1. What Happened at ITChem?

ITChem’s 2024 consolidated audit report revealed a significant turnaround, with revenue of KRW 62.17 billion (up 38.3% YoY), operating profit of KRW 6.39 billion (returned to profit), and net income of KRW 11.39 billion (returned to profit). The news of Oculus No. 1 Private Equity Partnership acquiring a 28.39% stake also drew significant market attention.

2. What Drove the Turnaround?

ITChem’s turnaround is attributed to a combination of aggressive investments and business expansion leading to increased sales, improved profitability, and capital expansion efforts such as rights offerings and preferred stock conversions. Favorable macroeconomic conditions, including a weaker Korean Won, declining interest rates, and stable raw material prices, also contributed positively.

3. The 860% Debt-to-Equity Ratio: Cause for Concern?

Despite the remarkable growth, the debt-to-equity ratio exceeding 860% remains ITChem’s biggest risk factor. This high ratio stems from the financing secured for aggressive investments. Debt management and financial structure improvement are crucial for sustained growth.

4. Investor Action Plan

  • Positive Factors: Successful turnaround, private equity investment, growth momentum
  • Risk Factors: High debt-to-equity ratio, potential changes in private equity investment strategy
  • Key Watch Points: Debt management, investment performance, the role of private equity, maintaining profitability, and macroeconomic fluctuations

Before making any investment decisions, carefully consider ITChem’s efforts to secure financial soundness and its future growth potential.