1. SMCG Q2 Earnings: Below Expectations
SMCG reported Q2 2025 revenue of ₩16.1B (-10% YoY), operating profit of ₩1.7B (-11% YoY), and net income of ₩1.3B (-41% YoY), missing market expectations. The significant decline in net income has raised investor concerns.
2. Reasons for Underperformance: One-off Costs and External Factors
The disappointing results are attributed to a combination of factors, including increased one-time costs related to a merger, higher financial expenses, rising raw material prices, and unfavorable exchange rate fluctuations. Operating cash flow also worsened due to increased inventory.
3. Positive Factors: Growth Momentum Remains
- • Supplying global beauty companies: L’Oreal, Johnson & Johnson
- • Benefiting from ESG and premiumization trends: Eco-friendly glass containers
- • Expansion of production capacity and automation investment
- • K-Beauty growth and export diversification
- • Expected improvement in financial structure through KOSDAQ listing
4. Action Plan for Investors: 5 Key Checkpoints
SMCG presents both growth potential and short-term financial risks. Consider these 5 points before investing:
- • Possibility of earnings turnaround in the second half
- • Trend of financial health improvement (debt ratio reduction)
- • Improvement in working capital management efficiency
- • New order wins and global market expansion performance
- • Exchange rate fluctuation risk management strategy