KOSPIChemicals457190

Isu Specialty Chemical

₩81,400▲ 3.83%2026-10-02 close

Market Cap

₩2.5T

Turnover

₩28.3B

Volume

350,000 shares

Shares out.

30.2M

PER

—

PBR

14.1×

EPS

—

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q1–2025Q4) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Li2S Plant Completed, Core Margins Recovering

Quarterly operating margins in the core fine-chemicals business have recovered through 2026, while the commercial plant for lithium sulfide, a solid-state battery material, has been completed, putting the business mix at a turning point.

1
Mercaptan-based fine chemicals such as TDM and NOM/NDM, plus IPA and special solvents, account for most revenue, while lithium sulfide remains an early-stage new business.
2
2025 revenue rose to KRW 411.4bn but operating profit was only KRW 1.6bn (0.4% margin), and Q2 2025 posted an operating loss of KRW 4.7bn.
3
Operating profit was KRW 3.5bn in Q1 2026 and KRW 7.7bn in Q2 2026, a clear quarterly margin improvement.
4
The KRW 85.2bn lithium sulfide commercial plant (150 tons initial, designed to expand to 500 tons) was completed ahead of schedule in June 2026 and entered trial operation.
5
The debt-to-equity ratio rose from 129.5% in 2023 to 175.8% in 2025 on capex, and the timing of downstream solid-state demand remains a variable.

Business structure

ISU Specialty Chemical is a fine-chemicals company that was spun off from ISU Chemical in 2023 and absorbed the fine-chemicals division of ISU Exachem in 2024. Its main products are fine chemicals such as TDM, NOM/NDM, IPA and special solvents, along with lithium sulfide for solid-state batteries.

According to FnGuide's company profile, TDM is the only domestically produced item of its kind with roughly a 90% share, while IPA holds about a 40% share. The company states that in TDM, a polymer resin modifier, it ranks among the world's top three makers.

Because TDM is consumed in the polymerization of resins such as ABS, earnings track downstream resin utilization and pricing; segment-level revenue splits are only sparsely disclosed, so the mix can be judged only qualitatively.

In the new business, lithium sulfide is the feedstock for sulfide-based solid electrolytes, and NH Investment & Securities noted in a February 2026 report that hydrogen sulfide is sourced from an adjacent plant of affiliate ISU Chemical, allowing transport-cost savings.

Production capability has expanded from the earlier demo plant to a commercial plant with 150 tons of initial annual capacity, designed to scale up to 500 tons as demand grows.

On customer development, the company signed a cooperation memorandum with Dongwha Electrolyte for solid electrolyte development, taking the role of lithium sulfide supplier, and also signed a memorandum with Lotte Energy Materials for sulfide-based solid electrolyte development and commercialization.

In addition, it has agreements with parties including EcoPro BM and a joint development contract with KBR for low-cost, high-volume lithium sulfide production technology.

Earnings trend

Quarterly revenue · Operating profit

₩99.7B-₩4.7B25Q225Q3₩108.9B₩1.6B25Q4₩108.6B₩3.5B26Q1₩108B₩7.7B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩117.5B-₩6.1B2023₩332.1B₩14.2B2024₩411.5B₩1.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩99.7B	-₩4.7B	−4.7%
2025Q3	—	—	—
2025Q4	₩108.9B	₩1.6B	1.5%
2026Q1	₩108.6B	₩3.5B	3.2%
2026Q2	₩108B	₩7.7B	7.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2023	₩117.5B	-₩6.1B	-₩6.2B	−5.2%	−6.5%	129.5%
2024	₩332.1B	₩14.2B	₩10.5B	4.3%	8.6%	146.2%
2025	₩411.5B	₩1.6B	₩800M	0.4%	0.6%	175.8%

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

On confirmed annual figures, 2023, the first fiscal year after the spin-off, showed revenue of KRW 117.5bn with an operating loss of KRW 6.1bn and a net loss of KRW 6.2bn.

In 2024, reflecting the merger of ISU Exachem's fine-chemicals division, revenue reached KRW 332.1bn with operating profit of KRW 14.2bn (4.3% margin) and net profit of KRW 10.5bn, a swing to profit.

In 2025, revenue grew to KRW 411.4bn but operating profit was just KRW 1.6bn and net profit KRW 0.7bn, pushing the operating margin down to 0.4%.

Quarterly, the key damage came in Q2 2025, with revenue of KRW 99.7bn, an operating loss of KRW 4.6bn and a net loss of KRW 4.0bn; Shinhan Securities, in a report covered in early March 2026, attributed the weakness to large-scale scheduled maintenance in Q2 and aggressive price competition from North American and European rivals, adding that TDM prices had bottomed in Q4 and turned up.

Q4 2025 then returned to profit with revenue of KRW 108.9bn, operating profit of KRW 1.6bn and net profit of KRW 2.9bn, followed by revenue of KRW 108.6bn and operating profit of KRW 3.5bn in Q1 2026, and revenue of KRW 108.0bn with operating profit of KRW 7.7bn in Q2 2026.

Revenue has plateaued near KRW 108bn per quarter while operating profit alone has risen; the Q2 2026 operating margin calculates to the 7% range, suggesting pricing/mix and utilization effects working together.

On cash flow, operating cash flow fell from KRW 12.0bn in 2023 and KRW 10.6bn in 2024 to KRW 4.6bn in 2025, mirroring the profit decline.

On the balance sheet, equity of KRW 132.9bn against liabilities of KRW 233.6bn at end-2025 lifted the debt-to-equity ratio to 175.8%, up from 129.5% in 2023 and 146.2% in 2024, coinciding with the lithium sulfide investment cycle.

Industry analysis

The downstream solid-state battery industry is shifting from development to mass-production readiness.

In a March 2026 article, ZDNet Korea reported that launch timelines presented by major players including Samsung SDI, Toyota and CATL point to 2027 or later, and that the industry is watching for actual mass-production cases around that time.

Among Korea's three battery makers, Samsung SDI has the earliest schedule with a 2027 mass-production target, while LG Energy Solution and SK On aim for commercialization around 2030. Competition at the materials layer has already begun.

EcoPro BM runs a 40-ton-per-year solid electrolyte pilot line and Lotte Energy Materials a 70-ton pilot line, while Japan's Idemitsu Kosan is pursuing lithium sulfide and solid electrolyte production together with Toyota. Price is cited as the biggest bottleneck.

DB Securities analyst Ahn Hoe-soo wrote in a January 2026 report that at USD 250 per kilogram for lithium sulfide, solid electrolyte raw materials cost roughly 50 to 60 times more than liquid electrolyte materials, but costs could fall by 10 to 20 times under mass production; he listed interfacial impedance, low-temperature performance and lithium sulfide pricing as bottlenecks and argued robotics can tolerate these better, potentially pulling adoption forward to 2027-2028.

Meanwhile the core mercaptan and solvent business is a classic materials cycle driven by resin demand and global competitors' pricing, so whether pricing recovers after the 2025 competition is the swing factor for earnings.

Outlook

The lithium sulfide capacity timeline is documented in filings and media. In an August 2025 disclosure, the company decided to invest a total of KRW 85.2bn to build 500-ton base facilities and 150-ton initial production facilities, targeting construction start on 5 August 2025 and completion on 30 June 2026.

On 18 June 2026 it said the commercial plant had been completed ahead of the original plan; the new plant is designed for 150 tons per year and can be expanded up to 500 tons as the market grows.

The company plans to begin full commercial production after trial runs, equipment safety checks and quality stabilization, and the plant applies a continuous process with automated equipment.

On funding, reports in February 2026 said the company plans large-scale investment in lithium sulfide plants through end-2029, of which an advanced strategic industry fund will provide a KRW 100bn long-term loan for 10 years at a rate in the low 3% range.

On capacity plans, Shinhan Securities, in a report covered in early March 2026, said the company intends to expand lithium sulfide capacity to 190 tons including pilot lines by end-2026.

For the core business, NH Investment & Securities forecast in a 24 February 2026 report revenue of KRW 452.6bn and operating profit of KRW 9.1bn for 2026, while Shinhan Securities projected 2026 operating profit of KRW 16.6bn on expansion effects and higher ABS utilization.

For reference, confirmed first-half 2026 operating profit totaled KRW 11.2bn, which can be compared against those earlier projections.

That said, IBK Securities presented neither a rating nor a target price in its 13 March 2026 report, and LS Securities' 8 April 2026 company analysis also marked its target price as Not Rated, indicating differing views on earnings visibility.

Valuation

PER

—

PBR

14.1×

ROE

0.6%

EPS

—

BPS

₩4,489

Dividend per share

₩0

The market value of this stock is tied far more to future scenarios for the lithium sulfide business than to confirmed earnings.

Because 2025 net profit was very small, earnings-based multiples are hard to make meaningful, while the multiple against net assets sits in a premium zone rarely seen in Korea's chemical sector. No dividend was paid, so dividend-based comparisons do not apply. Outside views diverge.

Shinhan Securities, in a report covered in early March 2026, said valuation burden is high relative to current earnings power, yet called the stock attractive given the solid core business and first-mover effects as solid-state mass production expands.

By contrast, LS Securities' 8 April 2026 company analysis judged that timelines have slipped versus earlier EV adoption expectations, delaying the point at which profitability materializes.

Ultimately, the yardstick the market applies can shift depending on how fast core operating margins recover and how much actual lithium sulfide volume and utilization is confirmed.

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

Early Securing of Commercial Lithium Sulfide Capacity

On 18 June 2026 the company said its commercial plant was completed ahead of the original plan, designed for 150 tons per year. The design allows expansion to 500 tons, lowering initial investment burden while scaling in steps with market growth.

It also plans to raise production efficiency and quality uniformity using a continuous process and automated equipment. If downstream mass-production timelines move earlier, having capacity already in place could serve as a response capability.

Recovering Quarterly Margins in the Core Business

After a KRW 4.6bn operating loss in Q2 2025, quarterly operating profit stepped up to KRW 1.6bn in Q4 2025, KRW 3.5bn in Q1 2026 and KRW 7.7bn in Q2 2026. Revenue held near KRW 108bn per quarter while profit alone rose, making the margin improvement clear.

Shinhan Securities, in a report covered in early March 2026, said TDM prices bottomed in Q4 and turned upward. The absence of scheduled maintenance combined with pricing and mix factors appears to explain the stretch.

Policy Financing and Firming Downstream Roadmaps

The company plans large-scale investment in lithium sulfide plants through end-2029, and February 2026 reports said an advanced strategic industry fund would extend a KRW 100bn 10-year loan at a rate in the low 3% range.

Samsung SDI targets 2027 mass production of solid-state batteries and is regarded by the industry as a global top-tier player. A July 2026 report said Samsung SDI's solid-state samples received positive customer feedback on safety and energy density, keeping the 2027 mass-production schedule on pace.

The more downstream timelines hold, the more room there is for material qualification and advance-order discussions.

Bear factors

Lithium Sulfide Revenue Contribution Still Nascent

Reports in early March 2026 conveyed brokerage views that lithium sulfide revenue is currently only at sample scale, with meaningful revenue expected around 2030 when solid-state mass production takes off.

The company itself outlined a staged plan of trial runs, safety checks and quality stabilization before commercial production. In other words, completion does not translate directly into earnings. In the early ramp phase, depreciation and fixed costs may be recognized first.

Cost/Price Bottlenecks and Possible Downstream Delays

DB Securities' January 2026 report estimated that at USD 250 per kilogram of lithium sulfide, solid electrolyte raw materials cost about 50 to 60 times more than liquid electrolyte materials, with scope to fall by 10 to 20 times once mass production is established.

That implies downstream adoption may stay limited without price declines. LS Securities' 8 April 2026 material judged that timelines have slipped versus EV adoption expectations of two to three years ago, delaying the point of profitability. If commercialization slips, utilization of the new capacity could also be delayed.

Core Pricing Competition and Maintenance Variables

In 2025, despite revenue rising to KRW 411.4bn, operating profit stayed at KRW 1.6bn for a 0.4% margin. Shinhan Securities, in a report covered in early March 2026, attributed this to large-scale scheduled maintenance in Q2 and aggressive price competition from North American and European rivals.

Maintenance is a recurring cost item, and pricing is largely outside the company's control. Whether the first-half 2026 margin improvement is structural or temporary requires confirmation over further quarters.

Risk factors

Financial Leverage

The debt-to-equity ratio rose from 129.5% in 2023 to 146.2% in 2024 and 175.8% in 2025, with end-2025 liabilities of KRW 233.6bn against equity of KRW 132.9bn. The KRW 85.2bn lithium sulfide mother plant investment was described at disclosure as equal to 70.03% of equity.

With operating cash flow shrinking to KRW 4.6bn in 2025, continued heavy investment makes financing costs and repayment scheduling a key issue.

Gap Between Expectations and Results

On confirmed numbers, 2025 operating profit was KRW 1.6bn and net profit KRW 0.7bn. Market attention, by contrast, centers on material demand tied to solid-state mass production from 2027 onward.

Given that major players' launch timelines point to 2027 or later and the industry is watching for actual mass-production cases around then, the lag between confirmed results and priced-in expectations can show up as share-price volatility.

Competition and Customer Concentration

In solid electrolytes and lithium sulfide, EcoPro BM (40-ton pilot), Lotte Energy Materials (70-ton pilot) and domestic startup Solivis (Hoengseong plant with up to 42 tons) are building capacity in parallel. Japan's Idemitsu Kosan is also pursuing lithium sulfide and solid electrolyte production with Toyota.

With a limited number of downstream cell makers, a growing supplier field can intensify qualification competition and pricing pressure. A single customer's schedule change can translate directly into utilization risk.

What to watch next

Late October to mid-November 2026
Q3 2026 results disclosure. Key points are whether the operating profit improvement seen in Q2 2026 continues and how mother plant trial-run costs are reflected.
Q4 2026
Whether commercial production begins after trial runs and quality stabilization, and whether the end-2026 capacity plan of 190 tons including pilot lines is met. Utilization and actual volumes are the key to revenue recognition.
Q4 2026 to H1 2027
Whether disclosures emerge on material qualification or supply contracts with downstream players such as Samsung SDI, which targets 2027 mass production. A disclosed long-term supply contract would change the basis for judging revenue visibility.
Around March 2027
The 2026 annual business report. This is when product-level revenue mix, lithium sulfide utilization, borrowings and the debt-to-equity ratio can be checked as confirmed figures.
Periodically from H2 2026
Follow-up disclosures on the expansion plan through end-2029 and drawdown of the KRW 100bn policy loan, plus the timing of any decision to expand toward 500 tons. The funding method's impact on the balance sheet should be watched alongside.

Overall view

ISU Specialty Chemical runs a core business in mercaptan-based fine chemicals such as TDM plus IPA and special solvents, while building lithium sulfide for solid-state batteries as a new business.

Confirmed results improved from an operating loss in 2023 to operating profit of KRW 14.2bn in 2024, then fell sharply to KRW 1.6bn in 2025 (0.4% margin), with large-scale Q2 2025 maintenance and price competition cited as causes.

Quarterly operating profit then recovered to KRW 3.5bn in Q1 2026 and KRW 7.7bn in Q2 2026, totaling KRW 11.2bn in the first half, which is the checkpoint on the core business. At the same time, the KRW 85.2bn commercial plant was completed early in June 2026, establishing a 150-ton annual base expandable to 500 tons.

However, with analysis that lithium sulfide revenue remains at sample scale and meaningful contribution is expected only around 2030, there is a lag between plant completion and earnings impact.

The financial burden from a debt-to-equity ratio rising to 175.8% in 2025, along with external variables such as downstream solid-state mass-production timing and the pace of lithium sulfide price declines, should be considered together. This report is for informational purposes and contains no buy or sell opinion or 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.