1. Newflex Q2 2025 Earnings: What Happened?
Newflex reported revenue of KRW 39.9 billion (down 3.9% YoY), operating profit of KRW 3.2 billion (down 22% YoY), and net income of KRW 1 billion (return to profitability) in Q2 2025. While revenue fell short of market expectations, operating profit exceeded estimates, leading to a return to profitability.
2. Behind the Return to Profitability: Why the Turnaround?
Despite the decline in revenue, Newflex’s efforts to improve profitability paid off. Cost reductions and enhanced expense management boosted operating profit. However, profitability remains lower compared to the same period last year.
3. Key Investment Considerations: What Does This Mean for Investors?
- Intensifying FPCB Market Competition: Competition from Chinese and Southeast Asian companies is putting pressure on Newflex.
- New Business Growth Potential: New ventures in EV batteries and automotive components could provide long-term growth momentum.
- Foreign Exchange Risk: Fluctuations in the KRW/USD exchange rate could impact profitability.
- Financial Health: The net loss on a standalone basis raises concerns.
4. Investor Action Plan: What Should You Do?
Investors should consider future earnings trends, new business performance, and macroeconomic conditions when making investment decisions. Pay close attention to Newflex’s performance in the EV-related FPCB market and the sustainability of its profitability improvements.
What is Newflex’s main business?
Newflex manufactures and sells Flexible Printed Circuit Boards (FPCBs). These are essential components in various products, including smartphones, automotive electronics, and wearable devices.
How did Newflex perform in Q2 2025?
Newflex reported revenue of KRW 39.9 billion, operating profit of KRW 3.2 billion, and net income of KRW 1 billion. While revenue missed market expectations, operating profit exceeded estimates, resulting in a return to profitability.
What are the key risks to consider when investing in Newflex?
Investors should be aware of the intensifying competition in the FPCB market, foreign exchange risk, and the company’s financial health, particularly the net loss on a standalone basis.