1. Kangdong C&L’s H1 2025 Performance: What Happened?

Kangdong C&L reported sales of KRW 30.8 billion (down 34.9% YoY), operating profit of KRW 2 billion (turned to profit), and a net loss of KRW 0.3 billion (turned to loss) in H1 2025. The decline in sales was primarily due to reduced cement sales volume caused by the construction slowdown and sluggish leisure business performance. Cost reduction efforts led to operating profit, but increased financial expenses and investment losses resulted in a net loss.

2. Reasons for the Decline: Why These Results?

  • Cement Industry Downturn: The construction slowdown and difficulties in material supply negatively impacted the overall cement industry.
  • Intensified Competition: Declining market share (estimated at 0.5% in 2025) indicates weakening competitiveness for Kangdong C&L.
  • High Debt Ratio: The high debt ratio of 225.55% (as of H1 2025) poses a financial risk.

3. Positive Factors and Investment Points: What’s Next?

  • Regional Specialization Strategy: As the only Portland cement producer in the South Chungcheong and southern regions, Kangdong C&L maintains a competitive edge in the local market.
  • Improved Production Efficiency: The sale of the Gwangyang plant and the operation of the Mokpo plant enhance production efficiency.
  • Leisure Business: Efforts to improve profitability and secure new growth engines aim for a turnaround.

4. Action Plan for Investors: Investment Strategy?

Despite the current challenges, Kangdong C&L shows positive factors like regional specialization and improved production efficiency. Investors should closely monitor the following:

  • Timing of construction recovery and cement demand changes
  • Profitability improvement in the leisure business
  • Efforts to improve financial structure, including debt reduction
  • New management’s business strategies and execution capabilities

From a mid- to long-term perspective, it’s advisable to consider investment opportunities while observing the potential recovery of the cement industry and the company’s restructuring efforts.