1. What Happened?: KSP’s Performance Shock

KSP’s first-half 2025 revenue fell 46.7% year-on-year to KRW 45.414 billion, while operating profit plunged 55.5% to KRW 6.15 billion. Net income also saw a significant decline. The company has been directly impacted by the downturn in the shipbuilding industry.

2. Why?: Shipbuilding Downturn and Financial Deterioration

The decline in new shipbuilding orders has severely affected KSP’s core engine parts business. Adding to the woes, inventory levels have risen by 22.9%, and increasing debt has led to a higher debt-to-equity ratio, weakening financial health.

3. What’s Next?: Opportunities and Risks Amidst Uncertainty

KSP’s short-term recovery appears challenging due to the persistent shipbuilding downturn. However, the company’s technological prowess in engine parts and global manufacturing approvals provide a competitive edge. The expansion into new businesses (space/aviation) offers new growth potential. These positive factors suggest the possibility of a mid-to-long-term turnaround.

4. Investor Action Plan: Proceed with Caution, Long-Term Perspective is Key

Investing in KSP requires caution. While short-term improvement is unlikely, investors should evaluate the company’s long-term potential based on its technological capabilities and new business ventures. A thorough assessment of the shipbuilding industry’s recovery potential and KSP’s financial restructuring efforts is crucial before making investment decisions.