Same smelting industry: Korea Zinc vs. Youngpoong — Q1 operating profits 693.3 billion won vs. 27.4 billion won... a 25-fold gap

*This content was translated by AI.

Korea Zinc and Youngpoong, both in the smelting industry and facing a hostile M&A, are drawing attention for their stark performance differences in the first quarter of this year.

According to public disclosures on the Financial Supervisory Service's electronic filing system, Korea Zinc's consolidated revenue for the first quarter of 2026 totaled 6.72 trillion won, with operating profit reaching 746.1 billion won. In the same period, Youngpoong's consolidated revenue was 851.1 billion won, merely about 14% of Korea Zinc's revenue. Operating profit also stood at 43.3 billion won, meaning Korea Zinc's operating profit was more than 17 times higher. Korea Zinc's operating profit margin was 12.3%, 7.2 percentage points higher than Youngpoong's 5.1%.

According to expert analysis, Korea Zinc has maintained record-breaking quarterly performance and stable profitability by leading with proactive investments and portfolio diversification, whereas Youngpoong, though it escaped losses for the first time in four years, still shows significant gaps in revenue scale, profitability, and smelter utilization rates.

The performance gap was also clear on a separate basis. Korea Zinc's first-quarter revenue was 4.2945 trillion won, more than 11 times Youngpoong's 381.6 billion won. Operating profit also showed a gap of about 25 times, with Korea Zinc at 693.3 billion won compared to Youngpoong's 27.4 billion won. The operating profit margins also diverged by 8.9 percentage points, with Korea Zinc at 16.1% and Youngpoong at 7.2%.

The difference in production utilization rates is also substantial. Korea Zinc's Onsan Smelter operated at 100% capacity; according to its first-quarter report, it was reported that the facility runs 24-hour continuous operations without any shutdowns. In contrast, Youngpoong's Seokpo Smelter operated at only 57.23% capacity, with actual operating hours totaling 1,236 out of 2,160 available hours in the first quarter of this year.

Industry analysts attribute the performance gap between Korea Zinc and Youngpoong not only to technological capabilities but also to management teams' abilities in proactive investment and portfolio diversification, as well as their capacity to create corporate valuation. Despite a prolonged management dispute and heightened volatility in raw material markets, Korea Zinc is known to have defended its profitability by diversifying its product portfolio to include precious metals such as gold and silver, as well as strategic minerals like antimony and indium (rare metals). Both revenue and operating profit in the first quarter of this year reached record highs on a quarterly basis, and according to business circles and securities firms, the company has maintained operating profits for 105 consecutive quarters since quarterly disclosures became mandatory in 2000.

Youngpoong, until last year, was repeatedly criticized for prolonged poor performance and recurring environmental pollution risks. On a separate basis, its operating loss last year reached 277.7 billion won, and it is reported that the company recorded operating losses for five consecutive years since 2021.

The Seokpo Smelter in Bonghwa County, Gyeongsangbuk-do, received a 58-day suspension order for violating the Water Environment Conservation Act, including wastewater discharge and unauthorized pipeline installation. It has also been pointed out that the facility repeatedly failed to comply with the authorities' orders for contaminated soil remediation, thereby violating integrated environmental permit conditions and causing repeated controversies.

Industry observers also argue that a clear difference in management capability is evident in both companies' future growth strategies. Korea Zinc is pursuing a "Troika Drive" strategy centered on resource recycling, renewable energy, green hydrogen, and secondary battery materials. In particular, its Project Crucible, which involves building an integrated smelter in Clarksville, Tennessee, in partnership with the U.S. government to increase production of critical minerals whose demand is growing beyond supply chain importance, is attracting global attention beyond the domestic market.

In contrast, industry critics point out that Youngpoong's excessive reliance on zinc smelting is amplifying uncertainty about its future growth. According to its first-quarter report, of Youngpoong's separate-basis revenue of 381.6 billion won, sales of zinc ingot products and goods accounted for 265 billion won, or 69.4%.

In March, SustainBest Ryu Yeong-jae (CEO) stated in a column posted on his social media that "Korea Zinc's current management team has a track record in performance, technology, and strategy that ranks among the highest in the global peer industry," while adding that "Youngpoong, due to violations of environmental and safety regulations and long-term losses in the smelting sector, cannot be seen as a superior alternative at least from the perspective of ESG and risk management."

<© STARNEWS. All rights reserved. No reproduction or redistribution allowed.>

*This content was translated by AI.