1. Dongbu Construction’s H1 2025 Performance: What Happened?

Dongbu Construction reported revenue of KRW 413.1 billion and operating profit of KRW 1.6 billion in H1 2025. While revenue slightly exceeded market expectations, operating profit and net income fell short. Net income was negative KRW 6 billion, marking a significant loss.

2. Why the Concern Despite Profitability?

The decline in operating profit is primarily attributed to the sluggish performance of the construction division. Rising ready-mixed concrete prices and other cost pressures squeezed profitability. The net loss suggests potential non-operating expenses or losses. Furthermore, the risk associated with the Incheon Geomdan AA13BL accident and contingent liabilities related to real estate project financing add to investor concerns.

3. Investment Strategy: What Should Investors Do?

Dongbu Construction exhibits positive aspects, including its return to profitability, improved financial structure, and a stable order backlog. However, considering the underperformance against market expectations, potential increase in net debt ratio, and potential risks, investors should proceed with caution.

4. Action Plan for Investors

  • Short-term investors: Closely monitor operating profit margin trends, risk management of real estate project financing, and resolution of the Incheon Geomdan accident risk before making investment decisions.
  • Long-term investors: Observe the company’s ability to secure new orders and the success of its diversification strategy from a long-term perspective.