1. KOSPO Q2 2025 Earnings: What Happened?
KOSPO recorded revenue of KRW 453.9 billion (+7.0% vs. forecast) and operating profit of KRW 65.6 billion (+2.0%) in Q2 2025, exceeding market expectations. However, net profit reached KRW 50.8 billion, -1.5% below forecasts.
2. Strong Performance, but Lower Net Profit: Why?
Despite a slight decline in domestic business due to power plant maintenance schedules, KOSPO achieved solid overall results, offsetting sluggish overseas performance. A backlog of over KRW 4.6 trillion suggests stable future revenue. However, the reasons for the lower net profit require careful analysis through conference calls and other sources.
3. Navigating Market Volatility: KOSPO’s Future?
Fluctuations in macroeconomic indicators such as the USD/KRW exchange rate, interest rates, and oil prices, along with increased competition, pose potential risks. However, a stable financial structure (debt ratio of 27.6%), AA credit rating, and new business ventures in renewable energy and nuclear decommissioning offer positive prospects. Increased R&D investment, while potentially impacting short-term costs, is crucial for securing long-term growth.
4. Key Action Plan for Investors
- Maintain Buy Stance: Given the positive earnings trend and solid fundamentals, maintaining a buy stance is recommended.
- Analyze Net Profit Decline: Thorough analysis of the reasons behind the lower net profit is essential to assess its sustainability.
- Monitor Growth Drivers: Ongoing observation of orders and growth potential in new business areas is crucial.
- Manage Exchange Rate Volatility: Consider the potential impact of exchange rate fluctuations on performance.