1. What Happened? : DKTI H1 2025 Earnings Summary
DKTI reported revenue of KRW 118.7 billion (a 50.1% YoY decrease), operating profit of KRW 8.2 billion (a 44.6% YoY decrease), and net income of KRW 5.9 billion (a 56.7% YoY decrease) for the first half of 2025. The decline in smartphone and smartwatch sales was the primary driver of the overall poor performance.
2. Why Did This Happen? : Analyzing the Decline
The slump in the smartphone market and increased competition led to a 40.3% and 70.4% YoY decrease in smartphone FPCA and smartwatch sales, respectively. Conversely, the automotive segment grew by 14.3% due to increasing demand for automotive IT and eco-friendly vehicles. However, the rise in cost of goods sold to 75.68% negatively impacted profitability.
3. What’s Next? : DKTI Future Outlook
- Positive Factors: Continued growth in the automotive sector, expansion into new businesses (ANT HRC components, EV chargers, etc.)
- Negative Factors: Potential continued downturn in the smartphone market, volatility in raw material prices and exchange rates
While the growth in the automotive sector is encouraging, the recovery of the smartphone market is crucial for future earnings improvement.
4. What Should Investors Do? : Investment Strategy
The current investment recommendation for DKTI is ‘Neutral’. Given the coexistence of growth potential and short-term performance struggles, investors should closely monitor the performance of the automotive segment, the recovery of the smartphone market, and the company’s cost control capabilities. A cautious investment approach is recommended.