1. Fine Circuit Q2 Earnings: What Happened?
Fine Circuit’s Q2 2025 revenue was 23.9 billion KRW, a significant decrease year-over-year. Both operating and net income swung into losses, indicating severe profitability issues. These figures fell significantly short of market expectations.
2. Reasons for the Decline: Why These Results?
- Declining Sales: Weakness in the PCB business segment and increasing dependence on a major client contributed to the revenue drop.
- Profitability Deterioration: Rising raw material prices, exchange rate volatility, and reduced R&D investment impacted profitability.
- Weakening Financial Health: An increasing debt-to-equity ratio and rising short-term borrowings increase financial risk.
- Additional Risk Factors: Ongoing lawsuits and tax penalties create further uncertainty.
3. Market Impact and Outlook: What’s Next?
The poor Q2 performance is expected to negatively impact Fine Circuit’s stock price. Macroeconomic uncertainties like the rising KRW/USD exchange rate and rising interest rates could further dampen investor sentiment.
4. Investment Strategy: What Should Investors Do?
The current investment recommendation for Fine Circuit is Sell. Investors should closely monitor the company’s strategies for diversification, cost competitiveness, and resumption of R&D investment.