy sodium-ion battery technology at scale across passenger vehicles, commercial vehicles, and ESS applications throughout 2026.
Should commercialization of such next-generation batteries accelerate, there is market expectation that demand for filtration equipment in related material processes could follow.
In terms of competitive dynamics, while multiple suppliers exist in dry-type EMF, wet-type EMF requires a high level of technical sophistication, and Daebo Magnetic is reported to have maintained a dominant position in that segment for an extended period.
However, as the sharp earnings decline from 2023 to 2025 illustrates, the industry's structure is heavily dependent on the capital-expenditure cycles of battery makers, creating significant revenue volatility when upstream expansion slows.
More recently, shifts in U.S. tariff policy and efforts to comply with the EU's Critical Raw Materials Act (CRMA) have led Chinese-affiliated battery material companies to build production bases in third countries such as Morocco, raising the possibility of geographic diversification in order flows amid supply-chain realignment.
The first variable shaping Daebo Magnetic's future direction is the ownership-sale negotiation.
According to mid-2024 reporting, the company had selected Samjong KPMG as its sale advisor and was negotiating with LX International over the sale of the controlling shareholder's and related parties' stake, though the slow pace of talks left the final outcome uncertain.
An earlier 2023 sale process, which had shortlisted candidates including Skylake Equity Partners, the Korea Development Bank/Eugene Private Equity consortium, and Hansol Paper, ultimately collapsed due to gaps in valuation expectations, concerns over business restructuring, and disagreements with customers, making it difficult to predict the outcome of the current process.
A second variable is the expansion of overseas production bases. In March 2025, the company established a local subsidiary, 'DAEBO MAGNETIC USA,' in Nashville, Tennessee, aimed at minimizing tariff risk stemming from intensifying U.S. protectionism and building a North American supply chain.
A third variable is new technology development and customer diversification; the company has initiated development of an ultra-high-performance electromagnetic filter capable of removing ultra-fine iron content, and continues efforts to expand its supply footprint into Europe and North America.
That said, in July 2026 the Korea Fair Trade Commission disclosed a corrective order and a KRW 32 million fine against the company for violating written-notice obligations under the Subcontracting Act, warranting continued attention to compliance management going forward.
Daebo Magnetic has posted net losses for three consecutive years, making conventional price-to-earnings (P/E) comparisons difficult; as a result, the price-to-book ratio (P/B), which compares share price to asset value, tends to draw more attention as a reference metric.
However, it should be noted that owners' equity contracted sharply following the large 2025 loss, meaning book value per share itself has fallen considerably in recent periods.
The current share price trades above the company's self-calculated book value per share, placing it in a range where a certain premium to net assets has formed. On dividends, no per-share cash dividend was paid in the most recent fiscal year, limiting comparisons based on dividend appeal.
Because these metrics can shift depending on whether losses continue and how the ownership-sale negotiation progresses, they are best considered alongside the earnings trend rather than as a standalone snapshot of value.
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
Daebo Magnetic is reportedly the only global manufacturer capable of producing wet-type EMF, positioning it as a hard-to-replace supplier for customers requiring high-quality secondary battery materials.
Its customer base includes top-tier global battery and cathode material makers such as LG Energy Solution, Samsung SDI, CATL, and BYD, which underscores its technical credibility. This technology barrier may also reduce the threat of new entrants.
CATL has officially announced plans to deploy sodium-ion battery technology at scale across passenger vehicles, commercial vehicles, and ESS applications throughout 2026.
Should commercialization of such next-generation batteries advance, the market has floated the possibility that demand for filtration equipment in related material processes could follow. This remains an early-stage industry trend, however, and any translation into actual orders may take time.
In March 2025, Daebo Magnetic established a local subsidiary in Nashville, Tennessee, aiming to mitigate tariff risk and build a stable supply chain. The company has stated its intention to pursue overseas revenue growth through a stable U.S.-based supply chain. This can be viewed as a preemptive response to the external shift toward intensifying U.S. protectionism.
Revenue fell to a quarter of its prior level within three years, from KRW 108.6 billion in 2022 to KRW 26.1 billion in 2025, while the operating margin flipped from 24.4% to -39.9% over the same period.
The company posted net losses in each of the three years from 2023 to 2025, with the loss size widening annually, illustrating high sensitivity to slowdowns in capital expenditure among downstream secondary battery makers.
A single-quarter net loss of KRW 29.6 billion in 2025Q4 accounted for the majority of the full-year net loss of KRW 35.5 billion, driving owners' equity down from KRW 52.8 billion in 2024 to KRW 18.0 billion in 2025.
Over the same period, the debt ratio rose sharply from 55.4% to 164.2%, heightening concerns over financial stability. Any further losses could further constrain the company's capital buffer.
As of mid-2024 reporting, ownership-sale negotiations with LX International had not gained momentum, and an earlier 2023 sale attempt also collapsed due to valuation gaps, concerns over business restructuring, and disagreements with customers.
With the sale of the controlling shareholder's and related parties' stakes still unresolved and minority shareholders holding 46.75% of shares, governance-related uncertainty persists.
In July 2026, it was also confirmed that the Korea Fair Trade Commission issued a corrective order and fine against the company for violating the Subcontracting Act, raising questions about the need for stronger internal controls.
Prolonged or repeated failure of the ownership-sale negotiation could sustain management uncertainty. Past sale attempts were hindered by disagreements with customers, so changes to the sale structure could potentially affect business relationships.
The direction of future business strategy may vary significantly depending on whether the controlling stake is ultimately sold.
Company earnings are heavily dependent on the capital-expenditure cycle of secondary battery makers, and the 2023-2025 results already demonstrated that a slowdown in downstream capacity expansion can sharply contract revenue and orders.
If commercialization of next-generation technologies such as sodium-ion batteries is delayed beyond expectations, anticipated new demand inflows could also be pushed back.
A Chinese production subsidiary established in 2022 failed to generate revenue and fell into full capital impairment, with liquidation subsequently considered, suggesting the newly established U.S. subsidiary could face similar risks during its initial ramp-up.
While the fine amount from the July 2026 Fair Trade Commission sanction for Subcontracting Act violations was not large in itself, it points to a need to review internal transaction management systems.
The 2026Q3 quarterly report disclosure should be checked to see whether revenue, operating loss, and net loss trends improve or whether losses continue at a similar pace.
Related disclosures should be monitored to determine whether the ownership-sale negotiation with LX International advances or is ultimately terminated.
It is worth monitoring whether operational status and initial order results from the U.S. Tennessee subsidiary (DAEBO MAGNETIC USA) are disclosed.
It should be verified whether related EMF order momentum actually materializes in line with the pace of next-generation battery commercialization such as sodium-ion batteries.
It is necessary to check whether subcontracting practices improve following the July 2026 Fair Trade Commission sanction and whether any additional regulatory risks arise.
Daebo Magnetic possesses a distinctive technological strength in wet-type EMF that has secured customers among top-tier global secondary battery and cathode material makers, but its performance has contracted sharply, with net losses recorded in each of the three years from 2023 through 2025.
In particular, a large one-off loss in 2025Q4 substantially reduced owners' equity and sharply increased the debt ratio, raising concerns over financial health.
The company's future direction appears likely to hinge heavily on the outcome of the ownership-sale negotiation with LX International, the successful ramp-up of its new U.S. Tennessee subsidiary, and the pace of order recovery tied to next-generation battery commercialization such as sodium-ion technology.
The July 2026 Fair Trade Commission sanction, while modest in scale, points to a need to review internal transaction management systems. Investors should weigh the sustainability of any earnings recovery, progress on the sale negotiation, and results from overseas expansion together in forming their own assessment.
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.