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JONBUR Research · Initiation

LS Materials · 417200 · Electronic components

LS Materials: Rising Revenue, Near-Zero Profit and a Large Supply Contract

Why this report

Start of coverage: written when a reader opened this company and there was no report yet.

LS Materials, a KOSDAQ electronic components company, closed at ₩14,200 on 2026-10-19, up 36.7% over one year but well below its 52-week high of ₩32,725. Trailing revenue is ₩173.4B, yet operating margin is only 0.2%, and a newly announced supply contract of roughly ₩69B is the main recent news.

Written Oct 20, 2026 · Data as of Oct 19, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a picture of growing sales without matching profit. Revenue has risen each year since 2023, but operating income fell from ₩13.6B in 2023 to a small loss in 2025 and only ₩288.6M over the trailing twelve months. The stock has risen 32.0% in three months, which suggests the market is looking past current earnings toward the new contract.

The contract is notable: headlines describe a ₩68.8B to ₩69B ultracapacitor supply deal with a US company for AI data center power systems, and call it the largest export in the company's history. The data does not show the contract's timing, margins or effect on earnings, so its profit impact cannot be judged from what is available. Foreign investors have been net sellers, and foreign ownership has dropped from 8.7% to 4.0% in 60 days.

Business overview

LS Materials is listed on KOSDAQ in the electronic components sector. It was founded in 2021 and listed on 2023-12-12, with 67,652,659 shares outstanding and a market capitalisation of about ₩960.7B. The CEO is listed as 홍영호. Annual revenue grew from ₩136.9B in 2023 to ₩142.1B in 2024 (3.8% growth) and ₩153.6B in 2025 (8.1% growth). Product and customer details beyond the news headlines are not available in the data.

Financial analysis

These figures come from filed financial statements. Trailing twelve-month revenue to H1 2026 is ₩173.4B, with operating income of ₩288.6M (0.2% margin) and net income of ₩1.2B (0.7% margin). Return on equity is 0.6%.

Operating margin has fallen from 9.9% in 2023 to 4.4% in 2024 and -0.1% in 2025. Net income was ₩12.2B in 2023, ₩5.7B in 2024 and ₩435M in 2025. ROE moved from 6.7% to 3.1% to 0.2% over the same years.

The balance sheet looks moderate: liabilities are 47.7% of equity, cash is ₩49.6B and borrowings are ₩35.8B. Trailing free cash flow is negative at -₩37.1B, so the company is currently using cash.

Valuation

Trailing P/E is 802.0 because earnings are close to zero, so it is not a meaningful gauge. P/B is 5.2, P/S is 5.5 and dividend yield is 0.2%. Enterprise value is ₩946.9B; EV/EBITDA is not available. The year-end P/B was 16.6 in 2023, 4.3 in 2024 and 4.5 in 2025, so the current P/B is within the recent range but far below the 2023 level.

Among listed peers, P/B ranges from 1.6 (LG Innotek) to 8.5 (Samsung Electro-Mechanics), and P/E from 15.1 to 88.2. LS Materials' P/B sits within that range, while its P/E is far above all of them because of depressed profit. The valuation model's fair value estimate is not available for this company, so no comparison with the share price can be made.

Catalysts

  • On 2026-10-13 the company filed a major sales or supply contract, reported by several outlets as a roughly ₩69B ultracapacitor deal with a US company.
  • Headlines describe the deal as the company's largest-ever export and an entry into the US AI data center power market.
  • The next quarterly report would show whether sales growth begins to turn into operating profit.
  • The corporate value-up plan filed on 2026-03-24 may matter if it leads to shareholder return measures; its details are not in the data.
  • Institutions and retail investors were net buyers over 20 days (₩25.5B and ₩27.1B), which could matter if the trend continues.

Risks

  • Operating margin is 0.2% and net margin 0.7%, leaving little profit cushion if costs rise or sales slow.
  • Free cash flow is negative at -₩37.1B over the trailing twelve months, which could increase reliance on cash reserves or borrowing.
  • Foreigners sold a net ₩53.6B over 20 days and foreign ownership fell from 8.7% to 4.0% in 60 days.
  • The share price is still 56.6% below its 52-week high, showing large price swings.
  • The financial impact of the new contract, including margins and delivery timing, is not disclosed in the data.

Closing view

The evidence is mixed. Sales have grown steadily and a large new export contract has drawn attention, but profitability has eroded to near zero, cash flow is negative and foreign holdings have fallen. Multiples based on earnings are not informative at present, and no model fair value is available. Whether the contract restores margins is the key open question, and the data cannot answer it yet.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Filings and data used

Report history

  1. Oct 20, 2026InitiationStart of coverage (reader request)LS Materials: Rising Revenue, Near-Zero Profit and a Large Supply Contract

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information