LS Materials

LS Materials was established in 2021 through a spin-off of the ultracapacitor (UC) business division from LS Mtron, and operates as an LS Group affiliate producing and selling mid-to-large UC products.

UC devices charge and discharge much faster than conventional batteries and have longer lifespans, making them suited to applications requiring instantaneous high output such as wind power, uninterruptible power supplies (UPS), automated guided vehicles (AGVs) in smart factories, and electric vehicles.

The company also runs an aluminum materials and landscaping business through its wholly owned subsidiary LS ALSCO, and as of Q1 2026 the revenue mix was roughly 81% aluminum materials/parts versus 19% ultracapacitors, meaning aluminum accounts for the bulk of sales.

In addition, joint venture HAIMK, established with Austrian aluminum extrusion company HAI, has completed a high-strength aluminum parts plant for EVs at the Gumi National Industrial Complex and has begun mass production of battery-case-related components.

The customer base spans wind power equipment makers, renewable energy operators, automakers, and industrial power equipment manufacturers, and the company recently signed an MOU with data center power and cooling solutions provider Vertiv to discuss supplying power-stabilization solutions for AI data centers.

LS Materials was reportedly the first in Korea to develop mid-to-large UC technology and is known as the world's third such developer after Germany and China, giving it a relatively high technical entry barrier.

More recently, however, overseas players such as Estonia's Skeleton Technologies, Eaton, and Panasonic have declared entry into the data-center supercapacitor market, gradually intensifying competition.

In sum, the company is in the process of broadening its portfolio from a single UC business into aluminum and EV parts, and the timing and scale of new business revenue contribution stand out as a key variable for future earnings.

Looking at annual results, revenue fell from KRW 162.0 billion in 2022 to KRW 136.9 billion in 2023 (-15.5%), then rose again to KRW 142.1 billion in 2024 (+3.8%) and KRW 153.6 billion in 2025 (+8.1%).

Operating profit, however, kept declining from KRW 14.46 billion in 2022 to KRW 13.57 billion in 2023 and KRW 6.20 billion in 2024, before turning negative at KRW -141 million in 2025.

Net profit attributable to owners also rose from KRW 8.41 billion in 2022 to KRW 12.16 billion in 2023, then fell to KRW 5.67 billion in 2024 and further shrank to KRW 435 million in 2025.

Operating margin declined for three straight years, from 9.9% in 2023 to 4.4% in 2024 and -0.1% in 2025, indicating a clear profitability slowdown.

On a quarterly basis, after a modest operating profit of KRW 381 million on revenue of KRW 39.19 billion in Q2 2025, the company swung back to an operating loss of KRW 211 million on revenue of KRW 38.50 billion in Q3 2025.

Q4 2025 rebounded with revenue of KRW 40.56 billion, operating profit of KRW 1.11 billion, and owner net profit of KRW 1.28 billion, but Q1 2026 fell back into losses—an operating loss of KRW 1.15 billion and a net loss of KRW 763 million—despite revenue rising to KRW 43.05 billion.

Q2 2026 then saw revenue climb to KRW 51.30 billion, up 19.2% quarter over quarter and the highest in this window, with operating profit of KRW 533 million and owner net profit of KRW 666 million marking a return to profitability.

Cumulative owner net profit over the most recent four quarters (Q3 2025 through Q2 2026) stands at roughly KRW 1.2 billion, reflecting large quarter-to-quarter swings without a firmly established directional trend.

On the cash flow side, operating cash flow was a solid KRW 5.64 billion in 2025 relative to net income, whereas 2024 saw a net outflow of KRW -10.92 billion, underscoring year-to-year volatility.

The ultracapacitor market has grown alongside the expansion of renewable power generation, and more recently, power-stabilization demand from AI data centers has emerged as a new growth axis.

Because data centers can experience sudden, large-scale power draws that leave them vulnerable to outages or voltage fluctuations, hybrid power systems combining batteries with UCs are being discussed as one solution.

Within this trend, LS Materials has signed supply agreements with renewable energy operators such as NextEra Energy, and more recently secured a new application by supplying more than 1,000 large UC modules to a US fusion power demonstration project.

That said, the UC segment is understood to have been affected by weak global wind installation volumes and distribution-channel inventory adjustments, which are cited as one factor behind the weak 2025 results.

The aluminum segment reportedly showed relatively solid growth, helped by automotive lightweighting demand and expanded shipments of hydrogen fuel-cell-related parts.

On the competitive front, mid-to-large UC technology has historically had high entry barriers concentrated among a few players, but recent announcements from overseas firms entering the data-center supercapacitor market signal gradually intensifying competition.

In the aluminum parts market, the EV battery-case component segment that HAIMK has entered has traditionally been dominated by a handful of European players, and securing a domestic production base is seen as meaningful for supply-chain diversification.

In a June 19, 2026 company brief, Kiwoom Securities projected LS Materials' 2026 consolidated revenue at KRW 178.0 billion, up 16% year over year, with operating profit of KRW 3.3 billion, forecasting a return to overall operating profitability for the year, driven by UC revenue recovering 37% year over year to KRW 40.0 billion.

The same report anticipated meaningful earnings improvement starting in 2027.

A June 2026 KB Securities report noted that ultracapacitors are emerging as a power-stabilization solution for AI data centers in addition to existing applications in wind power, smart factories, and EVs, while aluminum materials/parts are expected to see expanded sales of EV and hydrogen fuel-cell components on top of existing internal-combustion-engine and appliance demand, and Battery System parts revenue is expected to trend upward from the second half of 2026, centered on premium vehicles from domestic automakers.

Subsidiary HAIMK is mass-producing EV battery-case components at its Gumi plant and has set a target of KRW 200 billion in annual revenue by 2030.

The company is sharing a data-center power-solution roadmap through its collaboration with Vertiv, and its initial supply track record from the US fusion demonstration project is cited as a potential gateway to further demonstration and commercialization orders.

However, the scale and timing of revenue contribution from these new applications, along with the pace of HAIMK's earnings improvement, remain variables that have yet to be confirmed through official disclosures.