1. What Happened in H1 2025?
Dongwon Systems recorded sales of KRW 366.3 billion (+3% vs. expectations), operating profit of KRW 25.9 billion (+11% vs. expectations), and net income of KRW 15.8 billion (-5% vs. expectations) in the first half of 2025. Sales and operating profit exceeded market expectations, showcasing positive performance. The decrease in net income is attributed to temporary cost increases related to investments in the secondary battery business.
2. What are the Key Growth Drivers?
Dongwon Systems has two main growth drivers:
- Packaging Business: Steady growth is maintained through a stable customer base in food, beverages, and household goods, increasing demand for eco-friendly packaging, and expansion into overseas markets.
- Secondary Battery Materials Business: Significant growth potential is driven by the surging demand for secondary battery materials (cylindrical cans, cathode foils, cell pouches, etc.) due to the growth of the electric vehicle market, particularly with a strong foothold in the 4680 cylindrical battery can market.
3. Action Plan for Investors
Dongwon Systems is an attractive investment opportunity combining the high growth potential of the secondary battery materials business with the stability of the packaging business. However, consider the following factors before making an investment decision:
- Maintain a Long-Term Perspective: Develop a long-term investment strategy considering the long-term growth prospects of the secondary battery industry.
- Risk Management: Continuously monitor and manage risk factors such as fluctuations in raw material prices and exchange rates, and financial burdens related to investments in the secondary battery business.
- Valuation and Market Condition Check: Determine the appropriate investment timing and size considering current stock prices and market conditions.