1. Neotis Q2 Earnings: What Happened?

Neotis recorded sales of KRW 15.7 billion and operating profit of KRW 1.2 billion in Q2 2025. Significantly exceeding market expectations (KRW 0 billion), sales showed signs of recovery, with only a slight decrease compared to the previous quarter despite a year-over-year decline. However, net income recorded a loss of KRW 0.3 billion, attributed to non-operating factors such as foreign exchange losses.

2. What Drove the Change in Earnings?

Neotis’s improved Q2 performance can be attributed to the recovery of its existing businesses (Microbits & Shafts, Lens Polishing Machines) and the growth potential of its new automotive electronics business. In particular, the launch of an SUV sunroof controller in the automotive electronics division secured growth momentum in line with the trend towards vehicle electrification and autonomous driving. However, the industry slowdown, rising raw material prices, and initial investment costs in the automotive electronics business continue to pose challenges.

3. What Should Investors Do?

While Neotis’s Q2 results show positive signs, a cautious approach to investment is necessary. Although the growth potential of the automotive electronics business is attractive, investors must consider risk factors such as intensifying competition, continued decline in profitability, and macroeconomic uncertainties. Therefore, continuous monitoring of the specific sales contribution and profitability improvement trend of the automotive electronics business, recovery of existing businesses, fluctuations in raw materials/exchange rates, and interest rate changes is essential.

4. Future Investment Action Plan

  • Monitor sales and profitability trends of the automotive electronics division.
  • Observe the recovery of existing businesses and external variables (raw materials, exchange rates, interest rates).
  • Re-evaluate investment opinion upon confirmation of improved earnings and concrete performance in the automotive electronics business.