1. Binex’s Disappointing H1 Earnings: What Happened?

Binex’s H1 2025 revenue reached 44.5 billion won, 5% below the market consensus of 46.9 billion won. Operating profit was a mere 1 billion won, a significant 84% drop from the expected 6.3 billion won. While net profit turned to a positive 1.3 billion won, this was mainly attributed to non-operating factors such as reduced interest expenses.

2. Reasons Behind the Underperformance

The revenue shortfall seems to be a result of a combination of factors, including temporary production delays, delays in securing new contracts, and potentially increased market competition. The operating profit shock stems from the revenue decline, coupled with increased R&D investments and initial operating costs associated with the new plant.

3. So, How Should Investors Approach Binex?

In the short term, caution is advised due to potential stock price volatility. It’s prudent to observe market reactions and the company’s explanations before making any investment decisions. In the medium to long term, investors should focus on the growth potential of the CDMO business and the positive impact of the Busan plant expansion. However, careful monitoring of financial risks, such as increasing debt-to-equity ratio and potential interest rate hikes, is crucial. Consider staggered investments when the CDMO business growth is reconfirmed and the visibility of earnings improvement increases.

4. Key Checkpoints for Investors

  • Additional orders and global partnerships in the CDMO business
  • Strengthening competitiveness in the chemical pharmaceuticals segment
  • Trends in operating profit margin improvement
  • Financial soundness indicators (debt-to-equity ratio, debt)