1. Konan Technology H1 2025 Performance: What Happened?

Konan Technology reported revenue of KRW 7.455 billion and an operating loss of KRW 8.371 billion for H1 2025. Q2 results, with revenue at KRW 3.3 billion and an operating loss of KRW 4.4 billion, painted a challenging picture with declining revenue and continued losses year-over-year. While seasonality, with major project revenue concentrated in Q3, played a role, the results fell short of investor expectations.

2. Decoding the Performance: Why These Results?

Beyond seasonality, revenue decline was impacted by increased competition affecting the Vision AI segment. The continued operating losses are attributed to high R&D investment (29.70% of revenue), rising AI processor costs, and increasing LLM training and inference expenses.

3. Konan Technology Outlook: What Lies Ahead?

Konan Technology holds a substantial order backlog of KRW 24.587 billion and is investing in new ventures like on-device AI PCs, Konan RAG-X, and chatbot solutions. Key factors influencing the future stock price and company valuation include Q3 and beyond performance, profitability improvement efforts, maintaining competitiveness in the AI market, and global economic and IT investment trends.

4. Investor Action Plan: How to Respond?

Investors should maintain a cautious approach in light of the short-term performance challenges, while closely monitoring the company’s long-term growth strategy and market responsiveness. Careful consideration of revenue growth and profitability improvement in Q3 and beyond is crucial for informed investment decisions.