1. What Happened at Fine Steel?

Fine Steel achieved a remarkable turnaround in H1 2025, reporting sales of KRW 84.27 billion and an operating profit of KRW 1.58 billion. This represents a 55.55% increase in sales and a shift from loss to profit compared to the same period last year. This positive development marks a significant milestone after a period of sustained losses in 2024.

2. Decoding the Turnaround

Three key factors contributed to Fine Steel’s success. First, the recovery of the shipbuilding industry, driven by stricter IMO regulations and increased orders for eco-friendly vessels, boosted demand for Fine Steel’s core product: shipbuilding steel sections. Second, strategic investments in new businesses, including robotic automation, smart factories, and energy IT, are beginning to yield results. Third, effective cost management, aided by stable international raw material prices and declining slab prices, helped improve profitability.

3. What’s Next for Fine Steel?

While the turnaround is a positive sign, Fine Steel still faces the challenge of a high debt-to-equity ratio (368.50%). Furthermore, raw material price volatility, exchange rate fluctuations, and uncertainties surrounding the profitability of new businesses remain potential risks. However, if the shipbuilding industry continues its recovery and new ventures perform as expected, Fine Steel’s future prospects appear bright.

4. Investor Action Plan

In the short term, investors should approach Fine Steel cautiously, considering both the positive momentum from Q2 results and the high debt-to-equity ratio. For the long term, careful monitoring of shipbuilding order trends, the performance of new businesses, and efforts to improve the debt structure is essential for developing a sound investment strategy.