PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,500 per share · Prices as of the 2026-10-02 close
The world's No.1 position in PET tire cord anchors earnings, while the chronically loss-making carbon fiber and aramid super-fiber businesses are turning as volumes and prices improve together.
Q2 2026 revenue reached KRW 952.7bn and operating profit KRW 77.6bn, up 13.0% and 32.2% year-on-year respectively
Tire reinforcement segment drove results with quarterly revenue of KRW 549.3bn and operating profit of KRW 59.4bn on peak-season demand and price hikes
Carbon fiber losses are narrowing as China and Vietnam plants resume operation amid new wind-blade and drone demand
Net income attributable to owners swung from a KRW -21.6bn loss in 2025 to profits in both Q1 and Q2 2026
The company plans large-scale investment in the new silicon anode material business (Umicore joint venture), while a rising debt ratio remains a financial burden
HS Hyosung Advanced Materials was established in 2018 through a spin-off from the former Hyosung Corporation, operating as an advanced materials specialist centered on tire reinforcement (tire cord and steel cord), alongside industrial yarn, aramid, carbon fiber, and film/spandex businesses.
According to company statements, its tire cord is used in roughly half of all passenger car tires produced worldwide, and the company has led the global PET tire cord market. Long-term supply relationships with global tire makers such as Hankook Tire and Kumho Tire underpin sales volumes and pricing.
Aramid is used in hybrid tire cords, ballistic materials, and 5G data cables, while carbon fiber applications have expanded into lightweight automotive parts, high-pressure vessels, wind blades, drones, wire cores, and sporting goods.
Per credit rating agency data, tire reinforcement (tire and steel cord) accounts for roughly 60% of revenue, T-yarn and airbag fabric about 15-20%, with aramid and carbon fiber sales gradually expanding.
Production bases are globally diversified across Korea, Vietnam, China, Europe, and the United States, spreading tariff and logistics risk. The company has recently moved to add silicon anode materials as a new growth pillar by acquiring a stake in EMM, a battery anode subsidiary of Belgium's Umicore.
A planned sale of the tire steel cord business considered last year was ultimately withdrawn after stable supply-chain demand from global tire partners was confirmed.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩843B | ₩58.7B | 7.0% |
| 2025Q3 | ₩801B | ₩19.3B | 2.4% |
| 2025Q4 | ₩785.5B | ₩30.3B | 3.9% |
| 2026Q1 | ₩829B | ₩34.4B | 4.2% |
| 2026Q2 | ₩952.7B | ₩77.6B | 8.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩3.8T | ₩315.1B | ₩125.3B | 8.2% | 17.7% | 267.0% |
| 2023 | ₩3.2T | ₩172.4B | ₩35.6B | 5.4% | 5.2% | 304.5% |
| 2024 | ₩3.3T | ₩219.7B | ₩49.8B | 6.6% | 4.8% | 230.1% |
| 2025 | ₩3.3T | ₩157.4B | -₩21.6B | 4.8% | −2.7% | 372.3% |
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
Annual results peaked in 2022 with revenue of KRW 3.84tn and operating profit of KRW 315.1bn (8.2% operating margin), then moderated to revenue of KRW 3.20tn and operating profit of KRW 172.4bn in 2023, before recovering to revenue of KRW 3.31tn and operating profit of KRW 219.7bn (6.6% margin) in 2024, only to soften again in 2025 to revenue of KRW 3.28tn and operating profit of KRW 157.4bn (4.8% margin).
Notably, 2025 saw net income attributable to owners swing to a loss of KRW -21.6bn on an annual basis, reflecting persistent losses in the super-fiber (carbon fiber and aramid) segment combined with one-off costs.
On a quarterly basis, losses persisted through Q3 2025 (operating profit KRW 19.3bn, owners' net loss KRW -13.6bn) and Q4 2025 (operating profit KRW 30.3bn, owners' net loss KRW -0.9bn), before the company turned profitable in Q1 2026 with operating profit of KRW 34.4bn and owners' net income of KRW 6.9bn.
Q2 2026 showed a marked improvement with revenue of KRW 952.7bn, operating profit of KRW 77.6bn, and owners' net income of KRW 44.8bn, driven by pass-through of raw material cost increases into pricing across business lines combined with peak-season tire reinforcement demand.
Trailing four-quarter (Q3 2025-Q2 2026) owners' net income totaled KRW 37.1bn, indicating a move away from the 2025 annual loss. The tire reinforcement segment posted quarterly revenue of KRW 549.3bn and operating profit of KRW 59.4bn in Q2, its largest quarterly revenue since 2022.
However, some other businesses such as film continue to post losses amid delayed demand recovery in end markets, meaning the pace of recovery varies by segment.
The global tire reinforcement market moves in line with vehicle production and tire replacement demand, and HS Hyosung Advanced Materials serves as a stable cash-generating business on the back of its leading position in PET tire cord globally.
The carbon fiber industry, by contrast, has been navigating a downcycle from 2022 to 2025 driven by aggressive capacity expansion in China, which has created oversupply and pricing pressure worldwide.
As a result, the industry's competitive focus is shifting from capacity expansion to securing high-value-added products, with market observers pointing to utilization rates, the share of high-value product sales, exposure to China-bound revenue, and the pace of normalization at the Vietnam plant as the metrics to watch rather than nameplate capacity alone.
The silicon anode material market remains in an early commercialization stage, led by China's BTR and Shanshan and Japan's Shin-Etsu Chemical, meaning that securing a stable mass-production system will be key for HS Hyosung as a later entrant.
Aramid benefits from stable demand in ballistic and 5G data cable applications, with additional expectations for cable demand tied to data center expansion.
The company presents normalization of profitability in the carbon fiber and aramid super-fiber businesses as its next challenge, building on the stable earnings base of tire reinforcement.
Its China carbon fiber plant, which had been suspended, resumed operations in Q1 2026, and Shinhan Investment Corp. noted that Q2 sales volume rose 43% quarter-on-quarter with prices up 8%, helping narrow the segment's losses versus the prior quarter.
Some observers expect the Vietnam plant to also resume operations in Q3, supporting further top-line growth and additional loss reduction.
In early September, the company participated in the China Composites Expo (CCE 2026) in Shanghai, showcasing applications spanning automotive parts, high-pressure vessels, drones, and wire cores to pursue new customers, while emphasizing supply chain competitiveness backed by production bases in Korea, China, and Vietnam.
Market estimates suggest carbon fiber capacity could expand from 16,500 tons in 2025 to 21,500 tons in 2026 and roughly 24,000 tons by 2028.
On the new-business front, the company is pursuing silicon anode materials through a joint venture with Belgium's Umicore, reportedly aiming to build a new plant in Ulsan with mass production targeted around 2028.
However, the funding structure for this large-scale investment—whether through bond issuance, policy financing, or other means—has not yet been finalized.
On a price-to-book basis, the stock tends to trade in the lower part of its historical valuation band, which may reflect concerns stemming from the 2025 net loss and the rising debt ratio.
On an earnings basis, however, multiples based on the trailing four quarters have moved closer to the upper end of the multi-year trading range following the return to profit in the first two quarters of 2026.
KB Securities, in a May 2026 report, projected earnings would improve materially on the back of tire cord price hikes and new carbon fiber orders, raising its target price to KRW 270,000.
NH Investment & Securities, in a late-June 2026 report, assessed that the improvement trend remained valid with tire cord continuing as a cash cow alongside improving super-fiber profitability, setting a target price of KRW 260,000.
On the dividend side, recent earnings volatility leaves room for differing market views on dividend sustainability. Whether the earnings recovery is sustained and when the super-fiber business reaches breakeven are likely to be the key variables in future valuation discussions.
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
The leading position in the global PET tire cord market and long-term supply relationships with global tire makers provide a structural advantage that supports both volume and pricing.
Tire reinforcement revenue reached KRW 549.3bn in Q2 2026, its largest quarterly figure since 2022, as peak-season demand and pass-through of raw material cost increases into pricing both materialized simultaneously.
The sequential resumption of operations at China and Vietnam plants, combined with new demand from wind blade and drone applications, is improving carbon fiber sales volume and pricing together.
Aramid also maintains solid profitability on hybrid tire cord demand and expectations for growing cable demand tied to data center expansion. If this trend continues, the company's profit structure could diversify beyond tire reinforcement alone.
The company is entering the silicon anode material business through a joint venture with Belgium's Umicore, gaining a foothold in the next-generation battery materials market. This is interpreted as a strategy to add a future growth pillar on top of stable cash flow from existing businesses.
Should the market's growth potential materialize, it could establish a new revenue stream over the medium to long term.
Aggressive capital expenditure and new business investment pushed the debt ratio to 372.3% in 2025, and per credit rating agency data, the debt ratio and borrowing dependency stood at 357.0% and 63.2% respectively at the end of March 2026, with financial stability metrics weakening versus the past.
Continued funding needs from routine investment and expansion of overseas subsidiaries mean improvement in the financial structure may not come easily.
Oversupply and pricing pressure from aggressive capacity expansion by Chinese producers remain ongoing, and continued price weakness signals the industry recovery is not yet complete.
Expanded capacity does not necessarily translate immediately into earnings improvement, and depreciation and fixed cost burdens can actually increase in the early stages of expansion.
Large-scale future investment is planned for the silicon anode material business, but with the debt ratio already elevated, a concrete funding plan (bonds, policy financing, capital raising, etc.) has not yet been finalized.
A company representative has stated that specific plant construction timelines and investment scale have not been confirmed, meaning the size of the financial burden will depend on how the plan and funding method are finalized.
Fluctuations in PET and nylon-related raw material prices for tire cord directly affect cost burdens, and foreign exchange exposure from operating global production bases can also impact results. A time lag between raw material price spikes and price pass-through can pressure margins in the short term.
In carbon fiber, price competition for commodity-grade products is intensifying as China emerges as the world's largest producer, creating risk that a delayed shift toward high-performance, high-value products could slow the pace of profitability recovery. Higher exposure to China-bound revenue could increase vulnerability to local price competition.
Silicon anode materials remain in an early commercialization stage, and securing a stable mass-production system amid competition from leading Chinese and Japanese producers is critical. Delays in the production timeline or customer certification could push back the payback period for the large upfront investment.
Watch tire reinforcement sales trends after the peak season and the pace of loss reduction from the Vietnam carbon fiber plant's resumed operations.
Check whether the Ulsan plant groundbreaking for the silicon anode material business and specific investment scale/funding plan are finalized.
This is the point to check whether the carbon fiber segment has reached breakeven and to what extent the annual debt ratio improved for 2026.
Monitor trends in debt ratio and borrowing dependency, as well as any changes to the credit rating or outlook.
HS Hyosung Advanced Materials is a company where stable cash generation from its world-leading position in PET tire cord coexists with early signs of recovery in the long-loss-making carbon fiber and aramid super-fiber businesses.
After posting an annual net loss attributable to owners in 2025, the company returned to profit in both Q1 and Q2 of 2026, with Q2 operating profit of KRW 77.6bn up 32.2% year-on-year.
Whether this recovery depends heavily on seasonal peak-season effects in tire reinforcement or reflects structural improvement in the super-fiber business will need confirmation over the coming quarters.
At the same time, aggressive capital expenditure and entry into the silicon anode material business have pushed the debt ratio above 350%, leaving the balance between financial burden and growth investment as an important challenge.
Some in the brokerage community focus on the stable earnings base from tire cord and the potential for improving super-fiber profitability, but uncertainty around the carbon fiber industry from aggressive Chinese capacity expansion and unresolved funding plans for the new business also warrant attention.
Investment judgment requires a balanced view that considers both the pace of segment-level recovery and progress on financial structure improvement.
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.