1. Sungkwang Bend Q2 2025 Performance: Below Expectations

Sungkwang Bend reported weak Q2 2025 results with revenue of KRW 58.1 billion (down 13.2% YoY), operating profit of KRW 10.8 billion (significantly down YoY), and net profit of KRW 6.5 billion (significantly down YoY and 63% below consensus). The sharp decline in net profit is a particular concern for investors.

2. Analyzing the Underperformance

The disappointing results are likely due to a combination of factors, including slowing demand in downstream industries, potential order delays, difficulties in managing cost of goods sold, and increased expenses. Rising raw material prices, currency fluctuations, and increased competition may have also contributed to the weaker performance.

3. Action Plan for Investors

In the short term, a conservative approach is recommended due to the potential for increased stock price volatility following the weak earnings report. Investors should closely monitor raw material prices, currency exchange rates, the outlook for orders in the second half of the year, and the progress of the new solar power project.

In the medium to long term, investors should consider the growth potential of Sungkwang Bend’s core pipe fitting business, increasing LNG-related projects, and growing demand for renewable energy. However, it will be crucial to monitor whether the company can overcome its current underperformance and achieve stable profitability.