1. What Happened at Shinjin SM?

Shinjin SM’s H1 2025 consolidated revenue plummeted by 47% year-over-year to 26.8 billion KRW, with operating profit shrinking to a mere 93.82 million KRW. Net income swung to a substantial loss of 14.3 billion KRW, signaling severe profitability concerns. Both the parent company and subsidiaries experienced declining sales, with rising cost of goods sold and increasing SG&A expenses contributing to the profit erosion.

2. Why the Decline?

Several factors contributed to Shinjin SM’s disappointing performance. Externally, a deteriorating macroeconomic environment and intensifying market competition played a role. Internally, insufficient R&D investment and the financial burden of establishing overseas subsidiaries further strained the company’s financials. The aggressive overseas expansion strategy, in particular, poses a significant risk given the current financial state.

3. What’s Next for Shinjin SM?

The future trajectory of Shinjin SM’s stock price hinges on several factors: the potential for a turnaround in its core businesses, the recovery of the global economy and industry conditions, fluctuations in exchange rates and interest rates, and the competitive landscape and pace of technological innovation.

4. What Should Investors Do?

Currently, a ‘conservative wait-and-see’ approach is recommended for Shinjin SM. The short-term performance is deeply concerning, and there’s a lack of tangible evidence of a turnaround. Investors should closely monitor management’s strategic initiatives, execution capabilities, and efforts to improve the company’s financial health. Caution is advised until positive signs emerge.