KOSDAQSteel & Metals312610

A.f.w

₩37▼ 5.13%2026-10-02 close

Market Cap

₩700M

Turnover

₩50,031,155

Volume

1.4M

Shares out.

20.3M

PER

—

PBR

0.1×

EPS

-₩499

Dividend Yield

0.00%

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

Report overview

Revenue Rebound Emerges Amid Persistent Losses, Balance Sheet Weakens

AFW is a root-technology company built on cathode friction welding terminals for lithium-ion batteries and aluminum die casting, and while recent quarterly revenue shows a recovery trend, operating losses have persisted for four consecutive years.

1
2026Q2 revenue rose sharply to KRW 6.45 billion from KRW 3.65 billion a year earlier, but operating loss widened rather than narrowed
2
FY2025 annual revenue fell 12.9% year-on-year to KRW 13.71 billion, while operating loss expanded to KRW 9.52 billion
3
Debt ratio surged from 2.2% in 2022 to 43.2% in 2025, while total equity has declined for four consecutive years
4
The 2023 acquisition of an aluminum die casting company (Yongheung Industry) has diversified the business into auto parts
5
Key customers include Shinheung SEC (a first-tier Samsung SDI vendor) and China's Shaanxi Zhuxin, with battery components used in BMW, VW, Audi, and Chrysler vehicles

Business structure

Founded in 1998, AFW is a friction welding specialist that produces cathode friction welding terminals for lithium-ion batteries and various metal-processed goods.

Based on recently disclosed revenue mix, cathode friction welding terminals account for roughly 44% of sales, die-casting-related revenue about 22%, and friction-welded metal processed goods about 14%, with the remainder from other metal parts and merchandise sales.

The cathode friction welding terminals are supplied to Shinheung SEC, a first-tier vendor of Samsung SDI, and China's Shaanxi Zhuxin Power Battery Technology, ultimately reaching ESS applications and EV batteries used by automakers including BMW, Volkswagen, Audi, and Chrysler.

The metal-processed goods segment counts Seohan Industry among its key customers. In 2023 the company absorbed aluminum die-casting firm Yongheung Industry, expanding into the auto parts business, and has since continued facility expansion including additions to its Guji and Yuga plants.

The company is also pursuing diversification through a BSA (battery safety assembly) busbar business for EVs and eco-friendly vehicle electronic components leveraging friction stir welding (FSW) technology.

Competitively, friction welding remains a traditional root industry, while in die-casting the company faces much larger listed peers such as Samki and Samki EV, which serve automakers directly at greater scale.

In April 2025 a gift-based transfer changed the largest shareholder from Vice Chairwoman Jeong-a Jin to Director Jun-young Kim, marking a generational transition.

Earnings trend

Quarterly revenue · Operating profit

₩3.6B-₩2.5B25Q2₩3.3B-₩2.5B25Q3₩3.9B-₩2.5B25Q4₩4.3B-₩2B26Q1₩6.5B-₩2.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩4.4B-₩4B2022₩6.8B-₩4.1B2023₩15.7B-₩6.5B2024₩13.7B-₩9.5B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩3.6B	-₩2.5B	−67.8%
2025Q3	₩3.3B	-₩2.5B	−75.0%
2025Q4	₩3.9B	-₩2.5B	−64.3%
2026Q1	₩4.3B	-₩2B	−47.4%
2026Q2	₩6.5B	-₩2.6B	−40.8%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩4.4B	-₩4B	-₩3.4B	−90.0%	−5.1%	2.2%
2023	₩6.8B	-₩4.1B	-₩3B	−59.8%	−4.8%	4.5%
2024	₩15.7B	-₩6.5B	-₩5.6B	−41.1%	−9.8%	24.3%
2025	₩13.7B	-₩9.5B	-₩10.3B	−69.5%	−21.8%	43.2%

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

Earnings analysis

FY2025 annual revenue came in at KRW 13.71 billion, down 12.9% from KRW 15.74 billion the prior year, while the operating loss widened to KRW 9.52 billion from KRW 6.48 billion, pushing the operating margin down to -69.5%.

In 2024, revenue jumped sharply from KRW 6.82 billion in 2023 to KRW 15.74 billion following the Yongheung Industry merger, but the operating loss also expanded from KRW 4.08 billion to KRW 6.48 billion, meaning top-line growth did not translate into improved profitability.

The company posted operating losses for four consecutive years from 2022 through 2025, and the net loss attributable to owners more than tripled from KRW 3.37 billion in 2022 to KRW 10.26 billion in 2025.

On a quarterly basis, revenue bottomed at KRW 3.30 billion with an operating loss of KRW 2.48 billion in 2025Q3, then rose for four consecutive quarters to KRW 3.95 billion in Q4, KRW 4.27 billion in 2026Q1, and KRW 6.45 billion in 2026Q2, showing a clear recovery trend.

However, the operating loss narrowed to KRW 2.02 billion in 2026Q1 before widening again to KRW 2.63 billion in 2026Q2, indicating that revenue growth has not directly translated into a healthier cost structure.

Over the most recent four quarters (2025Q3 through 2026Q2), the combined net loss attributable to owners totaled approximately KRW 10.1 billion, showing the annualized loss scale remains large.

On the cash flow front, operating cash flow turned negative twice, at -KRW 1.28 billion in 2023 and -KRW 5.58 billion in 2025, and total equity shrank from KRW 65.96 billion in 2022 to KRW 47.06 billion in 2025 over the same period.

Meanwhile total liabilities rose from KRW 1.46 billion to KRW 20.33 billion, pushing the debt ratio from 2.2% to 43.2%, which appears to reflect expanded external financing amid ongoing facility expansion and continued losses.

Industry analysis

The battery industry underlying the company's results is undergoing a bifurcation. EV battery demand growth has slowed as automakers moderate the pace of electrification investment, while the ESS (energy storage system) market is expanding rapidly on the back of grid demand tied to AI data center buildouts.

Samsung SDI posted revenue of KRW 3.7688 trillion and operating profit of KRW 203.8 billion in 2026Q2, returning to an operating profit for the first time in seven quarters, and has designated 2026 as an "ESS-centered turnaround year." Industry outlet BatteryToday assessed that "Samsung SDI's 2025 performance reflects a structural investment outcome focused on strengthening ESS-centered technology competitiveness and portfolio diversification rather than short-term results." In addition, in a July 2026 government-backed AI-enabled ESS infrastructure program, Samsung SDI secured 66% of total volume through six consortium operators, signaling expanding domestic ESS supply chain activity.

AFW is indirectly linked to this supply chain through Shinheung SEC, Samsung SDI's first-tier vendor, leaving room for ESS-related battery demand growth to feed through to demand for the company's cathode friction welding terminals.

However, volumes tied to EV automaker customers (BMW, VW, Audi, Chrysler) appear to remain in a period of margin deterioration due to rising raw material costs and cost burdens.

In die casting, larger competitors such as Samki and Samki EV are capturing market share through expanded US local production and new product launches, leaving the relatively smaller AFW to compete in a niche segment.

Outlook

The company has expanded production infrastructure through additions to its Guji and Yuga plants, centered on the die-casting business acquired in 2023.

In 2025 it completed construction of a GP (Green Program) system and received usage approval for the Yuga plant expansion, which could form the basis for future capacity expansion in die-casting and metal processing.

The company is pursuing sales diversification through new businesses including a BSA busbar operation for EVs and eco-friendly vehicle electronic components based on friction stir welding (FSW) technology, though specific order sizes or mass production schedules have not been publicly confirmed.

On the revenue side, four consecutive quarters of growth since 2025Q3 suggest the trough may have passed, but operating losses over the same period have remained largely confined to the KRW 2.0-2.6 billion range, leaving the timing of any break-even point uncertain.

The fact that Samsung SDI, a key downstream customer, has designated 2026 as an ESS-centered turnaround year and is pursuing expanded US local production and new customer wins could provide a favorable backdrop for AFW given its position in the indirect supply chain.

However, the timing and magnitude of any pass-through to the company's own results requires further confirmation. No separate brokerage coverage or quantitative company guidance has been identified at this time, warranting continued monitoring through future quarterly disclosures and order-related filings.

Valuation

PER

—

PBR

0.1×

ROE

-21.3%

EPS

-₩499

BPS

₩2,096

Dividend per share

₩0

With net assets having contracted over recent years, the company's shares appear to trade at a substantial discount to net asset value. No dividend history has been identified, so dividend-related metrics are not established.

The stock has a history of sharp trading swings during periods when secondary-battery themes gained market attention, meaning valuation metrics have repeatedly been driven more by thematic flows than by earnings fundamentals.

On the earnings side, both operating and net losses have persisted on an annual basis, making earnings-based valuation metrics such as price-to-earnings difficult to compute meaningfully; in such conditions, asset- or sales-based metrics such as price-to-book or market cap-to-sales tend to be relatively more informative.

Recent quarterly revenue has shown a recovery trend, but whether this translates into an eventual earnings recovery requires further confirmation through future results.

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

Bull factors

Four Consecutive Quarters of Revenue Growth

Revenue has grown for four consecutive quarters after bottoming at KRW 3.30 billion in 2025Q3, rising to KRW 3.95 billion in Q4, KRW 4.27 billion in 2026Q1, and KRW 6.45 billion in 2026Q2, pointing to a possible trough having passed.

In particular, 2026Q2 revenue rose sharply from KRW 3.65 billion a year earlier, providing a clear top-line recovery signal. This could reflect either normalization of the die-casting business or a recovery in battery component demand.

ESS-Centered Downstream Market Growth

Samsung SDI has designated 2026 as an ESS-centered turnaround year and is expanding US local production and new customer orders, creating potential for indirect demand growth through AFW's first-tier supply channel, Shinheung SEC.

Growing ESS grid demand tied to AI data center expansion could also serve as a favorable environment. All three domestic battery makers have participated in a government-backed AI-enabled ESS infrastructure program, confirming an expanding domestic ESS supply chain.

Business Diversification and a Low-Leverage History

The 2023 die-casting acquisition broadened the customer base from a single battery-component business to auto parts, alongside new items such as BSA busbars and FSW electronic components being pursued in parallel.

Although the debt ratio rose to 43.2% in 2025, the company maintained very low leverage of 2-5% through 2022-2023, giving it a relatively strong financial buffer as a starting point.

It is also worth noting that no history of rights offerings or convertible bond issuances resulting in equity dilution has been identified over the past five years.

Bear factors

Four Straight Years of Operating Losses, With Losses Widening

Operating losses continued every year from 2022 through 2025, and the loss size actually widened from KRW 3.99 billion to KRW 9.52 billion. The operating margin also deteriorated from -41.1% in 2024 to -69.5% in 2025.

Even during the revenue recovery seen in 2026Q1-Q2, the operating loss failed to fall below the KRW 2.0 billion range.

Deteriorating Balance Sheet and Shrinking Equity

Total equity has declined for four consecutive years, from KRW 65.96 billion in 2022 to KRW 47.06 billion in 2025, while total liabilities rose from KRW 1.46 billion to KRW 20.33 billion over the same period, pushing the debt ratio up sharply from 2.2% to 43.2%.

Operating cash flow also turned negative twice, in 2023 and 2025, indicating that sustained losses are placing a strain on the balance sheet.

Slowing Automaker Demand and Cost Pressure

Growth in EV demand from automakers to which the company supplies battery components—including BMW, VW, Audi, and Chrysler—has reportedly slowed, and cost pressure from rising raw material prices has been cited as a factor in margin deterioration.

In die-casting, the company is at a relative scale disadvantage versus larger competitors such as Samki and Samki EV, which could limit its pricing and volume negotiating power.

Risk factors

Profitability / Equity Erosion Risk

Continued operating and net losses over four consecutive years have steadily reduced total equity, and if this trend persists it could further erode the company's financial buffer.

Because the loss scale has outpaced the pace of revenue growth, the timing of any structural improvement in profitability remains difficult to gauge.

Customer and Supply Chain Concentration Risk

Core revenue is concentrated in Shinheung SEC within the Samsung SDI supply chain and a small number of overseas automaker customers, meaning demand shifts or supply chain policy changes at any single customer could directly affect results.

Reliance on a Chinese customer (Shaanxi Zhuxin Power Battery Technology) is also a factor exposed to geopolitical and trade risks.

Rising Financial Leverage Risk

The debt ratio jumped sharply from 2.2% in 2022 to 43.2% in 2025 within a short period, which could increase sensitivity to future interest expense burdens or loan renegotiation terms. Operating cash flow has repeatedly turned negative, raising the possibility of continued reliance on external financing.

What to watch next

Around November 2026
The 2026Q3 earnings disclosure is expected around this time, and it will be important to check whether the four-quarter revenue growth streak continues alongside any narrowing of the operating loss.
Ongoing (upon disclosure)
If Samsung SDI announces ESS-related orders or capacity expansions, or if there are disclosures on changes to supply contracts involving Shinheung SEC, the impact on AFW's indirect demand channel should be examined.
Ongoing (upon disclosure)
Follow-up disclosures or IR materials on die-casting utilization rates and the reflection of expanded capacity following the Guji and Yuga plant additions should be monitored.
Ongoing (raw material price trends)
Trends in key raw material prices such as copper and aluminum directly affect the company's cost burden and margins, warranting continued monitoring.
Ongoing (shareholding disclosures)
Following the April 2025 gift-based change in the largest shareholder, it is worth checking for any further shareholding changes or governance-related disclosures.

Overall view

AFW is a small root-technology company built on two pillars—battery components and aluminum die casting—and has shown signs of top-line recovery with four consecutive quarters of revenue growth since 2025Q3.

However, operating losses continued for four straight years from 2022 through 2025, and the loss scale has actually widened, meaning the revenue recovery has not yet translated into an improved profit structure.

Over this period, total equity has steadily declined while the debt ratio has surged, confirming growing balance-sheet strain.

The fact that downstream customer Samsung SDI is pursuing an ESS-centered turnaround could be a favorable factor for AFW given its position in the indirect supply chain, but the timing and magnitude of any actual pass-through to results requires further confirmation.

Ahead of any investment decision, it will be important to continuously monitor future quarterly disclosures, whether a break-even point is reached, and changes in the balance sheet. This report is for informational purposes only and does not include a buy or sell recommendation.

Sources

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

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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.