1. Daechang Forging’s H1 2025 Earnings Disappointment: What Happened?
Daechang Forging’s consolidated revenue for the first half of 2025 reached 172.3 billion KRW, a 46.5% decrease compared to the same period last year. Operating profit and net income also declined by 33.5% and 61.4%, respectively, indicating an overall earnings slump. The downturn in the construction market, coupled with prolonged high interest rates and the resulting stagnation in the construction equipment market, are identified as the primary causes.
2. Analyzing the Reasons Behind the Earnings Decline: Why?
- Construction market downturn and prolonged global high interest rates
- Decreased demand due to stagnation in the construction equipment market
- Continued fixed cost burden despite declining sales
3. So, What’s the Future of Daechang Forging?
In the short term, if the construction market recovery is delayed, it will be challenging to improve earnings. However, based on its stable financial structure, Daechang Forging is investing in new businesses (solar power generation and electricity sales) to secure future growth engines. These efforts are expected to positively impact corporate value in the long term.
4. Action Plan for Investors
- Short-term investors: Carefully monitor signals of recovery in the construction market to determine investment timing.
- Long-term investors: Analyze the growth potential of new businesses and strategies to strengthen the competitiveness of existing businesses to assess long-term investment value.