1. What Happened at UIL?

UIL’s H1 2025 revenue was 102.8 billion KRW, down 11.1% year-over-year. Operating profit decreased by 6.7% to 7 billion KRW, and net income plummeted by a staggering 71.6% to 2.1 billion KRW. Increased competition and a demand slowdown in the mobile phone and e-cigarette components markets are the primary factors behind this poor performance.

2. Why Did This Happen?

A general downturn in the mobile phone market coupled with intensified competition led to a decline in sales of UIL’s core metal components business. The e-cigarette components market also underperformed expectations, with increased competition negatively impacting results. While the rise in the KRW/USD exchange rate is a positive, further analysis is needed considering overseas production base operating costs and foreign currency debt. The decline in the KRW/EUR exchange rate could be a burden for UIL, given its presence in the European market.

3. What’s Next for UIL?

UIL is striving to secure long-term growth drivers through investments in new businesses, such as expanding its e-cigarette components business and establishing UIL Partners. However, this may increase financial burdens in the short term. The success of this business diversification strategy will be key to UIL’s future growth.

4. What Should Investors Do?

Downward pressure on the stock price is expected in the short term, so a wait-and-see approach is recommended. In the medium to long term, investment decisions should be made while monitoring new business performance, profitability improvement, and exchange rate fluctuations. Key variables to watch include mobile phone market recovery, revenue contribution from new businesses, and UIL’s cost management capabilities.