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
Nepes Ark returned to profit in 2025 after two years of losses, then posted double-digit operating margins in both quarters of the first half of 2026 while pushing ahead with a large test equipment expansion.
2025 consolidated revenue of KRW114.1bn and operating profit of KRW4.76bn marked a return to profit after two years of losses, with operating margin extending to the mid-teens percent in both Q1 and Q2 2026
In May 2026 the company disclosed a KRW66.7bn semiconductor test equipment investment equal to 39.55% of equity, following an earlier KRW37.5bn investment decision in April
The company has set a long-term 2030 target to diversify beyond mobile PMIC testing toward automotive (43%) and AI server (14%) applications
Several brokerages raised their target prices in April-May 2026 (LS Securities to KRW82,000 on May 28, Korea Investment & Securities to KRW65,000 on May 27), though these reflect each firm's own view
A dedicated sales unit formed in September 2025 aims to build independent order-taking capability beyond the parent's turnkey business, with qualification for HBM4-related memory controller testing a key item to watch
Nepes Ark was established in April 2019 through a spin-off of the test division from parent Nepes's semiconductor business unit and listed on KOSDAQ in November 2020 as a system semiconductor back-end test specialist.
Its core business splits into wafer test and package test, and as of Q1 2026 wafer test accounted for an overwhelming 99.54% of revenue, with package test at just 0.21% and other items at 0.25%.
The company's primary test targets are non-memory products including power management ICs (PMIC), display driver ICs (DDI), application processors, SoCs, RF chips and AI semiconductors, with PMIC representing the largest share.
Parent Nepes holds roughly 37% of shares as the largest shareholder, and the group operates a turnkey structure combining Nepes's bumping and packaging with Nepes Ark's testing to serve major customers such as Samsung Electronics.
Unlike most domestic OSAT firms that focus on memory packaging, the Nepes group has differentiated itself by concentrating on non-memory back-end processes.
The estimated 2026 revenue mix is heavily skewed toward mobile at 84%, while automotive and AI server contributions remain negligible, reflecting continued reliance on the mobile cycle.
In September 2025 the company set up a dedicated sales organization to build independent order-winning capability beyond the parent's turnkey arrangement.
Globally, the competitive landscape is led by large OSAT players such as Taiwan's ASE, US-based Amkor and China's JCET, while domestic firms including Nepes Ark and Testna seek differentiation through high-value processes and niche specialization.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩32.5B | ₩4.6B | 14.0% |
| 2025Q3 | ₩27.7B | ₩1.1B | 3.8% |
| 2025Q4 | ₩24.8B | -₩42,530,619 | −0.2% |
| 2026Q1 | ₩29.9B | ₩5B | 16.7% |
| 2026Q2 | ₩30.9B | ₩5.1B | 16.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩153.9B | ₩22.5B | ₩25.7B | 14.6% | 10.0% | 78.6% |
| 2023 | ₩126.1B | -₩6.9B | -₩30.3B | −5.5% | −13.4% | 75.3% |
| 2024 | ₩119.3B | -₩2.6B | -₩28.7B | −2.2% | −17.3% | 88.8% |
| 2025 | ₩114.1B | ₩4.8B | ₩3.4B | 4.2% | 2.0% | 72.9% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21
Nepes Ark's earnings have swung sharply with the OSAT market cycle.
In 2022 the company posted peak results with revenue of KRW153.86bn, operating profit of KRW22.53bn (14.6% margin) and net profit of KRW25.70bn, but in 2023 revenue fell to KRW126.09bn while the company swung to an operating loss of KRW6.92bn (-5.5% margin) and a net loss of KRW30.32bn.
Losses continued in 2024 with revenue of KRW119.26bn, an operating loss of KRW2.63bn (-2.2% margin) and a net loss of KRW28.69bn.
In 2025, revenue edged down slightly to KRW114.09bn, but the company returned to profit with an operating profit of KRW4.76bn (4.2% margin) and net profit of KRW3.42bn, its first profitable year in two years.
On a quarterly basis, revenue of KRW27.73bn and operating profit of KRW1.06bn in Q3 2025 gave way to Q4 2025 revenue of KRW24.83bn and an operating profit near breakeven at -KRW0.04bn, even as net profit jumped to KRW3.57bn, creating a notable gap between operating and net results.
Momentum built through 2026, with Q1 revenue of KRW29.94bn, operating profit of KRW5.01bn (roughly 16.7% margin) and net profit of KRW2.63bn, followed by Q2 revenue of KRW30.93bn, operating profit of KRW5.10bn (roughly 16.5% margin) and net profit of KRW9.35bn — operating margins now running well above the 2025 full-year level.
However, the recurring pattern in Q4 2025 and Q2 2026 of net profit substantially exceeding operating profit suggests non-operating items or tax effects may have materially contributed to net income, warranting caution in interpretation.
Over the trailing four quarters (Q3 2025 through Q2 2026), combined revenue reached KRW113.44bn, operating profit KRW11.13bn and net profit attributable to owners KRW14.95bn, underscoring a continued improvement trend relative to full-year results.
The semiconductor back-end (OSAT) industry sits within a structural trend of rising outsourcing demand as system semiconductors become more integrated and the fabless-foundry division of labor expands.
Within back-end processes, the test segment spans defect detection at the wafer stage through final reliability verification after packaging, and the complexity of test steps has grown alongside the spread of AI semiconductors and 2.5D/3D advanced packaging.
The non-memory test market in which Nepes Ark operates is a specialized niche distinct from most domestic OSAT firms that concentrate on memory, and it is sensitive to demand cycles across mobile, automotive and AI server applications.
Since 2025, a recovery in mobile set volumes together with new customer inflows has been described as an industry turnaround in progress.
The global competitive landscape is led by large integrated OSAT players such as Taiwan's ASE, US-based Amkor and China's JCET, while domestic firms including Nepes Ark and Testna pursue differentiation through high-value processes and specialized customer bases.
As demand for AI-oriented advanced packaging such as HBM grows, domestic back-end companies are increasingly expected to see related test and verification volumes expand, though many of these new items remain in early qualification stages with a time lag before they show up meaningfully in revenue.
In May 2026, Nepes Ark disclosed a new facility investment of KRW66.7bn (39.55% of equity) to secure semiconductor test production capacity, running from June 1, 2026 to May 31, 2027.
This followed an earlier decision in April 2026 to invest KRW37.5bn (22.24% of equity) in test equipment, meaning two large capacity expansion decisions were made in quick succession during the first half of the year.
The company has set a target of 39% compound annual revenue growth over the five years from 2026 to 2030, outlining a strategy that combines mobile growth through strengthened CIS (image sensor) business for global set customers with expansion into automotive and AI server applications.
Its 2030 application mix target calls for mobile at 35%, automotive at 43%, AI server at 14%, consumer at 3%, computer at 4% and other at 1%, a substantial shift from the estimated 2026 mix of 84% mobile with automotive and AI server contributions effectively nil, implying that reaching these targets will require years of customer acquisition and qualification work.
In a report dated May 28, 2026, LS Securities assessed that the recent capacity expansion reflects preemptive positioning for anticipated qualification of an HBM4-related memory controller, while cautioning that the estimated market size could vary significantly depending on whether the product is mounted per HBM4 stack or once per AI package.
The company has stated that a dedicated sales organization established in September 2025 has built independent order-winning capability beyond the parent's turnkey business, with observers noting potential for new orders in test-centric outsourced product categories such as automotive SoCs.
Nepes Ark moved from consecutive losses in 2023-2024 to profitability in 2025, and has extended that recovery with double-digit operating margins in both quarters of the first half of 2026.
This shift in earnings direction is a factor that can influence how the market values the shares, and the multiple relative to net assets or past profitable periods can shift over time, so readers should also consult the real-time indicators displayed alongside this report.
On dividends, the company has continued to report no cash dividend based on the most recent disclosures, suggesting a priority on funding growth through capital expenditure rather than shareholder returns for now.
Among brokerages, target prices were raised in quick succession between April and May 2026: LS Securities lifted its target from KRW55,000 to KRW82,000 in a report dated May 28, while Korea Investment & Securities raised its target from KRW41,500 to KRW65,000 in a report dated May 27.
These figures reflect each brokerage's own earnings assumptions and expectations for new product items, and since the underlying assumptions can change over time, investors should treat them as reference points only.
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 2026-08-21
After consecutive losses in 2023-2024, the company returned to profit in 2025, and both Q1 and Q2 2026 posted operating margins around the mid-teens percent, well above the full-year 2025 level, reflecting the impact of mobile volume recovery and new customer inflows.
Net profit attributable to owners over the trailing four quarters reached KRW14.95bn, already exceeding full-year 2025 net profit.
The company decided on more than KRW100bn in combined test equipment investment across April and May 2026, which LS Securities characterized as preemptive positioning ahead of anticipated qualification for an HBM4-related memory controller.
Bottlenecks at leading foundries and potential dual-sourcing of competitor volumes have also been cited as favorable factors.
The company has set a 39% revenue CAGR target for 2026-2030 alongside 2030 mix goals of 43% automotive and 14% AI server, and stated that a dedicated sales organization formed in September 2025 has built independent order-winning capability beyond the parent's turnkey volume. The presence of a concrete roadmap to reduce mobile concentration is viewed favorably.
The estimated 2026 revenue mix still shows mobile at 84% while automotive and AI server contributions are effectively negligible, meaning diversification remains at an early stage. 2025 revenue of KRW114.09bn remains well below the 2022 peak of KRW153.86bn.
As the large losses of 2023-2024 demonstrate, results can deteriorate sharply when the mobile cycle slows. Both Q4 2025 and Q2 2026 saw net profit substantially exceed operating profit, meaning the influence of non-operating factors needs to be examined alongside operating performance when assessing earnings quality.
LS Securities itself noted that the mounting structure of the HBM4-related new item (per stack versus per package) remains uncertain, meaning the estimated market size could vary considerably.
The automotive and AI server mix targets are long-term goals extending to 2030, and concrete interim order confirmations have not yet been sufficiently verified.
Demand for back-end testing is closely tied to the order cycles of mobile and set customers, as shown by the swing from profit in 2022 to large losses in 2023-2024. If the industry cycle weakens again, the recent earnings improvement trend could be reversed.
Within the turnkey structure with parent Nepes, dependence on volume tied to specific customers appears high, and a slowdown in group-level order flow could directly affect Nepes Ark's results. An independent sales organization has been established, but its contribution to results remains at an early stage.
The more than KRW100bn in combined facility investment decided across two rounds in 2026 represents a substantial share of equity, and if utilization does not rise as expected, depreciation could pressure profitability. The timing and scale of qualification for the HBM4-related new item also remain unconfirmed variables.
2026 Q3 earnings are expected around this time; it will be important to check whether the double-digit operating margins and the net-versus-operating income gap seen through Q2 continue.
This is the execution deadline for the KRW66.7bn test equipment investment disclosed in May 2026; the pace of utilization increases and when new-item revenue begins to show up should be monitored after completion.
Confirmation of qualification status and mounting structure (per stack versus per package) for the HBM4-related memory controller should be watched, as this is the key variable LS Securities flagged for market size estimates.
It is worth tracking how actual segment revenue mix evolves relative to the 2030 diversification targets (43% automotive, 14% AI server), and whether independent order wins from the dedicated sales organization are disclosed.
Nepes Ark moved from deep losses in 2023-2024 to profitability in 2025, and extended that recovery through the first half of 2026 with double-digit operating margins in both quarters.
Building on this improvement, the company decided on more than KRW100bn in combined test equipment investment across two announcements in April and May 2026, and outlined a diversification target to significantly expand automotive and AI server applications by 2030.
However, mobile still accounted for 84% of the estimated 2026 revenue mix, and the automotive and AI server expansion remains at a long-term planning stage.
The recurring gap between operating profit and a much larger net profit in Q4 2025 and Q2 2026 is a point that warrants closer examination when assessing earnings quality.
Several brokerages raised their target prices between April and May 2026, but these represent each firm's own view, and the mounting structure and market size of the HBM4-related new item remain unconfirmed variables.
Going forward, Q3 earnings, the utilization ramp of the new equipment, and confirmation of qualification for new items are likely to be the key items to watch for gauging the company's direction.
Report written 2026-09-05 · Data as of 2026-09-04
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