Sangji Construction

Sangji Construction was founded in 1979 and listed on KOSDAQ in 2000 as a construction and real estate development company.

It operates real estate development (pre-sale construction), general construction (contract construction), and electrical work businesses, holding premium residential brands such as 'Sangji Ritzville,' 'Sangji Kailum,' and 'Sangji Kailum M.' In 2025 it launched a new top-tier brand, 'Kailum Escala,' to reinforce its push into the high-end residential market in core locations such as Gangnam.

Its consolidated subsidiaries include Ore Development, Kailum Dosan, and Sangji Green Energy, with Kailum Dosan serving as the project company for the high-end Nonhyeon-dong development in Gangnam. The largest shareholder is Jungang Advanced Materials, holding a 12.58% stake.

The business portfolio has been gradually shifting from luxury housing pre-sales toward public and private contract construction, including work for military electrical projects.

Recently the company increased the contract value for a neighborhood-facility construction project in the Seongnam Sincheon public housing district and won a contract to build the Imsil Community Revitalization Center in North Jeolla Province, continuing to expand its order base through public and private contracts.

Backed by these new orders, the construction order backlog is reported to have grown to over KRW 140bn. The company is also strengthening smart-home IoT and EV-charging infrastructure construction capabilities to improve competitiveness in the contract-construction segment.

Consolidated revenue fell sharply for two straight years, from KRW 173.9bn in 2023 to KRW 20.4bn in 2024 and KRW 18.6bn in 2025. This reflects a shrinking revenue base after a large pre-sale construction project was recognized intensively in 2023 and subsequently wound down.

Operating results swung from a profit of KRW 32.5bn (operating margin of 18.7%) in 2023 to a loss of KRW 21.8bn (operating margin of -106.6%) in 2024, before the loss narrowed to KRW 6.8bn (operating margin of -36.8%) in 2025.

Net income attributable to owners followed a similar pattern, moving from a profit of KRW 36.8bn in 2023 to losses of KRW 26.7bn in 2024 and KRW 13.5bn in 2025, with the loss size shrinking.

Quarterly trends, however, have been uneven: revenue of KRW 8.3bn in Q3 2025 and KRW 5.4bn in Q4 2025 fell further to KRW 3.6bn in Q1 2026 and KRW 2.1bn in Q2 2026, while the operating loss widened again from KRW 1.7bn in Q1 2026 to KRW 1.8bn in Q2 2026.

Q4 2025 was the only quarter with an operating profit, of KRW 0.47bn, yet it recorded the largest net loss attributable to owners of the window, at KRW 6.3bn.

The combined net loss attributable to owners over the most recent four quarters (Q3 2025 through Q2 2026) reached KRW 15.75bn, indicating the loss trend has persisted on a rolling annual basis as well.

Cash generation also deteriorated, with consolidated operating cash flow swinging from an inflow of KRW 3.57bn in 2024 to an outflow of KRW 24.8bn in 2025.

Meanwhile, total equity rose from KRW 64.9bn in 2022 to KRW 99.5bn in 2025, a build-up attributed to external capital raising such as rights offerings rather than retained earnings.

The domestic construction industry continues to face liquidity pressure, particularly among small and mid-sized builders, amid a tight project-financing (PF) market and accumulated unsold inventory.

Sangji Construction's own 'Kailum Escala' project remains at the bridge-loan stage ahead of a full PF conversion, illustrating that financing conditions across the industry remain challenging.

Government policies to expand housing supply and expectations around urban redevelopment activity have at times supported investor sentiment toward the construction sector broadly.

Unlike the general pre-sale market, however, the high-end housing segment has a limited buyer pool, prompting frequent adjustments to project scale and unit composition to secure feasibility.

Sangji Construction has built brand recognition in the Gangnam high-end market through its 'Ritzville' and 'Kailum' brands, but it remains at a disadvantage relative to larger builders in terms of construction scale and financial capacity.

KOSDAQ-listed construction companies now face tightened listing-maintenance standards related to capital impairment and market capitalization, raising the risk of administrative-issue designation for smaller builders with weaker balance sheets.

Against this backdrop, company-specific credit changes, such as rating upgrades, have become an important variable differentiating access to financing.

Sangji Construction's future results are likely to hinge heavily on whether the 'Kailum Escala' project in Nonhyeon-dong, Gangnam converts to full project financing.

The project carries a contract value of roughly KRW 70.1bn, but its progress rate stood at only 5.59% as of the end of last year, indicating it remains in an early stage. Completion is targeted for April 2029, meaning substantial construction costs and financing expenses will need to be committed over the coming years.

The company attempted a shareholder-priority rights offering of about KRW 18.7bn around August 2026, stating it would lend the entire proceeds to project company Kailum Dosan to cover bridge-loan interest expenses and operating funds.

However, this offering was fully suspended once after the Financial Supervisory Service demanded a corrective filing, and the record-date and subscription schedule were subsequently reset following refiling.

In the contract-construction segment, continued order wins in Seongnam Sincheon-dong, Imsil in North Jeolla Province, and elsewhere have lifted the order backlog to roughly KRW 140bn, which could underpin future revenue recognition.

Credit rating agency SCI Pyeongga Jeongbo upgraded Sangji Construction's rating from BB+ to BBB- in April 2026, a factor that could support improved financing conditions.