Korea Stock Market Insights

Tag: Oil Business

  • Leadcorp (012700) H1 2025 Earnings Analysis: Back to Black, But Oil Business Remains a Drag

    1. What Happened? Leadcorp’s H1 2025 Earnings Release

    Leadcorp announced its H1 2025 earnings on August 14, 2025, reporting revenue of KRW 90.1 billion (YoY increase), operating profit of KRW 2.4 billion (YoY decrease), and net income of KRW 13.2 billion (return to profitability). Revenue exceeded market expectations, while operating profit fell short. Net income significantly surpassed estimates.

    2. Why These Results? Business Segment Performance

    • Oil Business: Eco-friendly trends and oil price volatility significantly impacted revenue and operating profit, leading to a sharp decline.
    • Consumer Finance: Loan portfolio expansion and improved asset quality drove significant growth in both revenue and operating profit.
    • Highway Rest Area Business: Increased competition and rising labor costs contributed to a decline in both revenue and operating profit.

    3. What’s Next? Outlook and Investment Implications

    While the growth in the consumer finance segment is positive, the struggling oil business and increasing financial burden from rising debt pose ongoing risks. Overseas expansion offers potential future growth, but uncertainties remain. Investors should consider the following:

    • Sustainable growth of the consumer finance segment
    • Restructuring and transition strategy for the oil business
    • Management of financial soundness and debt levels
    • Sustainability of non-operating income factors

    4. Investor Action Plan

    If considering an investment in Leadcorp, closely monitor the continued growth of the consumer finance segment and the future direction of the oil business. Furthermore, continuously monitor changes in financial soundness indicators and prioritize risk management.

    Frequently Asked Questions

    What are Leadcorp’s main businesses?

    Leadcorp operates in the oil, consumer finance, and highway rest area businesses.

    Why did Leadcorp’s H1 2025 net income increase significantly?

    Growth in the consumer finance segment and positive non-operating factors, such as gains on financial assets, contributed to the increase.

    What are the key risks to consider when investing in Leadcorp?

    Investors should be aware of the risks associated with the struggling oil business and the increasing financial burden from rising debt levels.

  • Namhae Chemical H1 2025 Earnings Analysis: Solid Growth, But What About Investment Opportunities?

    1. Namhae Chemical H1 2025 Performance Overview

    Namhae Chemical achieved sales of KRW 863.9 billion and operating profit of KRW 34.9 billion in H1 2025, maintaining a solid growth trajectory. The fertilizer segment, with a 42% domestic market share, generated stable profits, while the oil business contributed positively with increased sales volume.

    2. Key Business Performance and Challenges

    Fertilizer Segment: Steady Growth, but Raw Material Prices Remain a Concern

    The fertilizer segment remains Namhae Chemical’s core business, underpinning its solid performance. However, rising prices of key raw materials like urea, potassium chloride, and sulfur could pressure margins and require ongoing monitoring.

    Oil Business: Sales Volume Growth Drives Stable Profitability

    The oil business saw sales grow by 8.8% year-on-year, driven by increased sales volume, positively impacting overall performance. Volatility in international oil prices requires continued observation.

    Semiconductor-Grade Sulfuric Acid: Initial Investment Burden, Future Growth Driver

    The new semiconductor-grade sulfuric acid business is currently operating at a loss due to initial investment and operating costs. However, it holds potential for future profitability with anticipated growth in the semiconductor industry.

    3. Investment Considerations

    • Raw Material Price Volatility: Fluctuations in international raw material prices, particularly sulfur, could negatively impact profitability.
    • Exchange Rate Fluctuations: USD exchange rate volatility can introduce variability in profits.
    • New Business Profitability: The initial losses from the semiconductor-grade sulfuric acid venture pose a burden on consolidated earnings.

    4. Action Plan for Investors

    • In the short term, monitor the slowdown trend observed in Q2 earnings.
    • In the medium to long term, closely monitor raw material price fluctuations, the turnaround of the new business, and changes in the macroeconomic environment.
    • Develop an investment strategy by comprehensively considering Namhae Chemical’s business portfolio diversification strategy and future growth potential.
    What are Namhae Chemical’s main businesses?

    Namhae Chemical’s primary businesses are fertilizer chemicals, oil, and a new venture in semiconductor-grade sulfuric acid.

    How did Namhae Chemical perform in the first half of 2025?

    Namhae Chemical recorded sales of KRW 863.9 billion and operating profit of KRW 34.9 billion in H1 2025.

    What are the key considerations for investing in Namhae Chemical?

    Investors should consider factors such as raw material price volatility, exchange rate fluctuations, and the profitability of the new semiconductor-grade sulfuric acid business.