1. What Happened? H1 2025 Earnings Overview
Sekyung Hi-Tech reported revenue of KRW 74.8 billion (YoY decrease) and an operating loss of KRW 1.8 billion for H1 2025. These figures fell short of market expectations, disappointing investors. The significant decline in operating profit raises concerns about profitability.
2. Why Did This Happen? Analyzing the Earnings Miss
- Intensified Market Competition: Increasing competition in the display and IT parts market has impacted profitability.
- High Inventory Levels: Rising inventory suggests sluggish sales, potentially leading to further losses.
- Increased Investment in New Businesses: Investments in new IT parts ventures contributed to the short-term decline in profitability.
3. What’s Next? Outlook and Investment Strategy
Sekyung Hi-Tech is pursuing new business ventures and strengthening its competitiveness in the foldable device market to secure future growth drivers. However, the short-term decline in profitability could be a burden for investors. Investors should pay attention to the following:
- New Business Performance: The successful establishment and revenue contribution of the new IT parts business will be crucial for mid-to-long-term growth.
- Profitability Improvement Efforts: The success of cost reduction and high-value-added product expansion strategies will be key to stock price recovery.
- Maintaining Competitiveness in the Foldable Market: Maintaining technological leadership and supplying differentiated products in the foldable market is crucial.
4. Investor Action Plan
Investors should be aware of the potential for short-term price volatility and closely monitor the performance of new businesses and profitability improvement efforts from a mid-to-long-term perspective. All investment decisions should be made carefully and at the investor’s own risk.