1. What Happened? (H1 2025 Earnings Analysis)

WCP reported KRW 38.2 billion in revenue for H1 2025, exceeding market expectations with a 39% YoY increase. However, operating losses widened to KRW -26 billion and net losses to KRW -27.9 billion. Why did profitability decline despite revenue growth?

2. Why These Results? (Cause Analysis)

The main culprits for the worsening losses are increased R&D expenses and higher fixed costs due to investments like the Hungary plant expansion. The slowdown in global EV market growth and policy uncertainties in North America also contributed negatively. Conversely, stricter global environmental regulations could act as a long-term growth driver.

  • Positive Factors:
    • Revenue Growth
    • Long-term Growth Potential (EV Market Growth)
  • Negative Factors:
    • Deepening Losses
    • High Fixed Costs
    • Worsening Financial Health (Increased Debt Ratio)
    • Customer Concentration
    • Foreign Exchange Risk

3. What’s Next? (Future Outlook)

In the short term, downward pressure on the stock price is expected due to the poor earnings. However, if the Hungary plant operates successfully and profitability improvement efforts become visible, there is potential for a mid-to-long-term stock price recovery. WCP’s technological competitiveness, including its 5.5m wide manufacturing equipment technology and European market entry, are positive factors for the future.

4. What Should Investors Do? (Investment Strategy)

WCP currently presents a situation of coexisting growth and risk. Maintaining a conservative investment perspective is recommended. Closely monitor future earnings announcements for continued revenue growth, narrowing losses, and the possibility of turning profitable. Continuously track the company’s cost optimization efforts, financial restructuring plans, and changes in the macroeconomic and industrial environment. Considering a gradual purchase strategy when turnaround signals become clear is advisable.