1. What Happened? H1 2025 Performance Review
Hankook Movnex reported KRW 865.38 billion in revenue for H1 2025, an 11% YoY increase driven by strong automotive parts sales. However, the flange business underperformed. Operating and net profits declined significantly, by 42.4% and 67.4% YoY, respectively, impacting profitability.
2. Why These Results? Drivers of Performance
The automotive parts success stemmed from a recovering global car market and favorable exchange rates. Conversely, the flange business faced challenges from decreased orders in the plant industry and increased competition. Rising R&D costs and increased SG&A expenses also contributed to the decline in profitability.
3. What’s Next? Outlook and Investment Strategy
Hankook Movnex is expected to continue revenue growth, bolstered by the robust automotive parts sector. However, the uncertainty surrounding the flange business and declining profitability pose investment risks. The success of the new solar power business and improvement in existing business profitability will be crucial for future stock performance. The current investment recommendation is ‘Hold’.
4. Investor Action Plan: Key Investment Takeaways
- Monitor Profitability: Watch closely for signs of a rebound in the flange business and improved cost management.
- Assess New Business Growth: Track the revenue contribution and profitability of the solar power venture.
- Analyze Macroeconomic Influences: Consider the potential impact of global economic slowdown and exchange rate fluctuations on Hankook Movnex.
Frequently Asked Questions
What is Hankook Movnex’s core business?
Hankook Movnex’s primary business is automotive parts (H/Shaft, Axle), which constitutes a major portion of its revenue. Hyundai Kia Automotive Group is their main customer.
How did Hankook Movnex perform in H1 2025?
Revenue increased by 11% YoY, but operating and net profits decreased by 42.4% and 67.4% YoY, respectively.
What is the investment outlook for Hankook Movnex?
While automotive parts growth is positive, declining profitability and the struggling flange business are concerns. The success of new ventures and profitability improvement are key. The current recommendation is ‘Hold’.