1. Hyundai G&F Holdings Q1 2025 Earnings: What Happened?

Hyundai G&F Holdings reported a significant decline in consolidated revenue to KRW 207.2 billion in Q1 2025. While changes in the scope of consolidation should be considered, the underperformance of the heavy equipment, telecommunications, and bio sectors was noticeable, offsetting the relatively strong performance of the apparel and furniture segments. Operating profit also decreased to KRW 9.6 billion, attributed to a combination of factors, including declining revenue, rising raw material costs, and increased SG&A expenses.

2. External Factors: Why These Results?

  • Rising Raw Material Prices: Increases in the price of raw materials, such as cotton, rice, and dried shredded squid, directly impacted the profitability of various business segments.
  • Exchange Rate Volatility: Fluctuations in the KRW/EUR exchange rate affected import and export activities, particularly impacting export-oriented business units.
  • High Interest Rate Environment: Interest rate hikes in the US and Korea increased corporate financing costs and constrained investment.
  • Global Economic Slowdown: The decline in the China Containerized Freight Index suggests a global economic slowdown, potentially negatively impacting Hyundai G&F Holdings’ export business.

3. Key IR Discussion Points and Investor Action Plan: What to Do?

The upcoming IR is expected to address short-term earnings improvement strategies, risk management plans, new business growth strategies, and R&D investment plans. Investors should seek answers to the following questions:

  • What are the specific reasons for the weak Q1 performance and the solutions?
  • What are the strategies to address rising raw material prices and exchange rate volatility?
  • What are the specific business plans and profitability strategies for new business areas (e.g., ready-to-eat meals, health foods)?
  • What are the financing and investment plans in the high interest rate environment?

Based on the IR outcomes, investors should reassess their investment strategies and carefully evaluate the long-term growth potential.