1. What Happened? GS E&C Reports Weak Q2 Earnings

GS E&C announced its Q2 2025 financial results on August 14, 2025. The company reported revenue of KRW 336.9 billion (down 5% YoY), an operating loss of KRW 2.7 billion, and net income of KRW 4.3 billion. These figures significantly missed market consensus.

2. Why Did This Happen? Construction Sector Weakness and Real Estate Downturn

  • Construction Business Struggles: The construction segment, which accounts for 63% of revenue, experienced a sharp decline (-63.1%).
  • Real Estate Market Downturn: The housing business was also impacted by the ongoing downturn in the real estate market.
  • Rising Costs and SG&A Expenses: Along with declining revenue, increasing costs and selling, general, and administrative expenses contributed to the operating loss.

3. What Should Investors Do? Investment Strategy

In the short term, downward pressure on the stock price is expected, suggesting a cautious approach. For long-term investors, GS E&C’s investment appeal will depend on its ability to restructure its business, improve cost efficiency, and manage financial risks effectively.

4. Investor Action Plan

  • Short-term Investors: Wait and see or consider reducing holdings.
  • Long-term Investors: Monitor key business performance indicators, including the recovery of core businesses and improvements in financial structure.