1. KG Chemical Q2 2025 Earnings: What Happened?

KG Chemical reported revenue of KRW 2.18 trillion (a 4% YoY increase), operating profit of KRW 78.8 billion (a 25% YoY decrease), and net income of KRW 58.1 billion (a 20% YoY decrease). While revenue exceeded expectations, both operating and net income fell short.

2. Reasons for Profit Decline: Why Did This Happen?

The economic slowdown and sluggish business performance are identified as the primary causes. A detailed cost structure analysis is necessary, but factors like rising raw material prices and increased SG&A expenses likely played a role.

3. KG Chemical’s Future: What’s Next?

  • Short-term Outlook: The decline in profitability could negatively impact stock prices in the short term. The market’s focus will be on the company’s outlook for the second half of the year and its plans for profit improvement.
  • Long-term Outlook: The performance of new businesses, such as the tank terminal project, will be a critical factor. Successful market entry could provide new growth momentum, but initial investment and market entry risks should be considered. Additionally, while shareholder return policies like share buybacks are positive, the decline in profitability could limit future policy options.

4. Action Plan for Investors: What Should Investors Do?

  • Short-term Investors: It’s advisable to wait and see, monitoring further information on the causes of the profit decline and market reactions.
  • Long-term Investors: Closely monitor the company’s fundamentals and the performance of its new businesses. Pay attention to the impact of macroeconomic variables such as exchange rate and interest rate fluctuations.