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
SGC E&C continues to post operating profit on the back of expanding overseas plant revenue, but rising construction receivables and heavy borrowings remain the key swing factors for its balance sheet.
2025 revenue reached KRW 1.342tn and operating profit KRW 52.7bn, both improved year on year, but net loss attributable to owners widened to KRW 64.5bn
Net profit attributable to owners turned positive for two straight quarters in 2026, at KRW 8.3bn in Q1 and KRW 6.0bn in Q2
The overseas share of revenue jumped from 0.7% in 2023 to as high as 28.74% recently, forming a growth axis centered on Saudi Arabia and Malaysia
Rising construction receivables and continued negative operating cash flow have pushed debt dependency and net-debt ratios well above industry-standard thresholds
The debt ratio has stayed in the 290-310% range for four consecutive years (2022-2025), with the company relying on hybrid capital securities to manage its balance sheet
SGC E&C traces its roots to Youngchang Construction, founded in 1982, and took its current name after a 2020 spin-off/merger and a 2024 corporate renaming, operating as an OCI Group-affiliated integrated engineering firm.
The company engages in plant EPC across petrochemicals, fine chemicals, and power generation, along with building construction and housing development. SGC E&C is an OCI Group-affiliated plant EPC company whose core business spans chemical, semiconductor, bio, and environmental facilities.
The largest shareholder is SGC Energy, which holds a 33.0% stake and is itself a holding-type entity formed from the merger of Samkwang Glass, Etech Construction, and Kunjang Energy.
Domestically, the company pursues selective orders centered on high-value industrial facilities such as pharma/bio, semiconductor, and aviation projects, along with public works and regional housing-association projects, while its housing business operates under the 'THE LIV' brand for apartments, mixed-use, and officetel buildings.
Previously the company also undertook self-developed housing projects in addition to contracted work, but as the domestic housing market deteriorated it revised its order strategy toward reducing pre-sale risk.
Overseas, the company is anchored in Saudi Arabia and Malaysia, executing large petrochemical plants including ethylene/propylene facility construction, isopropyl alcohol facility construction, and chemical plant construction, and last August it won an EPC project in Malaysia for OCI TerraSus's semiconductor-grade polysilicon production facility.
The overseas share of revenue, just 0.7% in 2023, has risen as high as 28.74% recently, while the company's overseas order ranking jumped from 39th to 6th over the same period.
Amid a competitive landscape where large contractors are also expanding into overseas plant markets, SGC E&C is viewed as having moved relatively quickly among mid-tier builders in growing its overseas exposure.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩336B | ₩14.9B | 4.4% |
| 2025Q3 | ₩325.8B | ₩11.6B | 3.6% |
| 2025Q4 | ₩350.2B | ₩14.6B | 4.2% |
| 2026Q1 | ₩317.9B | ₩17.9B | 5.6% |
| 2026Q2 | ₩278.7B | ₩14.3B | 5.1% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.5T | ₩33.2B | ₩52.3B | 2.2% | 20.8% | 295.2% |
| 2023 | ₩1.9T | -₩21.6B | -₩33.8B | −1.2% | −15.1% | 293.9% |
| 2024 | ₩1.2T | ₩10.6B | -₩41.8B | 0.9% | −12.6% | 309.7% |
| 2025 | ₩1.3T | ₩52.7B | -₩64.5B | 3.9% | −18.1% | 310.7% |
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
Consolidated revenue reached KRW 1.342 trillion in 2025, up from KRW 1.206 trillion in 2024, while operating profit improved sharply to KRW 52.7 billion from KRW 10.6 billion, lifting the operating margin to 3.9%.
However, net loss attributable to owners actually widened, from KRW 41.8 billion in 2024 to KRW 64.5 billion in 2025, showing operating-profit improvement and net-income deterioration occurring simultaneously.
On a nine-month cumulative basis through Q3 2025, revenue rose 19.9% year on year and operating profit surged 1058.7%, yet net loss still grew 20.2%, confirming that plant-segment revenue growth and cost reduction drove results even as the net loss widened.
By quarter, operating profit was KRW 14.9 billion with a net loss of KRW 6.0 billion in Q2 2025, and KRW 11.6 billion operating profit with an KRW 10.5 billion net loss in Q3; in Q4, operating profit of KRW 14.6 billion still coincided with a net loss that ballooned to KRW 50.0 billion, becoming the main driver of the full-year net loss expansion.
This period coincides with disclosures that total construction receivables reached KRW 379 billion at end-Q3, up 23.1% from a year earlier, with cumulative impairment losses on receivables reaching KRW 39 billion, suggesting receivable-related impairment recognition was among the factors behind the widened net loss.
The pattern reversed in 2026, with Q1 revenue of KRW 317.9 billion, operating profit of KRW 17.9 billion, and net profit of KRW 8.3 billion, followed by Q2 revenue of KRW 278.7 billion, operating profit of KRW 14.3 billion, and net profit of KRW 6.0 billion — two consecutive quarters of positive net income.
Over the most recent four quarters (Q3 2025 through Q2 2026), cumulative net profit attributable to owners still stands at roughly negative KRW 46.2 billion, meaning the recent quarterly turnaround has not yet offset prior losses.
In 2022 the company posted revenue of KRW 1.523 trillion, operating profit of KRW 33.2 billion, and net profit of KRW 52.3 billion, but in 2023, despite revenue rising to KRW 1.864 trillion, it swung to an operating loss of KRW 21.6 billion and a net loss of KRW 33.8 billion — underscoring that results have swung widely over four years largely independent of revenue scale.
Cumulative overseas construction orders by Korean builders this year are expected to exceed USD 50 billion, the largest tally in more than a decade, as major contractors have turned to overseas markets amid a prolonged domestic construction downturn.
The Middle East and Southeast Asia remain a persistent source of large refinery and petrochemical plant orders, with continued large-scale refinery, gas, and petrochemical plant ordering underpinned by Middle Eastern feedstock cost competitiveness, alongside plant-market growth from rising renewable energy demand and developing-economy growth.
Within this trend, SGC E&C has positioned itself as a mid-tier EPC player that has rapidly expanded its overseas footprint from bases in Saudi Arabia and Malaysia, though it remains relatively weaker than large contractors in capital strength and credit standing.
Its domestic construction segment has been directly affected by the property downturn, as it maintained a profitability-focused selective order strategy, with revenue declining 26.4% year on year to KRW 394.7 billion.
By contrast, the public-project share of total new domestic orders has risen steadily, from 17% in 2023 to 22% in 2024 and 39% in 2025, in line with an industry-wide shift away from private housing dependence.
Overseas order competition hinges heavily on project execution capability and client relationships; SGC E&C's overseas new orders this year fell sharply to KRW 241 billion versus the prior year, which the company attributed to focusing on executing existing projects, while stating plans to again expand its global contractor footprint from next year.
The company has set a 2026 target of revenue of KRW 1.4428 trillion and operating profit of KRW 50.9 billion, with segment plans of KRW 1.1 trillion for plants (KRW 1 trillion overseas, KRW 100 billion domestic), KRW 660 billion for private/development, and KRW 160 billion for public works.
Its new-order target is KRW 1.9 trillion, to be pursued through a dual strategy of global plants and public projects.
Domestically, roughly KRW 1 trillion worth of domestic projects have broken ground over the past year, with order strategy centered on high-value-add industries such as pharma/bio, semiconductors, and aviation, plus public-sector work, while overseas, a total of five projects worth KRW 1.73 trillion are all under construction, leaving room for sequential revenue recognition ahead.
In parent company SGC Energy's July 2026 earnings commentary, it was also noted that the construction/real estate segment continues to see solid profitability as SGC E&C's large overseas projects enter the construction phase, with a stable order backlog maintained through successful new orders centered on viable public and development projects.
Still, overseas new orders slowed versus prior years in 2025, leaving a watch point on whether the pace of new-order recovery can fill the revenue gap once existing large projects wind down sequentially from 2027 onward.
Domestically, risk management through greater reliance on regional housing associations and public projects is likely to continue, with recent public-project wins including the LH Siheung-Geomo A-7BL apartment complex 5th zone (KRW 80.3 billion), the Gangnam Station deep tunnel stormwater project (KRW 80.0 billion), and the Yongsan International Business District urban development project (KRW 52.0 billion).
Over the past four years the company has tended to trade at a discount to net asset value, a pattern that can be read as reflecting the net losses accumulated from 2023 through 2025 alongside a debt ratio exceeding 300%.
The stock has continued to trade in a discount range relative to book value rather than a premium, indicating that balance-sheet concerns remain priced in even as operating results have shifted from loss to profit.
The return to consecutive quarterly net profit in Q1 and Q2 2026 can be read as a directionally positive signal, but on a trailing four-quarter basis the company remains in a net loss position, meaning prior large losses have not yet been fully offset.
There has been no dividend payment in the most recent fiscal year, limiting the shareholder-return appeal for now. These figures serve only as reference points for gauging relative positioning against a market price that changes daily, and should not be treated as a basis for an investment decision.
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 overseas revenue share has risen from 0.7% in 2023 to as high as 28.74% recently, while overseas order ranking jumped from 39th to 6th, rapidly diversifying the business mix. Five overseas projects worth a combined KRW 1.73 trillion are all under construction, leaving room for further revenue recognition ahead.
Repeat order experience in hub countries like Saudi Arabia and Malaysia could serve as a foundation for future business expansion.
The company stated it has maintained eight consecutive quarters of operating profit, solidifying a profitability-recovery trend. In 2026, net profit also turned positive for two consecutive quarters, broadening the base of earnings improvement.
A growing share of high-value-add domestic industrial facilities and public projects could provide a relatively more stable margin base.
The company has laid out concrete 2026 segment targets, aiming for revenue of KRW 1.4428 trillion and operating profit of KRW 50.9 billion.
New public-sector order wins such as the LH Siheung-Geomo apartment project, the Gangnam Station stormwater tunnel, and the Yongsan International Business District project continue to supplement the stability of the domestic revenue base. An expanding public-project share reduces exposure to swings in the private housing market.
Operating profit improved to KRW 52.7 billion in 2025, yet net loss attributable to owners actually widened to KRW 64.5 billion. On a nine-month cumulative basis in 2025, operating profit surged 1058.7% while net loss still grew 20.2%, indicating a structural gap between operating results and net income. Despite two consecutive quarters of net profit in H1 2026, the trailing four-quarter figure remains a net loss.
Cumulative operating cash flow through Q3 2025 was negative KRW 118.4 billion, nearly double the net outflow of the same period a year earlier. Total construction receivables reached KRW 379 billion, up 23.1% from the prior year-end, with cumulative impairment losses reaching KRW 39 billion.
If revenue growth continues to outpace actual cash collection, further impairment recognition cannot be ruled out.
Total borrowings rose 14.5% from the prior year-end to KRW 578.8 billion, pushing debt dependency to 42% versus an appropriate threshold of 30%, while the net-debt ratio reached 134.7%, more than double the appropriate level.
Hybrid capital security distribution payments in H1 2026 reached KRW 10 billion, more than triple the KRW 3 billion paid in the same period a year earlier. A debt ratio that has held in the 290-310% range for four straight years also suggests the financial burden is unlikely to ease quickly.
Deteriorating financial health at SGC E&C has directly burdened its largest shareholder, SGC Energy, whose key financial metrics have also weakened as SGC E&C's condition is reflected on a consolidated basis.
The parent has repeatedly provided credit enhancement for project-finance loans, raising the possibility that a realized shortfall could transmit the burden across the group.
Construction receivables rose 23.1% from the prior year-end to KRW 379 billion, with cumulative impairment losses reaching KRW 39 billion — meaning more than 10% of total receivables have been classified as uncertain-recovery assets and impaired. Renewed payment delays or construction delays from clients could trigger further impairment.
Overseas new orders fell sharply to KRW 241 billion in 2025 compared with the prior year, which the company attributed to focusing on executing existing projects.
With large projects concentrated in specific countries, local political conditions, construction delays, and raw-material price swings could affect profitability, and a slower-than-expected recovery in new orders raises concern about a future revenue gap.
The Q3 2026 quarterly report is expected. Check whether the net-profit turnaround seen in H1 2026 extends into Q3, and whether construction receivables and operating cash flow show improvement.
Check progress against the company's stated 2026 new-order target of KRW 1.9 trillion via cumulative order disclosures on DART.
Monitor whether SGC Energy discloses additional credit-enhancement measures (such as fund reimbursement or debt assumption) related to SGC E&C's project-finance loans, and whether hybrid security distribution costs continue to rise.
The FY2026 annual earnings release is expected. Check whether the company met its stated target of KRW 1.4428 trillion in revenue and KRW 50.9 billion in operating profit, along with whether the net loss narrowed.
SGC E&C has shown a clear recovery in operating profit through overseas plant revenue expansion and a selective order strategy centered on domestic public works and high-value-add industrial facilities.
The return to net profit for two consecutive quarters in H1 2026 is a notable directional shift, but the trailing four-quarter figure remains a net loss, and the large Q4 2025 net loss illustrates that earnings volatility remains significant.
Rising construction receivables, negative operating cash flow, and a debt ratio above 300% are variables that must be weighed when assessing the durability of the earnings recovery. The consolidated structure with parent SGC Energy also means credit risk can transmit in both directions across the group.
Whether the company meets its stated 2026 revenue, operating profit, and new-order targets, and whether receivables and cash-flow metrics improve, will likely be the key points to watch going forward. This report is for informational purposes only and does not constitute a buy or sell recommendation.
Report written 2026-09-05 · Data as of 2026-09-04
This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.