KOSDAQSemiconductors357780

Soulbrain

₩425,000▼ 1.16%2026-10-02 close

Market Cap

₩3.3T

Turnover

₩12.7B

Volume

30,000 shares

Shares out.

7.8M

PER

19.5×

PBR

2.2×

EPS

₩16,670

Dividend Yield

0.72%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,350 per share · Prices as of the 2026-10-02 close

Report overview

A materials name caught between a capex upcycle and cost pressure

The core semiconductor materials business has posted five straight quarters of revenue growth as customers ramp new fabs, yet rising raw material costs and subsidiary consolidation and one-off items make the margin picture harder to read.

1
Most revenue comes from semiconductor materials. The Korea IR Council in June 2026 described the 2025 mix as 83% semiconductor materials, 7% display materials and 7% battery materials.
2
Quarterly revenue rose for five consecutive quarters, from KRW 228.8bn in 2Q25 to KRW 312.0bn in 2Q26, while operating profit expanded from KRW 20.2bn to KRW 46.0bn over the same span.
3
The 2025 operating margin fell to 14.5% from 19.5% in 2024. The Korea IR Council attributed this to initial one-off costs from the Sun Fluoro System acquisition, higher SG&A and spending to build a glass substrate pilot line.
4
Meritz Securities noted in an August 2026 report that affiliate DNF was consolidated from 2Q26, lifting the reported top line a step higher, so simple year-on-year comparisons need care.
5
Total liabilities grew from KRW 76.6bn in 2023 to KRW 335.2bn in 2025 and the debt-to-equity ratio rose from 8.3% to 30.2%, reflecting acquisitions and a wider consolidation scope.

Business structure

Soulbrain manufactures chemical materials for semiconductors, displays and secondary batteries, with production and sale of semiconductor and electronics-related chemicals at its core.

In a June 2026 report the Korea IR Council put the 2025 revenue mix at 83% semiconductor materials, 7% display materials and 7% battery materials. Key customers are listed as Samsung Electronics, SK hynix, Samsung Display, LG Display, Samsung SDI, SK On and LG Energy Solution.

Within semiconductor materials, hydrofluoric, phosphoric and acetic acid based etchants, precursors and CMP slurries are the main lines, and the company is understood to hold a high share of hydrofluoric-acid-based etchant at domestic memory makers' new fabs.

In advanced packaging, reports state it is the only domestic supplier of a specialty slurry that removes excess copper layers in high bandwidth memory processing.

Portfolio expansion has come through M&A: a board resolution in October 2023 approved the purchase of 2 million DNF shares for KRW 96.0bn, taking a 17.28% stake and the largest-shareholder position.

Continued open-market purchases lifted that holding to 32.51% by early 2026, and brokerage reports confirm DNF was consolidated from the second quarter of 2026.

On competition, ENF Technology is cited as the closest domestic rival in etchants, Hansol Chemical produces hydrogen peroxide and precursors, Wonik Materials specialty gases, while overseas Entegris has the most similar mix of etchants, CMP slurry and precursors and Resonac makes CMP slurry and specialty gases.

Product lines overlap, but process qualification makes substitution slow, so line-by-line share allocation at customers largely drives results.

Earnings trend

Quarterly revenue · Operating profit

₩228.8B₩20.2B25Q2₩241.1B₩34.4B25Q3₩244B₩43B25Q4₩263.8B₩44.7B26Q1₩312B₩46B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.1T₩207.1B2022₩844B₩133.5B2023₩863.4B₩167.9B2024₩923.4B₩133.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩228.8B	₩20.2B	8.8%
2025Q3	₩241.1B	₩34.4B	14.3%
2025Q4	₩244B	₩43B	17.6%
2026Q1	₩263.8B	₩44.7B	16.9%
2026Q2	₩312B	₩46B	14.8%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.1T	₩207.1B	₩167.7B	19.0%	21.5%	17.0%
2023	₩844B	₩133.5B	₩130.4B	15.8%	14.6%	8.3%
2024	₩863.4B	₩167.9B	₩118.4B	19.5%	11.7%	12.6%
2025	₩923.4B	₩133.6B	₩79.1B	14.5%	7.5%	30.2%

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

Earnings analysis

The annual numbers trace the cycle directly. From revenue of KRW 1,090.9bn and operating profit of KRW 207.1bn (19.0% margin) in 2022, results fell to KRW 844.0bn and KRW 133.5bn (15.8%) in 2023, then margins recovered in 2024 on revenue of KRW 863.4bn and operating profit of KRW 167.9bn (19.5%).

In 2025, however, revenue rose to KRW 923.4bn while operating profit fell to KRW 133.6bn (14.5%), so the top line grew as profit shrank.

The Korea IR Council pointed to initial one-off costs from the Sun Fluoro System acquisition, higher SG&A and spending on the new glass substrate pilot line as reasons for the margin decline.

Net profit attributable to owners also fell from KRW 118.4bn in 2024 to KRW 79.1bn in 2025, and in 4Q25 the gap was stark, with operating profit of KRW 43.0bn against owners' net profit of KRW 10.7bn.

The quarterly trend is clearer in direction: revenue rose for five straight quarters, from KRW 228.8bn in 2Q25 to KRW 241.1bn, KRW 244.0bn, KRW 263.8bn and KRW 312.0bn, with operating profit climbing from KRW 20.2bn to KRW 34.4bn, KRW 43.0bn, KRW 44.7bn and KRW 46.0bn.

The operating margin, though, slipped from 16.9% in 1Q26 to 14.7% in 2Q26, and Meritz Securities said logistics disruption tied to Middle East conflict pushed up prices for raw materials such as hydrofluoric acid, that the company is negotiating price increases on key products including etchants, and that the effect should appear from the third quarter.

Owners' net profit of KRW 54.8bn in 2Q26 exceeded that quarter's operating profit, a result of non-operating items rather than a pattern that can be assumed to repeat each quarter.

On the balance sheet, total liabilities rose from KRW 76.6bn in 2023 to KRW 335.2bn in 2025 and the debt-to-equity ratio from 8.3% to 30.2%, non-controlling interests grew from KRW 29.0bn to KRW 55.8bn as consolidation widened, and operating cash flow narrowed from KRW 262.3bn in 2024 to KRW 146.9bn in 2025.

Industry analysis

Semiconductor materials earnings track customer utilization and wafer input directly. The Korea IR Council expects supply of etchants and cleaning chemicals to rise as new memory lines such as Samsung Electronics' P4 and SK hynix's M15X come on stream in sequence.

The same report framed the product drivers as higher hydrofluoric-acid etchant demand from new DRAM fabs, wider phosphoric-acid demand from NAND conversion investment, and acetic-acid etchant supply beginning in earnest as a customer's new US foundry fab starts up in the second half.

On market size, the global semiconductor materials market is forecast to grow 4.4% from USD 73.2bn in 2025 to USD 76.4bn in 2026, driven by memory capacity expansion, rising process complexity and advanced-node demand.

In other words, headline market growth is moderate and individual results hinge on line-level share and product mix.

Views on the pace of NAND recovery still differ: Kiwoom Securities highlighted Samsung Electronics' ninth-generation NAND ramp and utilization recovery as a potential upside driver, while Samsung Securities argued for a conservative stance since there is no new capacity this year and conversion investment can reduce actual wafer input.

Localization is a double-edged sword competitively. ENF Technology developed and began supplying a titanium etchant for HBM3E TSV processing, localizing an area previously led by a Japanese joint venture.

Advanced packaging materials remain early stage: the market views glass substrates as being in a pilot and prototype phase in 2026 to 2027, with volume production from 2028.

Outlook

No official company-wide annual guidance is publicly confirmed, so market expectations rest on brokerage and research-house estimates.

In a report dated 17 June 2026, the Korea IR Council forecast 2026 revenue of KRW 1,109.7bn (up 20.2% year on year), operating profit of KRW 197.4bn (up 47.7%) and an operating margin of 17.8%.

Meritz Securities, in an 18 August 2026 report, estimated third and fourth quarter operating profit at KRW 54.8bn and KRW 55.9bn respectively.

In the same report, Meritz Securities said shipments and prices of key products should rise together in the second half, raised its target price from KRW 430,000 to KRW 450,000 and maintained a buy rating (that view belongs to Meritz Securities and is not a judgement of this report).

New-business timelines have also become checkable. The company is reported to hold TGV, metallization and CMP capabilities within glass substrate manufacturing, with a pilot line to be built in the third quarter of 2026 and customer samples planned from the fourth quarter.

In precursors, DNF is reported to have completed hafnium precursor development and to be pursuing commercialization targeted at the end of 2026, when the related patent held by Japan's Tri Chemical Laboratories expires.

Medium-term volumes hinge on share at the next round of fabs: Meritz Securities said line-by-line share allocation is believed to be under discussion for new fabs due to start next year, including Samsung Electronics' Pyeongtaek P5 and SK hynix's Yongin cluster Y1.

On shareholder returns, a corporate value-up plan announced in April 2026 set out a floor for dividends per share for 2025 through 2027 and a plan to buy back and cancel KRW 30.0bn of treasury shares over three years.

Valuation

PER

19.5×

PBR

2.2×

ROE

11.8%

EPS

₩16,670

BPS

₩150,069

Dividend per share

₩2,350

Any earnings-based multiple needs a stated base. Over the most recent four quarters (3Q25 to 2Q26), revenue totalled roughly KRW 1,060.9bn and operating profit roughly KRW 168.1bn, a step above full-year 2025, and that total blends in the subsidiary consolidation effect from 2Q26.

In an August 2026 report Meritz Securities assessed the shares as trading below their historical average multiple on the next twelve months of earnings, and read this as margin-compression concerns from higher raw material prices weighing on the multiple even as shipment growth resumed.

On peer comparison, the Korea IR Council put the peer group's average multiple on expected 2026 earnings at 37.8x domestically, 39.7x overseas and 38.4x overall, noting Soulbrain screens at a lower multiple than the peer average.

On an asset basis, the price-to-book ratio sits above one, implying a premium to net assets, while the absolute dividend yield is not high.

In short, external assessments place the earnings multiple below both the peer average and the company's own historical average, whereas the premium to net assets persists, so the two measures do not point the same way.

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

Bull factors

Volumes tied directly to new fab ramps

The Korea IR Council expects etchant and cleaning chemical supply to grow as new lines such as Samsung Electronics' P4 and SK hynix's M15X start up in sequence, and noted the company is understood to hold a high hydrofluoric-acid etchant share at domestic memory makers' new fabs.

Unlike equipment, materials consumption scales with operating volume, so revenue responds quickly during ramps. Five consecutive quarters of revenue growth since 2Q25 are consistent with that structure. As long as line-level share holds, higher downstream utilization translates into higher shipments.

Broadening product and customer axes

The Korea IR Council sees hydrofluoric-acid demand from new DRAM fabs and phosphoric-acid demand from NAND conversion investment followed in the second half by acetic-acid etchant supply to a customer's new US foundry fab.

Precursors came in via acquisition, and DNF supplies zirconium precursor to Samsung Electronics and is reported to have completed hafnium precursor development. Widening the base from memory alone toward foundry and precursors can reduce dependence on any single product cycle. The pace of that shift, however, depends on customer qualification schedules.

Glass substrate initiative and shareholder return policy

The Korea IR Council judges the company capable of TGV, metallization and CMP steps, citing glass-processing know-how built up in its former thin glass business plus supply experience in etchants, battery lead-tab plating and CMP slurry.

A pilot line in 3Q26 and customer samples from 4Q26 are on the stated plan, giving a checkable timeline. Alongside that, the April 2026 value-up plan set a dividend floor and a KRW 30.0bn buyback-and-cancellation program over three years, clarifying how cash flow is to be used. Glass substrates, though, are not yet a revenue contributor.

Bear factors

Raw material prices and margin pressure

The operating margin fell from 16.9% in 1Q26 to 14.7% in 2Q26. Meritz Securities said logistics disruption from Middle East conflict pushed up prices of raw materials such as hydrofluoric acid and that the company is understood to be negotiating price increases on key products with customers.

Because increases are a negotiated outcome, neither timing nor size is settled, and any delay could keep shipment growth from flowing fully into margins. Structurally, pricing power in materials tilts toward the customer side.

Customer and downstream cycle concentration

The Korea IR Council flagged roughly 80% revenue reliance on domestic memory makers as a source of earnings volatility, noting that materials demand falls immediately with utilization once memory enters a downcycle.

It cited 2024, when semiconductor materials growth was capped by falling NAND utilization, as an example. Brokerage views on the pace of NAND recovery still diverge, and in a conversion-investment phase utilization and actual wafer input can move differently. With revenue concentrated among a few customers, changes to their capex plans are an immediate variable.

Consolidation changes reduce comparability

DNF was consolidated from 2Q26, and revenue was reported up 36% year on year in that quarter. Unless organic growth is separated from the change in consolidation scope, growth rates can be over-read.

In 2025 total liabilities reached KRW 335.2bn and the debt-to-equity ratio rose to 30.2%, reflecting acquisition and consolidation burdens, while operating cash flow narrowed to KRW 146.9bn from the prior year.

When non-operating items drive the bottom line, as in 2Q26 where owners' net profit exceeded operating profit, judging earnings quality becomes harder.

Risk factors

Downstream capex cycle

Materials revenue follows customer utilization and wafer input, so delayed investment or inventory correction shows up directly as lower shipments.

The Korea IR Council warned that renewed softening in memory demand or customer inventory adjustment could bring both downward earnings revisions and share price adjustment. New fab start-up dates can shift with equipment delivery schedules, widening quarterly swings.

Raw materials, logistics and FX

An August 2026 report documented rising prices for key inputs such as hydrofluoric acid due to logistics disruption. In a chemicals business where raw materials are a large cost share, higher procurement prices hit margins immediately if pass-through lags.

With some overseas production and sales, currency moves and shifts in logistics routes remain additional cost variables.

Competition and technology substitution

ENF Technology is cited as the closest domestic rival in etchants, while overseas Entegris offers a similar range across etchants, CMP slurry and precursors. As localization and supplier diversification advance, as with titanium etchant for HBM, incumbent share structures can change.

A customer push toward multi-sourcing is not necessarily favourable for securing stable volumes, and share allocation at new fabs remains a swing factor for medium-term results.

What to watch next

Late October to early November 2026
In the 3Q26 results, the key questions are whether price increases on key products such as etchants actually flowed through, and whether the operating margin improves from 14.7% in 2Q26 by offsetting input costs. Meritz Securities estimated third-quarter operating profit at KRW 54.8bn.
Fourth quarter of 2026
This is when to verify execution of the plan to build a glass substrate pilot line in the third quarter and supply customer samples from the fourth quarter. The start of sample shipments and evaluation feedback would be the first gauge of how quickly the new business advances beyond 2027.
Around December 2026
DNF is reported to have completed hafnium precursor development and to be targeting commercialization around the end-2026 expiry of a Tri Chemical Laboratories patent. Watch for disclosures or reports on supply start or customer qualification after the patent lapses.
4Q26 to 1H27
Meritz Securities said line-by-line share allocation is believed to be under negotiation for fabs due to start next year, including Samsung Electronics' Pyeongtaek P5 and SK hynix's Yongin cluster Y1. The outcome sets the baseline for shipment volumes from 2027 onward.
Around February 2027
Alongside confirmed full-year 2026 results, this is the point to check progress on the dividend floor and the KRW 30.0bn three-year buyback-and-cancellation policy set out in April 2026. As the first full year under a wider consolidation scope, the split between core and subsidiary contributions also warrants attention.

Overall view

Soulbrain's recent results tell two different stories about direction and quality.

Revenue rose for five straight quarters, from KRW 228.8bn in 2Q25 to KRW 312.0bn in 2Q26, with operating profit up from KRW 20.2bn to KRW 46.0bn, yet for full-year 2025 revenue grew to KRW 923.4bn while the operating margin slipped to 14.5% from 19.5% in 2024.

The Korea IR Council explained that margin decline through initial one-off acquisition costs, higher SG&A and spending on the glass substrate pilot line.

The bullish case rests on rising etchant and cleaning chemical supply as new memory lines start up in sequence, product expansion into foundry and precursors, and the medium-term glass substrate option.

The bearish case rests on higher raw material prices and uncertainty around price increases still under negotiation, volatility from roughly 80% reliance on domestic memory customers, and reduced year-on-year comparability after subsidiary consolidation from 2Q26.

On valuation, external assessments place the earnings multiple below the peer average while a premium to net assets persists, so the measures do not align.

Ultimately three checkpoints - cost pass-through from the third quarter, the glass substrate sample timeline, and share allocation at the next fabs - will decide the balance between the bull and bear cases. This report is prepared for informational purposes only.

Sources

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

Show 18 more articles and sources

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.