1. What Happened? : JC Chemical’s H1 2025 Earnings Analysis

JC Chemical announced a return to profitability in its H1 2025 report, with revenue of KRW 92.1 billion, operating profit of KRW 3.9 billion, and net profit of KRW 2 billion. The growth of the palm plantation business and improved profitability in the biofuel business were the main drivers of this turnaround. However, operating cash flow significantly worsened to KRW -29.012 billion, and the debt-to-equity ratio rose to 109.98%.

2. Why Did This Happen? : Reasons for Profitability and Financial Risk Analysis

Rising palm oil prices and increased harvest volume led to strong performance in the palm plantation business, while rising biodiesel prices and cost reduction efforts contributed to improved profitability in the biofuel segment. However, increased borrowing for new business investments and operating funds was the main cause of the deteriorating financial health. Increased accounts receivable and inventories also contributed to the worsening cash flow.

3. So What? : Key Points for Investors

Investing in JC Chemical presents both an opportunity with the return to profit and a risk with the financial challenges. Investors should pay attention to the following:

  • Possibility of Financial Health Recovery: Carefully review the company’s debt repayment plan and financial restructuring measures.
  • Growth Potential of New Businesses: Continuously monitor the performance of SAF raw material production and global trading businesses.
  • Changes in the External Environment: Keep an eye on macroeconomic variables such as interest rates, exchange rates, and oil prices, as well as the biofuel market situation.

4. Investor Action Plan

Investors should make investment decisions by comprehensively considering changes in JC Chemical’s financial health indicators, new business performance, and market conditions. It’s crucial to develop an investment strategy from a long-term perspective without being swayed by short-term stock price fluctuations.