1. Nexteel’s Q2 2025 Earnings: Key Highlights

Nexteel reported sales of KRW 178 billion, operating profit of KRW 14.5 billion, and net income of KRW 9.7 billion for Q2 2025. While sales and operating profit decreased year-over-year, the company maintained a relatively robust profitability with an 11.21% operating profit margin.

2. Reasons for Decline: Global Slowdown and Protectionism

The main factors contributing to the decline in sales are the global economic slowdown and increasing protectionist trade policies. Weakening demand in the US market and geopolitical tensions in non-US regions negatively impacted Nexteel’s exports. The downturn in the domestic construction market also played a role in the decline.

3. Nexteel’s Future Growth Drivers: Active Investment and R&D

Despite the challenging business climate, Nexteel continues to invest in future growth. The operation of its 26-inch large-diameter steel pipe facility and investments in wind energy-related equipment are expected to contribute to new market development and sales growth. The company is also focusing on strengthening its technological competitiveness through R&D activities such as the development of cryogenic toughness steel pipes.

4. Investor Action Plan: Hold and Seek Further Analysis

Nexteel’s ability to maintain profitability through its core business and continued investment in future growth is positive. However, global economic uncertainty, strengthening protectionism, and fluctuations in exchange rates and raw material prices remain risk factors. Therefore, the investment recommendation remains ‘Hold,’ and further analysis is needed on order backlog for the second half of 2025, strategies for managing exchange rate and raw material price fluctuations, and the actual operating rate of new investment facilities.