KOSPIConstruction & Materials028100

Dong-Ah Geological Engineering Company

₩19,840▲ 0.35%2026-10-02 close

Market Cap

₩222B

Turnover

₩300M

Volume

20,000 shares

Shares out.

11.2M

PER

10.3×

PBR

1.0×

EPS

₩1,721

Dividend Yield

3.39%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩600 per share · Prices as of the 2026-10-02 close

Report overview

Underground Infrastructure Leader: Earnings Rebound Meets Ownership Overhang

Dong-Ah Geological Engineering is showing a clear revenue and earnings recovery on the back of its leading position in specialized civil works such as TBM and DCM, while simultaneously facing a governance overhang from its private equity controlling shareholder's exploration of a stake sale.

1
Revenue rose for four consecutive years from KRW 266.3bn in 2022 to KRW 467.7bn in 2025, while operating profit swung from a KRW 30.6bn loss to a KRW 18.1bn profit over the same period.
2
Controlling shareholder Crescendo Equity Partners (34.23% stake via Dover Holdings) has retained KB Securities as advisor to pursue a control sale, but no final decision has been made.
3
The company is reported to have handled 80-90% of domestic large-diameter shield TBM projects and holds the leading domestic market position in TBM and DCM methods.
4
In the 2025 construction capability evaluation for the ground-formation and paving specialty category, the company rose one notch to 4th place domestically from 5th the prior year.
5
The order backlog exceeded KRW 1 trillion at end-2025 before easing slightly to KRW 925.2bn by mid-2025, followed by new orders including Singapore's Changi Airport project and a domestic power-line tunnel.

Business structure

Dong-Ah Geological Engineering was founded in Busan in 1971 and listed on the KOSPI market in 2009 as a specialized civil engineering contractor.

The company provides a total solution spanning ground investigation, design, and construction, centered on shield tunneling using Tunnel Boring Machines (TBM), the Deep Cement Mixing (DCM) method for soft ground improvement, and diaphragm wall construction.

Its large-diameter shield TBM technology has been deployed extensively in major domestic underground infrastructure projects including GTX, Seoul subway lines, and subsea tunnels under the Han River, and the company is reported to have handled a substantial share of related domestic contracts.

In 2024, the company obtained a construction-machinery manufacturing certification from the Ministry of Land, Infrastructure and Transport, enabling it to build TBM units using its own technology.

Its client base includes government and public agencies such as the Korea National Railway and the Public Procurement Service, consortiums led by large general contractors such as Hyundai Engineering & Construction, and overseas clients including Singapore's Land Transport Authority.

Overseas operations have expanded to include the Singapore MRT, the Philippines' North-South Commuter Railway, Hong Kong airport runway works, and Middle East infrastructure projects in Qatar and Abu Dhabi; a company representative stated in a 2021 report that more than half of revenue was coming from overseas markets.

In its niche specialty of ground formation and paving construction, the company holds a top-tier position, ranking 4th domestically in the relevant capability evaluation.

On governance, founder Lee Jung-woo forgone family succession and sold control to private equity firm Crescendo Equity Partners in 2019, which now holds its controlling stake through the special purpose vehicle Dover Holdings.

Earnings trend

Quarterly revenue · Operating profit

₩105.5B₩4.2B25Q2₩130.9B₩5.2B25Q3₩127.5B₩5.1B25Q4₩123.8B₩5.1B26Q1₩111.9B₩5B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩266.3B-₩30.6B2022₩345B₩7.7B2023₩393.5B₩9.6B2024₩467.7B₩18.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩105.5B	₩4.2B	4.0%
2025Q3	₩130.9B	₩5.2B	4.0%
2025Q4	₩127.5B	₩5.1B	4.0%
2026Q1	₩123.8B	₩5.1B	4.1%
2026Q2	₩111.9B	₩5B	4.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩266.3B	-₩30.6B	-₩22.8B	−11.5%	−10.3%	68.0%
2023	₩345B	₩7.7B	₩10.2B	2.2%	4.5%	70.8%
2024	₩393.5B	₩9.6B	₩11.4B	2.4%	5.0%	76.2%
2025	₩467.7B	₩18.1B	₩18.7B	3.9%	8.2%	99.1%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-22

Earnings analysis

Dong-Ah's consolidated revenue rose for four straight years, from KRW 266.3bn in 2022 to KRW 345.0bn in 2023, KRW 393.5bn in 2024, and KRW 467.7bn in 2025.

Operating profit swung from a KRW 30.6bn loss in 2022 to profits of KRW 7.7bn in 2023, KRW 9.6bn in 2024, and KRW 18.1bn in 2025, with the operating margin improving steadily from -11.5% to 2.2%, 2.4%, and 3.9% over the same period.

Net income attributable to owners followed a similar path, moving from a KRW 22.8bn loss in 2022 to profits of KRW 10.2bn, KRW 11.4bn, and KRW 18.7bn in 2023-2025, respectively.

On a quarterly basis, revenue jumped from KRW 105.5bn with operating profit of KRW 4.2bn in the second quarter of 2025 to KRW 130.9bn revenue and KRW 5.2bn operating profit in the third quarter, before holding at KRW 127.5bn revenue and KRW 5.1bn operating profit in the fourth quarter.

Into 2026, the company posted KRW 123.8bn revenue and KRW 5.1bn operating profit in the first quarter, followed by KRW 111.9bn revenue and KRW 5.0bn operating profit in the second quarter, with operating profit staying in a relatively stable KRW 4.2-5.2bn range over the most recent five quarters.

Net income showed more quarter-to-quarter swings, rising to KRW 6.6bn in the fourth quarter of 2025, dipping to KRW 4.2bn in the first quarter of 2026, and recovering to KRW 5.5bn in the second quarter.

Net income attributable to owners over the most recent four quarters (Q3 2025 through Q2 2026) totaled KRW 21.3bn, indicating that profit expansion has continued on an annualized basis.

A separate media report also noted first-half 2025 revenue of KRW 209.4bn and operating profit of KRW 7.7bn, up 12.9% and 104.8% year-on-year respectively, supporting the view that the earnings improvement has been building since early 2025.

Industry analysis

The specialized civil engineering market is closely tied to the domestic construction order cycle, but niche segments requiring advanced techniques such as TBM and DCM have relatively high barriers to entry, resulting in a market led by a small number of players.

Dong-Ah is reported to have handled a substantial share of domestic large-diameter shield TBM projects and maintains a top-tier position in the relevant specialty construction capability evaluation.

On the demand side, deep underground infrastructure projects such as GTX, Seoul subway lines, and subsea tunnels, along with the railway-undergrounding policy that has been pledged by the government and political parties for the greater Seoul metropolitan rail network, are cited as potential sources of future orders.

However, such large national infrastructure programs require multiple stages including master plan formulation, route selection, and budget allocation, meaning there is typically a lag before actual contract awards materialize.

Overseas, ongoing opportunities have emerged in Singapore's MRT expansion, the Philippines' North-South Commuter Railway, and Middle East infrastructure projects, areas where the company has accumulated long-standing construction experience.

While the broader domestic construction sector continues to face intense bidding competition and persistent cost pressure, the specialized civil works segment is seen as retaining a relatively differentiated position due to technical entry barriers.

Compared with larger peers, Dong-Ah remains a mid-sized specialty contractor in absolute revenue terms, but it is reported to hold a technical edge in specific methods such as mechanized tunnel boring and marine ground improvement.

Outlook

The key variable for earnings from 2026 onward is the pace of order backlog recovery.

The backlog exceeded KRW 1 trillion at end-2025 but eased to KRW 925.2bn by the end of June 2025, after which the company secured new contracts including Singapore's Changi Airport Terminal 5 project (KRW 29.4bn) in July 2025 and a Sinsiheung-Sinsongdo power-line tunnel project (KRW 67.7bn) in August 2025.

Since shifting to a co-CEO structure that includes an overseas division head, the company has also indicated a policy of expanding its overseas revenue share and order intake.

Domestically, large underground infrastructure programs such as the railway-undergrounding initiative for the greater Seoul metropolitan area, which has been discussed by the government and political parties, are cited as a future order pipeline, though there is typically a time lag before master plans are finalized and construction begins on specific routes, limiting near-term earnings impact.

On the governance front, after controlling shareholder Crescendo selected KB Securities as sale advisor in May 2025, reports indicated the seller was seeking a valuation in the low-to-mid KRW 300bn range on a 100% basis, but as of August 2025 no final decision had been made.

Crescendo has stated it intends to take a measured approach rather than rushing the sale, leaving the pace of the process and the nature of any eventual buyer as variables that could influence the company's future strategic direction.

Founder Lee Jung-woo still holds a 13.11% stake, and whether his shares would be sold alongside the controlling stake remains a point of interest in any future negotiation.

Valuation

PER

10.3×

PBR

1.0×

ROE

9.5%

EPS

₩1,721

BPS

₩18,541

Dividend per share

₩600

The share price trades at a discount to book value per share, suggesting a valuation that is not carrying a significant premium relative to net asset value.

Given that earnings have recovered steadily from a loss in 2022 through 2025, the multiple the market assigns also appears more settled compared with the loss-making period. Dividends are paid annually, but the dividend itself is unlikely to be viewed as the central driver of investment appeal.

That said, the governance overhang from the controlling shareholder's stake-sale process introduces a factor whose impact on valuation could vary depending on how the process unfolds and who any eventual buyer turns out to be, making the situation harder to read from standard financial metrics alone.

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 2026-08-22

Bull factors

Continuation of the Earnings Recovery Trajectory

Revenue has increased for four consecutive years since 2022, and operating profit turned from deficit to reach KRW 18.1 billion in 2025. From Q3 2025 through Q2 2026, operating profit remained relatively stable for five consecutive quarters, ranging from the high KRW 4 billion range to the low KRW 5 billion range.

The sum of controlling shareholders' net income over the most recent four quarters also reached KRW 21.3 billion, showing a trend of expanding annual profit scale. Whether this trend continues will depend on future order intake and cost management.

Technical Competitiveness in Specialty Civil Works

Dong-Ah Geological Engineering is known to hold the No. 1 domestic market share position in the TBM and DCM fields, and has performed a significant portion of large-diameter shield TBM construction projects in Korea.

In 2024, the company obtained certification for self-manufactured TBM equipment, securing localization capability for equipment as well. In the 2025 construction capability evaluation, the company ranked 4th domestically in the ground improvement and paving construction sector, up from the previous year.

This technological edge could serve as a differentiating factor in future competition for large-scale underground infrastructure project orders.

Policy Tailwinds and Overseas Order Pipeline

As the government and both ruling and opposition parties have included the undergrounding of metropolitan area surface railways as a campaign pledge, there is potential for expanded orders for deep tunnel construction over the long term.

Overseas, new orders have continued, including Singapore Changi Airport Terminal 5 construction, and participation in large-scale projects such as the Philippines North-South Commuter Railway continues.

The company has organizationally responded to expanding overseas revenue by transitioning to a co-CEO system that includes a head of the overseas division.

Bear factors

Governance Uncertainty

The largest shareholder, Crescendo Equity Partners, selected KB Securities as the sale advisor in May 2025 and is pursuing a sale of management control, but as of August 2025, no concrete decisions have reportedly been made.

Depending on whether the sale process becomes prolonged or on the nature of the potential buyer, the company's strategic direction could vary. Founder Chairman Lee Jung-woo still holds a 13.11% stake, making the scope and method of the stake sale fluid as well.

Order Backlog Volatility

The order backlog exceeded KRW 1 trillion at the end of 2025, then slightly declined to KRW 925.2 billion as of end-June 2025.

It has since been replenished by new orders, but the structure is such that the backlog and revenue visibility can fluctuate depending on the timing of order intake and completion of a single large project. Whether future new orders sufficiently offset the existing decline is a point to watch going forward.

Sensitivity to Construction Cycle and Cost Pressures

The specialty civil engineering sector is also affected by the overall domestic construction order environment and is exposed to cost pressures from fluctuations in raw material and labor costs.

Given the high proportion of overseas projects, external variables such as exchange rate fluctuations and delays in local construction processes can also affect performance. The large-scale operating loss case in 2022 demonstrates that such volatility can indeed be reflected in actual performance.

Risk factors

Governance and Sale-Process Risk

The combined stake of Crescendo and related parties reaches 52.92%, and whether the sale process will proceed and at what pace remains uncertain.

If the sale is completed, management direction could change according to the new controlling shareholder's strategy, and uncertainty could persist even if the sale falls through. Whether the founder's stake will be sold together is another variable that could change depending on negotiation outcomes.

Overseas Project Execution Risk

Given the high proportion of overseas projects in Singapore, the Philippines, the Middle East, and elsewhere, the company may be affected by exchange rate fluctuations, local regulations, and process delays.

Large-scale infrastructure projects have complex contract terms and cost structures, raising the possibility of unexpected costs. Geopolitical risks or changes in the client's budget situation could also affect project progress.

Safety and Industry-Specific Risk

Specialty civil engineering work such as tunnel excavation and offshore ground improvement inherently involves a working environment with safety accident risks. In the event of a serious accident, construction suspension, reputational damage, or additional costs could occur.

Fluctuations in domestic construction order volume and intensifying competition could also act as burdens on profitability.

What to watch next

Around November 2026
The Q3 2026 earnings disclosure should be checked to see whether the relatively stable operating profit trend seen over the past five quarters continues.
Second half of 2026 through first half of 2027
Any additional disclosures on Crescendo's stake-sale process or news of a preferred buyer would warrant a review of the direction of governance change.
At each quarterly report and disclosure
Given that the order backlog fell from over KRW 1 trillion at end-2025 to KRW 925.2bn by June 2025, subsequent backlog trends should be checked to see whether new orders are sufficiently offsetting the decline.
From the second half of 2026 onward
It is worth tracking whether master plans and route-specific order schedules for large national programs such as the metropolitan railway-undergrounding initiative become more concrete.

Overall view

Since experiencing a large-scale operating loss in 2022, Dong-Ah Geological Engineering has seen revenue and profit recover for four consecutive years, and operating profit has remained in a relatively stable range over the past five quarters.

Its leading domestic position in the TBM and DCM fields and rising construction capability evaluation ranking are indicators of its technological competitiveness, while policy discussions on railway undergrounding and new overseas orders are cited as potential factors for long-term growth.

However, as the largest shareholder Crescendo Equity Partners' pursuit of a stake sale remains unconfirmed and ongoing, the timing and direction of a potential change in governance structure and its impact on the company's strategy remain sources of uncertainty.

The order backlog has slightly decreased compared to the end of 2025 and is in the process of being replenished by new orders, requiring further confirmation in terms of revenue visibility.

Given the structure with a high proportion of overseas business, exchange rate and local project execution risks, as well as safety risks specific to specialty civil engineering construction, are also factors to consider.

Overall, this is assessed as a phase in which a recovery trend in performance coexists with uncertainty in governance structure.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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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.