1. What Happened at YJ Link?

YJ Link reported disappointing H1 2025 results with revenue of KRW 17.88 billion (down 26.6% YoY), an operating loss of KRW 3.35 billion (shifting to a loss), and a net loss of KRW 3.5 billion. Q2 results, in particular, significantly missed market expectations, sending shockwaves through the investor community.

2. What Caused the Earnings Miss?

  • Global Economic Slowdown and Reduced Client Investment: With a high proportion of overseas sales, YJ Link was directly impacted by the global economic slowdown.
  • Increased SG&A Expenses and R&D Investment: While investments in future growth are essential, they contributed to short-term profit decline.
  • Initial Costs Associated with Overseas Expansion: Expanding global production facilities in Mexico and India, while positive in the long term, added to short-term cost burdens.

3. What’s the Outlook for YJ Link?

Despite short-term challenges, YJ Link still holds growth potential.

  • SMT Market Growth: Growth in key sectors like electric vehicles, 5G, and AI is expected to drive continued growth in the SMT market.
  • New Business Venture (PCB Assembly): This new venture is expected to create new growth drivers through synergy with the existing SMT business.
  • Expansion of Global Production Facilities: New facilities in Mexico and India will contribute to increased production capacity and improved delivery competitiveness.

4. What Should Investors Do?

A cautious approach is necessary in the short term. Closely monitor the company’s earnings recovery and improvements in financial health. In the medium to long term, investment decisions should consider SMT market growth, new business performance, and the stabilization of overseas subsidiaries.