1. Dong-A ST Q2 Earnings: Key Things to Watch

The investor relations (IR) meeting for Dong-A ST is scheduled for July 28, 2025. Investors will be looking for solutions to the issues that plagued Q1 performance, including high SG&A and R&D expenses, and increasing debt. Key points to watch include Q2 earnings improvements, R&D pipeline updates, and the outcome of the ‘volume-price linkage system’ negotiations.

2. Q1 Disappointment: Understanding the Underlying Causes

Despite an increase in sales, Dong-A ST experienced a decline in operating profit during Q1. While growth in GroTropin and strong overseas performance contributed to higher sales, increased SG&A, R&D expenses, and growing debt were identified as primary factors in the profit downturn.

3. Macroeconomic Environment: Potential Impact on Dong-A ST

The current high-interest rate environment, rising raw material prices, and volatility in foreign exchange and shipping markets could negatively impact Dong-A ST’s performance. The high-interest rate environment is particularly concerning given Dong-A ST’s high debt-to-equity ratio.

4. Action Plan for Investors

Careful review of the IR presentation and gathering additional information, including financial statements, competitor analysis, and expert market opinions, are crucial for making informed investment decisions. A long-term investment strategy, rather than reacting to short-term price fluctuations, is recommended.