1. What Happened? : Q2 Earnings Analysis
Iljin Hysolus’s Q2 2025 revenue came in at 18.3 billion KRW, 15% below the market consensus of 21.5 billion KRW. Operating profit was -2.7 billion KRW, a wider loss than the -1.6 billion KRW projected. Net income also turned negative to -0.4 billion KRW, sending shockwaves through the market.
2. Why Did This Happen? : Causes of Underperformance
The primary driver of this underperformance is the decline in sales of hydrogen tanks, the company’s core business. The global slump in the hydrogen vehicle market and decreased sales of Hyundai’s Nexo (-31.9%) directly impacted Iljin Hysolus’s performance. The weak performance of the environmental business segment also contributed to the overall decline.
- Hydrogen Business Slump: Nexo sales decline led to a sharp drop in hydrogen tank revenue.
- Weak Environmental Business: High dependence on government policies makes the business vulnerable to market volatility.
- Increased Inventory: Slowing sales led to a surge in inventory (75% increase compared to the end of the previous year).
3. What’s Next? : Outlook and Investment Strategies
While downward pressure on the stock price is expected in the short term, long-term prospects include the launch of the ‘All-New Nexo,’ expansion of the commercial vehicle market, and the development of new business models. Investors should carefully consider the following key points when making investment decisions:
- Sales Performance of the ‘All-New Nexo’
- Order Intake in the Commercial Vehicle Market
- Inventory Management Efficiency
- Performance of New Businesses (Overseas Expansion, Mobile Charging Facilities, etc.)
- Improvement in Cash Flow from Operating Activities
4. What Should Investors Do? : Action Plan
At present, a cautious approach is recommended rather than aggressive investment. Continuous monitoring of the key points mentioned above is crucial, and investment should be considered when signs of performance improvement emerge.