1. TK Gang’s H1 2025 Earnings: Key Highlights

TK Gang reported KRW 19.2 billion in revenue, KRW -2.1 billion in operating income, and KRW -1.9 billion in net income for the first half of 2025. Compared to the same period last year, revenue decreased by approximately 67.5%, and operating income turned negative.

2. Analyzing the Decline

This decline is primarily attributed to the slowdown in the construction industry and the resulting contraction in related industry demand. Increased selling, general, and administrative expenses also contributed to the deteriorating profitability. Total debt surged by approximately 380% compared to the same period last year, driven by increases in both long-term and short-term borrowings.

3. Impact on Investors

In the short term, downward pressure on stock price, increased credit risk, and declining market confidence are expected. The company’s past experience with default, coupled with its current financial state, could significantly unsettle investors.

4. Positive/Negative Scenarios and Investment Strategies

  • Positive Scenario: The incorporation of a new subsidiary and potential returns from R&D investments offer long-term growth potential. However, this hinges on a recovery in the construction market and stabilization of raw material prices.
  • Negative Scenario: Failure to improve the financial structure and a prolonged downturn in the construction industry could lead to further financial crisis. The burden of debt repayment will also restrict management activities.

Investor Action Plan: Investing in TK Gang currently carries very high risk. If considering investment, closely monitor efforts to improve financial soundness, revenue recovery and new business performance, cost management capabilities, and stock price reactions.