Solus Advanced Materials

Solus Advanced Materials traces its roots to Doosan Solus, spun off from Doosan Corporation in 2019, and has operated three main businesses—battery foil, OLED materials, and circuit foil—since being acquired by Skylake Investment in 2020.

The battery foil business produces copper foil for EV and ESS battery anode current collectors at its Hungary plant, supplying European and North American battery makers including LG Energy Solution and Automotive Cells Company (ACC).

The OLED materials business supplies emitting materials such as green phosphorescent host and non-emitting materials such as hole-blocking layers to display panel makers, and completed an integrated production base in Hamyeol, North Jeolla Province in February that doubled prior capacity.

The circuit foil business, formerly one of the three core pillars, achieved rapid growth through subsidiary Circuit Foil Luxembourg (CFL), supplying hyper-very-low-profile (HVLP) copper foil for AI accelerator substrates to global semiconductor firms including Nvidia, but the company fully exited this business by selling 100% of CFL to a fund operated by controlling shareholder Skylake for KRW 301.4 billion at the end of April 2026.

Proceeds from the sale are earmarked for investment in the battery foil business, and the company subsequently made an additional KRW 40 billion capital injection into its Hungary production subsidiary.

In terms of competitive positioning, domestic battery foil peers SK Nexilis and Lotte Energy Materials primarily target the Chinese market through domestic and Malaysian production bases, whereas Solus Advanced Materials differentiates itself by targeting non-China markets through local production in Europe (Hungary) and North America (Canada).

A new Phase 1 battery foil plant with 25,000-ton capacity is under construction in Quebec, Canada, targeted for operation start in early 2027 after completion.

This business restructuring can be interpreted as a strategy to concentrate resources on the core battery foil business in an effort to break out of a chronic loss structure.

Consolidated revenue in 2025 reached KRW 616.1 billion, up from KRW 570.9 billion a year earlier, but the operating loss widened to KRW 73.3 billion from KRW 54.4 billion, and profit attributable to owners remained negative at KRW -66.9 billion.

By segment, the circuit foil business posted KRW 306.5 billion in 2025 revenue, up 56.2% year-on-year, while OLED materials revenue held roughly flat at KRW 126.2 billion; battery foil revenue declined 26% to KRW 183.7 billion from KRW 248.3 billion, the main driver behind the widening consolidated loss.

On a quarterly basis, results showed a gradual improvement: Q2 2025 revenue of KRW 143.9 billion with an operating loss of KRW 15.0 billion and owners' net loss of KRW 41.0 billion, Q3 2025 revenue of KRW 145.1 billion with an operating loss of KRW 21.2 billion and net loss of KRW 10.1 billion, and Q4 2025 revenue of KRW 169.5 billion with an operating loss of KRW 21.9 billion and a near-breakeven net loss of KRW 0.07 billion.

In Q1 2026, revenue rose to KRW 192.6 billion while the operating loss stayed around KRW 22.0 billion, but profit attributable to owners turned positive at KRW 7.9 billion, reflecting a 47% quarter-on-quarter increase in battery foil revenue alongside a gain related to the circuit foil business sale.

In Q2 2026, the operating loss widened to KRW 31.6 billion, yet profit attributable to owners jumped to KRW 43.3 billion, marking a second consecutive profitable quarter.

Notably, the company's preliminary Q2 disclosure on July 24, 2026 reported an operating loss of KRW 21.3 billion, which differs from the confirmed KRW 31.6 billion figure, likely reflecting accounting reclassification between continuing and discontinued operations tied to the circuit foil divestiture.

At the preliminary release, the company reported battery foil revenue of KRW 75.0 billion, up 63% year-on-year, and attributed the continued loss to rising European power and raw material costs amid war-related disruptions, currency fluctuations, and relocation costs from the March OLED plant expansion, despite higher sales volume and utilization.

For context, the large net profit of KRW 187.5 billion attributable to owners in 2023 stemmed from a one-off gain related to the divestiture of subsidiary Solus Biotech that year, and should be viewed separately from the structural profitability of the core battery foil and OLED businesses.

The battery foil industry is undergoing competitive realignment amid headwinds including a global EV chasm, reduced US EV subsidies, and expanding market share by Chinese producers in Europe.

At the same time, tightening US Advanced Manufacturing Production Credit (AMPC) rules that exclude products with high content from prohibited foreign entities including China are creating a more favorable environment for suppliers with non-China supply chains.

In Europe, the pending Industrial Accelerator Act (IAA) is expected to strengthen regional production incentives, positioning Solus Advanced Materials as a potential beneficiary given its Hungary plant, the sole EU-based battery foil production base.

Domestic competitors SK Nexilis and Lotte Energy Materials have primarily targeted the Chinese market through domestic and Malaysian production bases, whereas Solus Advanced Materials is seen as securing a differentiated customer base through local production in Europe and North America.

Meanwhile, the market for hyper-very-low-profile (HVLP) copper foil used in AI accelerators is enjoying a separate boom driven by demand for high-performance printed circuit boards amid AI data center expansion, but Solus Advanced Materials has voluntarily exited this growth avenue by divesting the CFL business.

The OLED materials industry is driven by the spread of foldable smartphones and rising demand for large OLED panels in gaming monitors, though approval delays among Chinese customers and cost-cutting by panel makers amid rising memory prices are near-term variables.

Overall, the battery foil segment is positioned at the intersection of policy tailwinds and a volume recovery phase, while the OLED segment combines structural demand growth with short-term volatility.

The company presented a 2026 total revenue target of KRW 533 billion excluding the divested business, comprising KRW 394 billion in battery foil and KRW 139 billion in OLED materials.

In the battery foil segment, the company added four new customers last year to bring its total to eight in Europe and North America, and plans to expand to ten customers within 2026.

Management has projected that battery foil supply volume would roughly double in Q2 2026 versus Q1, and expects the Hungary plant utilization rate to rise above 90% in the second half.

In North America, a new Phase 1 battery foil plant with 25,000-ton capacity is under construction in Quebec, Canada, targeting operation start in early 2027 to serve ESS and EV demand.

The OLED business plans to expand supply of IP-protected products for IT devices and to begin full-scale production of its Green Host phosphorescent material within the year, while strengthening production stability based on the new integrated Hamyeol facility.

In May, the company decided to inject an additional KRW 40 billion into its Hungary production subsidiary, a move described as leveraging proceeds from the circuit foil sale to fund capacity expansion without external financing.

IBK Investment Securities projected in an April 29, 2026 report that the company's annual operating profit would turn positive in 2027 and set a target price of KRW 20,000.

However, this profitability turnaround outlook is also noted to hinge on the pace of normalization at the Canada plant and the scale of ESS demand growth.