1. Shinsung E&G’s Q2 Earnings Shock
On August 14, 2025, Shinsung E&G announced preliminary earnings of KRW 23.9 billion in sales, KRW 100 million in operating profit, and a net loss of KRW 200 million. Although exceeding market expectations of KRW 0, this represents a significant decline compared to the previous quarter and the same period last year, leading to an ‘earnings shock’.
2. Analyzing the Causes of the Downturn
The primary reasons for this underperformance are the decline in operating rate in the secondary battery segment (54.06%) and decreased sales in the IT/automotive segment. The downturn in the secondary battery segment suggests a possible overall market slowdown and increased competition. The IT/automotive segment is also presumed to be affected by a decrease in demand.
3. How Should Investors Respond?
In the short term, there is a high likelihood of increased pressure on stock prices. However, the long-term growth potential, including expansion into the North American ESS market, should be considered. Investors should make investment decisions considering the following:
- Short-term response: Currently, maintaining a ‘sell’ or ‘hold’ position and waiting for additional information is recommended.
- Long-term perspective: Carefully review the company’s response strategies and growth potential through future earnings announcements and IR materials.
- Monitoring key indicators: Continuously monitor key indicators such as secondary battery operating rate, new customer acquisition, competitiveness reinforcement in the IT/automotive segment, and fluctuations in exchange rates and interest rates.