1. What Happened? : Hanil Forging’s Earnings Shock

Hanil Forging reported consolidated revenue of KRW 32.6 billion, operating income of KRW 1.3 billion, and a net loss of KRW 100 million for the first half of 2025. Compared to the same period last year, sales plummeted by 55.11%, operating income by 73.76%, and net income turned negative. Even more concerning is the operating loss of KRW 4.787 billion on a standalone basis.

2. Why Did This Happen? : Industry Downturn and Eroding Profitability

The primary driver of this earnings shock is the downturn in the automotive industry, Hanil Forging’s main customer base. Despite a high export dependency (57.78%), the company has been hit hard by the global economic slowdown. High interest rates have further exacerbated the situation by increasing financial burdens and eroding profitability.

3. What’s Next? : Uncertainty and Investment Caution

While the recent rise in exchange rates could offer some relief to exports, it’s unlikely to offset the overall decline in sales. Continued poor performance raises serious concerns about the company’s financial health, and the success of new business/technology development remains uncertain. With the stock price continuing its downward trend, extreme caution is advised for investors.

4. What Should Investors Do? : Proceed with Caution

Investors should focus on the company’s fundamental improvements rather than short-term stock price fluctuations. Carefully consider the details and execution of Hanil Forging’s turnaround plan, and analyze competitors within the same industry before making any investment decisions. Rash investments could lead to significant losses.