1. What’s Happening with IT Chem (309710)?

IT Chem reported sales of 19.8 billion KRW, an operating loss of 0.7 billion KRW, and a net loss of 1.8 billion KRW for the first half of 2025. Compared to the same period last year, sales have drastically decreased, and the company has swung to a loss. The second quarter’s performance was particularly concerning, with further sales decline and widening losses.

2. What’s Driving the Decline?

Sales declined across all segments, including pharmaceutical materials, display materials, and other businesses. The main factors contributing to this decline are the sluggish performance of existing businesses and the lack of revenue contribution from new ventures. Furthermore, the consolidated debt-to-equity ratio has soared to 166.63%, and accumulated losses have worsened, painting a grim picture of the company’s financial health. This deteriorating financial structure could significantly hinder future funding and operations.

3. What’s the Outlook for IT Chem?

IT Chem is facing a severe financial crisis, negatively impacting its fundamentals. The possibility of a short-term turnaround is low, and without substantial financial restructuring, normal business operations will be challenging. While there’s growth potential in the pharmaceutical and OLED materials markets, the company’s current financial difficulties could prevent it from benefiting from this growth.

4. What Should Investors Do?

Investors should exercise extreme caution with IT Chem. Closely monitor the company’s financial restructuring efforts, the performance of new businesses, and management’s ability to navigate this crisis before making any investment decisions. High volatility is expected in the short term, and investors should be prepared for substantial risk. Prudence is advised until tangible signs of financial recovery and improved performance emerge.