1. PI Advanced Materials Q2 Earnings: What Happened?

PI Advanced Materials reported revenue of ₩72.5 billion, operating profit of ₩16.2 billion, and net income of ₩11.7 billion for Q2 2025. These figures represent a 7%, 9%, and 19% miss, respectively, compared to market consensus. The significant decline in net income is particularly worrying for investors.

2. Why the Disappointing Performance?

  • Rising Raw Material Prices: Sustained increases in raw material prices, including a surge in gold prices, negatively impacted profitability.
  • Investment Delays: Delays in the expansion of the PI varnish production line hampered production capacity expansion.
  • Exchange Rate Fluctuations: As a company with a high proportion of exports, PI Advanced Materials was significantly affected by exchange rate movements.
  • Macroeconomic Uncertainty: Concerns over a global economic slowdown and volatile oil prices added to the uncertainty.

3. What’s Next for PI Advanced Materials?

The stock price is likely to face downward pressure in the short term. The long-term outlook depends on management’s response strategy, stabilization of raw material prices, and the overall macroeconomic environment. The change in management strategy under Arkema Korea Holdings also warrants close attention.

4. What Should Investors Do?

  • Remain Cautious: Be mindful of increased short-term volatility in the stock price.
  • Monitor Management’s Response: Carefully review management’s plans for cost reduction and growth strategy revisions.
  • Track Macroeconomic Indicators: Continuously monitor trends in raw material prices and exchange rates.