1. What Happened? – Wonik QnC Q2 2025 Earnings Analysis

Wonik QnC reported revenue of KRW 232.9 billion (robust YoY growth), operating profit of KRW 14 billion (-36% vs. consensus), and a net loss of KRW 11.5 billion for Q2 2025. While revenue held up, profitability significantly deteriorated.

2. Why These Results? – Analyzing the Reasons for Underperformance

The main factors contributing to the decline in operating profit are the decrease in utilization rates at overseas customers in the quartz business segment and continued losses in the ceramics segment. Rising costs also played a role in the worsening profitability. The net loss was primarily due to the decrease in operating profit, which wasn’t offset by the reduced losses related to derivatives.

  • Quartz Business Segment: Despite the negative impact of lower utilization rates at overseas customers, there were positive factors such as expanding sales to overseas customers and improved performance of the Taiwan subsidiary.
  • Ceramics Business Segment: Continued losses due to the downturn in the display industry necessitate the development of high-performance ceramic components for semiconductors and cost reduction efforts.
  • Other Business Segments: Quartz raw materials, cleaning & coating, and lamp segments show future growth potential.

3. What’s Next? – Investment Strategy Recommendations

While downward pressure on the stock price is expected in the short term due to the weak earnings, investors should focus on the potential recovery of the semiconductor industry and the growth prospects of the quartz business segment in the long term.

  • Valuation and Dollar-Cost Averaging: Analyze the valuation and consider a dollar-cost averaging strategy, taking into account the potential for earnings improvement.
  • Risk Management: Continuously monitor exchange rate and interest rate fluctuations and pay attention to the possibility of a turnaround in the ceramics segment.
  • Long-Term Perspective: Maintain a long-term investment perspective, considering the potential recovery of the semiconductor industry and new business opportunities.