Korea Stock Market Insights

Tag: Post-Quantum Cryptography

  • ICTTKE (456010) H1 2025 Earnings Shock: Crisis Looms Just One Year After Turning Profitable?

    What Happened? Analyzing ICTTKE’s Earnings Shock

    ICTTKE reported KRW 800 million in revenue, KRW -2.6 billion in operating profit, and KRW -4.1 billion in net profit for H1 2025, significantly missing market expectations. Just one year after achieving annual profitability in 2024, the company has fallen back into the red. In particular, KRW 25.8 billion in recurring R&D expenses has been cited as a primary cause of the deteriorating profitability, deemed excessive relative to the company’s revenue scale.

    Why Did This Happen? Exploring the Reasons Behind the Decline

    ICTTKE’s earnings decline is the result of several intertwined factors. In addition to surging R&D costs, plummeting overall sales, high dependence on major customers (84.9% of sales), and the potential for foreign exchange losses due to a rising won exchange rate have all contributed to the poor performance. Although the proportion of product sales increased (68.73%), the sharp decline in overall sales diminishes the significance of this positive development.

    What’s Next? ICTTKE’s Future Outlook

    ICTTKE possesses core technologies such as VIA PUF-based IoT security chips and Post-Quantum Cryptography (PQC) technology, and its recent EAL 6 certification enhances its technological credibility. Furthermore, the growing demand for IoT security and PQC technology in the hyper-connected era underscores ICTTKE’s growth potential. However, the current dire financial situation and declining profitability increase the likelihood of a short-term stock price plunge and are expected to create difficulties in raising capital. In the long term, fundamental improvements, including profitability recovery, customer diversification, and new business development, are crucial for survival.

    What Should Investors Do? Investment Strategy Recommendations

    Investors need to assess ICTTKE’s current situation objectively and invest with caution. Rather than being swayed by short-term stock price fluctuations, it is important to make investment decisions based on a comprehensive consideration of the company’s fundamental improvement prospects, management’s crisis response capabilities, and changes in market conditions.

    What are the main reasons for ICTTKE’s poor performance in H1 2025?

    A combination of factors, including excessive R&D spending, a sharp decline in overall sales, high dependence on major customers, and a rising won exchange rate, contributed to the poor results.

    What are ICTTKE’s core technologies?

    ICTTKE’s core technologies include VIA PUF-based IoT security chips and Post-Quantum Cryptography (PQC) technology.

    What is the outlook for ICTTKE?

    In the short term, downward pressure on the stock price is expected due to poor earnings. However, in the long term, there is potential for recovery based on the company’s core technological competitiveness and market growth potential. Profitability improvement and customer diversification are essential for this recovery.

  • Hancom With (054920) H1 2025 Earnings Analysis: Declining Profitability Despite PQC Investment

    1. What Happened?

    Hancom With announced its Q2 2025 preliminary earnings on August 14, 2025. While revenue slightly increased to ₩186.9 billion compared to the previous quarter, operating profit and net profit decreased to ₩500 million and ₩4.1 billion, respectively. Year-over-year, revenue decreased, operating profit increased, and net profit turned to black.

    2. Why These Results?

    The main cause of the revenue decline is the sluggish gold trading business. Conversely, the security solutions sector showed growth. Operating profit increased year-over-year due to growth in the security solutions sector and improved margins in the gold trading business, but decreased significantly compared to the previous quarter. Net profit turned to black due to non-operating factors such as investment gains from affiliated companies, but decreased when Q2 preliminary results were reflected. Furthermore, the increased debt ratio due to increased borrowing raises concerns about financial soundness.

    3. What’s Next?

    Hancom With is actively investing in promising future technologies such as PQC, AI-based security solutions, and blockchain, securing long-term growth potential. However, high dependence on the gold trading business and the increasing debt ratio are risk factors. The commercialization and market performance of PQC and AI technologies, the development of new growth engines besides gold trading, and the management of financial soundness will be key variables in the future.

    4. What Should Investors Do?

    • While the company’s efforts to secure future growth engines and its technological capabilities are positive, investment should be approached from a mid- to long-term perspective, considering the short-term sluggish performance and increased financial burden.
    • Investors should continuously monitor debt ratio management, business portfolio diversification, and performance improvement in the security software business.
    • Compare and analyze future official earnings with market expectations to inform investment decisions.
    What are Hancom With’s main businesses?

    Hancom With engages in various businesses, including security software, blockchain, and gold trading. The company is particularly focused on investing in the development of Post-Quantum Cryptography (PQC) and AI-based biometric authentication technology.

    How did Hancom With perform in H1 2025?

    Hancom With recorded revenue of ₩186.9 billion, operating profit of ₩500 million, and net profit of ₩4.1 billion. Year-over-year, revenue decreased, operating profit increased, and net profit turned to black. Quarter-over-quarter, revenue slightly increased, while both operating profit and net profit decreased.

    What should investors consider when investing in Hancom With?

    Investors should be aware of the company’s high dependence on the gold trading business and its increasing debt ratio. It’s also important to monitor the commercialization and market performance of PQC and AI technologies, the development of new growth engines, and the management of financial soundness.