1. What Happened? Kemtros H1 2025 Performance

Kemtros reported revenue of KRW 26.94 billion in H1 2025, a slight increase year-over-year. However, the company recorded an operating loss of KRW 630 million and a net loss of KRW 1.76 billion, indicating a significant decline in profitability. Preliminary earnings further amplified market concerns, missing expectations with an operating loss of KRW 800 million and a net loss of KRW 2.2 billion.

2. Why Did This Happen? Profitability and Debt Burden

The primary drivers for the decline in profitability are rising cost of goods sold (COGS) and selling, general, and administrative expenses (SG&A). Despite growth in the advanced materials division, Kemtros struggled to manage costs, impacting profitability. Furthermore, the company’s high financial leverage, including convertible bonds, bonds with warrants, and derivatives, continues to weigh on its financial health.

3. What’s Next? Short-Term and Long-Term Outlook

In the short term, concerns over profitability and financial health could put downward pressure on Kemtros’ stock price. The disappointing earnings are likely to dampen investor sentiment, and the company will face pressure to cut costs and improve efficiency. In the long term, improving financial structure and securing growth momentum are crucial for Kemtros. Maximizing the impact of its new plant and strengthening its competitiveness in new business areas are essential for achieving tangible results.

4. What Should Investors Do? Key Considerations and Investment Strategy

Investors should closely monitor Kemtros’ plans for improving profitability, strengthening its financial position, and demonstrating growth momentum. It’s crucial to assess the company’s long-term growth potential and risks, rather than focusing solely on short-term stock price fluctuations. H2 2025 earnings and management actions will be critical inflection points for investment decisions.