[Edaily Reporter Kwon Oh Seok ] DS Investment & Securities stated in an analysis on the 2nd that TC Materials Co., Ltd. is significantly undervalued within its sector and that quarterly margins are expected to improve, with the second quarter marking the trough. However, the firm did not provide an investment recommendation or a target price.

TC Materials Co., Ltd. is a company that produces materials—such as cables and transformers—used in industries that rely on electricity, utilizing copper. It has secured major domestic transformer and wire manufacturers, including HD HYUNDAI ELECTRIC, HYOSUNG HEAVY INDUSTRIES, ILJIN ELECTRIC, and LS Cable, as clients.
Jo Dae-hyung, an analyst at DS Investment & Securities, stated, “The company is also expected to benefit from rising Chonbang demand driven by the replacement of aging power grids and architectural changes resulting from increased power density in data centers.” He added, “Its main products include enameled copper wire, as well as round copper wire and CTC (continuous drawn copper), which are used as core materials in transformers. “In particular, the revenue share of CTC—used in the manufacture of everything from medium- and low-voltage transformers to ultra-high-voltage transformers—is projected to increase, leading to expected improvements in profitability,” he emphasized.
The proactive capacity expansion initiated in 2025 to increase the revenue share of highly profitable CTC is now entering its final stages. The company plans to sequentially add eight CTC production lines by October of this year, bringing the total from five to 13. Consequently, monthly CTC production is expected to more than triple to 1,600 metric tons.
Analyst Cho explained, “In 2027, when the expanded capacity is fully operational, both top-line revenue and profitability are expected to improve due to the increased share of CTC and enhanced productivity,” adding, “As the share of large-capacity and ultra-high-voltage transformers—which have high wire consumption—increases, we can even anticipate further improvements in profitability.”
Second-quarter operating profit reached 3.8 billion won (up 164.2% year-over-year, with an operating margin of 3.1%), continuing to benefit from rising Chonbang demand; however, the stock price fell sharply following the earnings announcement due to disappointing profitability compared to the first quarter (operating margin of 6.3%). He stated, “This is because, during periods of rapidly rising costs, the timing of applying the cost—which serves as the basis for pricing—varies by client,” adding, “To resolve this, we understand that negotiations are underway to restructure pricing so that it is calculated based on the current-month cost at the time of shipment.”
He added, “Consequently, a significant increase in annual earnings is expected, and the outlook for operating profit of 21.3 billion won (+213.0%) in 2026 and 36.7 billion won (+72%) in 2027 is highly visible.”