Korea Stock Market Insights

Tag: Synthetic Resin

  • Kangnam Jevisco (000860) H1 2025 Earnings Analysis: Hidden Opportunities Amidst Uncertainty?

    1. What Happened? H1 2025 Performance Analysis

    Kangnam Jevisco recorded sales of KRW 161.6 billion, operating profit of KRW 6.4 billion, and net income of KRW 5.3 billion in H1 2025. Both sales and profitability decreased compared to the same period last year, with a particularly noticeable decline in the paint segment. Conversely, the synthetic resin segment maintained solid profitability, and the composite molding materials segment showed improved efficiency.

    2. Why These Results? Reasons for the Underperformance

    The sluggish performance of the paint segment is primarily attributed to declining demand in downstream industries due to macroeconomic factors such as the global economic slowdown, increased trade barriers, and deteriorating financial conditions. The downturn in paint-demanding industries like construction, shipbuilding, and automotive directly impacted the results. On the other hand, the strong performance of the synthetic resin segment can be attributed to successful strategies in developing eco-friendly and high-value-added products and expanding overseas markets.

    3. What’s Next? Future Outlook and Opportunities

    The performance in the second half hinges on the recovery of the paint segment. The steady growth of the synthetic resin segment and efficiency improvement efforts in the composite molding materials segment are positive factors. Increased liquidity from the stock split and continuous R&D investment are expected to act as mid- to long-term growth momentum.

    4. What Should Investors Do? Action Plan

    Investors should closely monitor the recovery of the paint segment, the performance of new products, and the maintenance of competitiveness in the synthetic resin segment. It is crucial to make informed investment decisions by continuously monitoring quarterly earnings announcements and changes in macroeconomic indicators.

    Q: How did Kangnam Jevisco perform in the first half of 2025?

    A: Sales were KRW 161.6 billion, operating profit was KRW 6.4 billion, and net income was KRW 5.3 billion, all showing a decline compared to the same period last year. The paint segment’s underperformance was particularly pronounced.

    Q: What were the main reasons for the decline in performance?

    A: The main reasons were declining demand in downstream industries due to the global economic slowdown, particularly the downturn in paint-demanding industries such as construction, shipbuilding, and automotive.

    Q: What is the outlook for Kangnam Jevisco?

    A: The recovery of the paint segment will be key. The growth of the synthetic resin segment and R&D investments are positive factors. Investors should monitor quarterly earnings and macroeconomic indicators.

  • Deoksung (004830) H1 2025 Earnings Report Analysis: Can it Seize Opportunities Amidst Crisis?

    1. What Happened? Deoksung’s H1 2025 Earnings Analysis

    Deoksung’s H1 2025 sales decreased by 41% year-on-year to KRW 73.9 billion, and operating profit fell by 43% to KRW 5.04 billion. Intensified competition in the main synthetic leather business and the external economic slowdown are analyzed as the main causes of the sluggish performance. In particular, the low operating rate of the synthetic resin division (42.28%) shows the urgent need for strategies to improve profitability.

    2. Why Did This Happen? Background of Sluggish Performance and External Environment Analysis

    Deoksung’s poor performance was influenced not only by internal factors but also by the external environment. The unstable macroeconomic environment, including volatility in international oil prices, rising KRW/USD and KRW/EUR exchange rates, and global supply chain bottlenecks, weighed on Deoksung’s profitability. Also, high interest rates added to the financial burden by increasing borrowing costs.

    3. What’s Next? Deoksung’s Future Prospects and Growth Potential

    Deoksung is actively investing in the development of eco-friendly synthetic leather and resins, striving to secure future growth engines. This R&D investment is expected to provide long-term growth momentum. However, whether earnings will recover, the success of new businesses, and cost efficiency will be important variables determining Deoksung’s future.

    4. What Should Investors Do? Investment Implications and Action Plan

    Investors considering investing in Deoksung should consider the current sluggish performance and external uncertainties. Preparation for short-term stock price volatility is necessary, and a thorough evaluation of the company’s mid- to long-term growth strategy and execution capabilities is essential. A cautious investment approach is necessary until visible signs of an earnings rebound appear.

    What are Deoksung’s main businesses?

    Deoksung’s main businesses are the manufacturing and sale of synthetic leather and synthetic resins.

    How was Deoksung’s performance in the first half of 2025?

    Deoksung’s sales in H1 2025 decreased 41% year-on-year to KRW 73.9 billion, and operating profit fell 43% to KRW 5.04 billion.

    What are Deoksung’s future growth drivers?

    Deoksung is focusing its investments on developing eco-friendly synthetic leather and resins to secure future growth engines.

    What should investors be aware of when investing in Deoksung?

    Investors should consider the current sluggish performance and external uncertainties and carefully evaluate the company’s mid- to long-term growth strategy and execution capabilities.

  • SH Energy & Chemical Q1 2025 Earnings Shock: Analysis and Outlook for Investors

    1. What Happened at SH Energy & Chemical?

    SH Energy & Chemical reported an earnings shock in Q1 2025 with revenue of KRW 25.3 billion, an operating loss of KRW 3.2 billion, and a net loss of KRW 2.8 billion. This significant underperformance compared to market expectations (0 KRW) has caused investor concern.

    2. Why These Results?

    • Synthetic Resin Business Decline: Sales in the synthetic resin manufacturing sector plummeted by 55% year-on-year due to the construction market downturn, increased low-priced imports, and expansion of substitute markets.
    • Resource Development and Management Consulting Underperformance: Shale gas sales remained negligible, and the management consulting sector struggled to improve performance due to a challenging market environment.
    • Increased Cost Burden: Despite a decrease in SM prices, the rise in LRL prices has exacerbated the cost burden. The rising USD/KRW exchange rate and the global interest rate hike trend are also contributing to financial pressure.

    3. What’s Next?

    Downward pressure on the stock price is expected in the short term. However, there is potential for mid-to-long-term recovery through successful market entry and overseas expansion of high-value-added products (DUOPOL, ZEROPOL), securing cost competitiveness, and efficient financial management.

    4. What Should Investors Do?

    • Cautious Investment: Rather than short-term investment, it’s crucial to observe and carefully monitor the company’s recovery potential.
    • Strengthening Core Business Competitiveness: Securing new revenue streams through commercialization of high-value-added products and expanding into overseas markets is essential.
    • Securing Financial Soundness: Efforts to manage cash liquidity and stabilize debt ratios are critical.
    • Monitoring Macroeconomic Variables: Continuously monitor the impact of macroeconomic variables such as exchange rates, interest rates, and raw material price fluctuations.
    How did SH Energy & Chemical perform in Q1 2025?

    SH Energy & Chemical reported revenue of KRW 25.3 billion, an operating loss of KRW 3.2 billion, and a net loss of KRW 2.8 billion in Q1 2025, falling significantly short of market expectations.

    What are the reasons behind SH Energy & Chemical’s poor performance?

    The main reasons are analyzed to be a sharp decline in sales in the synthetic resin business sector, underperformance in the resource development and management consulting sectors, and an increased cost burden.

    What is the outlook for SH Energy & Chemical?

    While downward pressure on the stock price is expected in the short term, there is potential for mid-to-long-term recovery through the growth of high-value-added products and expansion into overseas markets.