1. What Happened at Taegwang Co.?
Taegwang Co. reported revenue of KRW 72.3 billion (up 15.2% YoY), operating profit of KRW 7.7 billion (up 4.1% YoY), and net income of KRW 14.7 billion for Q1 2025. While revenue and net income exceeded market expectations, operating profit fell short.
2. Why These Results?
The revenue growth is attributed to a recovery in the upstream industry and robust order intake. However, the decline in operating profit suggests worsening profitability due to increased cost burdens, higher selling, general and administrative expenses, and potentially an increase in low-margin orders. The surge in net income is likely due to non-operating factors such as increased financial income, one-off gains, and lower corporate taxes.
3. What’s Next for Taegwang Co.?
In the short term, concerns over weak operating profit could negatively impact the stock price. However, market conditions and external factors can influence stock movements. In the medium to long term, the recovery of the plant equipment division and the growth of HTC’s secondary battery business will be key determinants of the company’s value. External factors, such as fluctuations in raw material prices, exchange rates, and interest rate cuts, will also play a significant role.
4. What Should Investors Do?
- Verify Final Results: Compare and analyze the differences between preliminary and final earnings.
- Analyze Operating Profit Decline: Understand the reasons for the decline in profitability through the company’s official announcements and business reports.
- Monitor Secondary Battery Business Strategy: Pay attention to HTC’s secondary battery business growth strategy and its execution results.
- Evaluate Plant Business Recovery Potential: Monitor the global plant market outlook, Taegwang’s order intake, and its performance improvement.