Enchem

Founded in 2012 and listed on KOSDAQ in 2021, Enchem is a specialized manufacturer of electrolytes and additives for secondary batteries and EDLCs.

Its core product is electrolyte for electric vehicle batteries, and the company has recently been expanding its portfolio toward energy storage system (ESS) and LFP battery electrolytes.

According to a Wiseport report, the company has built global electrolyte capacity of 570,000 tons and NMP capacity of 20,000 tons, and is pursuing an additional expansion of 252,000 tons of electrolyte, 2,000 tons of CNT, and 140,000 tons of NMP at its US and European plants to strengthen its global strategy and technology competitiveness.

Production sites span Korea, China (Zhangjiagang and Zaozhuang), Europe (Wroclaw in Poland and Komarom in Hungary), and the United States (Georgia, with a Texas plant under construction), enabling local supply near major battery production hubs.

Customers include top-tier global battery makers and automakers such as LG Energy Solution, SK On, Tesla, Panasonic, Ultium Cells (a joint venture between LG Energy Solution and GM), and BlueOval SK (a joint venture between SK On and Ford), and in late 2025 the company also signed a large long-term supply agreement with China's CATL.

The company is restructuring its portfolio from EV-focused electrolyte toward ESS-focused electrolyte, as supply of LFP electrolyte for China's ESS market is growing rapidly and it has also begun supplying LFP electrolyte for ESS in North America.

The global electrolyte market is dominated by China's top three players, Tinci, Capchem, and GTHR, and Enchem ranked fourth in global sales volume last year, maintaining its position as the largest domestic electrolyte producer.

More recently, the company acquired a stake in solid-state electrolyte developer TDL and is pursuing the Saemangeum lithium salt manufacturing project, expanding into raw-material vertical integration and next-generation materials.

Enchem's revenue declined for four consecutive years, from KRW 509.8 billion in 2022 to KRW 424.7 billion in 2023, KRW 365.7 billion in 2024, and KRW 312.8 billion in 2025.

Operating profit remained positive in 2022 at KRW 15.4 billion (operating margin of 3.0%) and in 2023 at KRW 5.1 billion (1.2%), but swung to an operating loss of KRW 50.4 billion (-13.8%) in 2024 and widened further to a loss of KRW 78.4 billion (-25.1%) in 2025.

Net profit attributable to owners was positive at KRW 21.8 billion in 2022 before turning to large losses of KRW 49.3 billion in 2023 and KRW 555.4 billion in 2024, then narrowing sharply to a loss of KRW 67.7 billion in 2025.

According to a Wiseport report, the 2025 full-year results showed consolidated revenue down 14.5% year-on-year, the operating loss widening by 39.1%, but the net loss shrinking by 87.8%, indicating divergent trends between operating performance and the bottom line.

On a quarterly basis, revenue was KRW 64.1 billion with an operating loss of KRW 2.7 billion in the second quarter of 2025, widening to a KRW 90.3 billion revenue and KRW 27.2 billion operating loss in the third quarter and KRW 90.2 billion revenue and KRW 29.3 billion operating loss in the fourth quarter, before improving to KRW 84.1 billion revenue and a KRW 24.2 billion operating loss in the first quarter of 2026 and then to KRW 102.3 billion in revenue and an operating loss of KRW 11.6 billion in the second quarter of 2026, roughly halving the loss.

The company disclosed that its gross margin improved from -0.85% in the first quarter of 2026 to 14.08% in the second quarter, indicating a recovery in profitability tied to product pricing and utilization rates.

However, a substantial portion of the large 2024 net loss is reported to reflect non-operating factors such as derivative valuation losses linked to convertible bonds amid a sharp stock price rally, so operating results and net income volatility should be viewed separately.

Overall, while revenue growth has yet to recover, the narrowing of quarterly operating losses and the turn to gross profit suggest an ongoing normalization of the profit and loss structure.

While global growth in the electric vehicle battery market has slowed, demand for energy storage systems (ESS) is expanding rapidly, prompting electrolyte makers to shift their revenue structure from EV-centered to ESS and LFP-centered business.

Industry participants have noted that top Chinese electrolyte producers pursued aggressive price-cutting strategies out of concern over the US Inflation Reduction Act and the EU's Critical Raw Materials Act, which pressured domestic Korean producers' earnings in the first half of 2025.

On the policy front, however, starting in 2026 battery manufacturers must source at least 60% of materials from non-prohibited foreign entity (non-PFE) sources to qualify for the US Advanced Manufacturing Production Credit (AMPC), with the threshold rising by five percentage points annually (ten points from 2028) to reach a final requirement of 85% by 2030.

This is seen as an incentive for North American battery and automotive makers, who need to reduce dependence on China, to partner with non-Chinese electrolyte suppliers.

Enchem plans to build a total North American electrolyte production capacity of 650,000 tons by 2026, a figure described as overwhelming relative to competitors, positioning the company relatively well in terms of North American localization.

Nonetheless, the global electrolyte market itself remains dominated by China's top three players, Tinci, Capchem, and GTHR, exposing non-Chinese producers including Enchem to ongoing competitive pressure on both pricing and quality/certification fronts.

Domestically, competitors such as Donghwa Electrolyte and Soulbrain are frequently cited, and vertical-integration competition is intensifying across the broader value chain of lithium salts, solvents, and additives that underpin electrolyte production.

Enchem has set a target of 200,000 tons in electrolyte sales volume for 2026, strengthening its customer response system centered on North American, Chinese, and European production sites in line with expanded supply to global battery makers.

The company declared this year the starting point of an earnings turnaround and set a goal of achieving a quarterly operating profit in the second half, making the question of whether an actual breakeven quarter materializes from the third quarter of 2026 onward a key point to watch.

As the five-year supply agreement with CATL ramps up, the company expects increased volumes of mass-produced LFP electrolyte centered on its Zaozhuang plant, with rising utilization in its China operations having potential to contribute to earnings improvement.

In the United States, a Texas plant, reported to begin supply from late 2025, is planned to work alongside the Georgia plant to split coverage of southwestern and southeastern North American customers, while in Europe the Poland and Hungary plants are expected to continue serving the local volumes of domestic Korean battery makers.

Domestically, the Saemangeum project by Enchem and EDL is under way with a target of investing a total of KRW 600 billion by the end of 2026 to build a lithium salt manufacturing facility with capacity of up to 50,000 tons, which the company says will contribute to strengthening raw-material vertical integration once completed.

The company is also pursuing new revenue sources through its stake in solid-state electrolyte developer TDL, including a BESS pilot project in Indonesia.

These plans, however, are targets based on company announcements and IR materials, and their actual timing and scale will need to be confirmed through future disclosures.