KOSPIBatteries450080

Ecopro Materials

₩38,200▲ 3.38%2026-10-02 close

Market Cap

₩2.7T

Turnover

₩19.6B

Volume

520,000 shares

Shares out.

70.8M

PER

35.0×

PBR

2.2×

EPS

₩1,025

Dividend Yield

0.00%

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

Report overview

Smelter Consolidation Lifts Sales, Margins Still on Trial

Consolidation of an Indonesian nickel smelter and a broader external customer base have revived revenue quickly, but a smelter outage pushed the second quarter of 2026 back into an operating loss, leaving the durability of core margins as the key item to verify.

1
Revenue rose from KRW 299.8bn in 2024 to KRW 392.5bn in 2025, and quarterly revenue expanded sharply to KRW 166.5bn in the first quarter and KRW 178.8bn in the second quarter of 2026.
2
Operating profit of KRW 15.7bn in the first quarter of 2026 reversed to a KRW 10.6bn operating loss in the second quarter, which the company attributed to lower utilization at its Green Eco Nickel smelter in Indonesia.
3
The 2025 swing to net profit was heavily influenced by a one-off bargain purchase gain tied to the Green Eco Nickel acquisition booked in the third quarter.
4
Management guided for roughly 90% growth in precursor sales volume in 2026 and an increase in the external sales mix from about 35% toward 70%.
5
Operating cash flow turned from negative in 2024 to a positive KRW 94.4bn in 2025 and the debt-to-equity ratio fell from 74.9% to 51.1%, yet capacity spending and preferred-share-related capital structure issues still require monitoring.

Business structure

EcoPro Materials produces precursors, the key intermediate material for high-nickel cathodes, from its manufacturing base in the Yeongilman industrial complex in Pohang.

Precursors are made by co-precipitating nickel, cobalt and manganese in set ratios, and according to a 2023 Etnews report they account for roughly 20% of battery cost and 70% of cathode cost, making them a decisive factor in cost competitiveness.

The company has internalized the RMP process, which sulfates low-grade nickel to raise purity, in order to manage costs from the raw material stage.

Sales were long dominated by captive volumes to affiliate cathode maker EcoPro BM, but on a February 2026 group conference call management said it aims to lift the external sales mix from around 35% in 2025 toward roughly 70% in 2026.

From the first quarter of 2026, Indonesian nickel smelting subsidiary Green Eco Nickel was consolidated, adding smelting profit and loss to the precursor manufacturing base.

On the demand side, the company targets energy storage applications such as data center battery backup units and uninterruptible power supplies in addition to electric vehicles, and said North American ESS precursor sales began in the first quarter of 2026.

The product portfolio is also widening: on the August 2026 second quarter call, management said LMR precursors are being developed for a new North American customer with sales timing under discussion, and that sodium-ion battery precursors are being optimized with customers.

Competitively, large Chinese producers such as GEM, CNGR and Huayou Cobalt lead on volume, while the company positions itself on non-China supply chain requirements, quality and vertical integration.

Product-level and customer-level revenue mix figures are not verifiable in public disclosures, so they are not quantified here.

Earnings trend

Quarterly revenue · Operating profit

₩78.1B-₩28.8B25Q2₩63.2B-₩25.1B25Q3₩115.2B₩3.3B25Q4₩166.5B₩15.7B26Q1₩178.8B-₩10.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩665.2B₩39B2022₩952.5B₩8.8B2023₩299.8B-₩64.7B2024₩392.5B-₩65.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩78.1B	-₩28.8B	−36.9%
2025Q3	₩63.2B	-₩25.1B	−39.8%
2025Q4	₩115.2B	₩3.3B	2.9%
2026Q1	₩166.5B	₩15.7B	9.4%
2026Q2	₩178.8B	-₩10.6B	−5.9%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩665.2B	₩39B	₩15.6B	5.9%	5.0%	102.0%
2023	₩952.5B	₩8.8B	₩5B	0.9%	0.6%	38.2%
2024	₩299.8B	-₩64.7B	-₩42.7B	−21.6%	−5.8%	74.9%
2025	₩392.5B	-₩65.4B	₩24.1B	−16.7%	2.1%	51.1%

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 earnings path combines a steep decline with a partial recovery. Revenue grew to KRW 665.2bn in 2022 and KRW 952.5bn in 2023, collapsed to KRW 299.8bn in 2024, then recovered to KRW 392.5bn in 2025.

Profitability moved from operating profit of KRW 39.0bn in 2022 (5.9% margin) and KRW 8.8bn in 2023 (0.9%) to operating losses of KRW 64.7bn in 2024 (-21.6%) and KRW 65.4bn in 2025 (-16.7%), two consecutive loss years.

Net income, by contrast, swung from a KRW 42.7bn loss in 2024 to a KRW 24.1bn profit in 2025, and the fact that this occurred alongside an operating loss shows how large non-operating items were.

In the third quarter of 2025 the company posted revenue of KRW 63.2bn and an operating loss of KRW 25.1bn yet net profit attributable to owners of KRW 161.6bn, which the EcoPro group's third quarter call explained as the effect of a bargain purchase gain from completing the Green Eco Nickel acquisition.

In the fourth quarter of 2025, revenue of KRW 115.2bn produced operating profit of KRW 3.3bn but also a net loss attributable to owners of KRW 96.7bn, underscoring how volatile the quality of earnings has been.

In the first quarter of 2026, revenue of KRW 166.5bn, operating profit of KRW 15.7bn and net profit of KRW 14.0bn marked an improvement that management linked mainly to the consolidation of Green Eco Nickel.

In the second quarter of 2026, however, revenue rose further to KRW 178.8bn while the company reported an operating loss of KRW 10.6bn and a net loss of KRW 7.3bn; according to an August 4, 2026 report by TheElec, management cited production disruption at the Green Eco Nickel smelter caused by a tailings dam accident and heavy rainfall.

The balance sheet has been improving: equity rose from KRW 737.6bn in 2024 to KRW 1,144.7bn in 2025, the debt-to-equity ratio fell from 74.9% to 51.1%, and operating cash flow turned from an outflow of KRW 134.6bn in 2024 to an inflow of KRW 94.4bn in 2025.

Industry analysis

The precursor industry endured severe underutilization and price competition through the slowdown in electric vehicle demand, and demand is now broadening from EVs alone toward energy storage systems.

On its third quarter 2025 call, the EcoPro group argued that ESS demand for AI data centers and uninterruptible power supplies remains firm even after the expiry of US EV tax credits, which is consistent with a widening demand base for precursors. On policy, China cuts both ways.

Samil PwC noted in 2026 that the abolition of China's export VAT rebate could gradually raise Chinese export prices and improve the relative appeal of non-China supply chains, while cost volatility in China-dependent inputs such as graphite and electrolytes remains a risk.

In addition, according to a September 2026 Etnews report, China began levying a 2% consumption tax on lithium-ion batteries and similar products on September 1, 2026, with the rate scheduled to rise to 4% from September 2027, changing the cost structure of the Chinese battery chain.

On the raw material side, nickel price volatility is high. Investing News Network noted in July 2026 that nickel prices reached a two-year high during the second quarter before retreating on oversupply and shifting battery demand.

Competitively, large Chinese producers still lead on scale, so the pace at which non-China supply chain requirements translate into actual orders is the key swing factor for Korean precursor utilization.

The company differentiates on vertical integration extending into nickel smelting, but that also means metal prices and smelter operating stability now feed directly into its profit and loss.

Outlook

The direction management has disclosed is to lift core precursor utilization and smelting contribution at the same time.

On its February 2026 call, the EcoPro group guided for roughly 90% growth in 2026 precursor sales volume on a low 2025 base and new project entries, with the external sales mix widening from about 35% toward 70%.

On smelting, the company said Green Eco Nickel would be fully consolidated from January 2026, and on its April call said utilization would rise gradually from April with performance trending better into the second half.

After the second quarter smelter disruption, the company said it expects Green Eco Nickel utilization to normalize substantially in the third quarter and to reach full operation in the fourth quarter, according to an August 4, 2026 TheElec report.

On sales, management pointed to the start of precursor supply to a new North American customer in the second half, efforts to win new European customers, and easing price competition following the removal of Chinese producers' VAT rebate.

On costs, the company said on its August 2026 call that it is adopting new processes such as spray and carbonate co-precipitation, and plans to apply its in-house developed all-in-one facility, which integrates filtration, washing and dehydration, from 2027 to cut manufacturing costs.

Capacity spending has already been paced down: according to a June 2025 report by TheBell, the company cut planned investment in precursor manufacturing and metal sulfate smelting facilities from KRW 957.3bn to KRW 755.3bn and extended the investment end date to September 30, 2026.

The key items to watch in the second half are therefore the pace of smelter normalization, the timing of first shipments to new North American and European customers, and whether higher revenue converts into operating margin.

Valuation

PER

35.0×

PBR

2.2×

ROE

6.3%

EPS

₩1,025

BPS

₩16,384

Dividend per share

₩0

Valuation here has to be read with the caveat that the earnings base is not yet stable. Net income over the past four quarters includes a one-off bargain purchase gain from the Green Eco Nickel acquisition booked in the third quarter of 2025, so that figure cannot simply be extrapolated as repeatable profit.

The price-to-book multiple sits in a range that carries a premium to net assets, and compared with the high single-digit average earnings multiple for global precursor peers cited in brokerage material at the time of the 2023 listing, a growth premium typical of Korean materials names still appears embedded in the multiple.

The company pays no dividend, so there is effectively no shareholder-return metric to reference.

In directional terms, the company moved from a net loss in 2024 to a net profit in 2025 and posted an operating profit from the fourth quarter of 2025, but the return to an operating loss in the second quarter of 2026 means the trend cannot be described as settled.

It is therefore closer to the facts to read current multiples as resting more on two assumptions, normalization of smelting profit and recovery of precursor utilization, than on reported results.

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

Internalized Smelting Has Changed the P&L Structure

With Green Eco Nickel of Indonesia consolidated from the first quarter of 2026, the scale of revenue and the composition of profit entered a different phase. The company posted first quarter revenue of KRW 166.5bn and operating profit of KRW 15.7bn, attributing the improvement mainly to that consolidation.

On its February 2026 call, the EcoPro group described the Indonesian smelter as a structure where refining costs are largely fixed on the back of low-cost local nickel mines while selling prices track nickel benchmarks.

The bull case starts from the fact that smelting profit can now support results even while core precursor utilization remains low.

Demand Is Broadening From EVs to ESS

The company said North American ESS precursor sales began in the first quarter of 2026 and that it expects strong growth in demand for data center battery backup units and uninterruptible power supplies.

On its August 2026 call, management said LMR precursors are being developed for a new North American customer with sales timing under discussion, and that sodium-ion battery precursors are being optimized with customers.

If end applications diversify from EVs alone into ESS, autonomous driving and robotics, sensitivity of results to the EV cycle could decline. The size and timing of these new volumes, however, are not yet verifiable in disclosed figures.

Cash Flow and Balance Sheet Have Improved

Operating cash flow turned from an outflow of KRW 134.6bn in 2024 to an inflow of KRW 94.4bn in 2025. Equity rose from KRW 737.6bn in 2024 to KRW 1,144.7bn in 2025, while the debt-to-equity ratio fell from 74.9% to 51.1%.

According to a June 2025 TheBell report, the company paced down capital spending by cutting planned facility investment from KRW 957.3bn to KRW 755.3bn, a choice consistent with limiting cash burn during a demand slowdown.

That said, smaller capacity additions can also constrain future volume headroom, making it a two-sided decision.

Bear factors

The Core Business Has Been Loss-Making for a Long Stretch

The company posted operating losses of KRW 64.7bn in 2024 and KRW 65.4bn in 2025, two straight loss years, with operating margins of -21.6% and -16.7%.

After operating profits in the fourth quarter of 2025 and the first quarter of 2026, a KRW 10.6bn operating loss returned in the second quarter of 2026, so profitability cannot be described as established.

Precursor manufacturing is capital intensive with heavy fixed costs, so margins are hard to fix through revenue growth alone without a utilization recovery. Indeed, in the second quarter of 2026 revenue rose sequentially while profit and loss deteriorated.

Smelter Operations and Metal Prices Are New Swing Factors

Consolidating smelting means overseas operating accidents and weather now flow straight into reported results.

According to an August 4, 2026 TheElec report, Green Eco Nickel suffered production disruption from a tailings dam accident early in 2026 followed by heavy rainfall, cited as the direct reason for the second quarter loss. If selling prices track nickel benchmarks, falling metal prices work to compress spreads.

Investing News Network noted in July 2026 that nickel prices retreated after a two-year high in the second quarter, partly on oversupply.

Earnings Quality and Potential Share Count Changes

The 2025 net profit owed much to a one-off bargain purchase gain in the third quarter, which is not repeatable. In the fourth quarter of the same year, a large net loss attributable to owners occurred despite operating profit, confirming very high volatility in non-operating items.

In addition, the number of common shares differs from total issued shares, meaning potential conversion of non-common shares can affect per-share metrics; the terms and timing should be checked directly in original filings. A thin earnings base widens the range of possible valuation interpretations.

Risk factors

Customer and Demand Concentration

Sales were long concentrated in captive volumes to the affiliated cathode maker, and while management said the external mix should reach around 70% in 2026, that remains a target.

If new customer projects do not enter mass production on schedule, utilization of expanded capacity and recovery of fixed costs are both delayed. On the third quarter 2025 call, the company noted that inventory adjustments at some North American automakers could push back projects due to start. Actual progress on customer diversification must be verified through quarterly revenue mix and volume trends.

Raw Material and FX Volatility

Both the precursor and smelting businesses are directly exposed to metal prices such as nickel and cobalt and to exchange rates.

On its February 2026 call, the EcoPro group said its Indonesia-related operating profit guidance assumed specific nickel price and exchange rate levels, which means outcomes change when those assumptions change.

Rising metal prices can help spreads but simultaneously increase inventory valuation and working capital burdens. Regardless of price direction, the volatility itself reduces the predictability of quarterly results.

Policy, Regulation and Funding

Policy shifts such as North American EV tax credits and China's tax reforms change demand and price competition at the same time.

According to a September 2026 Etnews report, China began levying a 2% consumption tax on lithium-ion batteries and similar products from September 1, 2026, rising to 4% in September 2027, which affects costs in the Chinese chain.

Meanwhile, large capacity additions and overseas smelting investments require substantial funding, and capital structure can shift depending on how that funding is raised. Investment completion dates and funding plans need continuous verification through filings.

What to watch next

Late September 2026
Per a June 2025 TheBell report, the scheduled end date for investment in precursor manufacturing and metal sulfate smelting facilities is September 30, 2026. Whether the company discloses completion, another extension or a revised amount will indicate whether capacity additions resume and how depreciation burdens trend.
Late October 2026
Third quarter results are due, with Investing.com listing October 30 as the expected date, though the confirmed schedule should be checked in company filings. The key questions are whether management's expectation of substantial Green Eco Nickel normalization in the third quarter shows up in revenue and operating results, and whether the operating margin returns to positive.
Fourth quarter of 2026
Management said it expects Green Eco Nickel to reach full operation in the fourth quarter and flagged the start of precursor supply to a new North American customer in the second half. Whether full utilization is achieved and when new customer shipments begin will determine profit contribution from both smelting and precursors.
Around February 2027
The 2026 annual results release will allow verification of the company's two stated targets: roughly 90% growth in precursor sales volume and an external sales mix of about 70%. If targets are missed, it will be important to distinguish whether the cause is deferred demand or delayed customer projects.
During 2027
The company said it plans to introduce its in-house developed all-in-one back-end facility, integrating filtration, washing and dehydration, from 2027 to reduce manufacturing costs. Disclosure of the rollout schedule and realized cost savings would provide a basis for assessing headroom for margin improvement in precursors.

Overall view

EcoPro Materials saw revenue shrink to KRW 299.8bn in 2024 amid the EV demand slowdown before recovering to KRW 392.5bn in 2025, KRW 166.5bn in the first quarter of 2026 and KRW 178.8bn in the second quarter.

The main driver was not only a self-sustained recovery in core precursors but also the consolidation of Indonesian nickel smelting subsidiary Green Eco Nickel, which reshaped the profit structure while introducing new swing factors.

Management attributed the reversal from KRW 15.7bn of operating profit in the first quarter of 2026 to a KRW 10.6bn operating loss in the second quarter to smelter disruption, and said it expects substantial normalization in the third quarter and full operation in the fourth.

On earnings quality, the amplitude of non-operating items, such as the third quarter 2025 bargain purchase gain and the large fourth quarter net loss, makes quarterly net income an unreliable guide to trend.

Financially, operating cash flow turned to an inflow of KRW 94.4bn in 2025 and the debt-to-equity ratio fell to 51.1%, while reduced capacity investment and potential share count changes linked to preferred shares are factors to weigh alongside.

Industrially, expanding ESS and data center demand plus Chinese tax changes may favor non-China supply chains, whereas the scale advantage of large Chinese producers and metal price volatility remain constraints.

Ultimately two things need verification: whether higher revenue converts into operating margin, and whether smelting profit is reflected steadily without accident or weather disruption. This report is for information purposes and contains no buy or sell opinion and no target price.

Sources

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

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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.