Hanon Systems (018880) Q3 2026 earnings summary

Executive summary

• 3Q26 revenue was KRW 2,656.9bn, down 1.8% YoY; operating profit rose 26.6% to KRW 120.6bn, with a 4.5% margin.

• 9M revenue rose 1.2% to KRW 8,280.4bn; operating profit increased 77.9% to KRW 321.5bn.

• Q3 net loss was KRW 142.2bn, despite higher operating income, as finance costs and other losses weighed on results.

Financial highlights

• 3Q26 EBITDA was KRW 295.3bn, up 4.5% YoY; EBITDA margin was 11.1%, up 0.7 percentage points.

• 3Q26 COGS was KRW 2,351.4bn, down 2.8% YoY; COGS ratio improved to 88.5% from 89.4%. SG&A including R&D was KRW 185.0bn, down 3.8%.

• 9M gross profit increased to KRW 905.8bn from KRW 731.8bn; SG&A was KRW 584.4bn versus KRW 551.1bn.

• 9M pre-tax profit was KRW 37.7bn versus a KRW 134.9bn loss; consolidated net income was KRW 12.5bn versus KRW 17.6bn.

• 9M operating cash flow was KRW 625.4bn, compared with a KRW 21.9bn outflow in the prior-year period.

Outlook and guidance

• FY26 new business wins target is $1.3bn in annual average revenue, with key program wins expected in 4Q.

• 2026–2029 plans include scaling PCS/SST thermal solutions, developing AI data center cooling products and expanding customer partnerships; long-term goals include solid double-digit margins through system solutions.

• Mid- to long-term aftermarket target is 10% of revenue, with a stated goal of 10%+ operating margin and revenue growth.

• 2026 investment plan totals KRW 286bn for automotive air-conditioning machinery; KRW 149bn was invested through Q3.

• 9M R&D spending was KRW 285.4bn, or 3.5% of revenue; priorities include EV thermal systems, heat pumps, natural refrigerants and integrated thermal modules.