PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩750 per share · Prices as of the 2026-10-02 close
HS Hwasung is leaning on a backlog of roughly KRW 2.56 trillion and expansion into Seoul redevelopment projects even as the Daegu housing market remains sluggish, while quarterly earnings swings have widened.
2025 revenue reached KRW 659.5 billion with operating profit of KRW 43.2 billion, lifting the operating margin to 6.6%
A large lump of presale revenue was recognized in Q3 2025, while Q4 2025 and Q2 2026 posted operating losses
Order backlog stood at about KRW 2.56 trillion as of end-June, roughly six years of recent annual revenue
The company is expanding beyond its Daegu-centric base into Seoul redevelopment projects under its high-end brand 'Ecra'
The debt ratio declined sharply from 168.4% in 2023 to 69.5% in 2025, indicating improved balance-sheet health
HS Hwasung (formerly Hwasung Industrial), founded in 1958 and headquartered in Suseong-gu, Daegu, is a general contractor operating across building construction, civil engineering, housing presale, environment, precast concrete (PC), steel structures, and engineering.
Its revenue mix spans public and private construction contracting alongside its own housing presale business, covering public facilities, commercial buildings, apartments, roads, bridges, tunnels, and water infrastructure.
The company runs two housing brands: 'Park Dream,' aimed at mid-sized units in Daegu and other regional markets, and 'Ecra,' a high-end brand created for its push into Seoul redevelopment projects.
Its PC division is noted for technology development and patents that give it leading industry capability, a segment expected to benefit from growing public works and private project-financing developments.
In the Ministry of Land, Infrastructure and Transport's 2024 construction capacity ranking, the company was ranked 47th with a capacity value of about KRW 938.8 billion, placing it among mid-tier builders.
Over the past year or so it has won a series of Seoul-area contracts including the Myeonmok-bondong Moa Town zones 2, 3, and 5, the Jamwon Hansin Town reconstruction, and the Seongsu Sinseong association reconstruction, broadening its metropolitan redevelopment footprint.
As revenue from its housing-contracting-centered private building segment has contracted, the company has offset this by expanding its own presale housing business, which helped cushion operating profit during periods of falling revenue.
Competitively, it is regarded as the leading contractor in the Daegu-Gyeongbuk region, while in Seoul and the greater metropolitan area it competes with large and mid-tier builders for redevelopment contracts.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩116.1B | ₩2.4B | 2.0% |
| 2025Q3 | ₩295.5B | ₩33.8B | 11.4% |
| 2025Q4 | ₩96.7B | -₩3.5B | −3.6% |
| 2026Q1 | ₩69B | ₩200M | 0.3% |
| 2026Q2 | ₩81.6B | -₩5.4B | −6.7% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩645.7B | ₩14.5B | ₩24.3B | 2.3% | 6.8% | 109.0% |
| 2023 | ₩908.1B | ₩25.3B | ₩21.1B | 2.8% | 5.7% | 168.4% |
| 2024 | ₩612.8B | ₩23.7B | ₩12B | 3.9% | 3.1% | 117.7% |
| 2025 | ₩659.5B | ₩43.2B | ₩27.6B | 6.6% | 6.3% | 69.5% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23
Annual revenue peaked at KRW 908.1 billion in 2023 after rising from KRW 645.7 billion in 2022, then fell sharply to KRW 612.8 billion in 2024 before recovering to KRW 659.5 billion in 2025.
The operating margin improved gradually from 2.3% in 2022 to 2.8% in 2023 and 3.9% in 2024, then jumped to 6.6% in 2025, driven by a concentrated block of presale revenue recognition in Q3 2025 (revenue of KRW 295.5 billion, operating profit of KRW 33.8 billion).
Indeed, results swung from a modest Q2 2025 (revenue KRW 116.1 billion, operating profit KRW 2.4 billion) to that sharply larger Q3, before reverting to an operating loss in Q4 2025 (revenue KRW 96.7 billion, operating loss of KRW 3.5 billion).
Q1 2026 hovered near breakeven (revenue KRW 69.0 billion, operating profit KRW 0.2 billion), while Q2 2026 posted another operating loss (revenue KRW 81.6 billion, operating loss KRW 5.4 billion), underscoring the wide swings across the most recent four-quarter window (Q3 2025 through Q2 2026).
Net profit attributable to owners likewise fluctuated sharply, from a large KRW 20.8 billion gain in Q3 2025 to a KRW 1.6 billion loss in Q4, then KRW 4.6 billion and KRW 1.3 billion in the following two quarters, tracking the timing of segment revenue recognition.
On an annual basis, owners' net profit declined from KRW 24.3 billion in 2022 to KRW 21.1 billion in 2023 and KRW 12.0 billion in 2024, before rebounding to KRW 27.6 billion in 2025.
Operating cash flow swung from a large outflow of KRW 184.6 billion in 2022 to inflows of KRW 4.3 billion in 2023, KRW 122.7 billion in 2024, and KRW 52.7 billion in 2025, marking a shift toward a more stable cash-generation pattern.
The debt ratio fell sharply from 168.4% in 2023 to 117.7% in 2024 and 69.5% in 2025, reflecting an improving balance sheet.
The company's core Daegu housing market is now in a supply-contraction phase following a wave of heavy move-ins between 2022 and 2024.
According to the Daegu city government, unsold apartment units in the region stood at 4,383 as of end-June 2026, up 85 units from the prior month, with completed-but-unsold ('bad') inventory accounting for 81.6% of the total, a structural overhang that observers continue to flag.
Over the same period, Daegu's construction order intake fell to just KRW 90.1 billion in the second quarter, sharply down from KRW 1.498 trillion a year earlier, with private orders down 97.0% and public orders down 86.6%, underscoring the regional construction slowdown.
Still, from 2025 onward the market has entered a steep 'completion cliff' as new move-in supply shrinks, leading some analysts to point to potential recovery from tighter supply-demand balance.
In response to this regional concentration risk, HS Hwasung and other Daegu-based builders have been expanding their operating radius into Seoul and greater metropolitan redevelopment projects.
Competitively, the company retains a leading position within the Daegu-Gyeongbuk region, but faces intensifying competition from large national contractors in the Seoul redevelopment market.
At its 2026 management strategy meeting, the company set three key agendas—'fundamentals first,' 'data-driven management,' and 'business portfolio diversification'—and set a 2026 order target of KRW 1.4 trillion.
This follows a record order intake of roughly KRW 1.5 trillion in 2025, with selective high-quality project wins in metropolitan redevelopment and expansion into overseas business cited as key pillars.
In practice, the 'Beomeo Station Park Dream D'Are' presale in Daegu's Suseong-gu drew an average subscription ratio of 101.5-to-1 in its first-priority round in April 2026, the highest in the Daegu region since June 2021, with the top unit type reaching 339-to-1.
The project is scheduled for occupancy in October 2028, meaning associated presale revenue will be recognized progressively over the coming years.
In Seoul, the company is linking adjacent Myeonmok-bondong redevelopment zones to build out a 'Park Dream' brand town, having folded zone 4 into zone 3 to expand the project from 247 to 512 households.
It is also bidding against Hoban Construction for the Changdong Sanga 1-cha reconstruction project in Dobong-gu, Seoul; winning that contract would give the company its largest single Seoul project to date, at 962 households.
The company has also stated it is pursuing overseas contract awards, though specific contract timing has not yet been disclosed.
The price-to-book ratio sits well below 1x, meaning the shares trade at a discount to net asset value—a pattern that can be read as reflecting both the regional housing slowdown and the wide swings in quarterly earnings.
Earnings-based price multiples, viewed against the 2025 profit recovery and the most recent four quarters of results, sit closer to the lower end of the company's historical trading range. Based on the disclosed per-share cash dividend, the dividend yield appears close to or somewhat below the sector average.
That said, these comparisons could shift depending on the pace of unsold-inventory resolution in Daegu, the progress of Seoul redevelopment expansion, and the timing of segment revenue recognition, so the earnings trend and balance-sheet improvement warrant attention alongside any single multiple.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-23
The order backlog stood at about KRW 2.56 trillion as of end-June, roughly six years of recent annual revenue. As projects break ground and progress, this backlog is expected to convert into revenue over time, underpinning medium-term results. The company posted a record order intake of about KRW 1.5 trillion in 2025.
Leveraging its high-end 'Ecra' brand, the company is expanding into prime-location redevelopment projects in Seoul's Daechi, Jamwon, and Seongsu areas, reducing regional concentration risk.
Metropolitan redevelopment orders won over roughly the past year totaled about KRW 589.4 billion, comparable to its five-year average annual revenue. In the Myeonmok-bondong area, it is linking adjacent zones to build a large-scale brand town.
The debt ratio fell clearly from 168.4% in 2023 to 69.5% in 2025. Operating cash flow also shifted from a large outflow in 2022 to sustained inflows in 2024 and 2025. This partly offsets concerns about the financial burden associated with expanded presale business.
First-half 2026 consolidated revenue fell 43.7% year-on-year to KRW 150.5 billion from KRW 267.2 billion, with the regional housing slump cited as the main cause. New presales and groundbreaking have declined amid unsold-inventory pressure and weak transactions, while construction and financing cost burdens persist. Its Seoul expansion is underway but revenue contribution remains at an early stage.
A concentrated block of presale revenue in Q3 2025 drove full-year results, but Q4 2025 and Q2 2026 each posted operating losses. A revenue-recognition pattern concentrated in specific quarters reduces earnings predictability. Q1 2026 hovered near breakeven.
Unsold apartments in Daegu rose to 4,383 units at end-June 2026, with completed-but-unsold inventory accounting for 81.6% of the total. Such inventory pressure can weigh on new project execution and cash recovery.
Regional construction order intake also plunged to KRW 90.1 billion in the second quarter versus the prior year.
A significant share of revenue depends on housing business in the Daegu-Gyeongbuk region, so any prolonged delay in resolving unsold inventory or continued weak transactions would directly affect results. The high share of completed-but-unsold units can constrain capacity to pursue new projects.
Expanding its own presale housing business to offset declining private building contract revenue has been flagged as increasing operating risk. Industry observers note that a prolonged property market downturn or unsold units could lead to deteriorating profitability and weaker financial soundness.
The company is competing against large builders such as Hoban Construction for major redevelopment bids like the Changdong Sanga 1-cha reconstruction in Seoul's Dobong-gu, and failure to win such contracts could disrupt its new growth plans.
As it is still in an early stage of its metropolitan push, it also faces a brand-recognition disadvantage versus larger rivals.
The Q3 2026 report is due around this time, warranting a check on how the regional housing slowdown and presale revenue timing affected results.
Daegu city is expected to release its end-September unsold apartment data around this time, useful for tracking the trend in completed-unsold inventory share.
The outcome of the contractor selection for the Changdong Sanga 1-cha reconstruction in Dobong-gu, Seoul is worth tracking, as winning it would secure the company's largest Seoul project to date.
This is a point to check whether the annual order target of KRW 1.4 trillion is met and whether any overseas business contracts have been finalized.
HS Hwasung, a leading contractor in the Daegu-Gyeongbuk region, has secured a medium-term revenue base through an order backlog of about KRW 2.56 trillion, but its earnings pattern has been uneven due to the regional housing downturn and quarter-to-quarter differences in revenue recognition.
A large block of presale revenue recognized in Q3 2025 drove full-year results, yet operating losses returned in Q4 2025 and Q2 2026, warranting continued observation of profit sustainability.
Expansion into Seoul redevelopment under the high-end 'Ecra' brand and the strong subscription results for the Beomeo Station Park Dream D'Are project can be read as positive signs of business diversification.
At the same time, the high share of completed-but-unsold housing in Daegu and the sharp drop in regional construction orders remain notable downside factors. Improvement in the debt ratio and stabilization of operating cash flow are positive developments from a financial soundness standpoint.
Overall, the company presents a structure combining backlog stability with quarterly earnings volatility, and the pace of regional housing market recovery together with progress on metropolitan-area orders will likely be the key points to watch going forward.
Report written 2026-09-05 · Data as of 2026-09-04
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