1. What Happened at Daesung Hi-Tech?
Daesung Hi-Tech reported revenue of KRW 28.8 billion, an operating loss of KRW 1.5 billion, and a net loss of KRW 4.7 billion in Q2 2025. Compared to the same period last year, revenue decreased significantly, and profitability deteriorated sharply.
2. Why the Poor Performance?
The main reason for this poor performance is the decline in sales across all business segments, including Swiss-turn automatic lathes, compact machining centers, and precision parts. This decline is attributed to a combination of factors, including the global economic slowdown, a decline in investment in related industries, and intensified competition. Increased selling, general and administrative expenses and losses related to financial instruments also contributed to the decline in profitability. The debt-to-equity ratio exceeding 240% raises concerns about the company’s financial soundness.
3. What’s Next for Daesung Hi-Tech?
The short-term outlook is negative. The earnings shock and deteriorating financial health are likely to dampen investor sentiment. The rise in the KRW/USD exchange rate is also a factor that could increase cost burdens. However, there are also positive factors in the long term, such as the growth potential of new businesses in the defense and medical device sectors and the possibility of increased demand due to the expansion of the electric vehicle market.
4. What Should Investors Do?
- • New investments and additional purchases should be approached with caution at this time.
- • Closely monitor future earnings announcements and business progress, and make investment decisions after confirming improvements in financial indicators and performance of new businesses.
- • It’s crucial for investors to adhere to stop-loss principles.