1. What Happened?: Sales Decline and Profitability Efforts

Poongwon Precision’s H1 2025 revenue was KRW 14.596 billion, a 70% decrease year-over-year. Delays in investments by major clients and changes in OLED market demand are cited as the main causes. However, Q2 sales showed a recovery compared to Q1, and efforts to improve profitability are becoming visible, including a return to positive gross profit and a reduction in operating and net losses.

2. Why Did This Happen?: OLED Market Volatility and Financial Risks

The sharp decline in sales was directly impacted by the volatility of the OLED market and changes in client investment strategies. Increased debt due to convertible bond issuance is also a factor, negatively impacting financial soundness. The size of derivative liabilities could amplify risks stemming from market fluctuations.

3. What’s Next?: Future Growth Drivers and Uncertainties

Poongwon Precision is investing in FMM technology development and expanding production capacity to secure future growth drivers. Its selection as a ‘Material, Components, and Equipment Champion’ is a positive sign, validating its technological prowess. However, continued sales decline and increasing financial burden remain uncertainties.

4. What Should Investors Do?: Cautious Approach and Long-Term Perspective

In the short term, investors should be wary of continued sales decline and financial risks. Results falling short of market expectations could lead to a drop in share price. From a long-term perspective, focus on the growth of the FMM market and the company’s technological achievements, while consistently monitoring its efforts to improve financial health. A cautious approach and long-term perspective are recommended.