JS Link: After Securing Contracts, the Next Test Is Mass-Production Profitability
Analysis date
Published
MW GOBLIN · AI company research
As of 2026-09-30, the permanent magnet supply contract marks progress toward commercialization. However, for KRW 31,000 to be supported, expanded deliveries must lead to fixed-cost recovery and cash generation. It is difficult to judge the stock as undervalued based on the capital increase and net income turning positive alone.
Toss Securities
Quote September 30, 2026 at 13:15 KST
Retrieved September 30, 2026 at 13:16 KST
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The value of the 250-ton contract depends on delivery terms
Permanent magnets are moving from customer acquisition to revenue validation. The BEC contract in Germany announced by the company on September 28 is a minimum purchase and supply commitment based on a total procurement plan of 250 tons over five years starting in 2027. However, volumes and specifications by product will be finalized through customer approval and purchase orders, and the contract value is also unconfirmed. Magnet revenue in the first half was KRW 0, while the segment operating loss was KRW 6.89 billion; delivery prices and yields will determine whether fixed costs are recovered. [1][2]
Assess financing capacity alongside cash burn
The capital increase expanded investment capacity, but cash generation has not yet improved. First-half operating cash outflow of KRW 12.41 billion plus KRW 8.36 billion in property, plant and equipment purchases amounted to KRW 20.77 billion. Cash at the end of June was KRW 72.23 billion, but there was also KRW 9 billion in bank borrowings and KRW 65.86 billion in CB face value outstanding. The KRW 53.39 billion from the capital increase was paid in on July 29, and the KRW 5.33 billion purchase price for CBs disclosed in August was scheduled to be paid on September 1; cancellation is also unconfirmed. [1][3][4]
Future cash flows needed to support approximately KRW 1.15 trillion
Applying the 37,191,690 shares listed as of September 22 to the intraday price of KRW 31,000 on September 30 gives a comparable equity value of approximately KRW 1.15 trillion. First-half net income of KRW 4.22 billion includes KRW 13.39 billion in derivative valuation gains, making it a weak basis for the PER. The long-term cash flows from permanent magnets need to be assessed, but selling prices, margins, and remaining investment costs have not been confirmed. The latest net debt and CB dilution cannot be incorporated, so no target price is provided. [1][4][5]
What could change the thesis
- If BEC customer approval and purchase orders confirm delivery prices and volumes, and losses in the magnet segment decline, the reliability of revenue and margin estimates will improve.
- A reduction in operating cash outflow after investment would improve the valuation. Delays in mass production combined with additional CBs or a further capital increase would lower the per-share value assessment.
Sources and Evidence
- JS Link Semiannual Report ↗2026-08-14 · Consolidated financial statements; Notes 4, 18 and 29; financing
- The Bell, report on the company's announcement of the BEC supply contract ↗2026-09-28 · Contract duration, minimum obligations and individual order terms
- JS Link Capital Increase Issuance Results ↗2026-07-29 · Section 3: issuance details and payment date
- JS Link Decision to Acquire Its Own Convertible Bonds ↗2026-08-24 · Item 8 acquisition amount; item 11 future disposition plan
- Exchange additional listing disclosure, republished by Securities Plus ↗2026-09-17 · Item 4 total listed shares; item 5 listing date
This AI-generated report is for information. Check the analysis date and primary sources. Terms