1. What Happened? Snet’s H1 2025 Performance Overview

Snet reported consolidated revenue of KRW 171.286 billion (a 3.2% YoY decrease) and operating profit of KRW 971 million (returning to profit) for H1 2025. While preliminary results exceeded market expectations, the impact of the shrinking ICT market was evident.

2. Why These Results? Drivers of Profitability and Growth

Cost optimization efforts and successful project completions contributed to the return to profitability. The stable revenue stream from the maintenance business segment also played a positive role. However, the decline in revenue is attributed to the overall contraction of the ICT market and reduced investments by key clients.

Snet’s focus on AI, including the establishment of an AI center and development of related solutions, is seen as a future growth driver. However, navigating intensifying market competition and adapting to rapid technological changes will be crucial.

3. What’s Next? Outlook and Investment Implications

A healthy backlog of orders provides positive visibility for future revenue. Expectations of global interest rate cuts and a stable KRW/USD exchange rate are also favorable factors. However, the decrease in cash and cash equivalents and the rise in debt-to-equity ratio warrant close monitoring of Snet’s financial health. The relatively low R&D investment compared to revenue raises concerns about long-term technological competitiveness.

4. What Should Investors Do? Actionable Insights

While Snet is actively pursuing a turnaround, investors should closely monitor the company’s performance in the AI sector, R&D investment trends, new order intake, and financial health management. A cautious approach with a medium- to long-term perspective is recommended.