[Click eStock] "DI Dongil Completes Business Structure Restructuring... Expecting Improvement in Controlling Shareholder Net Profit"

[Asia Economy Reporter Eunmo Koo] DB Financial Investment analyzed that DI Dongil has almost completed its business restructuring and expects a reduction in the gap between operating profit and controlling shareholder net income.

DI Dongil is the de facto holding company of the Dongil Group, which operates in textile materials, apparel, aluminum, and plant businesses. It changed its name from Dongil Textile in March last year. In the first to third quarters of 2019, sales by segment were 260.8 billion KRW for textile materials, 222.3 billion KRW for apparel, 170.6 billion KRW for aluminum, and 61.5 billion KRW for plant and others, with the textile materials business having the largest share. However, operating profits by segment for the same period were -1.9 billion KRW for textile materials, 25 billion KRW for apparel, 14.2 billion KRW for aluminum, and 4 billion KRW for plant and others, with most profits generated from non-textile businesses.

The business restructuring, which has taken over six years, is considered nearly complete. On the 14th, researcher Kyungha Yoo of DB Financial Investment stated in a report, “The textile materials segment has been reorganized into a structure where domestic spinning facilities have ceased operations, overseas subsidiaries are fully responsible for yarn production, and the headquarters focuses on manufacturing special fibers and product trading.” He explained, “The apparel segment is maximizing profitability through category expansion of the Lacoste brand and transitioning its own brand to online channels.” Additionally, he noted, “In aluminum, the newly introduced fourth rolling mill began full operation in the second quarter of this year to meet the surging demand for secondary battery materials, and the plant business is simultaneously experiencing growth in scale and profitability, supported by increased environmental facility investments by domestic companies.”

There is also an expectation of a reduction in the gap between operating profit and controlling shareholder net income. Researcher Yoo said, “While operating profit has sharply increased over the past three years, controlling shareholder net income has hardly improved,” adding, “However, this year, with a significant decrease in restructuring costs, the gap between operating profit and controlling shareholder net income is expected to narrow considerably.”