1. KH Vatec H1 2025 Earnings: Key Highlights

KH Vatec reported consolidated revenue of KRW 198 billion (down 36.3% YoY), operating profit of KRW 7.27 billion (down 43.1% YoY), and net income of KRW 7.27 billion (down 66.0% YoY) for H1 2025. The slump in the smartphone components business is identified as the primary driver of this downturn.

2. Analyzing the Decline: Smartphone Market Headwinds

Increased competition, a lack of new smartphone models, and customer inventory adjustments significantly impacted smartphone component sales, which fell to KRW 939 billion. Slowing growth in key products like foldable hinges further exacerbated the decline.

3. A New Growth Engine: Automotive Parts

Driven by the expanding electric and hybrid vehicle market, KH Vatec’s automotive parts segment saw revenue increase to KRW 127 billion. The company’s focus on strengthening its competitive edge in eco-friendly automotive components, with technologies like Thixomolding and thin-film casting, positions this segment as a key driver of future growth.

4. Investor Action Plan

  • In the short term, closely monitor the potential turnaround of the smartphone components business and the sustained growth trajectory of the automotive segment.
  • For the long term, focus on KH Vatec’s R&D investments for new growth engines and its efforts to improve its financial structure.