PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close
HL D&I is extending an earnings recovery on the back of a record order backlog and improving operating margins, while slowing new orders and stagnant net income attributable to owners remain unresolved challenges.
FY2025 consolidated revenue of KRW 1.7419 trillion and operating profit of KRW 79.8 billion mark a fourth straight year of revenue growth, with operating margin improving to 4.6%
First-half 2026 operating margin rose to 5.5%, up 0.8 percentage points year over year, driven by cost control and expansion of self-developed projects
Order backlog hit a record KRW 6.2299 trillion at end-2025, but new orders plunged 55% year over year in the first quarter of 2026
The company fully repaid bridge loans and swung operating cash flow from negative in 2024 to a KRW 75.5 billion surplus in 2025, improving its financial profile
Net income attributable to owners actually declined from KRW 25.1 billion in 2022 to KRW 15.2 billion in 2025, a notable divergence from operating profit growth
HL D&I (formerly HL D&I Halla) is a mid-cap general contractor listed on the KOSPI since 1980, operating in housing and building construction, civil engineering, infrastructure (power conduits, ports, railways, expressways), and self-developed projects.
As of FY2025, development and building construction accounted for the largest share of revenue at 68.65%, followed by civil engineering at 16.01% and self-developed sales at 9.93%.
The company relaunched its housing brand from Halla Vivaldi to EFETE in 2024, leveraging smart home technology and design-forward marketing to win urban redevelopment orders in Seoul.
The infrastructure segment, built on port, rail, airport and expressway construction experience, has emerged as a growth pillar, with its order backlog surging 78.6% year over year in 2025. The customer base spans public infrastructure agencies, redevelopment associations, and private developers.
In terms of competitive positioning, while large peers such as Samsung C&T, Daewoo E&C, and HDC Hyundai Development post operating margins in the 4-5% range and GS Engineering & Construction and POSCO E&C are in the 2% range with Hyundai E&C and SK Ecoplant near 1%, HL D&I recorded a 3.7% operating margin as of the third quarter of 2025, exceeding the average of larger peers.
The company has also been shifting from a pure contracting model toward a developer-style strategy that expands the weight of self-developed sales.
In parallel, it has diversified its portfolio through equity investments in AI semiconductor fabless firm Rebellions, Shinhan Wallpaper, and Eco Recycling to buffer against construction cycle volatility.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩406.9B | ₩19.8B | 4.9% |
| 2025Q3 | ₩476.9B | ₩25.5B | 5.4% |
| 2025Q4 | ₩533.2B | ₩20.3B | 3.8% |
| 2026Q1 | ₩384.6B | ₩19B | 4.9% |
| 2026Q2 | ₩445.6B | ₩26.5B | 6.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.5T | ₩52.6B | ₩25.1B | 3.6% | 5.9% | 290.3% |
| 2023 | ₩1.6T | ₩50.7B | ₩30.7B | 3.2% | 6.7% | 278.5% |
| 2024 | ₩1.6T | ₩57.9B | ₩21.4B | 3.7% | 4.5% | 258.7% |
| 2025 | ₩1.7T | ₩79.8B | ₩15.2B | 4.6% | 2.7% | 239.6% |
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
HL D&I's consolidated revenue rose for four consecutive years, from KRW 1.4721 trillion in 2022 to KRW 1.572 trillion in 2023, KRW 1.5788 trillion in 2024, and KRW 1.7419 trillion in 2025.
Operating profit also grew from KRW 52.6 billion in 2022 to KRW 79.8 billion in 2025, with the operating margin dipping from 3.6% in 2022 to 3.2% in 2023 before rebounding to 3.7% in 2024 and 4.6% in 2025.
However, net income attributable to owners peaked at KRW 30.68 billion in 2023 (from KRW 25.1 billion in 2022) before declining to KRW 21.4 billion in 2024 and KRW 15.2 billion in 2025, revealing a clear divergence between operating performance and bottom-line results.
This appears to reflect a combination of non-operating factors, including expanded bad-debt provisions tied to concerns over PF-related loans and guarantees, along with shrinking equity-method gains from affiliates.
On a quarterly basis, despite revenue of KRW 476.9 billion and operating profit of KRW 25.5 billion in the third quarter of 2025, net income attributable to owners was only KRW 2.88 billion, and in the fourth quarter of 2025, solid top-line figures of KRW 533.2 billion in revenue and KRW 20.3 billion in operating profit were accompanied by a sharp drop in net income to just KRW 0.14 billion, suggesting a sizable one-off charge.
In 2026, net income recovery resumed, with first-quarter revenue of KRW 384.6 billion, operating profit of KRW 19.0 billion, and net income of KRW 6.5 billion, followed by second-quarter revenue of KRW 445.6 billion, operating profit of KRW 26.5 billion, and net income of KRW 10.6 billion.
The cumulative operating margin for the first half of 2026 reached 5.5%, up 0.8 percentage points year over year, which the company attributed mainly to improved cost ratios and intensive cost reduction even as construction costs rose.
Cumulative net income attributable to owners over the trailing four quarters (Q3 2025 through Q2 2026) totaled roughly KRW 20.1 billion, underscoring continued quarter-to-quarter volatility.
Operating cash flow, negative at KRW 14.7 billion in 2022 and KRW 1.6 billion in 2024, swung to a positive KRW 75.5 billion in 2025, pointing to a meaningful recovery in underlying cash generation.
Korea's construction industry remains under a triple burden of persistent concerns over real estate project-finance defaults, prolonged high interest rates, and rising construction costs.
In the second half of 2026, whether maturing bridge loans can convert into permanent project financing continues to serve as an industry-wide risk gauge, while the government keeps offering targeted support such as expanded public guarantees through HUG and HF and unsold-inventory purchases via corporate restructuring REITs.
Even large builders show operating margins spread widely from 1% to 5%, making it hard to characterize the current stage as a cyclical peak, and demand for construction bonds remains sharply polarized between AA-rated-and-above issuers and BBB-rated-and-below issuers.
HL D&I carries a BBB+ rating from NICE Investors Service and Korea Ratings, putting it at a relative disadvantage in the public bond market, and it has previously failed to fully place a public bond offering.
Still, the company has differentiated itself by fully repaying bridge loans and expanding conversions to permanent project financing at quality metropolitan-area sites, restructuring its contingent liabilities toward the construction stage.
While its margin resilience is viewed favorably relative to peers, the company remains smaller in scale than top-tier builders, putting it at a disadvantage in funding costs and brand credibility. In redevelopment order competition, raising brand recognition for EFETE remains an important variable.
The company enters the outlook period with a record order backlog of KRW 6.2299 trillion at end-2025, securing a base for future revenue recognition.
Contracted-work backlog rose 13.9% year over year to KRW 4.2659 trillion, the largest component, while infrastructure-segment backlog surged 78.6%, giving the order book a more diversified structure.
However, new orders in the first quarter of 2026 fell 55% year over year to KRW 113.5 billion from KRW 251.6 billion, highlighting the challenge of sustaining medium-term order momentum.
CEO Hong Seok-hwa stated at the March annual shareholders' meeting that the company would apply stricter screening criteria to pursue higher-quality projects, suggesting a continued emphasis on quality over volume.
In housing, the company plans to launch sales this year at two Seoul redevelopment sites under the EFETE brand -- Donuimun District 2 (228 units) in Jongno-gu and the Namguro Station area (299 units) in Guro-gu -- both won last year and expected to be recognized as contracted-work revenue.
The average pre-sale rate across ongoing sites stood at roughly 85% at end-2025 and has been maintained around 89% in the first quarter of 2026, though some sites, such as Labium Han River in Mapo-gu, Seoul, have struggled with subscription demand.
Self-developed sales revenue is projected by IBK Securities to rise from KRW 251.7 billion in 2026 to KRW 279.0 billion in 2027, with analysts noting that if the cost ratio is managed around the 76% level, it could positively affect company-wide profitability.
HL D&I has traded at a discount to net asset value in recent years, and multiple brokerage reports have similarly noted that its price-to-book ratio has hovered in the 0.2x to 0.4x range.
On the earnings side, operating profit has grown steadily since 2023, while net income attributable to owners has fluctuated, and the trailing four-quarter window shows signs of renewed earnings recovery.
The company has not made cash dividend payments in recent fiscal years, suggesting capital has been prioritized toward balance-sheet repair and growth investment over shareholder returns.
Its BBB+ credit rating places it at a funding-cost disadvantage relative to higher-rated large builders, a factor that is also weighed in valuation discussions.
Hanwha Investment & Securities stated in an April 2026 report that an earnings turnaround had already begun and raised its target price to KRW 5,500, while Hyundai Motor Securities raised its target price to KRW 4,200 in a coverage report issued in late May 2026.
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
Operating margin improved from 3.2% in 2023 to 4.6% in 2025, and further rose to 5.5% in the first half of 2026. Combined with expanded self-developed projects and cost management, quarterly net income has resumed an upward trend in 2026. That said, quarter-to-quarter volatility remains high, warranting continued monitoring of sustainability.
The order backlog reached a record KRW 6.2299 trillion at end-2025, up 19% year over year. Infrastructure-segment backlog surged 78.6%, diversifying the pipeline. This provides a base for future revenue recognition.
The remaining bridge-loan balance for other businesses at end-2024 was fully repaid by end-2025, and operating cash flow swung from negative in 2024 to a KRW 75.5 billion surplus in 2025.
Expanded conversion to permanent project financing at quality metropolitan-area sites has also improved the contingent-liability structure.
Operating profit rose from KRW 52.6 billion in 2022 to KRW 79.8 billion in 2025, yet net income attributable to owners fell from KRW 25.1 billion to KRW 15.2 billion over the same period. Non-operating factors such as expanded bad-debt provisions and declining equity-method gains have eroded bottom-line results.
New orders in the first quarter of 2026 fell 55% year over year to KRW 113.5 billion. While the company has stated a selective-order strategy, a continuation of this trend risks eroding the medium-term order backlog.
With a BBB+ credit rating, the company faces less favorable bond-issuance conditions than AA-rated-and-above large builders. It has previously experienced undersubscription in public bond offerings, raising the possibility of similar difficulty when addressing future bond maturities.
Delayed pre-sales at some Gyeonggi-area sites have been flagged by credit-rating agencies as a monitoring factor. Some sites, such as Labium Han River in Mapo, have posted weak subscription results, and future pre-sale performance could affect financial metrics.
A KRW 200 billion contract for a housing construction project in Cheongju's Jangseong district, equivalent to 11.5% of 2025 revenue, saw seven amendment disclosures in August and September 2026, warranting verification of contract execution certainty.
Amid continued increases in construction costs, prolonged high interest rates could offset ongoing cost-ratio management efforts. There have been past instances of relatively low cash reserves versus short-term borrowings, requiring continued liquidity management.
Third-quarter 2026 preliminary earnings are expected to be disclosed — worth checking whether the operating margin improvement to the 5% range seen in the first half continues.
Watch for the launch and subscription results of two Seoul redevelopment sales — Donuimun District 2 (228 units) in Jongno-gu and the Namguro Station area (299 units) in Guro-gu.
Check the outcomes of the periodic credit-rating reviews by NICE Investors Service and Korea Ratings, and how the company addresses upcoming corporate-bond and short-term borrowing maturities.
Confirm whether the KRW 200 billion Cheongju Jangseong-district housing construction contract reaches final confirmation and whether further amendment disclosures occur.
HL D&I has shown a steady earnings recovery since 2022, with revenue and operating profit both rising, and the record order backlog and improved operating cash flow at end-2025 are positive signals for business stability.
However, the divergence between rising operating profit and declining net income attributable to owners, the sharp drop in new orders in the first quarter of 2026, and the funding burden associated with its BBB+ credit rating are factors that warrant balanced consideration.
Issues requiring further transparency also remain, such as the repeated amendment disclosures tied to the Cheongju Jangseong-district contract.
The company is pursuing qualitative growth through EFETE-branded Seoul redevelopment sales and a selective order strategy, and some brokerages have raised their target prices in recent reports.
Third-quarter earnings, Seoul pre-sale performance, and credit-rating review outcomes are likely to be the key variables determining whether the earnings recovery trend continues.
Report written 2026-09-05 · Data as of 2026-09-04
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