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
Hyosung Chemical posted consecutive operating profit turnarounds in the first and second quarters of 2026 after a prolonged loss streak, but structural challenges such as heavy reliance on polypropylene and risks tied to its Vietnamese subsidiary remain unresolved.
Consolidated operating profit turned slightly positive in Q1 2026 and expanded sharply to about KRW 170.8 billion in Q2.
Full-year 2025 net income attributable to owners swung to a profit of about KRW 393.1 billion, though a large portion reflects one-off gains tied to the divestiture of the NF3 specialty gas business.
The debt-to-equity ratio improved markedly at year-end 2025 versus the complete equity impairment recorded at year-end 2024.
Polypropylene (PP), which accounts for more than half of sales, remains heavily exposed to a supply glut driven by Chinese capacity expansion.
Sustained normalization of the Vietnamese subsidiary, Hyosung Vina Chemicals, is seen as a key variable for the durability of the earnings recovery.
Hyosung Chemical was spun off from the Hyosung Group in 2018 as a chemical materials company, with polypropylene (PP) and propane dehydrogenation (DH/PDH) forming the core of its business, accounting for more than half of revenue.
The company also diversified into polyketone (POK), an eco-friendly engineering plastic, packaging and optical films, and a specialty gas (NF3) business used in semiconductor processes that was once considered a cash cow.
However, the NF3 unit was divested to affiliate Hyosung TNC in 2025 for about KRW 920 billion, removing it from the company's portfolio.
Production sites span domestic locations such as Ulsan and Gumi as well as overseas facilities in Vietnam and China, with the Vietnamese subsidiary Hyosung Vina Chemicals operating a large PP and DH complex that has served as the group's strategic base in Southeast Asia.
The film segment includes nylon film and optical film, with production also carried out through a Chinese subsidiary. Polyketone, the world's first commercialized product of its kind, is positioned as a core pillar of the company's specialty strategy.
The competitive landscape combines large domestic petrochemical producers and Chinese firms undergoing massive capacity expansion, driving intense price competition in commodity products.
Under new leadership, the company has signaled a shift away from commodity-grade products toward specialty offerings such as polyketone, high-value pipe-grade PP (PPR), and advanced films.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩574.9B | -₩1.4B | −0.2% |
| 2025Q3 | ₩580.3B | -₩26.1B | −4.5% |
| 2025Q4 | ₩570.5B | -₩73.3B | −12.9% |
| 2026Q1 | ₩587B | ₩300M | 0.0% |
| 2026Q2 | ₩871.3B | ₩170.8B | 19.6% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.9T | -₩336.7B | -₩408.9B | −11.7% | −356.7% | 2631.8% |
| 2023 | ₩2.8T | -₩188.8B | -₩346.9B | −6.8% | −560.6% | 4934.6% |
| 2024 | ₩2.8T | -₩170.5B | -₩325.7B | −6.0% | — | −4912.3% |
| 2025 | ₩2.3T | -₩160.5B | ₩393.1B | −6.9% | 106.4% | 309.8% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Hyosung Chemical posted operating losses for four consecutive years from 2022 through 2025.
The operating loss narrowed progressively from KRW 336.7 billion in 2022 to KRW 188.8 billion in 2023, KRW 170.5 billion in 2024, and KRW 160.5 billion in 2025, with the operating margin improving from -11.7% in 2022 to -6.9% in 2025.
In contrast, net income attributable to owners swung to a profit of KRW 393.1 billion in 2025, following consecutive losses of KRW 325.7 billion in 2024, KRW 346.9 billion in 2023, and KRW 408.9 billion in 2022, a reversal largely attributed to one-off disposal gains from the sale of the NF3 business.
On the balance sheet, owners' equity, which stood at negative KRW 68.0 billion at end-2024 amid complete equity impairment, recovered to KRW 369.3 billion at end-2025, while the debt-to-equity ratio fell sharply from -4,912.3% in 2024 (a figure distorted by the equity impairment) to 309.8% in 2025.
On a quarterly basis, the operating loss widened from KRW 1.4 billion in Q2 2025 to KRW 26.1 billion in Q3 and KRW 73.3 billion in Q4, before reversing to a profit of KRW 0.3 billion in Q1 2026 and expanding sharply to KRW 170.8 billion in Q2 2026.
Revenue also rose markedly, from KRW 580.3 billion in Q3 2025 and KRW 570.5 billion in Q4 2025 to KRW 587.0 billion in Q1 2026 and KRW 871.3 billion in Q2 2026.
Net income attributable to owners followed a similar path, posting losses of KRW 19.7 billion, KRW 69.0 billion, and KRW 5.5 billion in Q3 2025, Q4 2025, and Q1 2026 respectively, before swinging to a profit of KRW 121.8 billion in Q2 2026.
However, operating cash flow remained negative at KRW 85.0 billion for full-year 2025, indicating that the earnings improvement has not yet fully translated into cash generation.
The global polypropylene (PP) market remains in a structural oversupply phase driven by continued large-scale capacity additions in China.
Korea Investors Service projected that the oversupply in propylene-related products would persist through 2027, noting that with annual excess supply exceeding eight million tons, a meaningful improvement in the supply-demand balance is unlikely before 2028.
Still, in 2026, geopolitical uncertainty stemming from the US-Iran conflict temporarily constrained global supply and drove a sharp widening of PP spreads, contributing to short-term earnings improvement for domestic producers.
Credit rating agencies have flagged that Hyosung Chemical's reliance on PP earnings has actually increased following the divestiture of its specialty gas business, heightening its sensitivity to industry swings.
Domestic competitors, many affiliated with large refining and chemical conglomerates, benefit from scale advantages and vertically integrated feedstock supply, while Chinese producers continue to push low-priced volumes into overseas markets.
Against this backdrop, Hyosung Chemical's push toward specialty products such as polyketone and advanced films is seen as an attempt to sidestep intense price competition in the commodity PP market.
Under CEO Lee Cheon-seok, Hyosung Chemical is pursuing a strategy of reducing commodity-grade product exposure while shifting its portfolio toward specialty offerings such as polyketone, high-value pipe-grade PP (PPR), and advanced films.
At a chemical industry new year gathering in early 2026, the CEO stated that the Vietnamese subsidiary's PL plant had largely stabilized and that further discussions with headquarters would continue.
The company has been using proceeds from the NF3 business sale to repay debt and fund operations as part of ongoing balance-sheet repair, and Korea Investors Service assessed that completing a sale of the film business could enable further debt reduction.
Holding company Hyosung also provided about KRW 300 billion in liquidity support in November 2025 through a funding backstop agreement, perpetual convertible bond purchase, and asset sale-and-leaseback arrangements, underscoring continued group-level support.
Even so, credit rating agencies expect the weak propylene-related product cycle to persist for some time despite the company's own profitability initiatives, leaving uncertainty around the pace and durability of the earnings recovery.
Through the second quarter of 2026, maturities of market-based borrowings appear to have been managed through a combination of group support and asset sales.
Hyosung Chemical emerged from complete equity impairment at the end of 2025, restoring owners' equity to a positive value and re-establishing a meaningful basis for comparing share price against book value per share.
That said, the current share price trades below the company's self-calculated book value per share, indicating the stock is valued at a discount to net assets.
During the four years of consecutive operating losses, conventional earnings-based valuation comparisons were difficult, but with quarterly profitability returning in 2026, earnings-based comparisons have become more meaningful again.
Dividends have not been paid in recent periods, meaning there is not yet a clear track record on the shareholder-return front.
Where the current level stands relative to trading bands formed during the prior financial distress period will likely depend on the durability of the recent earnings recovery, a matter better assessed through upcoming quarterly results than through any definitive judgment at this stage.
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 2026-09-04
Following a slight profit in Q1 2026, operating income expanded sharply to KRW 170.8 billion in Q2, marking a break from a loss streak spanning 16 quarters. Revenue also jumped to KRW 871.3 billion in Q2, a significant increase from the prior quarter, showing simultaneous improvement in sales and profitability.
The growing earnings contribution from specialty product lines such as polyketone and film is also cited as a positive signal.
Owners' equity, which stood in complete impairment at end-2024, recovered to about KRW 369.3 billion at end-2025.
The debt-to-equity ratio also fell sharply to 309.8% in 2025 from the distorted 2024 figure, reflecting improved financial health, a result attributed to combined proceeds from the NF3 divestiture and group liquidity support.
Under new leadership, a strategy of reducing commodity PP exposure while expanding polyketone, high-value pipe-grade PP (PPR), and advanced film offerings is underway.
In Q3 2025, the segment covering polyketone and film generated an operating profit while the PP segment posted a loss, a result interpreted as early evidence of this strategic shift.
With the divestiture of the NF3 business, a stable earnings source that once buttressed profitability has disappeared, leaving results more exposed than before to swings in the PP/DH business cycle.
With large-scale Chinese capacity expansion continuing, forecasts point to structural oversupply persisting through 2027, highlighting the risk of concentrated exposure to a single business line.
Hyosung Vina Chemicals has recorded substantial losses for an extended period, with a debt-to-equity ratio exceeding 3,000%, leaving financial strain considerable.
While the CEO recently noted plant stabilization, consolidated earnings improvement still needs to be confirmed through normalization at the overseas subsidiary, not just recovery at the parent level.
Operating cash flow remained negative at about KRW 85.0 billion in 2025, a level similar to the negative KRW 83.9 billion recorded in 2024. While earnings improvement is visible on an accounting basis, it has not yet fully translated into a recovery in actual cash generation, a point that warrants continued monitoring.
Structural oversupply in propylene-related products continues amid persistent Chinese PP capacity additions and low-priced export volumes.
Credit rating agencies expect this supply-demand imbalance to persist through 2027, leaving it unclear whether short-term spread improvements will translate into a sustainable industry recovery.
Hyosung Chemical has a history of addressing maturities of perpetual convertible bonds and market-based borrowings through group funding backstops and asset sales. Reliance on group-level support remains high, and any reduction in the scale or form of such support could increase liquidity strain.
Following the NF3 divestiture, there has been commentary suggesting further asset sales, such as the film business, could be considered. If diversification narrows further, dependence on specific product lines for earnings could increase, potentially raising sensitivity to industry cycle swings.
Confirmation is needed on how the company addresses maturing perpetual convertible bond obligations coming due.
The preliminary Q3 2026 earnings release will show whether the sharp Q2 profit turnaround continues and whether PP spread improvement persists.
A periodic credit rating review by agencies such as Korea Investors Service should be checked for any change in outlook, such as a shift from negative to stable.
Full-year 2026 results should be checked to see whether Hyosung Vina Chemicals achieves annual profitability normalization and whether financial metrics such as the debt ratio show further improvement.
Disclosures should be monitored for progress on discussions regarding potential further divestitures, such as the film business, and any resulting additional debt reduction.
Hyosung Chemical posted four consecutive years of annual operating losses from 2022 through 2025, before achieving consecutive quarterly profit turnarounds in Q1 and Q2 of 2026, offering early signs of an earnings rebound.
At the end of 2025, the company also emerged from complete equity impairment, with owners' equity restored to a positive value and the debt-to-equity ratio falling sharply, confirming balance sheet improvement.
However, since this improvement reflects a combination of one-off factors from the NF3 divestiture, group-level financial support, and a favorable external tailwind from widening PP spreads in the first half of 2026, further confirmation is needed on whether this trend can be sustained based on the company's own underlying competitiveness.
Full normalization at the Vietnamese subsidiary, recovery in operating cash flow, and any change in credit rating outlook are likely to serve as important benchmarks going forward.
The structural risk of PP oversupply originating from China remains unresolved, meaning the durability of the earnings improvement will need to be validated through the next several quarters of results.
Report written 2026-09-05 · Data as of 2026-09-04
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