PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩500 per share · Prices as of the 2026-10-02 close
IS Dongseo, whose net profit rebounded sharply in the first quarter on one-off gains, saw both revenue and profit fall sharply again in the second quarter, leaving the Gyeongsan Pentahills W presale performance and the founding family's pledged-share risk as the key variables for future earnings and the balance sheet.
The first-quarter 2026 owner net profit of KRW 153.0 billion was driven by one-off delivery-based revenue recognition at Goyang Deokeun blocks 6-7 and a reversal of allowance for doubtful accounts, but revenue fell sharply to KRW 113.8 billion and net profit to KRW 5.4 billion in the second quarter.
Battery-recycling subsidiary IS Eco Solution posted first-half 2026 revenue of KRW 102.2 billion, up 69% year on year, with an operating margin of 14.5%, emerging as the group's fastest-growing business.
Pentahills W Phase 1 (1,712 units) in Gyeongsan opened its model house and began presales on June 26, with the initial contract rate surpassing 60% by late July, even as the Daegu-Gyeongbuk housing market remains in a downturn.
Of the 55.89% stake held by the founding family and related parties, 36.68% is pledged as collateral to 11 financial institutions, with loans carrying maintenance ratios of 110-170% and maturities concentrated in the second half of 2026.
The apartment project near Busan's Yigidae coastal park cleared a Busan municipal review in January 2026, but civic opposition over landscape impact and public contribution issues continues.
IS Dongseo was established after separating from Hyundai Engineering & Construction's civil works division in 1975, and took its current name after merging with Ilshin Construction in 2008.
Its business is organized into concrete, construction, environment (waste and battery recycling), and other segments; based on Hana Securities' estimate, the 2025 revenue mix was roughly 36% construction, 29% waste management, 22% concrete, and 10% battery recycling.
The concrete segment produces and sells building materials such as precast concrete and PHC piles, and has recently benefited from large semiconductor-cluster project orders.
The construction segment runs both contracted civil/building works and self-developed presale housing projects, with Goyang Deokeun DMC, Ulsan New City Aillien's Ddeul, and Gyeongsan Pentahills W among its major sites.
The environment segment gained a battery-recycling value chain through the 2019 acquisition of Insun ENT, a waste collection, transport and treatment company, while wholly owned subsidiary IS Eco Solution operates integrated pre- and post-treatment battery recycling facilities in Hwaseong and Gumi, producing high-purity lithium carbonate, lithium phosphate and NCM compound liquid.
Because earnings are closely tied to the construction cycle, construction accounted for over half of revenue in 2022-2024 before its share shrank amid the downturn.
Among regional mid-tier builders, the company stands out for its relatively high share of self-developed projects, while securing battery scrap feedstock is cited as the key competitive factor across the battery-recycling industry.
Non-listed holding company IS Holdings (45.53% stake) is the largest shareholder, alongside Chairman Kwon Hyuk-woon's personal stake (8.11%), reflecting an owner-centered governance structure.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩335.2B | ₩53.8B | 16.1% |
| 2025Q3 | ₩271B | ₩9B | 3.3% |
| 2025Q4 | ₩329B | -₩27B | −8.2% |
| 2026Q1 | ₩437B | ₩118.1B | 27.0% |
| 2026Q2 | ₩113.8B | ₩5.1B | 4.5% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.3T | ₩345.1B | ₩195.7B | 15.1% | 14.0% | 132.7% |
| 2023 | ₩2T | ₩340.5B | ₩161.1B | 16.8% | 10.3% | 139.1% |
| 2024 | ₩1.5T | ₩169.7B | -₩148.7B | 11.2% | −10.9% | 128.2% |
| 2025 | ₩1.2T | ₩68.1B | -₩53.8B | 5.5% | −4.3% | 143.3% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annual results show a clear downtrend. Revenue fell for four consecutive years, from KRW 2,278.4 billion in 2022 and KRW 2,029.4 billion in 2023 to KRW 1,514.6 billion in 2024 and KRW 1,234.4 billion in 2025, while operating margin dropped from 15.1% and 16.8% in 2022-2023 to 11.2% in 2024 and 5.5% in 2025.
Notably, owner net profit swung from gains of KRW 195.7 billion and KRW 161.1 billion in 2022-2023 to losses of KRW 148.7 billion in 2024 and KRW 53.8 billion in 2025, as one-off costs such as impairment losses on environment-segment assets and allowances tied to the Goyang Deokeun site outweighed the residual operating profit.
Quarterly volatility has been extreme: revenue was KRW 271.0 billion with a net loss of KRW 11.9 billion in the third quarter of 2025, before revenue rose to KRW 329.0 billion in the fourth quarter alongside an operating loss of KRW 27.0 billion and a net loss that widened to KRW 64.5 billion, marking the trough.
The first quarter of 2026 then saw a dramatic rebound to KRW 437.0 billion in revenue, KRW 118.1 billion in operating profit, and KRW 153.0 billion in net profit, attributable to delivery-based revenue recognition at the Goyang Deokeun DMC IS BIZ Tower Hangang blocks 6-7 combined with a reversal of allowance for doubtful accounts.
The question is sustainability: second-quarter 2026 revenue contracted sharply to KRW 113.8 billion, with operating profit of KRW 5.1 billion and net profit of KRW 5.4 billion, showing that underlying operating strength remains thin once one-off factors fade.
Still, at the individual segment level the battery-recycling business showed clear improvement, with second-quarter 2026 revenue of KRW 47.2 billion (up 57.3% from KRW 30.0 billion a year earlier) and operating income swinging from a loss of KRW 3.4 billion to a profit of KRW 6.8 billion.
The regional housing market that underpins the construction segment remains weak.
The Daegu-Gyeongbuk area has reportedly seen a prolonged decline in apartment sale prices and holds a high level of post-completion unsold units nationally, and against this backdrop IS Dongseo is marketing the Gyeongsan Pentahills site adjacent to Daegu's Suseong district under its high-end 'W' brand.
The real estate industry points to the fact that prior phases in the Pentahills complex all sold out as grounds for optimism on the new supply, though some also note that a prolonged downturn in the surrounding Daegu housing market could re-surface presale risk.
The concrete segment has secured a relatively solid demand base as large semiconductor-cluster projects continue to place orders.
The waste-management segment is seen as needing time to recover amid competitive pressure and an unfavorable business environment, whereas the battery-recycling market is described as being reshaped around companies with strong feedstock-sourcing capability, driven by tightening global environmental regulation and expanding EV adoption.
Credit rating agency Korea Investors Service assessed that the construction segment's consolidated operating profit shrank from roughly KRW 300 billion annually in 2022-2023 to KRW 174.7 billion in 2024 and KRW 38.5 billion in 2025, and forecast that Pentahills W presale performance would determine medium-term operating results.
The most important near-term variable is the presale performance of Gyeongsan Pentahills W.
Phase 1 (1,712 units) surpassed a 60% initial contract rate by late July, with a presale official noting one unit type reached a 95% contract rate, but the timing of Phase 2 (1,731 units) presales and groundbreaking has not yet been finalized.
Korea Investors Service estimated the combined presale value of Phases 1 and 2 at KRW 3-4 trillion, subject to change, and assessed that the timing of construction start and presale results would determine the construction segment's medium-term operating performance.
In the concrete segment, semiconductor-related order flow is said to be continuing, while in battery recycling the key question is whether the recent trend of double-digit operating margins, supported by rising material prices and process efficiency gains, can be sustained.
On the other hand, the Goyang Deokeun DMC IS BIZ Tower Central site, despite a favorable initial contract rate of around 95%, has seen some contract cancellations along with delays in occupancy and payment collection, which could translate into financial burden even after completion.
The Busan apartment project near Yigidae cleared a Busan municipal review in January 2026, but continued civic opposition over landscape and public-contribution issues leaves the pace of subsequent permitting procedures uncertain.
Company representatives have stated their intention to keep strengthening the growth competitiveness of the battery-recycling business based on feedstock-sourcing competitiveness and process efficiency.
The current share price trades at a substantial discount to net asset value, and it should be noted that price-to-earnings-related metrics calculated on a trailing four-quarter basis are heavily dependent on the one-off profit recognized in the first quarter of 2026.
Hana Securities, in a report dated May 14, 2026, maintained a Buy rating with a target price of KRW 50,000, citing an expected earnings leap by 2028 from the Gyeongsan Pentahills W development and arguing that upside exists even applying the valuation trough multiple the stock had reached on two prior occasions.
By contrast, Hyundai Motor Securities was reported around June 2026 to have cut its target price by about 35%, from KRW 48,000 to KRW 31,000, reportedly reflecting the market's limited confidence in the sustainability of the first-quarter earnings beat.
Brokerage views therefore diverge sharply around whether the Pentahills W presale succeeds. On dividends, the fact that cash dividends have been maintained despite high earnings volatility is worth noting.
Given that results swung from profit in 2022-2023 to loss in 2024-2025, then to a large one-off gain in the first quarter of 2026 followed by a sharp pullback in the second quarter, the qualitative nature of these earnings should be weighed alongside any valuation assessment.
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 2026-09-04
IS Eco Solution posted first-half 2026 revenue of KRW 102.2 billion, up 69% year on year, achieving a double-digit operating margin of 14.5%. In the second quarter alone, operating profit swung from a loss to a gain versus the prior year, indicating an accelerating pace of improvement.
The company has stated its intention to keep strengthening this business's growth competitiveness through feedstock-sourcing competitiveness and process efficiency.
Gyeongsan Pentahills W Phase 1 surpassed a 60% initial contract rate by late July, with a sales official noting a 95% rate for one popular unit type. This is viewed as relatively favorable given the overall freeze in regional presale markets.
The absence of near-term new supply within the Gyeongsan Jungsan district is also cited as a potential source of spillover demand.
The concrete segment continues to secure large semiconductor-cluster project orders, adjusting the business portfolio to reduce reliance on the housing cycle. According to Hana Securities, a new order from SK hynix was identified during the second quarter of 2026.
This can be seen as a factor partially offsetting the construction segment's heavy dependence on the residential presale cycle.
The KRW 153.0 billion net profit in the first quarter of 2026 relied heavily on one-off factors, namely delivery-based revenue recognition at the Goyang Deokeun site and a reversal of allowance for doubtful accounts.
This concern was reinforced in the second quarter, when revenue fell sharply from KRW 437.0 billion to KRW 113.8 billion and net profit from KRW 153.0 billion to KRW 5.4 billion. Repeatable earnings power once one-off factors fade has yet to be demonstrated.
Amid ongoing weakness in the Daegu-Gyeongbuk housing market, the Goyang Deokeun DMC IS BIZ Tower Central site, despite a favorable initial presale rate of around 95%, has seen some contract cancellations along with delays in occupancy and payment collection.
The presale and groundbreaking timing for Gyeongsan Pentahills W Phase 2 (1,731 units) also remains unconfirmed, leaving room for increased funding needs on this large-scale project.
Korea Investors Service assessed that prolonged unsold or unoccupied units could sustain financial volatility from working-capital burdens.
Of the founding family and related parties' stake, 36.68% is pledged as collateral to 11 financial institutions, with loans carrying maintenance ratios of 110-170% and maturities concentrated in the second half of 2026.
A structural possibility exists for margin calls and forced share sales should the stock price fall sharply.
The Busan apartment project near Yigidae cleared a municipal review, but continued civic opposition over landscape and public-contribution controversies suggests the project may not proceed smoothly even after permitting.
Consolidated net debt has exceeded KRW 1 trillion in 2024-2025, and working-capital burdens from the construction segment and loans to buyers persist.
A significant portion of the founding family's stake is pledged as collateral with maturities concentrated in the second half of the year, so the possibility of additional collateral calls or forced share sales in the event of a share price decline cannot be ruled out.
Financial volatility could increase further if funding needs rise for the large self-developed Gyeongsan Pentahills W project.
The apartment project near Busan's Yigidae was voluntarily withdrawn once amid controversy over landscape damage and insufficient public contribution before being re-proposed, and although it cleared review in January 2026, civic-group opposition continues.
Gyeongsan Pentahills W has also faced controversy over its presale pricing, meaning public sentiment and permitting variables could affect project timelines. Such issues carry the potential to delay groundbreaking or presale schedules, or to require further design changes.
The environment (waste) segment recognized substantial impairment losses on related assets in 2024-2025 amid competitive pressure and an unfavorable business environment, so a recurrence of similar impairments cannot be ruled out.
Construction segment operating profit shrank from roughly KRW 300 billion annually in 2022-2023 to KRW 38.5 billion in 2025, meaning earnings volatility could widen depending on the pace of any industry recovery.
Battery recycling results are driven by material prices and scrap-sourcing conditions, exposing the business to raw-material market swings.
Check whether the second-quarter contraction proves temporary in the third-quarter results, and how much of the Pentahills W contract proceeds have been recognized as revenue.
Monitor the maturity of stock-collateralized loans provided by the founding family and IS Holdings, whether collateral maintenance ratios are managed, and any additional disclosures such as amended large shareholding reports.
Once Phase 2's presale timing and scale are set and Phase 1's sell-out status is confirmed, the reliability of medium-term construction segment earnings estimates could improve.
It is necessary to check the response of civic groups regarding landscape and public-contribution issues, whether further design changes occur, and the actual timing at which groundbreaking becomes feasible.
IS Dongseo's earnings have swung dramatically in recent years, moving from strong profitability in 2022-2023 to losses in 2024-2025, then rebounding on a one-off gain in the first quarter of 2026 before contracting sharply again in the second quarter.
The battery-recycling business is showing structural improvement with revenue and profit growing together, while the construction segment's medium-term results remain heavily dependent on the presale performance of Gyeongsan Pentahills W.
A significant portion of the founding family's stake is pledged as collateral to financial institutions with maturities concentrated in the second half of the year, adding governance and financial uncertainty that also warrants consideration.
The Busan Yigidae apartment project has cleared permitting but still faces social-acceptance issues.
Brokerage views also diverge, with Hana Securities maintaining a KRW 50,000 target price in May 2026 while Hyundai Motor Securities was reported to have cut its target to KRW 31,000 around June 2026, reflecting differing opinions on the sustainability of the earnings rebound.
Taken together, monitoring the next quarterly results, the progress of the Pentahills W presale, and how the founding family manages its pledged shares appears to be a useful approach going forward.
Report written 2026-09-05 · Data as of 2026-09-04
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