Wonik Materials Q2 Earnings Miss Estimates: What’s Next?

1. Wonik Materials Q2 Earnings Analysis: What Happened?

Wonik Materials reported Q2 2025 revenue of ₩74.9 billion (down 3% YoY), operating profit of ₩11.3 billion (down 23% YoY), and net income of ₩9.9 billion. Revenue and operating profit missed market consensus by 3% and 23%, respectively. While net income exceeded expectations (₩0 billion), it’s likely attributed to non-operating factors.

2. Reasons for Underperformance: Why Did This Happen?

The decline in revenue is primarily due to lower sales of NH3, the company’s core product. This can be attributed to the slowdown in the semiconductor and display industries, coupled with high customer concentration (56.67% reliance on Company A). The decrease in operating profit stems from a combination of lower revenue, increased expenses, and unfavorable cost structures.

3. Outlook and Investment Strategy: What’s Next?

While short-term downward pressure on the stock price is anticipated, investors should focus on long-term strategies. Key factors to consider include the semiconductor/display market recovery in H2 2025 and 2026, cost structure improvements, and new business performance. Next-generation technology development and customer diversification will be crucial for securing long-term growth.

4. Action Plan for Investors

• Short-term investors: Remain cautious until clear signs of earnings recovery emerge.
• Long-term investors: Monitor new business/technology development progress and customer diversification efforts to determine optimal buy/sell timing.