1. What Happened at KG Inicis?

KG Inicis reported revenue of KRW 323.3 billion and operating profit of KRW 24.8 billion for Q2 2025, missing market consensus by 5% and 13%, respectively. The decline is attributed to continued weakness in the e-commerce sector and deteriorating performance in its financial services segment.

2. Why the Underperformance?

Two key factors contributed to KG Inicis’ disappointing results. First, intensifying competition in the e-commerce market has pressured revenue. Second, rising delinquencies and declining profitability in its financial services, particularly KG Capital, are raising concerns about the company’s overall financial health.

3. What Should Investors Watch?

  • E-commerce Recovery Potential: Can KG Inicis leverage its 190,000 merchants to regain market share?
  • Financial Risk Management: The management of KG Capital’s non-performing loans and its ability to improve financial soundness are critical.
  • New Business Growth: Investors should assess the growth potential of new ventures in media/broadcasting and medical devices.

4. Investment Strategy: What’s Next?

KG Inicis currently carries a neutral rating. While it retains its competitive position in the PG market, the recent underperformance and financial risks warrant caution. Investors should closely monitor the company’s earnings trajectory and its ability to improve its financial health before making investment decisions.