PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩150 per share · Prices as of the 2026-10-02 close
Hanshin Engineering & Construction posted lower revenue in 2025 but a sharply improved operating margin and net profit, while its debt ratio has declined for four consecutive years.
2025 revenue fell year over year, but operating profit rose from KRW 37.3 billion to KRW 64.5 billion, lifting the operating margin from 2.5% to 5.6%.
Net income attributable to owners over the four quarters from Q3 2025 through Q2 2026 totaled roughly KRW 83.6 billion, indicating relatively resilient quarterly profitability.
The debt ratio declined for four straight years, from 223.3% in 2022 to 163.0% in 2025.
Operating cash flow swung from minus KRW 112.2 billion in 2023 to plus KRW 134.6 billion in 2024, before narrowing to plus KRW 22.4 billion in 2025.
Recent order wins include the Hoewon 2 District redevelopment in Changwon (total project cost of roughly KRW 600 billion) and a road construction contract in the Busan-Jinhae Free Economic Zone.
Hanshin Engineering & Construction has operated as a listed general contractor since converting to corporate form in 1967, with a business structure spanning building construction, civil works, plant, landscaping, and electrical construction.
Core revenue comes from residential apartment construction, and the company leverages accumulated construction experience and technical capability to secure public-sector orders, while expanding redevelopment and reconstruction projects under its ‘Hanshin The Hue’ brand and pursuing higher value-added business through entry into emerging overseas markets such as Vietnam.
It recently secured the construction rights for the Hoewon 2 District redevelopment in Masanhoewon-gu, Changwon City, a large-scale urban renewal project comprising roughly 2,000 apartment units across three basement and 27 above-ground floors, with a total project cost of about KRW 600 billion.
In the civil works segment, the company signed a contract for a northern access road construction project in the Busan-Jinhae Free Economic Zone worth approximately KRW 66.3 billion, continuing its participation in public infrastructure orders.
On the new-business front, it is pursuing higher value-added ventures including urban-type residential housing, senior living, mixed-use development, smart cities, parking business, and expanded overseas infrastructure work.
In terms of competitive positioning, the company is classified as a mid-tier contractor relative to large builders, with selective order-taking and cost management cited as its core strategy for defending profitability.
Its revenue mix is understood to be weighted toward private housing and reconstruction, complemented by public civil works, while overseas operations, centered on Vietnam and Southeast Asia, remain limited in scale relative to domestic revenue.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩300.2B | ₩17.7B | 5.9% |
| 2025Q3 | ₩285.9B | ₩22.3B | 7.8% |
| 2025Q4 | ₩258.6B | ₩8.1B | 3.1% |
| 2026Q1 | ₩252.4B | ₩19.3B | 7.7% |
| 2026Q2 | ₩258.9B | ₩20.5B | 7.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.2T | ₩39.4B | ₩45.5B | 3.2% | 6.2% | 223.3% |
| 2023 | ₩1.3T | ₩14.8B | ₩31.9B | 1.1% | 4.2% | 227.9% |
| 2024 | ₩1.5T | ₩37.3B | ₩6.9B | 2.5% | 0.9% | 196.7% |
| 2025 | ₩1.1T | ₩64.5B | ₩59.9B | 5.6% | 7.2% | 163.0% |
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
Hanshin's 2025 consolidated revenue came to KRW 1.149 trillion, down from KRW 1.490 trillion in 2024, while operating profit rose sharply to KRW 64.5 billion from KRW 37.3 billion, lifting the operating margin from 2.5% to 5.6%.
Net income attributable to owners jumped from KRW 6.9 billion in 2024 to KRW 59.9 billion in 2025, marking a notable recovery in earnings power.
In 2023, revenue was KRW 1.309 trillion with operating profit of KRW 14.8 billion and a margin of just 1.1%, the low point of the period, while 2022 revenue was KRW 1.222 trillion with operating profit of KRW 39.4 billion (a 3.2% margin), showing that margins fluctuated over the past four years before improving markedly in 2025.
On a quarterly basis, revenue was KRW 300.2 billion, operating profit KRW 17.7 billion, and owners' net income KRW 3.7 billion in Q2 2025; by Q3 2025, revenue was KRW 285.9 billion, operating profit KRW 22.3 billion, and owners' net income jumped to KRW 26.0 billion, a increase likely aided in part by one-off items such as project completion settlements.
In Q4 2025, revenue was KRW 258.6 billion and operating profit fell to KRW 8.1 billion, yet owners' net income held at a similar KRW 26.2 billion.
Q1 2026 (revenue KRW 252.4 billion, operating profit KRW 19.3 billion, owners' net income KRW 12.7 billion) and Q2 2026 (revenue KRW 258.9 billion, operating profit KRW 20.5 billion, owners' net income KRW 18.7 billion) showed lower revenue scale but relatively stable operating profit levels.
Owners' net income summed over the four quarters from Q3 2025 through Q2 2026 reached KRW 83.6 billion, though the quarter-to-quarter volatility in net income should be kept in mind.
On the balance sheet, the debt ratio declined from 223.3% in 2022 and 227.9% in 2023 to 196.7% in 2024 and 163.0% in 2025, while total equity rose from KRW 726.7 billion in 2022 to KRW 841.5 billion in 2025.
Operating cash flow, however, swung considerably, from net outflows of KRW 32.1 billion in 2022 and KRW 112.2 billion in 2023 to large net inflows of KRW 134.6 billion in 2024 and a smaller KRW 22.4 billion inflow in 2025.
The construction sector has endured a prolonged downturn amid high interest rates and a sluggish property market; first-half construction investment fell 12.2% year over year, the largest drop since the Asian financial crisis, and analysts expect the sector to bottom out sometime between this year's second half and next year's first half, with any subsequent recovery likely to be modest in speed and scale.
The Construction & Economy Research Institute of Korea projected that 2026 domestic construction orders would rise 8.9% year over year to KRW 240.8 trillion, construction investment would grow 0.3% to KRW 266.1 trillion, and nationwide housing sale prices would rise 2.5%.
However, the same outlook noted that upward pressure would dominate the greater Seoul area in 2026 while regional markets would see widening differentiation between prime and less-favored locations, underscoring pronounced regional polarization.
Indeed, the industry remains stuck in a lag between order recovery and revenue recognition: private building orders rose 13.3% and housing orders 24.5% year over year in the January-August 2025 period, even as constant-price construction output fell 18.5% over the same span, confirming the time lag between orders and revenue.
On the public side, the 2026 SOC budget was set at KRW 27.5 trillion, up KRW 2 trillion (7.9%) from the prior year, raising hopes for expanded civil-infrastructure orders, though observers note that budget increases face real execution constraints, with rising construction costs contributing to a growing number of unexecuted budget allocations.
Regional markets continue to face structural pressure, with post-completion unsold housing units reaching roughly 27,000, the highest level in 12 years.
Against this backdrop, mid-tier contractors such as Hanshin appear to be pursuing selective order-taking and a redevelopment-focused strategy to differentiate themselves from larger builders.
A December 2025 media report assessed that Hanshin was undergoing a fundamental shift backed by an order backlog in the KRW 6.5 trillion range and improving financial structure, though this remains a provisional observation point pending confirmation in actual revenue recognition.
On the new-order front, the Hoewon 2 District redevelopment in Changwon (total project cost of roughly KRW 600 billion, about 2,000 apartment units) and the road construction contract in the Busan-Jinhae Free Economic Zone (approximately KRW 66.3 billion) stand out as recently secured flagship projects.
The company continues efforts to diversify revenue sources into new business areas such as urban-type residential housing, senior living, mixed-use development, smart cities, parking operations, and overseas infrastructure.
Industry-wide, some observers see the point at which redevelopment order backlogs move into the construction phase in the second half of 2026 and beyond as the turning point for the sector's genuine recovery, making the pace at which Hanshin's redevelopment and reconstruction pipeline converts into actual revenue a key point to monitor.
Expanded government SOC budgets and public procurement policy could support the civil-works order base, but the actual pace of budget execution still needs to be watched.
Specific annual revenue or order guidance from the company was not identified in publicly available materials, so this report presents only directional context based on disclosed order announcements and broader industry policy trends.
Hanshin's shares have traded at a discount to net asset value for several years, and this book-value discount has persisted even after the 2025 earnings recovery. Given the sharp rise in net income over the four most recent quarters, the earnings-based trading multiple sits toward the lower end of its multi-year band.
On the dividend side, despite the expansion in earnings, the dividend per share itself remains relatively modest, so the appeal of shareholder returns through dividends has not yet become especially pronounced.
The steady decline in the debt ratio alongside growing equity strengthens the underlying net-asset base, though whether this translates into a broader market re-rating requires further confirmation through subsequent results.
Overall, the stock sits in a segment characterized simultaneously by a discount to net assets and a relatively low earnings-based multiple compared with its own historical range.
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 operating margin improved from 2.5% to 5.6% in 2025, and owners' net income rose from KRW 6.9 billion to KRW 59.9 billion. Operating profit remained solid in both Q1 and Q2 2026, at KRW 19.3 billion and KRW 20.5 billion respectively.
Improving profitability metrics despite shrinking revenue can be read as a result of selective order-taking and cost management.
The debt ratio fell for four consecutive years, from 223.3% in 2022 to 163.0% in 2025, while total equity grew from KRW 726.7 billion to KRW 841.5 billion over the same period, pointing to a gradual strengthening of financial stability.
That said, operating cash flow has been volatile, so whether this balance-sheet improvement persists will need to be verified in subsequent results.
Recent order wins include the Hoewon 2 District redevelopment in Changwon (total project cost of roughly KRW 600 billion) and a road construction contract in the Busan-Jinhae Free Economic Zone.
The company is also pursuing expansion into new business areas such as urban-type residential housing, senior living, mixed-use development, and smart cities. A redevelopment-centered order strategy could contribute to future revenue diversification.
2025 revenue fell to KRW 1.149 trillion from KRW 1.490 trillion in 2024, and Q1 2026 revenue is reported to have declined 17.1% year over year.
While margin improvement has offset the revenue contraction, stagnation in top-line growth itself remains a concern, and continued revenue declines could raise questions about the sustainability of the earnings improvement.
Operating cash flow moved from net outflows of KRW 32.1 billion in 2022 and KRW 112.2 billion in 2023 to net inflows of KRW 134.6 billion in 2024 and KRW 22.4 billion in 2025, a substantial swing in both sign and magnitude.
Such volatility suggests sensitivity to the timing of construction payment collections or project completion settlements, and without stable cash generation, the durability of balance-sheet improvement could be called into question.
Regional markets continue to face structural pressure, with post-completion unsold housing reaching a 12-year high, while polarization between the greater Seoul area and regional markets is deepening.
Although the public SOC budget has increased, reports indicate that rising construction costs are delaying actual budget execution in some cases. These industry conditions could constrain the pace at which individual companies recover orders and revenue.
Rising construction costs and intensifying competition in private housing sales are cited as pressures on building and civil-works revenue.
Recent spikes in net income may partly reflect one-off items such as project completion settlements, making it uncertain whether the same level of profitability can be repeated going forward. Cost-management capability remains a key variable for earnings stability.
Moves to revise labor-related legislation, including a proposed law addressing subcontractor labor disputes and a comprehensive wage regulation, along with stricter enforcement of the Serious Accidents Punishment Act, are cited as factors that could raise labor and safety-management costs across the construction industry.
Such regulatory changes could also affect the cost structure of mid-tier contractors, with the scale of the cost burden depending on policy direction and implementation timing.
Regional markets continue to face structural strain, with post-completion unsold housing reaching roughly 27,000 units, the highest in 12 years, while polarization between the greater Seoul area and regional markets is intensifying.
A business portfolio concentrated in specific regions could be more exposed to the effects of this polarization, making the execution of any regional diversification strategy an important variable.
Check the Q3 2026 earnings release to see whether the recent improvement in operating margin continues and whether the revenue decline is stabilizing.
Monitor the groundbreaking and revenue-recognition timeline for the Hoewon 2 District redevelopment in Changwon (total project cost of roughly KRW 600 billion).
Track the progress of recently won contracts such as the Busan-Jinhae Free Economic Zone road project and watch for additional new-order disclosures.
Confirm how the year-end dividend and shareholder return policy for fiscal year 2026 is finalized at the annual general meeting.
Watch whether the pace of government SOC budget execution and public-sector order volumes translate into actual civil-works revenue.
Hanshin Engineering & Construction showed a recovery in earnings power in 2025, with a sharply improved operating margin and net income despite lower revenue, and its financial structure has also gradually stabilized, with the debt ratio falling from 223.3% in 2022 to 163.0% in 2025.
However, operating cash flow has shown considerable volatility in both sign and magnitude year to year, and revenue itself has fluctuated over multiple years without showing clear sustained growth.
Recently secured orders, including the Changwon redevelopment project and the Busan-Jinhae road construction contract, could serve as material for future revenue diversification, but there is likely to be a time lag before they are reflected in actual revenue and earnings.
Industry-wide, forecasts of modest growth in 2026 construction investment and orders coexist with concerns over polarization between the greater Seoul area and regional markets and delays in public budget execution.
Under these conditions, Hanshin's future performance is likely to hinge on the pace at which its redevelopment pipeline converts into revenue and on its cost-management performance. Investors should continue to monitor upcoming quarterly results and new-order disclosures before forming a view.
Report written 2026-09-05 · Data as of 2026-09-04
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