1. SoluM’s Q1 Performance: What Happened?
Despite positive performance in the battery foil segment, declining sales and profitability in OLED and advanced materials led to an operating loss in Q1. The drastic drop in advanced materials revenue share to 5% is a significant concern.
2. Unpacking the Reasons for the Decline
- Increased competition in the Chinese OLED market and rising raw material prices
- Decreased operating profit in the battery foil segment and increased SG&A expenses
- Higher financial costs due to US/Korea interest rate hikes
- Fluctuations in the KRW/USD exchange rate and raw material price volatility
3. Key Takeaways from the July 24th IR Meeting
- Q1 Earnings and Turnaround Strategy: Evaluate management’s ability to address the current challenges.
- Battery Foil Growth Strategy & North American Expansion: Pay close attention to the specifics of their North American expansion plan and risk management strategies.
- Financial Stability Improvement Plan: Look for clear explanations of their debt reduction and fundraising plans.
- Long-term Growth Strategy and Future Vision: Assess the company’s vision through their new business development plans and mid-to-long-term growth targets.
4. Action Plan for Investors
Carefully analyze the IR meeting content to evaluate the company’s growth potential and risks. Investment strategies may need to be adjusted based on the company’s outlook and proposed improvements. Avoid being swayed by short-term stock fluctuations and focus on monitoring the company’s fundamentals over the long term.