Capro’s Q2 Performance: What Happened?

Capro recorded KRW 12.3 billion in revenue in Q2 2025, demonstrating a new revenue stream following the shutdown of its legacy businesses. This revenue comes from its new hydrogen and sulfuric acid businesses, offering a glimpse into the potential of its diversification strategy. However, the company continues to report losses, with an operating loss of KRW 9.4 billion and a net loss of KRW 11.7 billion. This is attributed to increased investment costs in new businesses and losses related to the withdrawal from existing operations.

Analyzing the Persistent Losses: Why These Results?

Capro’s continued losses can be attributed to three main factors. First, the discontinuation of its core caprolactam and ammonium sulfate businesses created a revenue gap. Second, increased investment costs in its new hydrogen and sulfuric acid businesses impacted profitability. Third, high debt-to-equity ratio and reliance on borrowing led to a significant interest expense burden. This weakens the financial structure and increases the risk of delisting.

Capro’s Future: What Lies Ahead?

While Capro has shown potential for growth through its new businesses, significant uncertainties remain. The company needs to address three key challenges: achieving stable revenue growth in new businesses, improving its financial structure, and mitigating the risk of delisting. On a positive note, the change in major shareholder and external investment indicate efforts to improve financial stability, and the conclusion of the workout process provides a foundation for normalization.

Action Plan for Investors

Investing in Capro carries a very high risk. If you’re considering an investment, carefully evaluate the following:

  • Growth potential of new businesses: Analyze the competitiveness and growth potential of the hydrogen and sulfuric acid businesses.
  • Financial structure improvement: Monitor improvements in financial indicators such as debt-to-equity ratio and reliance on borrowing.
  • Delisting risk: Continuously monitor public announcements and news related to the delisting risk.

Instead of aggressive investment, a prudent approach involves carefully observing the company’s recovery process before making any investment decisions.