1. What Happened? Deoksung’s H1 2025 Earnings Analysis
Deoksung’s H1 2025 sales decreased by 41% year-on-year to KRW 73.9 billion, and operating profit fell by 43% to KRW 5.04 billion. Intensified competition in the main synthetic leather business and the external economic slowdown are analyzed as the main causes of the sluggish performance. In particular, the low operating rate of the synthetic resin division (42.28%) shows the urgent need for strategies to improve profitability.
2. Why Did This Happen? Background of Sluggish Performance and External Environment Analysis
Deoksung’s poor performance was influenced not only by internal factors but also by the external environment. The unstable macroeconomic environment, including volatility in international oil prices, rising KRW/USD and KRW/EUR exchange rates, and global supply chain bottlenecks, weighed on Deoksung’s profitability. Also, high interest rates added to the financial burden by increasing borrowing costs.
3. What’s Next? Deoksung’s Future Prospects and Growth Potential
Deoksung is actively investing in the development of eco-friendly synthetic leather and resins, striving to secure future growth engines. This R&D investment is expected to provide long-term growth momentum. However, whether earnings will recover, the success of new businesses, and cost efficiency will be important variables determining Deoksung’s future.
4. What Should Investors Do? Investment Implications and Action Plan
Investors considering investing in Deoksung should consider the current sluggish performance and external uncertainties. Preparation for short-term stock price volatility is necessary, and a thorough evaluation of the company’s mid- to long-term growth strategy and execution capabilities is essential. A cautious investment approach is necessary until visible signs of an earnings rebound appear.