1. What’s Happening with CAP Corp.?

CAP Corp. reported revenue of KRW 147.3 billion and operating profit of KRW 11.6 billion in the first half of 2025, demonstrating robust growth. The high operating margin of the SMT business segment (16%) and the stable profitability of the wiper business were key drivers. The merger of two companies in May 2025 is expected to create synergy between the SMT (mobile phone components) and automotive parts (wipers) businesses.

2. What are the Key Growth Drivers?

  • SMT Business: Increased demand for FPCA, fueled by the adoption of OLED panels and the growth of the 5G market, supports the SMT business’s growth potential.
  • Automotive Wiper Business: Shifting the business model from OEM to aftermarket focus (80% aftermarket share) reduces dependence on new car sales fluctuations and secures a stable revenue base.

3. What Should Investors Consider?

Despite the positive aspects, several factors warrant consideration. Exchange rate fluctuations can impact the SMT business’s foreign exchange gains and losses, while a substantial amount of debt could become a financial burden if interest rates rise. Furthermore, intensifying competition in the SMT market and dependence on specific customers are potential risk factors.

4. Action Plan for Investors

CAP Corp. is expected to achieve stable growth based on business diversification and sound financial health. However, before making an investment decision, it’s crucial to carefully examine factors such as exchange rate risk, debt management, changes in the competitive landscape, and customer diversification strategies.