LK Chem is a small- to mid-cap company with a market cap of about ₩132.6 billion that makes and sells chemical materials, and because its revenue and profit move relatively sharply with a single large supply contract or a quarter's results, it is easier to understand by watching how far its recent contract and quarterly results feed through to actual revenue. In May 2026 it signed a single sales and supply contract worth ₩21.2 billion (105.1% of last year's revenue), and it confirmed an earnings improvement with 2025 annual results (revenue ₩20.2 billion, operating profit ₩4.6 billion, net profit ₩4.4 billion) and Q1 2026 results (revenue ₩6.1 billion, operating profit ₩1.1 billion, net profit ₩1.3 billion) in May. The point worth watching lately is that a thick 22.7% operating margin, a new contract exceeding last year's revenue, and a P/E of about 10x on this year's expected profit are strengths; against that, as a small- to mid-cap the outcome hinges heavily on a single contract or a quarter's results, and part of the Q1 growth rate carries a base effect, so it needs checking whether the profit improvement continues in the remaining quarters.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue fell 19.4% year over year (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 79.6% higher than a year earlier.
- ROE is 7.3% (controlling-interest basis). It is above the sector average.
- Operating margin is 22.7%.
- The P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder Lee Chang-yeop 56.63% (individual)
Controlling bloc incl. related parties 57.11%
With the controlling bloc holding 57%, control is very secure but the free float is thin.
🔎 In-depth analysis
- LK Chem is a company that makes and sells chemical materials.
- As a small- to mid-cap with a market cap of about ₩132.6 billion, its revenue and profit move relatively sharply with a single large supply contract or a quarter's results.
- So alongside the big picture of the business itself, watching how far its recent contract and quarterly results feed through to actual revenue makes the company easier to understand.
- The latest close is ₩18,700 and the market cap is ₩119.5 billion.
- The price sits below its 20-day line (₩24,089) and below its 60-day line (₩29,809).
- Trading beneath both its short- and medium-term moving averages, the trend is on the soft side.
- RSI (a supplementary gauge that weighs upward against downward force over the past 14 days on a 0-100 scale) is 31.0, a neutral level.
- The one-month change is -29.2%, the three-month change is -39.2%, and the position relative to the 52-week high is -63.5%.
- Relative strength versus the KOSDAQ is 60 (on a 1-99 scale, converting the past year's return against the index with more weight on recent periods; higher means stronger than the market).
- That places it in roughly the top 40% of all stocks by strength.
- Over the past three months it has lagged the index by 20.7%.
- Chart reading is best done alongside volume and the dates of disclosures.
- On a 2025 annual basis, revenue is ₩20.2 billion, operating profit ₩4.6 billion and net profit ₩4.4 billion.
- The operating margin of 22.7% is a thick margin for a chemicals company, and the ROE (how much the company earns on its equity in a year) of 7.3% is above the sector average.
- Financially, a debt ratio of 111.0%, a current ratio of 1,194% and interest coverage of 10.6x make it solid on short-term funding and debt burden.
- The P/E (how many times a year's earnings the share price is) is 30.5x on last year's confirmed earnings and the P/B (how many times book value the share price is) is 2.01x, which can look high on the numbers alone.
- However, this company is at an inflection where profit jumps sharply this year, so the P/E on this year's expected profit shows the company's real value better than the P/E computed on last year's results.
- The P/E on this year's expected profit comes down to about 9.95x, with an expected P/B of 2.01x, and given that peers' P/E is generally in the 6-12x range, it is hard to call this an expensive spot.
- Over several years, revenue went ₩15.3 billion in 2023 to ₩25.0 billion in 2024 to ₩20.2 billion in 2025, rising sharply in 2024 before catching its breath in 2025.
- Profit followed similarly, peaking in 2024 and then declining in 2025.
- But in the latest quarter, Q1 2026, the flow clearly turned.
- Revenue of ₩6.1 billion (+79.6% versus the same period a year earlier), operating profit of ₩1.1 billion (+130.7%) and net profit of ₩1.3 billion (+207.4%) all jumped sharply together.
- Not only did volume grow; profit grew faster, reading as a sign of better unit pricing or product mix.
- Add the ₩21.2 billion supply contract signed in May 2026 (larger than all of last year's revenue), and visibility to underpin this year's revenue emerged too.
- This year's estimates reflecting these Q1 results and the new contract come to about ₩36.2 billion in revenue, ₩10.5 billion in operating profit and ₩13.3 billion in net profit, a step up from last year.
- That said, the steep Q1 growth rate partly includes a base effect from a low year-earlier quarter, so whether this pace continues in the remaining quarters is something to verify through quarterly results.
- On May 14, 2026 it signed a single sales and supply contract (contract value ₩21.2 billion, 105.1% of last year's full-year revenue).
- Being larger than last year's revenue, it raises this year's revenue visibility, but the contract term and whether this transaction is a one-off or recurring are the key to the medium-term reading.
- On February 9, 2026 it confirmed annual results (revenue ₩20.2 billion, operating profit ₩4.6 billion, net profit ₩4.4 billion), and on May 15 its quarterly report disclosed Q1 2026 results (revenue ₩6.1 billion, operating profit ₩1.1 billion, net profit ₩1.3 billion), confirming the profit improvement.
- It helps to check whether the flow of disclosures points in the same direction as the annual trend and whether any one-off factors are mixed in.
- The strengths are clear.
- With a 22.7% operating margin, the margin is thick and the financials are solid; in Q1 revenue and profit jumped sharply together, a signal of a profit inflection, and a new supply contract exceeding last year's revenue underpins this year's results.
- The P/E of 30x computed on last year's profit looks high, but a P/E of about 10x on this year's expected profit is in line with chemicals peers, so if results come through as planned the price is not an expensive spot.
- That the shares have fallen nearly 60% from their high, diverging from results and price, is also worth noting.
- On the cautionary side, as a small- to mid-cap the outcome hinges heavily on a single contract or a quarter's results, and the Q1 growth rate partly carries a base effect.
- In short, if the profit improvement confirmed in Q1 continues in the remaining quarters and the new contract is well recognized as actual revenue, this year's expected profit gains support; conversely, if the contract proves one-off or quarterly results turn down again, that premise weakens.
🔎 Valuation vs peers Overvalued
Chemicals-sector names close in market cap.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hankook Cosmetics Manufacturing | 6.31x | 1.65x | 26.15% |
| Clio | 14.87x | 0.83x | 5.58% |
| Kyung Nong | 9.52x | 0.67x | 7.08% |
We looked first at public-data comparables close in market cap within chemicals. The current P/E (how many times a year's earnings the share price is) is 27.46x and the P/B (how many times book value the share price is) is 2.01x. That said, for lower-market-cap names, earnings swings and funding disclosures carry a large effect, so we did not draw firm conclusions from last year's confirmed-results metrics alone. The forecast box is based on DART seasonality approximations.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| This year | 2026 | ₩36.2 billion | ₩10.5 billion | ₩13.3 billion |
| Next quarter | Q2 2026 | ₩10.3 billion | ₩4.0 billion | ₩3.2 billion |
Price history Close · MA20 · MA60
The latest close is ₩18,700 and the market capitalization is ₩119.5 billion. The price sits below its 20-day moving average (₩24,089) and below its 60-day moving average (₩29,809). 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 31.0, a neutral level. The one-month change is -29.2%, the three-month change is -39.2%, and the position relative to the 52-week high is -63.5%. Relative strength versus the KOSDAQ is 60 (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 60% of all stocks. Over the past three months it lagged the index by 20.7%. 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 -20.66% / 6M -31.36% / 12M -6.81%
Key metrics vs sector median
Valuation
The P/E of 27.46x is above the sector median (14.79x). The P/B of 2.01x is above the sector median (0.97x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
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.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.8%, initial growth 4.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 7.3%, above the sector average (4.0%). The operating margin is 22.7%. The debt ratio is 111.0%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $10.1M | $16.6M | $13.4M | -19.42% ↓ slower |
| Operating profit | $3.7M | $6.7M | $3.0M | -54.91% ↓ slower |
| Net profit | $2.2M | $4.5M | $2.9M | -36.45% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | — | — | $10.1M | $16.6M | $13.4M |
| Operating profit | — | — | $3.7M | $6.7M | $3.0M |
| Net profit | — | — | $2.2M | $4.5M | $2.9M |
| Revenue CAGR | 2-yr avg 15.01% | ||||
Revenue fell 19.4% year over year (2023 ₩15.3 billion → 2024 ₩25.0 billion → 2025 ₩20.2 billion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Operating profit fell 54.9% year over year. The decline widened. Over the 3 years on record, revenue compound annual growth (CAGR) is 15.0%. The two-year revenue CAGR is 15.0%. In the most recent quarter (Q1 2026), revenue was 79.6% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- Revenue fell 19.4% year over year (3-year trend: mixed).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-14ContractSingle sales and supply contract signed: contract value ₩21.2 billion, 105.1% of recent revenueThe contract value and term are central to future revenue recognition. Whether it is one-off or a repeatable transaction shapes the medium-term reading. Source
- 2026-02-09EarningsChange in revenue or profit/loss structure of 30% or more (15% for large corporations): annual revenue ₩20.2 billion, operating profit ₩4.6 billion, net profit ₩4.4 billionThis is recent confirmed or preliminary earnings data. Check whether it points in the same direction as the annual trend and whether any one-off factors are present. Source
- 2026-05-15EarningsQuarterly report (2026.03): Q1 2026 revenue ₩6.1 billion, operating profit ₩1.1 billion, net profit ₩1.3 billionThis is recent confirmed or preliminary earnings data. Check whether it points in the same direction as the annual trend and whether any one-off factors are present. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Closing price | ₩18,700 | ₩18,700 | Confirmed | link |
| Latest quarterly results | revenue ₩6.1 billion, operating profit ₩1.1 billion | revenue ₩6.1 billion, operating profit ₩1.1 billion | Confirmed | link |
| Annual results | revenue ₩20.2 billion, operating profit ₩4.6 billion | revenue ₩20.2 billion, operating profit ₩4.6 billion | Confirmed | link |
| Contract disclosure source text | ㆍapprox. : approx. ₩21.2 billion · revenue 105.1% | ㆍapprox. : approx. ₩21.2 billion · revenue 105.1% | Confirmed | link |
| Earnings disclosure source text | revenue30%: revenue ₩20.2 billion · operating profit ₩4.6 billion · net profit ₩4.4 billion | revenue30%: revenue ₩20.2 billion · operating profit ₩4.6 billion · net profit ₩4.4 billion | Confirmed | link |
| Earnings disclosure source text | (2026.03): 2026 1 revenue ₩6.1 billion · operating profit ₩1.1 billion · net profit ₩1.3 billion | (2026.03): 2026 1 revenue ₩6.1 billion · operating profit ₩1.1 billion · net profit ₩1.3 billion | Confirmed | link |
| Forecast box basis | DART | DART | Confirmed | link |
Recent filings
- 2026-05-19OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-15PeriodicQuarterly report
- 2026-05-14Single supply/sales contract
- 2026-04-29OwnershipOwnership-change filing
- 2026-04-28OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-28OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-28OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-28OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-21Disclosure
- 2026-03-26Shareholders' meeting notice
- 2026-03-18PeriodicAnnual business report
- 2026-03-18Audit report
📖 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.