1. Gaon Cable’s 2025 Half-Year Report: What Happened?

Gaon Cable recorded sales of KRW 1.2825 trillion (a decrease year-on-year) and operating profit of KRW 45.1 billion (similar year-on-year) in the first half of 2025. Despite the sluggish performance of the power business unit, growth in the special cable business unit offset this, maintaining management efficiency. The gradual upward trend in sales and operating profit since the second half of 2024 is a positive sign.

2. Key Growth Drivers: Why Pay Attention?

  • Entry into the Green Energy Business: Gaon Cable has secured future growth engines by entering the solar and offshore wind power businesses. High growth potential can be expected in conjunction with the government’s renewable energy policies.
  • Expansion into the North American Market: By securing 100% stake in its US subsidiary, Gaon Cable demonstrates its commitment to expanding overseas markets. This is expected to contribute to long-term sales growth and diversification of revenue streams.
  • Growth of the Special Cable Business Unit: This unit is offsetting the sluggish performance of the power business unit and creating a stable revenue structure.

3. Investment Considerations: What are the Risks?

Despite Gaon Cable’s growth potential, there are risk factors to consider when investing.

  • Increased Financial Leverage: Due to increased borrowing for business expansion and investment, the debt-to-equity ratio (177.68%) and net debt-to-equity ratio (156.24%) have risen. Managing financial soundness is a critical task.
  • Volatility in Raw Material Prices and Exchange Rates: Fluctuations in copper prices and the USD exchange rate can directly impact profitability.
  • Intensifying Competition: Competition in the cable industry is expected to continue to intensify. Securing competitiveness in quality, delivery, and technology is crucial.

4. Action Plan for Investors

  • Monitor New Business Performance: Continuously check the specific performance and revenue contribution of the solar and offshore wind power businesses.
  • Check North American Market Entry Performance: Pay attention to the visible achievements and profitability improvement of Gaon Cable’s entry into the North American market.
  • Monitor Financial Soundness Management: Monitor efforts to manage debt ratios and alleviate interest expense burdens.