1. KNJ H1 2025 Performance: 37% Revenue Decline, But…

KNJ reported KRW 39.2 billion in revenue for H1 2025, a 37% decrease year-over-year. This reflects the direct impact of the semiconductor market downturn. However, the company managed to control costs, maintaining a 27.32% operating profit margin, minimizing the decline in profits.

2. Core Business Competitiveness: SiC, a Key Material for the 4th Industrial Revolution

KNJ holds a technological advantage in CVD-SiC products (SiC Focus Ring, etc.), a key material for the 4th industrial revolution. Their in-house CVD deposition chamber development capability strengthens their yield and error response. Continuous R&D investment (0.89% of revenue) also demonstrates their commitment to securing future growth engines.

3. Key Checkpoints for Investors

  • Inventory Management: High inventory levels (KRW 19.74 billion) relative to the revenue decline suggest the need for an efficient inventory depletion strategy.
  • Exchange Rate Volatility: Considering their high export ratio to China (40.45%), exchange rate fluctuations (a 10% increase impacts pre-tax profit by KRW 1.29 billion) can significantly affect profitability.

4. Investment Strategies: Short-term vs. Long-term Investors

Short-term Investors: The 37% revenue decline could negatively impact short-term stock prices. Carefully consider the earnings performance compared to market expectations and the timing of the market recovery.

Long-term Investors: The growth potential of the SiC market and KNJ’s technological competitiveness are attractive. Monitor H2 earnings improvement trends, new business ventures, and R&D achievements, considering a dollar-cost averaging strategy.