Tongyang

Tongyang was established in 1955 as Tongyang Cement Industrial and listed on the KOSPI in 1976, joining the Yujin Group as a subsidiary in 2016 while maintaining ready-mix concrete and building materials as its core business.

Most revenue comes from the building materials segment centered on ready-mix concrete and materials distribution, followed by a construction business developing apartments, a textile business producing acrylic yarn and nonwoven fabric, and a plant business manufacturing industrial blowers.

Its main customers are construction companies, and because ready-mix concrete delivery is time-constrained, the business is regionally organized: Tongyang covers Gangwon, Yeongnam, and Jeju supply networks while majority shareholder Yujin Corporation covers the greater Seoul metropolitan area, together forming a nationwide network across the group.

Recently the company consolidated its development-project functions into a single dedicated organization to expand into AI data centers (AIDC), senior housing, and content production infrastructure.

Subsidiaries include the wholly owned Yujin Home Center and eleven other affiliates, with real estate and REIT-related entities such as Yujin REITs Management and Yujin Mapo 130 Trust Real Estate Investment Company newly consolidated.

In the cement industry, competitors include Ssangyong C&E and Sungshin Cement, while the ready-mix concrete industry is polarized between large operators and regional small and mid-sized firms.

On the sustainability front, the Gimpo and Incheon ready-mix plants apply CarbonCure technology to produce low-carbon concrete and pursue carbon credits.

Annual revenue declined for three consecutive years, from KRW 866.3 billion in 2023 to KRW 750.4 billion in 2024 and KRW 630.6 billion in 2025, while operating profit swung from a KRW 26.5 billion gain in 2023 to losses of KRW 0.9 billion in 2024 and KRW 20.7 billion in 2025, an expanding loss trend.

In contrast, owner net income showed extreme volatility, moving from -KRW 4.4 billion in 2022 to +KRW 18.2 billion in 2023, -KRW 74.2 billion in 2024, and +KRW 20.1 billion in 2025, suggesting non-operating items had a large influence.

Narrowing to the most recent four quarters (2025Q3-2026Q2), revenue moved from KRW 160.5 billion to KRW 150.1 billion, KRW 125.4 billion, and KRW 146.1 billion, while operating losses persisted every quarter (-KRW 5.8 billion, -KRW 5.4 billion, -KRW 8.7 billion, -KRW 3.6 billion), indicating no clear recovery in core profitability.

Owner net income also swung sharply by quarter, from -KRW 8.4 billion in 2025Q3 to +KRW 30.8 billion in 2025Q4, +KRW 6.5 billion in 2026Q1, and -KRW 17.3 billion in 2026Q2, pointing to a structure heavily influenced by presumed one-off items such as asset disposals or equity-related gains and losses.

Cash flow also deteriorated, with operating cash flow moving from +KRW 54.2 billion in 2023 to -KRW 10.2 billion in 2024 and -KRW 15.4 billion in 2025, reflecting weaker core cash generation.

The debt ratio climbed rapidly from 25.5% in 2022 to 39.5% in 2023, 86.6% in 2024, and 92.2% in 2025, likely reflecting project financing and increased investment tied to development projects such as AIDC.

Overall, the core ready-mix concrete and building materials business faces clear downward pressure on revenue and operating profit amid the construction slowdown, while net income volatility is largely driven by non-operating items linked to development projects and group restructuring.

According to the Korea Research Institute for Construction Policy, 2026 cement demand is projected to fall about 1% year over year to 36.1 million tons, and ready-mix concrete demand to fall 0.4% to 91.1 million cubic meters, with weak permitting and groundbreaking activity persisting and polarization deepening across sectors and companies.

Negative growth in construction investment, real estate project-finance distress, and shrinking new sales amid rising unsold inventory are directly reducing revenue in the core building materials business.

At the same time, the government has announced a mega-project to invest roughly KRW 550 trillion by 2029 to build 8.4GW of AI data center capacity, expanding to 18.4GW by 2035, making data centers a new growth axis for the construction industry.

Large builders such as Daewoo Engineering & Construction and DL Construction have already been winning data center orders and expanding hiring, drawing broad industry attention.

Competitively, order recovery is expected to center on large construction companies, while the market presence of small and mid-sized builders and ready-mix concrete producers is likely to weaken further.

The Yujin Group operates one of the largest nationwide ready-mix concrete supply networks in Korea, spanning the greater Seoul area through Yujin Corporation and other regions through Tongyang, while Ssangyong C&E and Sungshin Cement are cited as key competitors in the cement industry.

Volatile raw material prices and rising logistics costs remain persistent pressures on profitability across the industry.

On September 1, 2026, Tongyang announced it had consolidated its development-project functions into a single organization to pursue diversification into AIDC, senior housing, and content production infrastructure.

Its first project, the Bucheon Samjeong AI Hub Center, broke ground in May and has completed procurement of core infrastructure equipment, targeting a total power capacity of 9.8 megawatts (7 megawatts IT load) with service launch planned for 2028 or later.

The second project, the Incheon Guwol AI Hub Center, has secured its building permit and is targeting groundbreaking within this year, while the company is also reviewing three additional AIDC sites in the greater Seoul area.

Management stated that if the planned projects are completed sequentially, the asset value of AI data centers to be completed within three years could reach roughly KRW 1 trillion.

On the portfolio diversification front, the company cited high-margin development projects such as Studio Eugenia, a filming location, and Itaewon111, and said subsidiary Geumwang F1 turned profitable in the first quarter of 2026, with annual operating profit expected to exceed KRW 2 billion.

On the capital policy front, the company retired treasury shares equal to 10.26% of total shares outstanding (about KRW 71.9 billion) in June 2026 alongside a 2-for-1 share consolidation, framing both as steps to streamline capital structure and enhance shareholder value.

However, most of these development projects target operation from 2028 onward, so revenue contribution has yet to materialize, and reports that a planned acquisition of Sungshin Cement was put on hold amid financial burden concerns suggest that balancing new-business expansion against financial soundness will remain a key point to watch.