Suprema Inc. (KOSDAQ 236200) _ Five consecutive years of growth in the core business
Suprema Inc. (KOSDAQ 236200) — Reading the Business and the Numbers Through Its Filings
Five consecutive years of growth in the core business, and three things that need checking after H1 2026
[DISCLOSURE]
Who wrote this, and why
A private analysis of public regulatory filings, written to set out what the filings say
so that a reader can follow the sources and either agree or disagree.
It was not produced for, or at the request of, any company, client or sponsor.
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Sources and accuracy
- Built from public filings (DART), company materials and press reports, as cited in the text.
- The author believes these sources are reliable but does not warrant their accuracy or
completeness. Errors of transcription or interpretation are possible.
- As of 2026-09-12. Filings and results after that date are not reflected, and the author
does not undertake to update this document.
Forward-looking statements
Section 12 sets out scenarios for 2027, and other passages describe possible futures.
These are the author's estimates built on stated assumptions. They are neither forecasts
of what will happen nor company guidance, and actual results may differ materially.
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Translation
An English version of a Korean-language report. Where the two differ,
the Korean original prevails.
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Converted at a single rate of USD 1 = KRW 1,400. "KRW bn" means billions of won and
"USD m" means millions of US dollars. Figures are rounded, so components may not sum
exactly to totals.
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One-line summary
The core business's margins and growth are confirmed by five years of numbers. But in the first half of 2026 three things happened: (1) profit and cash diverged sharply, (2) inventory grew far faster than revenue, and (3) a substantial part of net profit came from changes in the carrying value of financial assets the company holds. How these three settle in the third-quarter numbers is the fork in the road for reading this company.
| Label | Meaning |
|---|---|
| FACT | Directly supported by a filing or financial statement |
| COMPANY FILING | A claim the company wrote in its own report or disclosure |
| PRESS | Quoted from press coverage or a company official's remarks |
| VIEW | The author's interpretation or estimate |
0. Company profile — what kind of company is this
| Item | Content |
|---|---|
| Founded | 31 December 2015, newly established through a spin-off from Suprema HQ. Founding capital KRW 3.5bn (USD 2.5m) FACT |
| Listing | Re-listed on KOSDAQ on 5 February 2016. Not a special-track (pre-revenue) listing FACT |
| Head office | 17F Parkview Tower, 248 Jeongja-il-ro, Bundang-gu, Seongnam, Gyeonggi FACT |
| Size | 251 employees (as of 31 Dec 2025, excluding registered officers), average tenure 5 years. Classified as an SME and a venture company FACT |
| Management | Three-member board (2 inside directors, 1 outside director). Co-CEO structure under Lee Jae-won and Kim Han-cheol, both re-appointed 26 March 2024. No change in largest shareholder over the last five fiscal years FACT |
| Subsidiaries | Seven overseas (UK, France, Dubai, Japan, US, Mexico, India). Went from eight to seven after absorbing domestic subsidiary Suprema AI in February 2025 FACT |
| Credit rating | A+ (eCredible). Most recent assessment 26 March 2026; A+ maintained since 2023 FACT |
Product history [FACT — as written by the company in the corporate history section of its annual report] (20260319001121)
| Date | Content |
|---|---|
| 2016.02 | Fingerprint recognition solution for mobile devices launched |
| 2019.02 | Next-generation in-display fingerprint recognition solution launched |
| 2020.09 | Contactless mobile access card and AI facial recognition products launched |
| 2023.11 | AI-based fingerprint recognition product launched (the company describes it as a "world first") |
| 2024.09 | AI-based integrated control platform launched |
FACT There is a "Change of Head Office Location" filing dated 9 September 2026, but its content is not a relocation — it corrects a typographical error in the registered floor number, from 16F to 17F (20260909900209). Reading it as a move of premises would be factually wrong VIEW.
1. What the company sells
| Segment | Share of revenue | Customers | What is sold | How it gets paid |
|---|---|---|---|---|
| Integrated security systems | 81% | Roughly 1,000 dealers and system integrators (SI) across 100 countries. End demand from corporates, public sector, data centres, factories | Face and fingerprint access terminals plus management software | Order-based, short lead-time sales. Exports settled by telegraphic transfer (T/T), collection in 0–60 days |
| Biometric solutions | 11% | Qualcomm, plus smartphone, safe and door-lock makers | Fingerprint algorithms and recognition modules for smartphones | Algorithm licence fees plus module sales |
| Services and other | 8% | Domestic installation customers | Installation and maintenance | Project basis |
- H1 2026 revenue by segment — integrated security systems KRW 57.85bn (USD 41.3m), biometric solutions KRW 7.67bn (USD 5.5m), services KRW 2.89bn (USD 2.1m), other KRW 3.05bn (USD 2.2m) FACT (20260813001588)
- Exports KRW 60.81bn (USD 43.4m) / domestic KRW 10.65bn (USD 7.6m) → exports are 85.1% of revenue FACT (20260813001588)
- Since 2019, an ultrasonic fingerprint algorithm licence agreement with Qualcomm; supplied from the Galaxy S10 through the S26 COMPANY FILING (20260319001121)
- The company states that "because orders are short lead-time, order backlog is not a meaningful figure" COMPANY FILING (20260813001588). → There is therefore no backlog indicator that would give advance notice of future revenue. VIEW
- Integrated security systemsKRW 57.85bn · 81.0%
- Biometric solutionsKRW 7.67bn · 10.7%
- OtherKRW 3.05bn · 4.3%
- ServicesKRW 2.89bn · 4.0%
VIEW The company frequently mentions cloud and subscription, but no subscription revenue appears as a separate line in the financial statements. On the current financial structure, reading this as a hardware manufacturer that builds and sells terminals is the accurate description.
Why customers buy
- COMPANY FILING Cards and PINs can be lent or lost, so they cannot establish "who actually entered", whereas biometrics admit only the person themselves — this is the company's stated argument (20260319001121).
- COMPANY FILING The company frames the competitive factors as four: recognition accuracy, recognition speed, ease of use, and price.
- VIEW So this product is less a "nice to have" than equipment governed by a rule that is hard to change once set. Access rules are entangled with building management, HR and security policy, so swapping one terminal for another brand means replacing the management software as well. This is the most plausible candidate for explaining why there has been no down year in five. That said, the company does not disclose customer retention, so it cannot be confirmed numerically.
Where it is trying to expand
| Direction | What the company has stated | Source |
|---|---|---|
| More points of use | Beyond doors, into kiosks, smart buildings, elevators and ATMs (Automated Teller Machines) COMPANY FILING | 20260319001121 |
| Entry into video security | Development of AI video surveillance cameras (CCTV) and expansion into video management software (VMS) COMPANY FILING | 20260319001121 |
| Integrated platform | Unveiled an integrated solution showing access records, video and anomalies on one screen (SECON 2026, March 2026) PRESS | Boan News, March 2026 |
| Cloud | Introduced server-less cloud access control (BioStar Air) at Intersec 2026 (January 2026) PRESS | January 2026 coverage |
VIEW The direction of expansion is not toward finding new customers but toward selling cameras to the same customers who already have access control installed. On probability of success, this is the better path. But the video security market already has incumbents such as Hanwha Vision, Axis and Bosch, which makes this a familiar customer buying an unfamiliar product from the company's point of view. No video security revenue has ever appeared as a separate line in the filings to date.
2. Industry and demand
- H1 2026 consolidated revenue KRW 71.46bn (USD 51.0m), up 16.5% from KRW 61.33bn (USD 43.8m) a year earlier FACT (20260813001588)
- Second quarter alone KRW 40.34bn (USD 28.8m), up 24.0% year on year and 29.6% quarter on quarter FACT (20260730900786)
- Revenue from 2021 to 2025: KRW 72.6bn → 89.4bn → 94.6bn → 108.2bn → 137.3bn (USD 51.9m → 63.9m → 67.6m → 77.3m → 98.1m) — five consecutive years of growth, no down year FACT (20240318000679, 20260319001121)
COMPANY FILING The company writes that "security systems are installed wherever they are needed even in a weak economy, so the business is not greatly affected by the cycle" (20260319001121).
VIEW Since there was no down year across five years that included the pandemic and the rate-hike period, this claim is partly supported by measurement. Five years is, however, a short window to contain one full business cycle.
COMPANY FILING The company writes that tightening privacy regulation (Europe's GDPR — General Data Protection Regulation, and California's CCPA — California Consumer Privacy Act) accelerates adoption of biometric authentication.
VIEW Regulation cuts both ways. It also moves toward restricting the collection of facial data itself, so looking only at the favourable side tilts the picture.
Market size — starting with why the numbers are hard to trust
To check the total addressable market (TAM), the author looked at outside research firms. The results are below [PRESS — figures published by private market research firms].
| Research firm | What is being measured | 2026 size | Outlook |
|---|---|---|---|
| Mordor Intelligence | Access control (narrow definition) | USD 4.1bn | USD 5.9bn by 2031, 7.7% a year |
| 360iResearch | Access control | USD 11.8bn | USD 18.9bn by 2032, 8.2% a year |
| Fortune Business Insights | Access control | USD 12.7bn | USD 26.2bn by 2034, 9.5% a year |
| The Business Research Company | Access control | USD 17.2bn | USD 29.8bn by 2030, 14.8% a year |
| Persistence Market Research | Electronic access control (broad definition) | USD 54.8bn | USD 108.2bn by 2033, 10.2% a year |
| Goode Intelligence | Biometric access control | — | Over USD 9.8bn by 2028 |
VIEW These carry the same market name, yet the figures differ by more than thirteen times between firms, because the definitions vary — whether doors and locks are included, whether software is included. For that reason this report does not calculate "a percentage of the total market". The moment you choose a denominator, you have chosen the conclusion.
Instead, only a sense of scale is recorded VIEW.
| Item | Value | Basis |
|---|---|---|
| Market that can be addressed (SAM, Serviceable Available Market) | Biometric-based access control terminals and platforms | USD 4.0bn–10.0bn, using the narrower definitions above |
| Share actually captured (SOM, Serviceable Obtainable Market) | 2025 revenue KRW 137.3bn ≈ USD 98.1m | At USD 1 = KRW 1,400 |
| Ratio | Roughly 1.0–2.5% | Varies with the denominator chosen |
VIEW The company's claim of being "second globally" (citing OMDIA 2021) and the 1.0–2.5% above are not contradictory. In a highly fragmented market, second place can still be a single-digit share. Still, it is fairer to hold in mind that the actual share is smaller than the phrase "number two" suggests. For reference, Mordor Intelligence lists Suprema among the market's major players alongside Honeywell, Bosch, Hanwha Techwin and Thales PRESS.
Not confirmed — the market size and share data the company cites are from 2021. No independent source confirming a 2026 share was found. The research-firm figures in the table above cover total market size only and contain no company-level shares.
3. Does the competitive advantage show up in the numbers
| Candidate advantage | If real, where should it appear | Does it appear |
|---|---|---|
| Switching cost (once installed, expansion stays with the same brand) | Revenue stability, no down years | ○ Five consecutive years of revenue growth FACT |
| Certifications and patents | Sustained high gross margin | ○ Gross margin 67.6% (H1 2026) vs 67.5% (H1 2025) FACT |
| Ability to absorb input costs | Margin held through a spike in input prices | ○ Semiconductor (IC) purchases rose from 34.0% to 50.4% of input buying, yet gross margin held FACT |
| Scale and share | Share versus competitors | △ Company states it is second globally COMPANY FILING — the supporting data is from 2021 |
| Brand (pricing power) | A record of price increases | △ The company does not disclose price trends, stating that "the product price range is wide, making an average price trend difficult to calculate" COMPANY FILING |
- 155 registered patents (88 domestic, 67 overseas), 58 under examination FACT (20260319001121)
- R&D spending of KRW 13.68bn (USD 9.8m) in 2025, or 9.96% of revenue (11.71% in 2024, 13.07% in 2023) FACT (20260319001121)
VIEW The R&D ratio has fallen three years running (13.07% → 11.71% → 9.96%). The amount rose, but not as fast as revenue. That helps short-term margins, and points in a different direction from the stated plan to expand into video security. Whether the 2026 ratio falls further below 10% is a checkpoint.
Will this barrier still be there in three years VIEW
| Barrier | What holds it up now | How it could weaken | What to watch |
|---|---|---|---|
| Cost of switching | Terminal and management software (BioStar) come as a set, so changing brand means changing both | A migration to cloud replaces everything anyway, which opens a window to switch | Whether subscription or cloud revenue appears as a separate line |
| 155 certifications and patents | The company states this makes entry hard for later arrivals COMPANY FILING | Patents expire, and AI recognition performance is levelling off quickly as a commodity technology | Whether gross margin stays in the 67% range |
| Distribution (100 countries, 1,000 partners) | Twenty years of accumulation, including North American distributor ADI | Price offensives from Chinese vendors; distribution locked up by competitor M&A | Whether the French and Middle East subsidiaries turn from loss to profit |
| Qualcomm algorithm contract | Continuous supply from Galaxy S10 to S26 COMPANY FILING | Effectively a single customer. A change in sensor method could remove it at once | Whether adoption continues in the next Galaxy S series |
VIEWThe signal from the other side — the fuel that maintains these barriers is R&D. Yet R&D as a share of revenue has fallen three years in a row. This does not mean the barrier has collapsed, but there is room to read it as the pace of building the barrier slowing down. More so at a moment when the company is trying to enter a new field in video security.
4. Customers and competition
COMPANY FILING The competitive landscape as written by the company in its annual report (20260319001121)
| Price tier | Competitor | Company's stated position |
|---|---|---|
| Mid-to-high | Idemia (France) | Head-to-head competition |
| Mid-to-low | HIKVision, ZKTeco (China) | Hard to compete on price; responds with quality and certifications |
- Seven overseas subsidiaries — UK, France, Dubai, Japan, US, Mexico, India. Combined subsidiary revenue in H1 2026 KRW 38.22bn (USD 27.3m) FACT (20260813001588)
- 2025 net profit by subsidiary FACT (20260319001121)
| Entity | 2025 net profit |
|---|---|
| UK | +KRW 432m (+USD 309k) |
| France | −KRW 485m (−USD 346k) |
| Middle East (UAE) | −KRW 47m (−USD 34k) |
| Japan | +KRW 513m (+USD 366k) |
| US | +KRW 453m (+USD 324k) |
| Mexico | +KRW 266m (+USD 190k) |
| India | +KRW 113m (+USD 81k) |
VIEW Only two entities are loss-making — France and the Middle East — and the amounts are small. Grouped as "Europe", the UK profit offsets them and the total is around −KRW 53m (−USD 38k).
- North American distribution runs through dealers including the large security distributor ADI, alongside direct sales COMPANY FILING (20260319001121)
Not confirmed — the periodic reports contain no revenue breakdown by major customer. Concentration in any single customer therefore cannot be verified. That said, the biometric solutions segment (11% of revenue) is structurally dependent on smartphone makers on the company's own account.
VIEW Chinese vendors do not push in only one direction. They are a source of price pressure, and at the same time the trend of excluding them from Western markets on security grounds works the other way. Counting only one side gets it wrong.
5. What moves revenue and profit
Volume
- H1 2026 production 163,984 units (Q1 76,414 → Q2 87,570, +14.6%) FACT (20260813001588)
- Capacity utilisation 95.4% FACT (20260813001588)
- Production headcount 98 (Q1) → 116 (Q2) FACT (20260813001588)
VIEW Utilisation looks high, but the company states in the original text that it calculates capacity as headcount × eight hours a day. Headcount did in fact rise by 18. So 95.4% means less "a new plant is needed" than "capacity rises if more people are hired".
Price
- Facial recognition products carry similar profitability to existing products but roughly twice the average selling price (ASP), per a company official PRESS (summarised from Etoday, 30 July 2026)
- Artificial intelligence (AI) based products account for 53% of revenue COMPANY FILING (20260421900639)
Could input costs be passed through to prices
| Item | 2024 | 2025 | H1 2026 |
|---|---|---|---|
| Total raw material purchases | KRW 25.04bn (USD 17.9m) | KRW 28.91bn (USD 20.7m) | KRW 26.45bn (USD 18.9m) for the half |
| Of which semiconductors (IC) | 35.5% | 34.0% | 50.4% |
| Gross margin | — | — | 67.6% (67.5% a year earlier) |
FACT (20260319001121, 20260813001588)
VIEW The semiconductor share of purchases rose sharply, yet gross margin held. Either the rising mix of facial recognition products offset the cost increase, or the cost was passed into selling prices. Because the company does not disclose prices, the two cannot be separated. What is certain is that the margin held.
Inventory — the most important short-term checkpoint in this report
- Inventory KRW 21.47bn (USD 15.3m) at end-2025 → KRW 34.05bn (USD 24.3m) at end-June 2026 (+58.6%, +KRW 12.59bn / +USD 9.0m in six months) FACT (20260813001588)
- Revenue growth over the same period +16.5% FACT
- For reference — in 2025, when revenue grew 26.9%, inventory rose only 3%, from KRW 20.83bn (USD 14.9m) to KRW 21.47bn (USD 15.3m) FACT
Breakdown of the KRW 12.59bn (USD 9.0m) increase FACT (20260813001588)
| Category | End-2025 | End-June 2026 | Change | Share of the increase |
|---|---|---|---|---|
| Raw materials | KRW 11.19bn (USD 8.0m) | KRW 19.52bn (USD 13.9m) | +KRW 8.33bn (+USD 6.0m) | 66% |
| Finished and merchandise goods | KRW 7.02bn (USD 5.0m) | KRW 10.65bn (USD 7.6m) | +KRW 3.63bn (+USD 2.6m) | 29% |
| Work in process | KRW 3.23bn (USD 2.3m) | KRW 3.85bn (USD 2.8m) | +KRW 0.61bn (+USD 0.4m) | 5% |
| Goods in transit | KRW 20m (USD 14k) | KRW 30m (USD 21k) | +KRW 10m (+USD 7k) | 0% |
| Total | KRW 21.47bn (USD 15.3m) | KRW 34.05bn (USD 24.3m) | +KRW 12.59bn (+USD 9.0m) | 100% |
- Inventory turnover 2.2x in 2025 → 1.7x in H1 2026; inventory as a share of total assets 7.2% → 10.5% FACT
VIEW Inventory grew about 3.5 times faster than revenue. But two-thirds of the increase is raw materials, not finished goods. So the reading splits three ways.
| Branch | Content | What supports this branch now |
|---|---|---|
| (a) Pre-stocking | Preparing ahead for second-half volume | A business weighted to the second half (59.5% of 2025 operating profit) |
| (b) Demand misjudgement | Forecast missed and stock piled up | Finished and merchandise goods also rose KRW 3.63bn (USD 2.6m) |
| (c) Component securing | Raw materials bought ahead of semiconductor supply difficulty | Raw materials are 66% of the increase; semiconductor share of purchases went from 34.0% to 50.4% |
The three cannot be separated with the data available. What can be said is that reading it solely as "finished goods that did not sell" conflicts with the facts. The verdict lands with the third-quarter results.
6. Quality of earnings — do profit and cash move together
| Item | 2023 | 2024 | 2025 | H1 2025 | H1 2026 |
|---|---|---|---|---|---|
| Net profit | KRW 22.95bn (USD 16.4m) | KRW 32.49bn (USD 23.2m) | KRW 32.38bn (USD 23.1m) | KRW 8.83bn (USD 6.3m) | KRW 28.86bn (USD 20.6m) |
| Operating cash flow | KRW 23.41bn (USD 16.7m) | KRW 34.22bn (USD 24.4m) | KRW 37.33bn (USD 26.7m) | KRW 7.59bn (USD 5.4m) | KRW 1.92bn (USD 1.4m) |
| Cash ÷ profit | 1.02x | 1.05x | 1.15x | 0.86x | 0.07x |
FACT (20240318000679, 20260319001121, 20260813001588)
The first three columns are full years; the last two are half years. Even comparing like with like, half against half, the ratio widened from 0.86x to 0.07x FACT.
Why the gap opened
- H1 2026 non-cash adjustments −KRW 9.38bn (−USD 6.7m) (removing profit that did not arrive as cash) FACT
- Change in working capital −KRW 18.02bn (−USD 12.9m) (inventory growth is the large part) FACT
- Of pre-tax profit of KRW 33.37bn (USD 23.8m), operating profit was KRW 15.55bn (USD 11.1m) — the remaining roughly KRW 17.8bn (USD 12.7m) arose outside operations FACT (20260813001588)
What the non-operating profit consists of
| Financial income/expense item | H1 2025 | H1 2026 |
|---|---|---|
| Valuation gain on financial assets | KRW 1.62bn (USD 1.2m) | KRW 12.0bn (USD 8.6m) |
| Disposal gain on financial assets | KRW 0.23bn (USD 0.2m) | KRW 2.7bn (USD 1.9m) |
| Valuation loss on financial assets | −KRW 5.42bn (−USD 3.9m) | −KRW 2.91bn (−USD 2.1m) |
| Disposal loss on financial assets | 0 | −KRW 0.97bn (−USD 0.7m) |
| Net financial-asset result | −KRW 3.57bn (−USD 2.6m) | +KRW 10.82bn (+USD 7.7m) |
FACT (20260813001588, note 26)
VIEW Of H1 2026 net profit of KRW 28.86bn (USD 20.6m), KRW 10.82bn (USD 7.7m), or 37%, is the change in the carrying value of shares and bonds held. It did not arrive as cash. The same account swung through a range of about KRW 14.4bn (USD 10.3m) within a single year. Using this company's net profit and earnings per share (EPS) as they stand therefore means using a number that moves with the year.
Audit
- 2025 auditor Samjong Accounting Corp. (삼정회계법인), unqualified opinion, no going-concern uncertainty and no emphasis of matter FACT (20260319001121)
- Key audit matter — timing of revenue recognition on overseas goods sales (second year running) FACT. With 85% of revenue coming from exports, this means the auditor's closest attention went to when revenue is recognised VIEW
7. Financial position — cash and financial assets
Consolidated, as of 30 June 2026 FACT (20260813001588)
| Item | Amount |
|---|---|
| Cash and cash equivalents | KRW 77.44bn (USD 55.3m) |
| Short-term financial instruments | KRW 30.46bn (USD 21.8m) |
| Current financial assets at fair value | KRW 20.29bn (USD 14.5m) |
| Financial assets at amortised cost (current and non-current) | KRW 6.62bn (USD 4.7m) |
| Non-current financial assets at fair value | KRW 84.29bn (USD 60.2m) |
| Total financial assets | KRW 219.1bn (USD 156.5m) |
| Total liabilities | −KRW 28.07bn (−USD 20.1m) |
| Net financial assets | about KRW 191.0bn (USD 136.4m) |
VIEW "Net financial assets" here subtracts total liabilities in full from total financial assets. Total liabilities include operating items such as trade payables and income tax payable, so the figure is conservative; on the other side, other financial assets of KRW 9.17bn (USD 6.6m) were left out of the total.
- Long-term borrowings KRW 1.0m (USD 714) — effectively debt-free FACT
- No convertible bonds and no warrants → zero scheduled share issuance overhang FACT
- Contingent liabilities — a KRW 3.02bn (USD 2.2m) performance guarantee from Seoul Guarantee Insurance, and short-term export insurance (a limit) from K-SURE. No debt guarantees and no pledged collateral FACT
- Purchases of property, plant and equipment in H1 2026 were KRW 0.99bn (USD 0.7m) — a business structure with a light capital spending burden FACT
Composition of financial assets at fair value
| Category | End-2025 | End-June 2026 | Fair value level |
|---|---|---|---|
| Hybrid capital securities etc. | KRW 43.99bn (USD 31.4m) | KRW 26.2bn (USD 18.7m) | Level 2 |
| Listed equities | KRW 10.5bn (USD 7.5m) | KRW 18.82bn (USD 13.4m) | Level 1 |
| Unlisted equities | KRW 4.58bn (USD 3.3m) | KRW 4.58bn (USD 3.3m) | Level 3 |
| Debt securities | KRW 69.09bn (USD 49.4m) | KRW 54.98bn (USD 39.3m) | Level 2 |
| Total | KRW 128.17bn (USD 91.6m) | KRW 104.58bn (USD 74.7m) |
FACT (20260813001588, "e. Estimation of fair value")
Fair value level is a grade for "how the value was arrived at". Level 1 is the traded market price itself, Level 2 is calculated using inputs observable in the market, and Level 3 is the company's own estimate.
| Level | End-June 2026 | Share |
|---|---|---|
| Level 1 (market price as is) | KRW 18.82bn (USD 13.4m) | 18.0% |
| Level 2 (calculated from observable inputs) | KRW 81.18bn (USD 58.0m) | 77.6% |
| Level 3 (company's own estimate) | KRW 4.58bn (USD 3.3m) | 4.4% |
FACT Level 3 — where the company sets the value itself — is KRW 4.58bn (USD 3.3m), and the company states that it applies the cost method to these unlisted equities (treating acquisition cost as the best estimate of fair value). The amount is indeed identical, KRW 4.58bn (USD 3.3m), at both end-2025 and end-June 2026 (20260813001588).
FACT Individual holdings are disclosed in the annual report under "Investments in other entities (detailed)". As of end-2025 the listed portion included Union Biometrics (유니온바이오메트릭스), NVIDIA, TSMC, Samsung Electronics, SK hynix, Apple, Microsoft, Salesforce, BYD and Samsung Biologics; the unlisted portion included Clausen (클라우젠), Ridi (리디), Laonark (라오나크), Onoma AI (오노마ai) and the Capstone AI investment partnership (캡스톤AI투자조합). Romanised names of the unlisted holdings and of Union Biometrics are the translator's rendering; the Korean names as filed are given in brackets (20260319001121).
VIEW Put together: what rose during the half was listed equities, which carry the market price directly (KRW 10.5bn → 18.82bn / USD 7.5m → 13.4m), while unlisted equities, where company discretion is greatest, did not move by a single won from KRW 4.58bn (USD 3.3m). A suspicion that "profit was manufactured through valuation discretion" is therefore not supported by these filings. But the remaining fact stands — this KRW 10.82bn (USD 7.7m) is not cash, and it swings from year to year with interest rates and share prices.
Not confirmed — the individual composition of the KRW 54.98bn (USD 39.3m) of debt securities and the KRW 26.2bn (USD 18.7m) of hybrid capital securities is not disclosed. Both are classified as Level 2.
A large amount of financial assets was sold during the half
| Item | H1 2026 |
|---|---|
| Disposal of financial assets at fair value | KRW 40.76bn (USD 29.1m) |
| Acquisition of financial assets at fair value | −KRW 6.35bn (−USD 4.5m) |
| Net disposal | +KRW 34.41bn (+USD 24.6m) |
| Cash and cash equivalents | KRW 51.29bn → KRW 77.44bn (USD 36.6m → 55.3m) |
FACT (20260813001588, consolidated cash flow statement)
VIEW The balance of financial assets at fair value fell from KRW 128.17bn to KRW 104.58bn (USD 91.6m to 74.7m), a decline of KRW 23.6bn (USD 16.9m), while cash rose by KRW 26.1bn (USD 18.6m). This is a fact pointing the opposite way from a picture of "inflating the books with valuation gains", so it is fairer to read it alongside the KRW 12.0bn (USD 8.6m) valuation gain noted earlier.
8. Shareholder returns and governance
Ownership structure FACT (as of 30 June 2026, 20260813001588)
Chairman Lee Jae-won ──33.72%──▶ Suprema HQ (094840) ──29.22%──▶ Suprema (236200)
└────────────── direct 1.16% ──────────────────────────────────┘
Largest shareholder and related parties combined: 33.92%
| Shareholder | Stake | As of | Source |
|---|---|---|---|
| Suprema HQ | 29.22% | 2026.06.30 | 20260813001588 |
| Dalton Investments | 8.00% (previously 5.05%) | 2026.07.31 | 20260807000452 |
| National Pension Service | 5.26% | 2026.03 | 20260401004814 |
| The-J Asset Management | 5.03% | 2026.03 | 20260311003239 |
| Treasury shares | 1.59% (110,833 shares) | 2026.06.30 | 20260813001588 |
| 7,407 minority shareholders | 43.37% | 2026.06.30 | 20260813001588 |
- Suprema HQ29.22%
- Dalton Investments8.00%
- National Pension Service5.26%
- The-J Asset Management5.03%
- Treasury shares1.59%
- 7,407 minority holders43.37%
- Remainder (balancing)7.53%
VIEW Foreign asset manager Dalton Investments raised its stake from 5.05% to 8.00%, filing the purpose as simple investment. The timing overlaps with the company's shareholder-return measures, but there is no basis for asserting a causal link.
What changed in 2026 FACT
| Item | 2023–2025 | 2026 |
|---|---|---|
| Year-end dividend | None for three straight years | — |
| Quarterly dividend | None | KRW 200 per share (USD 0.14) paid (record date 30 June, total KRW 1.37bn / USD 1.0m, paid 23 July) — 20260707900461 |
| Treasury share cancellation | — | 282,962 shares cancelled (3.9% of shares outstanding) |
| Treasury share buyback | — | KRW 12.0bn (USD 8.6m) trust agreement (one year from 21 April 2026, cancellation intended at expiry) |
| Source of dividends | — | KRW 10.0bn (USD 7.1m) reduction of capital reserve, transferred to retained earnings (approved at the extraordinary general meeting on 11 August, 20260713000400) |
| Governance | — | Related-party transaction committee added to the articles of association; one additional outside director appointed |
COMPANY FILING Shareholder return policy 2026–2028 — a minimum annual dividend of at least KRW 400 per share (USD 0.29), and a three-year average total shareholder return ratio of at least 40% of consolidated net profit (20260421900639)
Related-party transactions FACT (consolidated basis, notes to 20260319001121)
| Item | 2024 | 2025 |
|---|---|---|
| Suprema's purchases etc. (recurring) | KRW 7.38bn (USD 5.3m) | KRW 9.68bn (USD 6.9m) (+31.1%) |
| Suprema's sales etc. | KRW 4.15bn (USD 3.0m) | KRW 5.17bn (USD 3.7m) |
| Acquisition of fixed assets | Not stated | KRW 4.59bn (USD 3.3m) |
- Counterparties within the 2025 recurring purchases of KRW 9.68bn (USD 6.9m) — Suprema HQ (슈프리마에이치큐, largest shareholder) KRW 6.1bn (USD 4.4m), MOCA System (모카시스템) KRW 3.47bn (USD 2.5m), Thegroo (더그루) KRW 0.1bn (USD 71k), Korea Sailing Yacht Club (코리아세일링요트클럽) KRW 10m (USD 7k) FACT
- Counterparties within the 2025 fixed asset acquisitions of KRW 4.59bn (USD 3.3m) — Thegroo (더그루) KRW 2.03bn (USD 1.5m), MOCA System (모카시스템) KRW 2.56bn (USD 1.8m) FACT
FACT Recurring purchases of KRW 9.68bn (USD 6.9m) equal 29.6% of 2025 operating profit of KRW 32.74bn (USD 23.4m).
FACT Suprema HQ is stated to handle original design manufacturing (ODM) and MOCA System to handle mobile access cards.
FACT Chairman Lee Jae-won holds 33.72% of Suprema HQ and 1.16% of Suprema.
VIEW Each line above is a fact verifiable in the filings. This report does not assess whether these transactions were on arm's-length terms; it records the amounts as disclosed. Two points are nonetheless worth noting. First, recurring purchases rose 31% in one year, from KRW 7.38bn (USD 5.3m) to KRW 9.68bn (USD 6.9m), which is faster than the 26.9% revenue growth in the same year. Second, in 2025 the company acquired KRW 4.59bn (USD 3.3m) of fixed assets from related parties, an item absent the year before. Whether this trend continues can be checked each year in the annual report under "Related-party transactions" and "Transactions with major shareholders". The composition and operating results of the related-party transaction committee will be visible for the first time in the March 2027 annual report.
9. Filings over the last 13 months (full review)
For the period 1 August 2025 to 12 September 2026, 102 filings in total by Suprema and Suprema HQ were reviewed at the list level.
Shareholder returns and governance
- 2026.01.28 decision to cancel shares / 2026.03.17 report on results of treasury share disposal
- 2026.03.12 notice of Corporate Value-up Plan / 2026.04.21 Corporate Value-up Plan progress report (20260421900639)
- 2026.04.21 decision to enter a treasury share acquisition trust agreement — KRW 12.0bn (USD 8.6m)
- 2026.07.07 cash and in-kind dividend decision, KRW 200 per share (USD 0.14) (20260707900461) — the company's first ever dividend
- 2026.07.22 report on acquisition under the trust agreement
- 2026.08.11 results of the extraordinary general meeting — amendment of the articles (related-party transaction committee), appointment of an outside director, KRW 10.0bn (USD 7.1m) reduction of capital reserve
Results and operations
- 2026.04.30 / 2026.07.30 consolidated preliminary results fair disclosure (20260730900786)
- 2026.02.23 change of 30% or more in revenue or profit and loss structure
- Six investor relations (IR) event disclosures
Ownership
- 2025.10.27 Lee Jae-won and related parties, 32.60% large-holding report (20251027000361)
- 2026.03.11 The-J Asset Management 5.03% / 2026.04.01 National Pension Service 5.26%
- 2026.06.02 and 2026.08.07 Dalton Investments 5.05% → 8.00%
Other
- 2026.09.09 change of head office location (20260909900209) — not a relocation but a correction of a floor-number typographical error
- At the parent, Suprema HQ: three correction orders relating to treasury share disposal between January and April 2026; 7 April 2026 advance notice of designation as a company with unfaithful disclosure (disclosure reversal); 27 April 2026 not designated (designation deferred) FACT. These relate to the parent, not to Suprema itself.
FACTRecording what is absent as well — over the last 13 months there was no rights issue, no convertible bond issuance, no change in the largest shareholder, no litigation disclosure, and no emphasis of matter in the audit report.
10. Strengths and weaknesses on one page (SWOT)
SWOT is a way of gathering Strengths, Weaknesses, Opportunities and Threats onto a single page.
| Strengths (S) | Weaknesses (W) |
|---|---|
| Five consecutive years of revenue growth; gross margin held in the 67% range | No order backlog indicator to give advance notice of future revenue |
| Net financial assets of about KRW 191.0bn (USD 136.4m); effectively debt-free | 37% of H1 2026 net profit came from valuation and disposal of financial assets |
| Distribution in 100 countries; 155 registered patents | Recurring related-party purchases of KRW 9.68bn (USD 6.9m) a year (30% of 2025 operating profit), up 31% in one year |
| Opportunities (O) | Threats (T) |
|---|---|
| Selling video security and AI cameras to existing access control customers | Price competition from Chinese vendors |
| Rising security demand in data centres, transport and energy | Possible delay in selling the KRW 34.05bn (USD 24.3m) of inventory |
| Start of a shareholder return policy — first dividend, treasury share cancellation | Privacy regulation that restricts the collection of facial data itself |
Strengths (S)
| Fact | Source |
|---|---|
| Revenue 2021–2025: KRW 72.6bn → 89.4bn → 94.6bn → 108.2bn → 137.3bn (USD 51.9m → 98.1m), with no down year FACT | 20240318000679, 20260319001121 |
| H1 2026 gross margin 67.6% (67.5% a year earlier) FACT | 20260813001588 |
| Financial assets KRW 219.1bn (USD 156.5m), liabilities KRW 28.07bn (USD 20.1m), long-term borrowings KRW 1.0m (USD 714) FACT | 20260813001588 |
What it means VIEW — this company's strength is closer to staying power than to growth. With almost no debt and cash-like assets making up two-thirds of total assets, a bad year or two would not shake the business structurally. But the fact that this cash is not reinvested in the business and sits instead in financial assets is attached to the weakness below.
Weaknesses (W)
| Fact | Source |
|---|---|
| The company states backlog is meaningless because orders are short lead-time COMPANY FILING | 20260813001588 |
| H1 2026 net financial-asset result +KRW 10.82bn (USD 7.7m), 37% of net profit of KRW 28.86bn (USD 20.6m) FACT | 20260813001588, note 26 |
| 2025 recurring related-party purchases KRW 9.68bn (USD 6.9m) (prior year KRW 7.38bn / USD 5.3m); fixed asset acquisitions KRW 4.59bn (USD 3.3m) FACT | 20260319001121 |
What it means VIEW — the three point the same way: an outside observer has few instruments for checking things in advance. Without a backlog there is no disclosed basis for gauging next quarter's revenue; net profit contains price movements of assets the company values; and related-party amounts are visible only once a year. This is not a verdict of "bad" — it is a problem of long checking intervals.
Opportunities (O)
| Fact | Source |
|---|---|
| Corporate Value-up Plan states an AI camera launch in Q3 2026 FACT | 20260421900639 |
| Stated expansion into AI data centre build-outs, emerging-market transport infrastructure and energy COMPANY FILING | 20260319001121 |
| First quarterly dividend in 2026 (KRW 200 / USD 0.14 per share), 282,962 treasury shares cancelled, KRW 12.0bn (USD 8.6m) trust buyback FACT | 20260707900461, 20260421900639 |
What it means VIEW — two different kinds of opportunity are mixed here. The business-side opportunities (video security, data centres) have not yet appeared in the numbers, while the shareholder-return changes have already been executed. Putting two things of different certainty in one box creates an illusion. Only the latter is confirmed today.
Threats (T)
| Fact | Source |
|---|---|
| Company states it competes with Chinese vendors (HIKVision, ZKTeco) in the mid-to-low tier COMPANY FILING | 20260319001121 |
| Inventory KRW 21.47bn → 34.05bn (USD 15.3m → 24.3m), +58.6% in six months, against +16.5% revenue FACT | 20260813001588 |
| France subsidiary 2025 net profit −KRW 485m (−USD 346k), Middle East −KRW 47m (−USD 34k) (UK +KRW 432m / +USD 309k, India +KRW 113m / +USD 81k) FACT | 20260319001121 |
What it means VIEW — of the three, the only threat currently visible in the numbers is inventory. Competition from Chinese vendors has not yet cut prices, judging by five years of maintained margin, and only two subsidiaries are loss-making; including the UK, the European total is around −KRW 53m (−USD 38k). In order of priority: inventory → subsidiaries → price competition. Even so, two-thirds of the inventory increase is raw materials, so it cannot be pinned down as "unsold finished goods".
Overall implications VIEW
Written as conditional statements rather than evaluative labels.
- If inventory falls below KRW 30.0bn (USD 21.4m) in the third quarter while revenue grows more than 20% year on year, that is a window in which the strength (staying power) and the opportunity (business expansion) are confirmed in the same direction.
- If inventory rises further and operating cash flow does not recover, the weakness (few checking instruments) and the threat (inventory) overlap, and an assessment of "a company that books profit but does not collect cash" could harden.
- If the March 2027 annual report shows related-party purchases higher again, the third weakness should be re-read as structural rather than temporary.
11. 2026 results estimate VIEW
The following is the author's simple estimate, not company guidance.
- The 2025 first-half to second-half split of revenue was 44.7 : 55.3 FACT
- Applying the same seasonality to H1 2026 revenue of KRW 71.46bn (USD 51.0m) gives about KRW 160bn (USD 114.3m) for the year → a range of KRW 155.0–165.0bn (USD 110.7–117.9m) VIEW
- The 2025 first-half to second-half split of operating profit was 40.5 : 59.5 FACT
- Applying the same seasonality to H1 2026 operating profit of KRW 15.55bn (USD 11.1m) gives about KRW 38.4bn (USD 27.4m) for the year VIEW
- Because there is no guarantee that seasonality repeats, the range is taken as KRW 37.0–40.0bn (USD 26.4–28.6m) VIEW
Normalised net profit — removing all valuation and disposal results on financial assets, 2026 net profit is estimated at about KRW 41.8bn (USD 29.9m) VIEW. Because the level of financial income this company earns on a steady basis cannot be established, this figure is also an assumption.
12. Outlook — how the playing field is changing, and what the company is doing
12-1. The direction in which the market structure is shifting
| Change | Content | Source |
|---|---|---|
| The line between access control and video security is disappearing | An integrated platform managing door hardware and CCTV on one screen is becoming the industry's standard direction PRESS / COMPANY FILING | SECON 2026 coverage, 20260319001121 |
| From on-premises servers to the cloud | Management via web and mobile without an on-site server has appeared PRESS | Intersec 2026 coverage |
| Geopolitics | The exclusion of Chinese vendors from Western markets on security grounds, and price offensives from those same vendors, operate at the same time VIEW | — |
VIEW Of the three, the first weighs most on this company. If the integrated platform becomes the standard, a company that sells only terminals slides into being a component supplier, and the company holding the screen sets the price. Reading the company's push into video security as a response to exactly this is the natural interpretation.
12-2. What the company has actually done — only items with a date attached
| Date | What | Source |
|---|---|---|
| 2026.01 | At Intersec 2026, announced two new access control devices (BioStation 3 Max, XPass Q2) for first-half launch, and introduced a cloud platform PRESS | January 2026 coverage |
| 2026.03 | At SECON 2026, unveiled an integrated access control, video management and video analytics solution, and presented a public-procurement version PRESS | Boan News, March 2026 |
| 2026.04.21 | Corporate Value-up Plan progress report states an AI camera launch in Q3 2026 FACT | 20260421900639 |
| 2026.06.10 | External investor material describes it as "preparing for a second-half launch" PRESS | Korea IR Service (한국IR협의회) material, June 2026 |
| 2026.04–08 | KRW 12.0bn (USD 8.6m) treasury trust, first quarterly dividend, capital reserve reduction, related-party transaction committee established FACT | See section 8 |
VIEW Among the dated responses, more has been executed on the shareholder-return side than on the product side. For the AI camera, the filing says "third quarter" while external material says "second half". Either way, no launch disclosure or press release had been confirmed as of this report's cut-off date FACT.
12-3. Three branches VIEW
| Bull | Base | Bear | |
|---|---|---|---|
| Premises | (1) In Q3, the KRW 34.0bn (USD 24.3m) of inventory, including KRW 19.5bn (USD 13.9m) of raw materials, converts into product and sales (2) AI camera launches and entry into video security (3) KRW 12.0bn (USD 8.6m) treasury cancellation plus a year-end dividend take the return ratio to 40% (4) Confirmed reduction in related-party purchases | (1) Revenue growth continues around 20% (2) Return policy executed as planned (3) Related-party transactions stay at current levels (4) Financial-asset valuation results neutral | (1) The inventory build is confirmed as a demand misjudgement — Q3 revenue stalls plus an inventory write-down (2) A 10% valuation loss on financial assets (−KRW 10.5bn / −USD 7.5m) (3) A weaker USD/KRW rate compresses export margins (4) Related-party purchases expand |
| 2027 revenue | KRW 210.0bn (USD 150.0m) | KRW 185.0bn (USD 132.1m) | KRW 145.0bn (USD 103.6m) |
| 2027 operating profit | KRW 52.0bn (USD 37.1m) | KRW 43.0bn (USD 30.7m) | KRW 25.0bn (USD 17.9m) |
Each branch, spelled out
| What was multiplied | The picture in words | Why this is the signal | |
|---|---|---|---|
| Bull | Revenue KRW 210.0bn (USD 150.0m) × operating margin 24.8% | The stockpiled raw materials become product and sell, the AI camera arrives and adds video security revenue, and expansion in data centres, India and the Middle East continues | Inventory turning into revenue comes first. The product launch comes after |
| Base | Revenue KRW 185.0bn (USD 132.1m) × operating margin 23.2% | Growth continues around 20% as it has, with new products not yet contributing much | Closest to the average shape of the last five years |
| Bear | Revenue KRW 145.0bn (USD 103.6m) × operating margin 17.2% | Inventory is confirmed as a misjudgement, a financial-asset valuation loss lands on top, and the exchange rate turns unfavourable | All three have to arrive together. Any one alone does not produce this figure |
The confirming signals are covered by the table in section 16 — which branch materialises is judged only by numbers and dates, not by words.
VIEWHow the bear case would actually happen — it is not simple growth slowdown but a chain. The KRW 34.05bn (USD 24.3m) of inventory is cash that has already gone out. If it does not sell, then (a) revenue does not grow, (b) an inventory write-down enters cost of sales and pulls the 67%-range gross margin down, and (c) operating cash flow, already down to KRW 1.92bn (USD 1.4m) in the half, gets worse. A financial-asset valuation loss then lands on top. Because net profit in H1 2025 was only KRW 8.83bn (USD 6.3m), this combination is not a hypothesis but a shape that has already appeared once FACT.
12-4. Overall outlook VIEW
What decides this company's future is not technology but two confirmations.
First, what the KRW 34.05bn (USD 24.3m) of inventory actually was VIEW. Given that KRW 8.33bn (USD 6.0m) of the KRW 12.59bn (USD 9.0m) increase was raw materials, it looks closer to "components secured in advance" than to "finished goods that did not sell". Whether those components become product and actually sell is not yet confirmed. If they sell, the door to the bull branch opens; if the forecast was wrong, it is the first button on the bear branch. The verdict lands with the third-quarter preliminary results at the end of October 2026.
Second, whether video security stays talk or becomes numbers. The direction in which integrated platforms reshape the playing field is described the same way across several sources, so the direction itself is relatively clear. For the company to be the one holding the screen, however, the AI camera has to launch and be confirmed in revenue, and no video security revenue has ever been booked separately in the filings.
Until these two are confirmed, reading this company as "a company that holds up well but does not show you its future in advance" is closest to the facts VIEW. Conversely, if both are confirmed together, the current reading has to change.
13. Calendar of things to check
| Timing | Event | What it confirms |
|---|---|---|
| During Q3 2026 | Launch of the in-house AI camera (the company's Corporate Value-up Plan states "scheduled for Q3 2026") | Whether it actually launches |
| Around mid-October 2026 | Board resolution on the third-quarter dividend | Whether the dividend continues, and at what amount |
| Around end-October 2026 | Q3 consolidated preliminary results fair disclosure | Whether the KRW 34.05bn (USD 24.3m) of inventory converted into revenue — the single most important item |
| Mid-November 2026 | Q3 quarterly report | Whether operating cash flow recovers; inventory level |
| February–March 2027 | Full-year 2026 results and year-end dividend resolution | Whether the 40% total shareholder return ratio is achieved |
| March 2027 | Annual general meeting and Corporate Value-up Plan progress report | First results of the related-party transaction committee |
| 21 April 2027 | Expiry of the treasury share trust agreement → cancellation intended | Whether it is carried out |
Expectations without a date attached (a large data centre order, robotics collaboration, expansion in India and the Middle East) are not placed on this calendar.
14. Risks, in order of impact on profit VIEW
| Category | Content | Impact on profit |
|---|---|---|
| Financial | Valuation losses on KRW 104.58bn (USD 74.7m) of financial assets at fair value | Large. A 10% valuation loss is −KRW 10.5bn (−USD 7.5m) pre-tax, equal to 32% of 2025 operating profit. There is a precedent: a −KRW 5.42bn (−USD 3.9m) valuation loss in H1 2025. That said, the composition is 18% Level 1, 78% Level 2, and only 4.4% company-estimated (Level 3) |
| Business | Delay in selling the KRW 34.05bn (USD 24.3m) of inventory | Large. An inventory write-down and stalled revenue arrive together |
| Governance | Rising related-party purchases | Medium to large. Recurring purchases of KRW 9.68bn (USD 6.9m) a year, up 31% in one year, plus a separate KRW 4.59bn (USD 3.3m) of fixed asset acquisitions in 2025 |
| Business | A weaker USD/KRW rate | Medium. Exports are 85% of revenue. Raw materials are also bought in dollars, which offsets part of it |
| Business | Price competition from Chinese vendors | Medium. The trend of exclusion from Western markets works the other way |
| Business | Customer concentration in biometric solutions | Small to medium. That segment's revenue is KRW 7.67bn (USD 5.5m), 11% of the total |
| Narrative | The gap between "AI data centre" expectations and the actual numbers | Medium. Data centre revenue was about KRW 3.1bn (USD 2.2m) in 2025 and about KRW 2.6bn (USD 1.9m) in Q1 2026 PRESS / COMPANY FILING |
| Regulatory | Tightening privacy regulation on facial recognition | Small to medium. Collection rules are tightening in Europe and the US |
15. Looking at it from the other side
For balance, four criticisms that could be made of this company are set out alongside the counter-arguments.
Criticism 1 — a large part of net profit did not arrive as cash.
Of total assets of KRW 323.7bn (USD 231.2m), KRW 219.1bn (USD 156.5m), or 68%, are financial assets. Of H1 2026 net profit of KRW 28.86bn (USD 20.6m), KRW 10.82bn (USD 7.7m) is the valuation and disposal result on those assets, and the same account moved through a range of about KRW 14.4bn (USD 10.3m) in a single year. FACT
Counter-argument — the auditor issued an unqualified opinion and this item was not included among key audit matters. The composition is also verifiable in the filings: of KRW 104.58bn (USD 74.7m) of financial assets at fair value, only KRW 4.58bn (USD 3.3m), or 4.4%, is Level 3, where the company sets the value itself, and even that was carried at cost and did not change during the half. What increased was listed equities, which carry the market price directly (KRW 10.5bn → 18.82bn / USD 7.5m → 13.4m), and individual equity holdings are disclosed by name in the annual report. FACT Even so, the facts that this profit is not cash and that it swings sharply from year to year remain. VIEW
Criticism 2 — cash generation from the core business fell sharply in the half.
Operating cash flow fell from KRW 7.59bn (USD 5.4m) in H1 2025 to KRW 1.92bn (USD 1.4m) in H1 2026 (the full year 2025 figure was KRW 37.33bn / USD 26.7m). While revenue grew 16.5%, inventory grew 58.6%. FACT
Counter-argument — this is a second-half-weighted business (59.5% of 2025 operating profit came in the second half), so first-half inventory build may be a normal pattern, and 66% of the increase is raw materials rather than finished goods. Still, compared with 2025, when inventory barely moved from KRW 20.83bn to 21.47bn (USD 14.9m to 15.3m) across the whole year, this year's increase is very different from the recent pattern, and no verdict is possible before the third-quarter results. VIEW
Criticism 3 — the amounts flowing to related parties are not small, and they are rising.
On a consolidated basis, recurring purchases rose 31%, from KRW 7.38bn (USD 5.3m) in 2024 to KRW 9.68bn (USD 6.9m) in 2025 (30% of 2025 operating profit). On top of that, KRW 4.59bn (USD 3.3m) of fixed assets were acquired from related parties in 2025, an item absent the year before. The chairman holds 33.72% of the parent and 1.16% of this company. FACT
Counter-argument — in 2026 the company cancelled 3.9% of its shares, paid its first dividend and reduced capital reserve, all actually executed, and established a related-party transaction committee. Even so, confirmation that the amounts have actually fallen is only possible in the March 2027 annual report. VIEW
Criticism 4 — the numbers are still small relative to the "AI data centre" story.
Data centre revenue was about KRW 3.1bn (USD 2.2m) in 2025, roughly 2.3% of total revenue. PRESS / COMPANY FILING
Counter-argument — the rate of increase is real (Q1 2026 reached 84% of the prior full year), and because facial recognition products carry a high unit price, the contribution grows quickly with volume. "The direction is right but the size is still small" is the accurate description. VIEW
VIEWStated plainly — of the four above, the author could not rebut criticism 3. No document was found in which the company explicitly commits to reducing related-party transactions, and re-checking the filings instead confirmed a rising trend (+31%). Creating a committee and reducing transaction amounts are two different things. Conversely, criticism 1 came out weaker than first drafted — the basis for saying that assets with wide valuation discretion had increased did not match the original filings, and was corrected.
16. Facts that would change the reading
| Direction | Fact to check | Where |
|---|---|---|
| Toward positive | Q3 revenue up more than 20% year on year while inventory falls below KRW 30.0bn (USD 21.4m) | End-October 2026 preliminary results fair disclosure |
| Toward positive | Full-year 2026 operating cash flow at 80% or more of net profit | Cash flow statement in the March 2027 annual report |
| Toward positive | Execution of the KRW 12.0bn (USD 8.6m) treasury share cancellation | Share cancellation decision filing |
| Toward positive | A decline in related-party purchases in the annual report | "Transactions with major shareholders" in the March 2027 annual report |
| Toward negative | Q3 revenue growth in the single digits | End-October 2026 preliminary results fair disclosure |
| Toward negative | Inventory rising further, above KRW 35.0bn (USD 25.0m) | Q3 quarterly report |
| Toward negative | Quarterly dividend suspended or reduced | Cash and in-kind dividend decision filing |
| Toward negative | Half-year valuation losses on financial assets above KRW 10.0bn (USD 7.1m) | Note 26 of the quarterly and half-year reports |
| Toward negative | A rights issue or convertible bond issuance | Material fact report |
| Toward negative | Related-party purchases above KRW 15.0bn (USD 10.7m) a year | March 2027 annual report |
| Toward negative | A new emphasis of matter, or a new key audit matter relating to financial assets | March 2027 audit report |
17. What could not be confirmed (insufficient evidence)
| # | Question | How it could be confirmed |
|---|---|---|
| 1 | The individual composition of KRW 54.98bn (USD 39.3m) of debt securities and KRW 26.2bn (USD 18.7m) of hybrid capital securities (equity holdings are disclosed in the annual report) | Question at an investor briefing |
| 2 | Why listed equities rose from KRW 10.5bn to 18.82bn (USD 7.5m to 13.4m) — new purchases or valuation gains (the cash flow statement shows only the net of KRW 40.76bn (USD 29.1m) disposals and KRW 6.35bn (USD 4.5m) acquisitions) | Notes to the Q3 report; question at an investor briefing |
| 3 | The regional composition of the KRW 34.05bn (USD 24.3m) of inventory, and the intended use of the KRW 8.33bn (USD 6.0m) increase in raw materials | Question at an investor briefing |
| 4 | Whether the AI camera actually launched in Q3 2026 | Press releases on the company website |
| 5 | The customer composition of the KRW 7.67bn (USD 5.5m) of biometric solutions revenue | Question at an investor briefing |
| 6 | Revenue concentration among top customers — whether any single customer exceeds 20% | Question at an investor briefing (not stated in periodic reports) |
| 7 | Global access security market share on a 2024–2025 basis | Independent market research (the company's citation is from 2021) |
| 8 | The first agenda items and outcomes of the related-party transaction committee | Governance section of the March 2027 annual report |
| 9 | Whether any merger discussion with Suprema HQ exists | Monitoring of filings (no related filing at present) |
| 10 | The cause of the 2025 losses at the European and Middle East subsidiaries — structural or temporary | Question at an investor briefing |
| 11 | The AI camera launch timing — the filing says "Q3", external material says "second half" | Company press release / Q3 quarterly report |
| 12 | Whether video security and subscription revenue are recognised as separate lines | Segment revenue in the quarterly and annual reports |
| 13 | Share by market definition on a 2026 basis — research firms differ by thirteen times on market size | Full text of paid market research reports |
Limits of this report — plain disclosure
- The 2026 operating profit estimate of KRW 37.0–40.0bn (USD 26.4–28.6m) is the author's calculation, a simple estimate applying the 2025 first-half/second-half split directly. It is not company guidance.
- Normalised net profit of KRW 41.8bn (USD 29.9m) removes all valuation and disposal results on financial assets; the "normal" level of financial income for this company cannot be established.
- This report contains no share price, market capitalisation, valuation multiple, fair value, target price or investment opinion. These were deliberately excluded; their absence is not an omission.
- The 2026 revenue estimate of KRW 155.0–165.0bn (USD 110.7–117.9m) is likewise the author's calculation, applying the 2025 first-half/second-half revenue split directly.
- The market size figures are transcribed from private research firms' published summaries and were not verified by the author. Because definitions differ by up to thirteen times between firms, they were not used as the basis for any share calculation.
- This document is a record organising public filings, not investment advice. It was made so that a reader can follow the sources and either agree or disagree.
Appendix — source list
The 14-digit numbers after figures in the text are receipt numbers from DART (Data Analysis, Retrieval and Transfer System), the Financial Supervisory Service's electronic disclosure system.
| Receipt number | Document | Filing date |
|---|---|---|
| 20260813001588 | Half-year report (June 2026) | 2026.08.13 |
| 20260319001121 | Annual report (December 2025) | 2026.03.19 |
| 20240318000679 | Annual report (December 2023) | 2024.03.18 |
| 20260730900786 | Consolidated preliminary results fair disclosure | 2026.07.30 |
| 20260713000400 | Notice of extraordinary general meeting | 2026.07.13 |
| 20260707900461 | Cash and in-kind dividend decision | 2026.07.07 |
| 20260421900639 | Corporate Value-up Plan progress report | 2026.04.21 |
| 20260807000452 | Large-holding report (Dalton Investments) | 2026.08.07 |
| 20260401004814 | Large-holding report (National Pension Service) | 2026.04.01 |
| 20260311003239 | Large-holding report (The-J Asset Management) | 2026.03.11 |
| 20251027000361 | Large-holding report (Lee Jae-won and others) | 2025.10.27 |
| 20260909900209 | Change of head office location | 2026.09.09 |
Press sources — Etoday, 30 July 2026 (company official's remarks on average selling price and data centres); Boan News, March 2026 (integrated solution unveiled at SECON 2026); January 2026 coverage of Intersec 2026 participation (two new products and a cloud platform); Boan News, September 2026 (participation in an Indian exhibition); Korea IR Service (한국IR협의회) corporate analysis material, 10 June 2026 (preparations for a second-half AI camera launch). Articles are summarised, not reproduced.
Market data — market size summaries published by Mordor Intelligence, 360iResearch, Fortune Business Insights, The Business Research Company, Persistence Market Research and Goode Intelligence (Biometric Update). The full text of the paid reports was not accessed; only the published summaries were used.
Currency note — all KRW figures are converted at USD 1 = KRW 1,400, a single rate applied throughout. Figures originally published in US dollars (the market size table in section 2) are shown as published and are not re-converted. Converted figures are rounded, so components may not sum exactly to totals.
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