1. Daedong Gear’s Performance Decline: What Happened?

Daedong Gear reported weak performance in H1 2025, with sales of KRW 119.8 billion (down 20.7% YoY), operating profit of KRW 0.87 billion (down 80.4% YoY), and a net loss of KRW 3.72 billion. The decline in sales in the agricultural and industrial machinery sectors, coupled with rising cost ratios and increased SG&A expenses, were the primary factors.

2. Why These Results?

  • Agricultural Machinery: Increased global competition and slowing demand.
  • Industrial Machinery: Slowdown in the construction industry and reduced capital investment.
  • Financial Burden: Increased debt-to-equity ratio and issuance of private placement bonds.

3. What’s Next?

Downward pressure on the stock price is expected in the short term, but the growth of the automotive sector and the new order contract with Hyundai Transys are positive factors. However, the high interest rate and high exchange rate environment remain ongoing risk factors.

4. Investor Action Plan

  • Short-Term Investors: A cautious approach is necessary until signs of performance improvement are confirmed.
  • Mid-to-Long-Term Investors:
    • Monitor earnings recovery, financial structure improvement, and the development of new growth engines.
    • Monitor changes in the macroeconomic environment.