1. Nara M&D H1 2025 Earnings Analysis: What Happened?

Nara M&D recorded consolidated revenue of KRW 86.5 billion in H1 2025, a decrease compared to the same period last year. Operating profit fell sharply to KRW 1.527 billion, primarily due to losses in the EV parts segment and declining profitability in the automotive/home appliance parts segment.

2. Analyzing the Causes of the Profit Decline: Why These Results?

  • Declining Profitability in EV Parts: Despite achieving KRW 25.9 billion in sales, this segment recorded an operating loss of KRW 3.2 billion. An operating rate of 76.91% suggests possible idle production capacity.
  • Low Profitability in Automotive/Home Appliance Parts: Despite KRW 13.6 billion in sales and a high operating rate of 90.21%, the operating profit margin was only 0.9%. This suggests increased price competition or rising cost burdens.
  • High Proportion of Short-Term Debt: Short-term debt accounts for KRW 64.2 billion of the total KRW 71.166 billion in debt, posing a risk to financial soundness due to potential interest rate hikes.

3. Investment Strategy: What’s Next?

Nara M&D’s future hinges on improving profitability in the EV parts business and securing financial stability. Investors should consider the following:

  • Verify the Profit Improvement Strategy for EV Parts: Check for strategies such as cost reduction, increased production efficiency, and sales price increases.
  • Review Financial Restructuring Plans: Carefully examine plans for debt management and financial structure improvement.
  • Manage Exchange Rate Risk: Understand the company’s strategies for managing exchange rate risks due to foreign exchange positions.

4. Investor Action Plan: What to Do?

Before making investment decisions, further analysis of the company’s strategies and market conditions is necessary. Consulting expert opinions and reviewing the company’s IR materials are recommended. Consider the stability of the mold business, the growth potential of the EV parts business, and financial risks comprehensively before making an investment decision.