1. What Happened?

Dongbu Construction was selected on July 19, 2025, as the contractor for the Gaepo Hyundai 4th Apartment redevelopment project. The contract is worth approximately KRW 100.1 billion, representing about 5.93% of Dongbu’s recent revenue.

2. Why Does it Matter?

This contract win could be a crucial catalyst for improving Dongbu Construction’s performance following the decline in revenue in Q1 2025. The KRW 100.1 billion project could not only boost short-term sales but also give Dongbu a competitive edge in future bids. It’s also expected to positively impact the company’s image, which was tarnished by the Incheon Geomdan site accident.

3. What’s the Likely Outcome?

  • Positive Impacts: Short-term revenue growth, improved operating profit, enhanced corporate image, stronger competitiveness in future bids.
  • Risk Factors: Lawsuits and administrative penalties related to the Incheon Geomdan accident, fluctuating raw material prices, intensified competition in the construction industry, potential interest rate hikes.

Coupled with expectations of an interest rate cut, the positive impacts are anticipated to outweigh the risks, although continuous monitoring of the aforementioned risk factors is essential.

4. What Should Investors Do?

While the stock price is likely to rise in the short term, a long-term investment strategy should consider the resolution of the mentioned risk factors, additional contract wins, and changes in the macroeconomic environment. Pay close attention to the outcomes of the lawsuits and administrative actions related to the Incheon Geomdan accident.