1. Jeil Technos Q2 Performance: What Happened?
Jeil Technos reported revenue of KRW 35.4 billion, operating profit of KRW 2.6 billion, and net income of KRW 6.3 billion for Q2 2025. Compared to Q1 2025, revenue increased by 2.31%, operating profit by 30%, and net income surged by 350%. Year-over-year comparisons also showed significant improvements. The return to profitability after a loss in Q4 2024 and continued profit growth in Q2 are particularly encouraging.
2. What Drove the Change?
- Shipbuilding: Stable revenue from nickel steel and high manganese steel processing for LNG carriers. Managing exchange rate risk from Vietnamese subsidiary.
- Construction: Secured order backlog for Deck Plate business. Construction market slowdown and increased competition pose risks.
- New Business (Graphene): Positioned as a future growth engine. Current investments are within a scope that doesn’t directly impact core businesses.
- Improved Financial Health: Reduced debt-to-equity ratio, enhancing financial stability.
3. Outlook and Investment Strategy
While the Q2 earnings improvement is positive, the continuous decline in revenue since 2022 remains a concern. The success of the graphene business and the recovery of the shipbuilding/construction sectors will likely determine the future stock price trajectory. The current investment recommendation is ‘Neutral’. While there’s short-term upside potential, a cautious approach is warranted from a mid-to-long-term perspective.
4. Action Plan for Investors
- Monitor the progress of the graphene business and the order backlog trend for shipbuilding/construction in the second half of the year.
- Analyze the impact of fluctuations in exchange rates and raw material prices, as well as the timing and pace of global interest rate cuts.
- Assess competitor performance and industry trends.