1. What Happened? : Reasons for the Earnings Decline
Hanil Hyundai Cement’s H1 2025 earnings showed a decline in both revenue and operating profit. The main cause was the sluggish demand for cement due to the construction downturn. Rising raw material prices, transportation costs, and stricter environmental regulations also contributed to the decline in profitability.
2. Why Did This Happen? : Construction Downturn and the Cement Industry
The cement industry is highly sensitive to fluctuations in the construction market. The construction downturn that began in 2024 directly impacted Hanil Hyundai Cement’s performance. Uncertainties in the macroeconomic environment, including interest rate hikes and volatile raw material prices, also put pressure on the cement industry.
3. What’s Next? : Merger Synergy and Future Outlook
The merger with Hanil Cement is a crucial factor for Hanil Hyundai Cement’s future. If synergy effects are realized in production, distribution, and R&D, it is expected to strengthen competitiveness and secure growth momentum. Economies of scale and improved operational efficiency are also anticipated. However, external uncertainties remain, including the timing of the construction market recovery and the stabilization of raw material prices.
4. What Should Investors Do? : Investment Strategy
The current investment recommendation is ‘Neutral’. Short-term stock price volatility is expected, but the merger synergy effect can be anticipated from a mid-to-long-term perspective. Investors should closely monitor the timing of the construction market recovery, the progress of the merger, and fluctuations in raw material prices.