What’s Happening? → The Crucial Q2 Earnings Call on July 24

On July 24, 2025, at 1:30 PM (KST), HD Hyundai Construction Equipment will hold its Investor Relations (IR) meeting to announce its Q2 2025 financial results. The figures and forward-looking statements from this event will be critical, directly influencing investor sentiment.

Why? → Mixed Signals from Q1 and Uncertainty in Q2

First, it’s essential to review the Q1 performance. In Q1 2025, HD HCE reported consolidated revenue of KRW 906.8 billion and an operating profit of KRW 41.6 billion.

  • 🔻 Revenue Decline: This was primarily due to a slowdown in the global construction equipment market and a real estate slump in China. The production halt at its Chinese subsidiary (Hyundai Jiangsu) also contributed.
  • 🔼 Operating Profit Increase: Despite lower sales, the company successfully defended its profitability through effective cost management and improved sales strategies, which is a positive sign.

This mixed Q1 report amplifies the uncertainty surrounding Q2 performance. The outcome for the second quarter will be determined by the following key variables.

So What? → The 5 Key Variables That Will Define Q2 Results

Here are the five critical points to focus on during the Q2 results and the subsequent IR call:

  1. Global Economic Headwinds: As indicated by high US Treasury yields, a high-interest-rate environment is the biggest factor dampening construction investment. A continued global slowdown will inevitably impact sales.
  2. Raw Material and Currency Volatility: Rising prices for raw materials, including crude oil, could squeeze the operating profit margin (4.6% in Q1). Conversely, as a major exporter, the recent strength of the US Dollar against the Korean Won could positively impact revenue and profitability, making the net effect of FX a key point of analysis.
  3. The Persistent China Factor: Signals of an economic slowdown in China, such as the falling container freight index, persist. A recovery in China’s real estate market will be crucial for the company’s sales in the region.
  4. Uncertainty from Production Relocation: The impact of the Chinese production facility relocation, mentioned in the Q1 report, needs to be clarified. Investors should check for any one-off costs or production disruptions that may have occurred in Q2.
  5. Interest Rates and Domestic Sentiment: Changes in South Korea’s benchmark interest rate and bond yields could affect domestic construction investment sentiment, acting as a variable for the domestic market performance.

Investor Action Plan → How to React Before and After the IR

Given the high external uncertainty, a cautious approach is more advisable than bold predictions.

  • 🗓️ Before the IR: Adopt a ‘wait and see’ approach while gathering information. Monitor Q2 earnings estimates from securities analysts and assess the potential impact of the aforementioned FX and commodity price movements.
  • 📢 After the IR: This is the most critical phase. Check if the announced Q2 results met market expectations. More importantly, closely analyze management’s future guidance and the Q&A session. The key is to understand the company’s concrete strategy for overcoming the current challenges.
  • 🚨 Risk Management: The stock price could become volatile depending on the earnings announcement. Be sure to establish and adhere to your own risk management strategy, such as adjusting your investment exposure.

In conclusion, HD Hyundai Construction Equipment’s Q2 IR will serve as a vital barometer for future investment decisions. A disciplined analysis of the reported numbers and the strategy behind them will be key to making a successful investment.