PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩700 per share · Prices as of the 2026-10-02 close
Kyeryong Construction Industrial has lifted its operating margin to 5.8% in 2025 on the back of expanding public housing and infrastructure orders from Korea Land & Housing Corporation, continuing a profit recovery trend.
2025 consolidated operating profit rose about 71% year-on-year to KRW 166.9 billion, with the operating margin improving from 3.1% to 5.8%.
Operating profit in the second quarter of 2026 reached KRW 69.0 billion, the highest among the most recent five quarters.
Media reports indicate the company recorded the highest number of contract sites in Korea's LH-backed private-participation public housing (minchan) market in 2025.
The debt ratio stood at 225.5% in 2025, edging higher from 217.8% in 2023.
BNK Securities stated in a May 29, 2026 report that it raised its target price from KRW 28,000 to KRW 32,000 (the brokerage's own view).
Kyeryong Construction Industrial is a KOSPI-listed mid-sized builder based in Daejeon with a diversified business spanning building construction, civil engineering, housing, plants, and distribution.
The building construction segment accounts for more than half of total revenue and serves as the core business, while civil engineering generates stable revenue tied to national infrastructure demand.
More than half of total orders come from the public sector, with long-accumulated design and construction capabilities cited as a key competitive strength.
Through its subsidiary KR Industry, the company also runs a distribution business including highway rest stops, though profitability in this segment has been declining as smaller rest areas proliferate.
The company's presence in Korea Land & Housing Corporation's (LH) private-participation public housing (minchan) market has grown to the point where media have described it as the de facto leader in that segment.
It has continued to win large public housing and redevelopment projects across Sejong, Daejeon, Suwon, Busan and other regional hubs, broadening its project portfolio. The company also pursues self-developed projects with secured development rights, expanding its value chain beyond pure contracting.
Competitively, it stands alongside mid-sized rivals such as Kumho Engineering & Construction, Dongbu Corporation and Jungheung Construction at the top of the LH minchan market, while large builders including Hyundai Engineering & Construction, DL E&C and GS Construction have recently increased their participation in this space.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩734.1B | ₩49B | 6.7% |
| 2025Q3 | ₩661.7B | ₩38.7B | 5.8% |
| 2025Q4 | ₩823.1B | ₩48.1B | 5.8% |
| 2026Q1 | ₩670.7B | ₩40.8B | 6.1% |
| 2026Q2 | ₩840.1B | ₩69B | 8.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩2.9T | ₩132.8B | ₩60.5B | 4.5% | 8.1% | 218.9% |
| 2023 | ₩3T | ₩100.7B | ₩47.2B | 3.4% | 5.9% | 217.8% |
| 2024 | ₩3.2T | ₩97.7B | ₩47.4B | 3.1% | 5.6% | 220.6% |
| 2025 | ₩2.9T | ₩166.9B | ₩97.9B | 5.8% | 10.4% | 225.5% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21
2025 consolidated revenue came to KRW 2.887 trillion, down about 8.9% from KRW 3.169 trillion in 2024, while operating profit rose about 71% year-on-year to KRW 166.9 billion from KRW 97.7 billion. The operating margin improved from 3.1% in 2024 to 5.8% in 2025, exceeding both 2022 (4.5%) and 2023 (3.4%) levels.
Net income attributable to owners more than doubled, from KRW 47.4 billion in 2024 to KRW 97.9 billion in 2025.
On a quarterly basis, revenue expanded from KRW 661.7 billion with KRW 38.7 billion operating profit in the third quarter of 2025 to KRW 823.1 billion revenue and KRW 48.1 billion operating profit in the fourth quarter, while the first quarter of 2026 saw revenue ease to KRW 670.7 billion but operating profit hold firm at KRW 40.8 billion.
In the second quarter of 2026, revenue reached KRW 840.1 billion with operating profit of KRW 69.0 billion and owners' net income of KRW 41.1 billion, the highest operating profit and net income among the most recent five quarters.
Owners' net income summed over the most recent four quarters (Q3 2025 through Q2 2026) totaled roughly KRW 122.9 billion, showing a clear improving trend despite quarter-to-quarter variation.
This profit improvement appears driven not by revenue expansion but by margin gains from selective order-taking and tighter cost management.
Operating cash flow also turned positive at KRW 209.9 billion in 2025, a marked improvement versus negative KRW 10.1 billion in 2024 and positive KRW 22.0 billion and KRW 28.7 billion in 2023 and 2022, respectively.
Korea's domestic construction cycle remains in a downturn as prolonged real estate market weakness continues to weigh on the private construction market.
Even so, the 2026 construction industry is expected to be directly affected by expanded public construction investment, with the government's social overhead capital (SOC) budget rising KRW 1.6 trillion year-on-year to KRW 21.1 trillion in 2026, a supportive variable for public-order-heavy builders.
LH announced plans to start construction on 96,000 housing units nationwide in 2026, concentrating 86,000 units in the Seoul metropolitan area, and shifted its business model from selling land to builders toward a contract-type private-participation scheme in which builders handle only design and construction.
This shift changed the risk structure so that LH bears more of the site-development and settlement risk, elevating consortium planning and design capability as a key competitive factor.
Amid this shift, Kyeryong Construction recorded the highest number of contract sites domestically in 2025, forming the top tier of public housing order-winners together with Kumho Engineering & Construction and Dongbu Corporation.
On the other hand, the real estate project-financing (PF) market is not expected to improve meaningfully in 2026, and government-led PF restructuring is set to continue, leaving PF-related credit enhancement and joint-guarantee risk as a common industry-wide variable.
Company officials have said the firm plans to "maintain a selective order-taking policy and focus on winning projects with secured profitability." Among recent wins, in March 2026 the company signed a contract with LH for the integrated minchan project at Suwon Dangsu2 district (contract value KRW 112.2 billion, 2,309 units), running through March 2030.
In June 2026, it contracted with Busan Metropolitan City Urban Corporation for the Eco Delta City 1BL public housing project (contract value KRW 150.7 billion, equal to 5.22% of 2025 revenue), running through October 2031.
In LH's third round of minchan bidding, the Kyeryong-led consortium competed alongside Woomi Construction, Seohan and Hyosung Heavy Industries, while across the market as a whole large builders such as Hyundai Engineering & Construction, DL E&C and GS Construction have increased their participation, intensifying competition.
Daejeon's urban rail Line 2 construction and public housing projects in Sejong and Dangjin in the Chungcheong region also continue to feed the pipeline.
That said, consortium restructuring stemming from LH's shift to contract-type schemes and the return of large builders to the public market could pose challenges to Kyeryong Construction's existing top-tier position.
The stock trades at a level well below net asset value, with the price-to-book ratio situated well under 1x. The earnings multiple at which the stock has traded over recent years has generally been on the low side, though recent profit recovery is now feeding into that metric.
The dividend yield is roughly in line with sector norms, neither notably high nor low, and the absolute payout has not been large. A debt ratio persistently above 200% also warrants consideration, as it points to a relatively heavier liability load versus equity.
BNK Securities stated in a May 29, 2026 report that it had a buy rating and a target price of KRW 32,000 for Kyeryong Construction, up from KRW 28,000 previously — this is that brokerage's own assessment and not the view of this report.
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 2026-08-21
Amid LH's shift to contract-type schemes and expansion of the minchan market, Kyeryong Construction recorded the highest number of contract sites domestically in 2025. More than half of total orders come from the public sector, making revenue relatively more stable versus private-market volatility.
Increased government SOC budgets and LH's large-scale construction start plans also support a favorable order environment.
The operating margin improved to 5.8% in 2025, and second-quarter 2026 operating profit of KRW 69.0 billion was the highest among the most recent five quarters. The improvement appears driven more by selective order-taking and cost management than by revenue growth. Operating cash flow also turned positive in 2025, a positive sign for financial stability.
A series of preferred-bidder positions on large urban redevelopment and public housing projects such as the Daejeon Soje district have deepened the mid- to long-term revenue pipeline. New contracts have continued across the country, including Suwon Dangsu and Busan's Eco Delta City. These projects run over multi-year contract periods, which enhances revenue visibility.
2025 revenue declined year-on-year, and revenue growth in the first quarter of 2026 was just 0.3% versus the prior-year period. Since profit improvement has come mainly from margin expansion, the extent of further improvement could be limited without accompanying top-line growth. A structure reliant on public orders offers stability but limited prospects for high growth.
The debt ratio has edged higher to 225.5% in 2025 from 217.8% in 2023. Kyeryong Construction Industrial participates as the contractor in multiple real estate project-financing (PF) developments, and there are instances of joint guarantees on affiliated project-financing-vehicle (PFV) debt. There is latent risk that the contractor could have to absorb liabilities if a PF project underperforms.
As LH's shift to contract-type schemes lowers risk, large builders have returned to the public market, intensifying competition. In some project sites, bidding has drawn as many as three competing consortiums, reflecting rising competitive intensity.
Maintaining top-tier standing will require continued upgrades to equity structuring, cost design and quality management capability.
The debt ratio has stayed in the high-200% range, and there are joint guarantees on affiliated project-financing-vehicle (PFV) debt. If sales or leasing at PF project sites weaken further, the contractor could be required to assume the associated debt. Financial soundness indicators should be checked regularly.
The impact of institutional changes such as LH's shift to contract-type schemes on consortium structures and profit-sharing arrangements is not yet fully settled. If government policy direction changes, the volume and terms of public orders could shift as well. Strengthened labor and safety regulations could also add to cost burdens.
The real estate project-financing (PF) market downturn is expected to persist into 2026, and recovery in the private construction market has been delayed. Rising material and labor costs are cited as factors pushing up cost ratios on existing contracted projects.
These industry-wide variables could indirectly affect Kyeryong Construction despite its high exposure to public-sector work.
Check whether preliminary third-quarter 2026 results are disclosed and whether the operating margin improvement trend continues.
Monitor the outcome of LH's additional minchan bidding rounds in the second half and whether implementation agreements (final contracts) are signed for large redevelopment projects such as the Daejeon Soje district.
Check the outcome of National Assembly deliberations on the government's 2027 SOC budget to see whether the trend of expanding public order volumes is maintained.
Review year-end regular credit rating assessments for any updated findings on the debt ratio and PF-related contingent liabilities.
Kyeryong Construction has continued its profit recovery, lifting the operating margin from the 3% range to 5.8% since 2025 despite flat-to-declining revenue, a result attributed to selective order-taking and stronger cost management.
The company has shown notable competitiveness in public orders, recording the highest number of contract sites amid LH's expansion of contract-type private-participation projects, but competition has intensified as large builders return to the public market.
The debt ratio has edged up into the high-200% range, and the company must also manage contingent risks such as joint guarantees stemming from its participation as contractor in multiple real estate project-financing deals.
Large multi-year projects such as Daejeon Soje, Suwon Dangsu and Busan's Eco Delta City underpin the revenue pipeline, though the limited pace of top-line growth itself also warrants attention.
Some brokerages have taken a positive view of the profit improvement, but that reflects each firm's own judgment and warrants further independent verification by investors.
On balance, the stock sits at an intersection of bullish factors — public-order stability and profit recovery — and bearish factors — stalled top-line growth and financial leverage.
Report written 2026-09-05 · Data as of 2026-09-04
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