Doosan FuelCell plunged to its lower limit on the 27th, hit by a second-quarter 'earnings shock' that fell far short of market expectations. Investor sentiment contracted sharply as the company grappled with a sales vacuum caused by fuel cell deliveries being pushed back to the second half, combined with costs for replacing existing product stacks and losses from the idling of its solid oxide fuel cell (SOFC) production line.

■ Closes at Lower Limit of KRW 30,000... Down 29.91%

On the Korea Exchange today, Doosan FuelCell finished trading at KRW 30,000, down KRW 12,800 from the previous trading day. The decline represents the daily price limit of 29.91%.

The direct catalyst for the plunge was the Q2 earnings report released on the 24th. The securities industry had forecast Q2 revenue of approximately KRW 131.8 billion and an operating loss of KRW 23.6 billion. However, actual revenue reached only about a third of the forecast, while the operating loss exceeded twice the expected amount.

■ Q2 Revenue of KRW 44.3 Billion... Down 66% Year-over-Year

On a consolidated basis, Doosan FuelCell's Q2 revenue was KRW 44.3 billion, a decrease of roughly 66% compared to the same period last year. The consolidated operating loss stood at KRW 50.9 billion, a significant widening of the deficit compared to a KRW 1.9 billion loss in the same period a year ago. On a non-consolidated basis, the operating loss was KRW 50.4 billion. The cost of goods sold resulted in a gross loss of KRW 40.6 billion.

Looking at the revenue breakdown, main equipment sales plummeted from KRW 121.5 billion in the first quarter to KRW 21.5 billion, while service revenue stood at KRW 22.8 billion.

Three factors simultaneously contributed to the deteriorated performance.

First is delivery delays. Phosphoric acid fuel cell (PAFC) projects originally slated for Q2 delivery were pushed back to the second half, significantly reducing main equipment sales.

Second, costs related to replacing existing products. The company is currently replacing degraded stacks and cell stack assemblies (CSAs) in PAFC product groups installed between 2020 and 2022. The securities industry estimates that related costs of approximately KRW 30 billion were reflected in the second quarter.

Third, an SOFC production gap. Following the completion of deliveries to the Changwon plant and before new orders were secured, a temporary drop in operating rates resulted in idle capacity losses of about KRW 10 billion being reflected.

■ Debt Surges to KRW 1.0363 Trillion, Debt-to-Equity Ratio Jumps to 346%

The company's financial burden has also expanded. As of the end of June, consolidated total debt reached KRW 1.0363 trillion, an increase of KRW 205.4 billion from the end of last year. During the same period, total equity decreased from KRW 367.5 billion to KRW 299.6 billion, and the debt-to-equity ratio rose by 120 percentage points, from 226% to 346%. Net borrowings also increased from KRW 476 billion to KRW 624.6 billion.

■ Targeting KRW 300 Billion in Main Equipment Sales for H2... Can Performance Recover?

The company plans to generate over KRW 300 billion in main equipment sales in the second half, including volumes postponed from Q2. The company maintains that a significant portion of the weak performance stems from shifts in delivery timing rather than evaporated demand.

On the order front, volumes from South Korea's Clean Hydrogen Portfolio Standard (CHPS) and overseas projects remain key variables. According to the company, approximately 110MW out of the volumes awarded between 2024 and 2025 are awaiting contract recognition, while potential CHPS-related orders for 2026 have been pegged at around 147MW. However, the size of this year's general hydrogen power bidding market is projected to shrink compared to the previous year.

Amid slowing domestic growth, the weight of U.S. and European markets is increasing. Through its North American subsidiary HyAxiom, Doosan FuelCell is in discussions to supply PAFCs for data centers, and has finalized major terms of an agreement with a German company for the supply of SOFC stacks between 2026 and 2027.

[This article was written with the assistance of AI. It does not recommend the purchase or sale of any specific stock. Investors should verify company disclosures and business progress directly before making decisions.]