1. What Happened? GH Shinsojae’s Q2 2025 Earnings Breakdown

GH Shinsojae reported KRW 21.5 billion in revenue, KRW 1.8 billion in operating profit, and a net loss of KRW 1.3 billion for Q2 2025. Compared to the same period last year, both revenue and operating profit decreased, while the company swung to a net loss. Losses related to derivatives are identified as a key contributor to the negative results.

2. Why the Decline? Analyzing the Factors Behind the Weak Performance

The decline in revenue is attributed to a decrease in domestic automobile production and sluggish performance in the US pallet business. The net loss was significantly impacted by valuation losses on derivatives. Fluctuations in raw material prices and exchange rates are also suspected to have played a role.

  • Non-woven Fabrics: Impact of the downturn in the domestic auto market
  • Pallets: Increased competition and rising interest rates in the US market
  • Yarn: Decrease in average selling price
  • Derivatives: Increased valuation losses

3. What’s Next? Future Outlook and Investment Strategies

GH Shinsojae is focusing on securing future growth engines, including expanding its US pallet business and developing eco-friendly materials. However, short-term uncertainty remains.

  • Positive Factors: Growth potential of the US pallet business, R&D investment in eco-friendly materials
  • Negative Factors: Short-term earnings uncertainty, derivative risks

4. What Should Investors Do?

Investors should consider the following factors when making investment decisions:

  • Derivative Risk Management: Carefully review the company’s risk management strategies.
  • Short-Term Performance Monitoring: Closely monitor Q3 earnings announcements to identify trends.
  • US Pallet Business Growth: Continuously monitor the performance of the US market entry strategy.