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Photo courtesy of Solus Advanced Materials |
[Alpha Biz= Paul Lee] SEOUL, October 29, 2025 — IBK Investment & Securities reported that Solus Advanced Materials Co., Ltd. (KOSDAQ: 336370) is unlikely to achieve the earnings turnaround initially expected in the fourth quarter of this year, citing sluggish electric vehicle (EV) demand and inventory adjustments at key clients. The brokerage maintained its “Buy” rating and ₩11,000 target price, forecasting the recovery to shift into the second half of 2026.
According to analyst Hyun-Wook Lee, Solus posted third-quarter revenue of ₩145.1 billion, up 0.8% quarter-on-quarter, while operating losses widened to ₩21.2 billion, reflecting an operating margin of –14.6%. These results were broadly in line with market consensus (₩143 billion in revenue, ₩18 billion in operating loss). Lee noted that profitability weakened as declining battery foil shipments increased fixed-cost burdens.
The battery foil division saw revenue fall 20.9% quarter-on-quarter to ₩36.4 billion due to inventory adjustments and ramp-up delays at LG Energy Solution’s European plants, as well as weak EV model sales among North American clients. Despite a 28% year-on-year rise in European BEV demand, the recovery was hindered by excess inventories. Meanwhile, the copper foil division, which supplies materials for AI accelerator applications, recorded a 15.9% increase in sales to ₩76.6 billion thanks to robust demand, although overall profitability remained under pressure from reduced battery foil output.
IBK highlighted CATL’s upcoming 30GWh battery plant in Hungary, set to begin operations in early 2026, as a key opportunity for Solus’s European expansion. “We expect customer diversification to accelerate from the fourth quarter as Solus begins supplying new clients,”
Lee said. “Currently, LGES and North American customers account for over 90% of sales, but four new client contracts are expected by 2026.” The company’s Hungary facility (Phases 1 and 2, 38,000 tons capacity) is projected to reach 90% utilization in the second half of next year following its ramp-up period.
Additionally, IBK expects the copper foil division divestment to be completed within 2025 pending final government approval, with ₩300 billion in proceeds to be used for expanding the battery foil business. Lee concluded that while near-term EV market weakness remains a drag, Solus Advanced Materials’ long-term fundamentals are intact. With greater production capacity in Europe and a broader client base, the company is positioned for a gradual recovery from late 2026.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
