Lotte Energy Materials makes copper foil — copper rolled thinner than a human hair — and is a Lotte Group materials subsidiary that produces battery foil for the anodes of EV and ESS batteries and circuit foil (HVLP) for high-speed signal transmission in AI data centers at plants in Iksan and Malaysia. In its preliminary first-quarter results on May 11, 2026 it confirmed a narrower operating loss and a swing to net profit, and in April it decided on a new capital investment (about ₩49.0 billion, due for completion at the end of 2027) in high value-added circuit foil for AI and semiconductor substrates. The point worth watching lately is that, having passed the trough of the battery-materials downcycle, its growth axis is shifting from EV battery foil to ESS and AI circuit foil, and with a debt ratio of 133% and a current ratio of 4.7x it has the strength to weather the recovery; but a full-year operating profit is not yet confirmed, and results swing heavily with cost and inventory effects from copper prices and with the downstream demand cycle.
At-a-glance assessment financial health · growth · profitability · valuation
- The most recent full-year net result was a loss.
- Revenue fell 24.9% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 1.2% higher than a year earlier.
- ROE is -9.5% (controlling-interest basis). It is below the sector average.
- Operating margin is -21.4%.
- P/E is hard to compute here, so this is read on P/B.
Ownership & governance As of 2025-12-31
Largest shareholder Lotte Chemical 46.94% (corporate)
Controlling bloc incl. related parties 46.96%
With the controlling bloc holding 47%, the ownership structure is stable.
🔎 In-depth analysis
- Lotte Energy Materials makes copper foil.
- Copper foil is a metal film of copper rolled thinner than a human hair, and it is used in two places.
- First, battery foil is a key material in the anode of a lithium-ion battery, supplied for electric vehicles (EVs) and large energy storage systems (ESS).
- Second, circuit foil is a thin copper film used in printed circuit boards (PCBs) and semiconductor substrates; in particular, demand is rising for very-low-profile (HVLP) circuit foil used for high-speed signal transmission in AI data centers.
- Its production bases are Iksan in Korea and Malaysia, and it is raising cost competitiveness by expanding Malaysia's No.
- 5 and No.
- 6 plants.
- Its largest shareholder is Lotte Chemical and others, at about 47%, making it an operating subsidiary that forms one axis of Lotte Group's materials business.
- The recent close is ₩33,300 and the market cap is ₩1.7 trillion.
- The price sits below the 20-day line (₩45,042) and below the 60-day line (₩55,245).
- Trading below both the short- and mid-term moving averages, the trend is on the soft side.
- RSI (a supplementary gauge that weighs upward against downward strength over the last 14 days on a 0-100 scale) is 30.6, a neutral reading.
- The one-month change is -26.8%, the three-month change is -26.8%, and the position versus the 52-week high is -57.6%.
- Relative strength against the KOSPI is 47 (1-99, converted from returns versus the index over the past year with more recent performance weighted more heavily; higher means stronger than the market).
- That places it in roughly the top 53% by strength among all stocks.
- Over the past three months it lagged the index by 40.5%.
- It is best to read the chart alongside trading volume and the dates of disclosures.
- The 2025 results were a loss.
- ROE (how much is earned in a year on equity) was -9.5%, the operating margin -21.4% and the net margin -23.3%, so profitability was badly impaired.
- With earnings negative, the P/E (how many times one year's earnings the share price is) cannot be computed.
- So this company is better viewed by P/B (how many times net assets the share price is) than by P/E, and the current P/B is 1.05x.
- Financial safety is sound.
- The debt ratio (debt versus equity) at about 133% is not excessive, and the current ratio of 4.7x leaves ample short-term liquidity.
- Net debt (total borrowings less cash) is ₩76.3 billion, which is not large.
- That said, the FCF yield (the ratio of cash actually generated to market cap) is -4.1%, as continued expansion investment means cash is still a net outflow.
- Judged only on last year's loss-making metrics it looks burdensome, but this should be read bearing in mind that these are numbers stamped at the bottom of the battery-materials cycle.
- Looking at the five-year trajectory, a company that was posting operating profit of ₩70.0-84.7 billion in 2021-2022 swung to operating losses for three straight years from 2023 as it met an industry downcycle of weakening EV battery demand and falling selling prices (2025 revenue of ₩677.5 billion, -24.9% year on year).
- Up to this point it is a clear slump.
- But a sign of an inflection appeared in the first quarter of 2026.
- Revenue was ₩159.8 billion, similar to the year-earlier quarter, but the operating loss narrowed sharply to about ₩5.0 billion and net profit swung to a gain of about ₩3.9 billion.
- There are two reasons behind this.
- One is productivity gains at the Malaysia plant and cost improvement from higher copper prices; the other is that the business axis is shifting from low-margin EV battery foil toward ESS battery foil and high value-added circuit foil for AI and semiconductor substrates.
- An expansion is under way to raise circuit-foil capacity from 3,700 tons in 2025 to 16,000 tons in 2027, and battery-foil demand is also on a recovery track as the North American ESS market expands.
- In short, last year's loss metrics are a picture of the trough, and this year the loss narrows while, toward next year, earnings power revives — which is closer to the facts.
- Recent disclosures support the direction of the recovery.
- On April 28, 2026 it decided, via a voluntary disclosure, on a new capital investment in high value-added circuit foil (about ₩49.0 billion, due for completion at the end of 2027) — a capacity expansion to meet demand for AI and semiconductor substrates.
- On May 11 it disclosed preliminary consolidated first-quarter results, confirming the narrower operating loss and the swing to net profit.
- In late April it held two investor briefings (IR) to communicate the direction of its business transition, and in May a series of business-restructuring-type disclosures followed, including the disposal of shares in another company and debt guarantees related to a subsidiary.
- Overall, the narrative of "high value-added transition through expansion plus confirmation of the earnings trough" is emerging through the disclosures.
- The points to watch are clear.
- The strengths are that, having passed the trough of the battery-materials downcycle, an inflection signal emerged in the first quarter with a narrower operating loss and a swing to net profit, and that the growth axis is shifting from the slumping EV battery foil toward high value-added circuit foil for ESS and AI data centers, backed by expansion.
- The balance sheet, with a debt ratio of 133% and a current ratio of 4.7x, also has the strength to weather the recovery period.
- The point to note is that a full-year operating profit is not yet confirmed, and the first-quarter net profit contains elements that can swing quarter to quarter, such as cost and inventory-valuation effects from copper prices.
- In addition, given the nature of the battery and materials sector, results are heavily driven by selling prices and the downstream demand cycle.
- In sum, it is an early-recovery phase: if ESS and AI circuit-foil demand and expansion volumes come on as planned, the earnings recovery accelerates; conversely, if downstream battery demand softens again, the landing into profit could be delayed.
🔎 Valuation vs peers Undervalued
Compared mainly against domestic makers of copper foil (battery and circuit foil) and secondary-battery materials. As the sector is broadly in a downcycle and mostly loss-making, position is judged by P/B rather than P/E.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Solus Advanced Materials | 0.00x | 0.78x | -9.70% |
| SKC | 0.00x | 5.48x | -88.26% |
| POSCO Future M | 402.54x | 3.19x | 0.79% |
(a) The true peer set — domestic copper-foil and secondary-battery materials makers — generally carries a high P/B even when earnings are depressed. SKC is at 5.9x and POSCO Future M at 3.58x. This stock's P/B of 1.24x is one-fifth to one-third of theirs, a clear discount. Fellow copper-foil maker Solus Advanced Materials is lower at 0.87x, but taking scale and financial strength (a debt ratio of 133% and a current ratio of 4.7x) into account, Lotte Energy Materials is relatively more stable. (b) Because last year was a loss, the P/E cannot be computed, but when a materials stock is at the bottom of a downcycle, last year's profit and loss do not explain the present. In fact, first-quarter utilization rose from the 40% range to the mid-60s and net profit swung back to a gain. The direction — circuit-foil expansion and demand for ESS and AI substrates — is not yet fully reflected in the metrics. (c) That said, operating profit is still a loss and the first-quarter net profit contains cost and inventory effects from copper prices. It is therefore more accurate to read it as "undervalued with substantial scope for re-valuation once the recovery takes hold" rather than to declare it flatly undervalued.
Price history Close · MA20 · MA60
The latest close is ₩33,300 and the market capitalization is ₩1.7 trillion. The price sits below its 20-day moving average (₩45,042) and below its 60-day moving average (₩55,245). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 30.6, a neutral level. The one-month change is -26.8%, the three-month change is -26.8%, and the position relative to the 52-week high is -57.6%. Relative strength versus the KOSPI is 47 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 47% of all stocks. Over the past three months it lagged the index by 40.5%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -40.54% / 6M -31.91% / 12M -39.05%
Key metrics vs sector median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 1.05x is below the sector median (1.63x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -9.5%, below the sector average (7.0%). The operating margin is -21.4%. The debt ratio is 133.4%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $536.2M | $598.0M | $449.0M | -24.91% ↓ slower |
| Operating profit | $7.8M | -$42.7M | -$96.3M | — |
| Net profit | -$21.6M | $4.2M | -$104.4M | -2601.09% |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $456.6M | $483.4M | $536.2M | $598.0M | $449.0M |
| Operating profit | $46.3M | $56.2M | $7.8M | -$42.7M | -$96.3M |
| Net profit | $41.6M | $29.0M | -$21.6M | $4.2M | -$104.4M |
| Revenue CAGR | 4-yr avg -0.41% | ||||
Revenue fell 24.9% year over year (2023 ₩809.0 billion → 2024 ₩902.3 billion → 2025 ₩677.5 billion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating results are in the red, so a swing back to profit matters more than the growth rate here. Over the 5 years on record, revenue compound annual growth (CAGR) is -0.4%. The two-year revenue CAGR is -8.5%. In the most recent quarter (Q1 2026), revenue was 1.2% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
Points to watch
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
- Revenue fell 24.9% year over year (3-year trend: mixed).
Recent news & events searched · sourced
- 2026-04-28FilingDecision on a new capital investment (about ₩49.0 billion) to address high value-added circuit foil, due for completion at the end of 2027Grounds for medium-term earnings strength and product-mix improvement through expanded circuit-foil capacity for AI and semiconductor substrates. Source
- 2026-05-11EarningsFair disclosure of preliminary consolidated Q1 2026 results — revenue of ₩159.8 billion, an operating loss of about ₩5.0 billion (narrower loss), and a swing to net profit of about ₩3.9 billionShort-term: confirmation of the earnings trough and a signal of improving profitability. Source
- 2026-04-30IRNotice of an investor briefing (IR) — explaining the business transition (ESS and high value-added circuit foil) and the earnings directionMedium-term: market communication of the high value-added transition strategy. Source
- 2026-05-22FilingDisclosures related to business structure, including decisions to dispose of shares and investment securities in other companies and to provide debt guarantees to third partiesMedium-term: business and subsidiary restructuring under way. Source
- 2026-05-15FilingSubmission of the March 2026 quarterly report (consolidated)Grounds for confirming earnings and financial condition through detailed first-quarter financial disclosure. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-22Disclosure
- 2026-05-22Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-11EarningsFair-disclosure notice
- 2026-04-30Disclosure
- 2026-04-30Disclosure
- 2026-04-28Disclosure
- 2026-04-27OwnershipOwnership-change filing
- 2026-04-23OwnershipLargest-shareholder ownership change report
- 2026-03-26OwnershipOwnership-change filing
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.