1. Korea Zinc Q1 2025 Earnings: Key Highlights
Korea Zinc reported revenue of KRW 24.614 trillion in Q1 2025, significantly below market expectations of KRW 37.478 trillion. However, operating profit remained relatively stable at KRW 2.665 trillion, and net profit surged to KRW 3.281 trillion, exceeding the market consensus of KRW 1.321 trillion by a significant margin.
2. Analyzing the Drivers of Earnings Fluctuation
The main reasons for the revenue decline were the slowdown in the Chinese domestic market and volatility in raw material prices. Falling zinc and lead prices negatively impacted the company’s performance. Conversely, the surge in gold and silver prices drove the significant increase in net profit.
3. Performance Analysis by Business Segment
- Non-ferrous Metals: While rising gold and silver prices had a positive impact, the sluggish domestic demand for zinc posed a challenge.
- Secondary Battery Materials: Despite the decline in nickel prices affecting performance, new facility investments are expected to act as a long-term growth driver.
- Resource Recycling: Growth in the Metal Scrap Trading segment partially offset the overall revenue decline.
4. Action Plan for Investors
A cautious approach is advised for short-term investments in Korea Zinc due to ongoing uncertainties like raw material price fluctuations and management disputes. However, from a long-term perspective, with the company securing new growth engines such as secondary battery materials, a dollar-cost averaging strategy could be considered.