1. EG Q2 2025 Performance: A Glimpse of a Turnaround?
In Q2 2025, EG reported revenue of KRW 15.6 billion, similar to the same period last year. However, the company showed positive signs by reducing its operating and net losses, attributed to efficient cost management efforts.
2. H1 2025 Performance: Stagnant Growth and Financial Instability
The first half of 2025 saw a 43.1% year-over-year decline in consolidated revenue to KRW 30.521 billion, primarily due to the global economic slowdown and weakening demand in downstream industries. While operating losses narrowed, they remain substantial, and the high debt-to-equity ratio raises concerns about financial health.
3. Business Segment Analysis: Opportunities and Threats
- Iron Oxide: Facing challenges from a sluggish traditional market and increased competition, EG may find opportunities in the growing demand for high-performance iron oxide for electric vehicles and 6G technology.
- Energy and Environment: This segment holds growth potential, but initial investment burdens and intensifying competition pose risks.
- Materials: While offering the potential for a stable revenue base, competition with larger companies and managing raw material price volatility are crucial.
- R&D: EG’s investment in R&D for new growth engines like 6G materials is positive, but commercialization will require time and resources.
4. Investment Strategy: A Cautious Approach
EG presents a mixed picture with reduced losses alongside declining revenue and financial instability. Investors should adopt a wait-and-see approach, carefully monitoring the company’s performance in the second half of the year, the success of new businesses, and efforts to improve its financial structure. Key factors to consider include the recovery of the iron oxide market, revenue contribution from new businesses, and the effectiveness of cost control and financial health improvement measures.