Korea Stock Market Insights

Tag: Reducer

  • SBB Tech (389500) H1 2025 Earnings Analysis: Balancing Growth Potential and Financial Risks

    1. What Happened at SBB Tech?

    SBB Tech achieved KRW 3 billion in revenue for H1 2025, an 8.6% increase year-over-year. However, both operating and net income remained negative at KRW -3.8 billion and KRW -4 billion, respectively. Despite positive signs like increased ROBO BEARING utilization and growing overseas sales, overall performance fell short of market expectations.

    2. Why the Poor Performance?

    A combination of market downturn, R&D expenses, SG&A expenses, stock option costs, and convertible bond valuation losses contributed to the negative results. The increased financial burden due to convertible bond issuance, including the potential for future stock dilution, is a particular concern for investors.

    3. What’s Next for SBB Tech?

    SBB Tech is focusing on securing future growth engines by expanding its reducer and drive module business and entering overseas markets. The growth of the robotics industry and the increasing demand for domestic component localization in Korea could present opportunities, but improving profitability and managing convertible bond risks are top priorities.

    4. What Should Investors Do?

    Given SBB Tech’s combined growth potential and financial risks, a cautious investment approach is necessary. Investors should monitor profitability and earnings improvement trends in the short term and closely observe the performance of new businesses and the resolution of convertible bond risks in the long term.

    What is SBB Tech’s main business?

    SBB Tech manufactures and sells semiconductor, LCD equipment, and robot drive components (bearings and reducers). They possess advanced technology in precision reducers and special environment bearings.

    How was SBB Tech’s performance in H1 2025?

    Revenue reached KRW 3 billion, an 8.6% YoY increase, but operating and net income were negative at KRW -3.8 billion and KRW -4 billion, respectively.

    What is the outlook for SBB Tech?

    While the company is expected to benefit from the growth of the robotics industry, improving profitability and managing convertible bond risks are key factors. The success of new business ventures will also be crucial.

  • Haesung Aero Robotics (059270): Turning Profitable in H1 2025 – Investment Analysis and Outlook

    1. Haesung Aero Robotics H1 2025 Performance Analysis: Successful Return to Profitability!

    Haesung Aero Robotics recorded sales of KRW 70.65 billion, operating profit of KRW 120.88 billion, and net income of KRW 6.75 billion in the first half of 2025, marking a successful return to profitability. Sales have remained steady since Q2 2024, and operating profit has significantly improved compared to Q1 2025. Notably, their efforts to reduce SG&A expenses have contributed to improved profitability.

    2. Core Business and New Growth Engines: Stable Revenue Base and High Growth Potential

    • Elevator Reducers: With a solid competitive edge and a dominant domestic market share of approximately 70%, this segment provides stable revenue generation.
    • Robot Reducers: As the only domestic manufacturer of high-precision cycloid reducers for manufacturing robots, Haesung holds high growth potential in line with the expanding robotics industry. However, the decline in sales in H1 2025 raises concerns about volatility.

    3. Investment Considerations: R&D Investment Decrease and Sluggish Stock Performance

    The decrease in R&D investment raises concerns about securing long-term technological competitiveness. Moreover, despite the improved earnings, the stock price remains sluggish, requiring a cautious investment approach.

    4. Investment Strategies: Short-Term vs. Long-Term

    • Short-Term Investment: The return to profitability and sound financial structure are positive factors, but the weak stock momentum should be considered.
    • Long-Term Investment: Growth in the robot reducer business and increased R&D investment could drive an increase in corporate value.

    5. Conclusion: Focus on the Turnaround Potential and Growth Prospects

    Haesung Aero Robotics has demonstrated its turnaround potential with its return to profitability. Growth in the robot reducer business and strengthened R&D investment could potentially drive growth beyond the current stock price level.

    Haesung Aero Robotics FAQ

    What are the main businesses of Haesung Aero Robotics?

    Haesung Aero Robotics’ main businesses are elevator reducers and robot reducers. They hold the number one domestic market share in the elevator reducer sector.

    How was Haesung Aero Robotics’ performance in the first half of 2025?

    Haesung Aero Robotics returned to profitability in the first half of 2025, recording sales of KRW 70.65 billion, operating profit of KRW 120.88 billion, and net income of KRW 6.75 billion.

    What are the key considerations for investing in Haesung Aero Robotics?

    Investors should consider the sales volatility of the robot reducer business, the decreasing trend in R&D investment, and the recent sluggish stock performance.