1. What Happened at Daesan F&B?
Daesan F&B reported Q1 2025 revenue of KRW 29.7 billion (up 20% YoY), operating profit of KRW 1.7 billion (up 325% YoY), and net income of KRW 1.8 billion (returning to profitability). These figures significantly surpassed market expectations, driven primarily by the recovery of domestic sales in the pork business.
2. Why the Improved Performance?
Increased sales and efficient cost management created synergy, resulting in a significant improvement in operating margin to 5.72%. Efforts to improve the financial structure also contributed to the return to net profitability.
3. Analyzing the Positives and Negatives
- Positives: Revenue and profitability recovery, improved debt ratio.
- Negatives:
- Delisting risk due to audit report rejection, embezzlement allegations, and disclosure violations.
- Accumulated deficit and capital impairment.
- High financial debt burden.
- Limitations in business diversification and concentration in the meat processing business.
- Decreased management transparency and credibility.
4. Action Plan for Investors
The surprising Q1 results are a short-term positive, but they are insufficient to address the fundamental risk of delisting. Investors need to remain cautious until uncertainties regarding listing maintenance and management normalization are resolved. Investment is not currently recommended.