KOSDAQConstruction & Materials043910

NatureandEnvironmentCo

₩3,200▲ 0.63%2026-10-02 close

Market Cap

₩36.1B

Turnover

₩36,765,204

Volume

10K

Shares out.

11.3M

PER

—

PBR

0.5×

EPS

-₩445

Dividend Yield

0.00%

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

Report overview

Revenue Contraction Persists as PC Segment Orders Offer a Path to Recovery

Nature & Environment has posted operating profit in two consecutive quarters in the first half of 2026 despite a four-year revenue decline and prior operating losses, and is seeking a turnaround through expanded orders in its precast concrete (PC) modular segment.

1
2025 consolidated revenue fell to KRW 37.3 billion from KRW 40.7 billion a year earlier, with an operating loss of KRW 3.98 billion marking a second straight year in the red.
2
Operating profit turned positive for two straight quarters in 2026 (KRW 0.16 billion in Q1 and KRW 0.29 billion in Q2), though Q2 net income attributable to owners reverted to a loss of KRW 0.25 billion.
3
At a May 2026 investor relations event, the company disclosed an order backlog of roughly KRW 122.7 billion and outlined plans to expand its PC modular and environmental plant businesses.
4
The company decided on a 10-for-1 share consolidation in February 2026, and the conversion period for a KRW 2.0 billion convertible bond issued in August 2025 began in August 2026.
5
Intensified competition in river maintenance projects and order restrictions stemming from local-firm protection policies have been cited as key factors behind the recent revenue decline.

Business structure

Nature & Environment is an eco-friendly specialist focused on environmental ecological restoration and soil remediation, manufacturing and constructing ecological revetment blocks, permeable pavement blocks, eco-friendly precast concrete (PC), and detention tank PC products.

It also operates soil and groundwater contamination remediation businesses, leveraging a nationwide network and accumulated technical expertise as competitive advantages in this field.

The landscaping segment covers seed and landscaping material distribution, landscaping construction, planting, and facility installation work. The environmental plant segment encompasses water treatment, contamination remediation, and resource recycling businesses, alongside a general construction business.

More recently, PC modular housing technology jointly developed with the Korea Institute of Civil Engineering and Building Technology has emerged as a new growth pillar after receiving new construction technology designation and industrialized housing certification from the Ministry of Land, Infrastructure and Transport.

Notable recent contracts include an office building construction project at the Yongin Semiconductor Cluster industrial complex (KRW 62.66 billion, contracted December 2025), a public housing project in Yangsan Sasong with Kyeryong Construction Industrial (KRW 2.33 billion, February 2026), and a PC underground parking construction contract at the Seokmun National Industrial Complex Block B-6 (KRW 4.3 billion, May 2026).

The river maintenance business faces structural headwinds from intense competition and order restrictions tied to local-firm protection policies.

The company is also diversifying through eco-friendly new businesses such as the 'Eco C-Cube' waste plastic recycling technology and carbon capture and utilization (CCU) equipment supply.

Earnings trend

Quarterly revenue · Operating profit

₩12.5B₩100M25Q2₩8.7B-₩300M25Q3₩5B-₩4.1B25Q4₩8.1B₩200M26Q1₩9.1B₩300M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩73.9B₩500M2022₩69.7B₩4.5B2023₩40.7B-₩2.1B2024₩37.3B-₩4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩12.5B	₩100M	0.9%
2025Q3	₩8.7B	-₩300M	−3.7%
2025Q4	₩5B	-₩4.1B	−81.5%
2026Q1	₩8.1B	₩200M	2.0%
2026Q2	₩9.1B	₩300M	3.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩73.9B	₩500M	₩400M	0.6%	0.6%	62.6%
2023	₩69.7B	₩4.5B	₩4.3B	6.5%	6.0%	63.1%
2024	₩40.7B	-₩2.1B	-₩3.1B	−5.2%	−3.4%	49.7%
2025	₩37.3B	-₩4B	-₩6.6B	−10.7%	−8.0%	50.7%

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

Earnings analysis

Annual revenue contracted by roughly half over four years, from KRW 73.87 billion in 2022 and KRW 69.71 billion in 2023 to KRW 40.73 billion in 2024 and KRW 37.31 billion in 2025.

Profitability deteriorated in tandem: the company posted an operating profit of KRW 4.53 billion (a 6.5% operating margin) in 2023, but swung to an operating loss of KRW 2.12 billion (-5.2%) in 2024 and a wider loss of KRW 3.98 billion (-10.7%) in 2025.

Net income attributable to owners followed the same pattern, moving from a KRW 4.35 billion profit in 2023 to losses of KRW 3.08 billion in 2024 and KRW 6.60 billion in 2025.

On a quarterly basis, revenue of KRW 12.49 billion and a slim operating profit of KRW 0.11 billion in Q2 2025 gave way to sharply widening losses in Q3 2025 (revenue KRW 8.70 billion, operating loss KRW 0.32 billion) and Q4 2025 (revenue KRW 4.99 billion, operating loss KRW 4.07 billion), with the fourth-quarter loss accounting for the bulk of the full-year deficit.

In 2026, operating profit turned positive again in Q1 (revenue KRW 8.12 billion, operating profit KRW 0.16 billion, owners' net income KRW 0.25 billion) and Q2 (revenue KRW 9.07 billion, operating profit KRW 0.29 billion), though Q2 owners' net income reverted to a loss of KRW 0.25 billion, underscoring a persistent gap between operating profit and net income.

Over the trailing four quarters (Q3 2025 through Q2 2026), cumulative net loss attributable to owners totaled approximately KRW 5.05 billion, indicating the company remains in loss territory even on an annualized basis.

On the cash flow side, operating cash flow was positive only in 2023 (KRW 4.20 billion), while it was negative in 2022 (KRW -5.67 billion), 2024 (KRW -3.95 billion), and 2025 (KRW -3.06 billion), reflecting a continued gap between reported earnings and cash generation.

The debt ratio, however, improved somewhat, declining from 62.6% in 2022 and 63.1% in 2023 to 49.7% in 2024 and 50.7% in 2025.

Industry analysis

The environmental ecological restoration, soil remediation, and eco-friendly building materials industry in which Nature & Environment operates is heavily dependent on government-driven procurement.

FnGuide has projected that expanded government housing supply plans and water-quality improvement and ecological restoration project orders from environmental authorities would support growth in the ecological restoration segment.

Conversely, the river maintenance business faces structural constraints from intensifying competition and order restrictions tied to local-firm protection policies, meaning growth in this traditional strength area is subject to policy variables.

The PC modular construction market is gaining attention as a next-generation building method for its advantages in shortening construction periods, easing labor shortages, and reducing safety incidents, with the Ministry of Land, Infrastructure and Transport pursuing an off-site construction (OSC) technology demonstration project backed by KRW 20 billion in government funding.

Continued budget allocations in 2026 for climate-crisis water management and circular economy activation by relevant ministries and the Korea Environmental Industry & Technology Institute suggest a broadly supportive policy environment persists.

That said, as a small KOSDAQ-listed company, it may face scale disadvantages when competing for orders against larger construction firms and specialized environmental companies, which remains a structural limitation.

Outlook

At a May 2026 investor relations session hosted by the Korea Exchange, the company disclosed an order backlog of approximately KRW 122.7 billion and stated that major projects would begin construction and shipment sequentially.

The PC underground parking construction contract at Seokmun National Industrial Complex Block B-6 is scheduled for completion by the end of 2026, with the company indicating that most of the related revenue would be reflected in second-half 2026 results.

The company has maintained a BBB- credit rating, which has been cited as evidence of a stable financial structure supporting business continuity.

The 10-for-1 share consolidation decided in February 2026 was disclosed as a consolidation that preserves corporate value, distinct from a capital reduction that would decrease paid-in capital.

The 12th series convertible bond, a KRW 2.0 billion issuance from August 2025, became convertible starting August 27, 2026, and full conversion would create dilution of approximately 2.31% of total shares outstanding.

The company continues to diversify through new businesses including PC modular joint research and new business development cooperation with Junglim Architecture, the 'Eco C-Cube' waste plastic recycling technology, and CCU equipment supply to the Korea Electric Power Research Institute, while pursuing an expansion strategy centered on PC modular and environmental plant businesses.

Valuation

PER

—

PBR

0.5×

ROE

-5.9%

EPS

-₩445

BPS

₩7,299

Dividend per share

₩0

The company's share price relative to net assets sits at a discount to its historical trading band, reflecting both a reduced book value per share following years of accumulated net losses and a limited market premium being applied.

Consecutive net losses in 2024 and 2025 have made price-to-earnings ratio calculation impractical, and whether the two consecutive quarters of operating profit in the first half of 2026 can shift this trend is a key point to watch.

The absence of recent dividend payments means the stock does not currently offer a notable dividend yield attraction.

The 10-for-1 share consolidation decided in February 2026 and the potential conversion of outstanding convertible bonds are factors that alter the share count underlying per-share metrics, which should be considered when interpreting future figures.

Overall, valuation here is shaped jointly by the durability of any earnings recovery and by ongoing changes to the capital structure.

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

Bull factors

Expansion of PC Modular New Technology

PC modular housing technology co-developed with the Korea Institute of Civil Engineering and Building Technology has secured technical standing as a next-generation construction method after receiving new construction technology designation and industrialized housing certification from the Ministry of Land, Infrastructure and Transport.

This has translated into actual orders such as the Seokmun National Industrial Complex and Yongin Semiconductor Cluster projects, alongside parallel new business development with Junglim Architecture.

An order backlog of KRW 122.7 billion, if realized sequentially into revenue, could serve as a foundation for business diversification.

Quarterly Operating Profit Turnaround

The company posted operating profit in both the first and second quarters of 2026, showing signs of breaking away from the chronic operating losses seen in 2024 and 2025. The debt ratio also improved from 63.1% in 2023 to 50.7% in 2025, indicating some strengthening of the financial structure. If this trend continues, it could provide a basis for normalizing the income statement.

Potential Policy Tailwinds

There have been projections that expanded government housing supply plans and increased water-quality improvement and ecological restoration project orders from environmental authorities could positively affect the company's traditional strength in ecological restoration.

Policy support related to PC modular construction, such as the Ministry of Land, Infrastructure and Transport's off-site construction (OSC) technology demonstration project, also continues.

Sustained government budget allocations for climate-crisis water management and circular economy initiatives are also cited as a favorable backdrop.

Bear factors

Multi-Year Revenue Decline

Revenue fell from KRW 73.87 billion in 2022 to KRW 37.31 billion in 2025, roughly halving over four years. Over the same period, operating results swung from a profit in 2023 to consecutive losses in 2024 and 2025. Whether any revenue recovery proves structural rather than one-off remains to be seen.

Order Constraints in River Maintenance

FnGuide has cited intensified competition in river maintenance projects and order restrictions from local-firm protection policies as a background factor behind the recent earnings decline. Such policy-driven constraints represent external variables largely outside the company's direct control.

While the company is attempting to differentiate itself through its nationwide network and technical capabilities, the underlying structural constraint itself has not been resolved.

Capital Structure Changes and Dilution Risk

A KRW 2.0 billion convertible bond issued in August 2025 became convertible starting August 2026, and full conversion could result in new share issuance equivalent to approximately 2.31% of total shares outstanding.

The 10-for-1 share consolidation decided in February 2026 is also a factor that changes the basis for per-share metric calculations. As a small KOSDAQ-listed stock, liquidity is limited, and the share price can be sensitive to capital-raising related events.

Risk factors

Order and Revenue Volatility

Revenue relies heavily on government and public-sector procurement projects as well as individual large contracts, meaning delays or cancellations of specific contracts can directly affect results.

The possibility of losses concentrating in a particular quarter, as occurred in Q4 2025, cannot be ruled out from recurring. Order opportunities may also be constrained by policy variables such as local-firm protection policies in the river maintenance business.

Financial Soundness and Cash Generation

Operating cash flow was negative in 2022, 2024, and 2025, with 2023 as the only exception, reflecting a persistent gap between reported earnings and cash generation. While the debt ratio has improved, it remains in the 50% range, meaning further earnings deterioration could increase financial strain. Continued reliance on external capital-raising instruments such as convertible bonds is also possible.

Share Structure and Dilution

Capital structure-related events—including the 10-for-1 share consolidation decided in February 2026 and the start of the convertible bond conversion request period in August 2026—are overlapping to change the basis for per-share metric calculations.

Minority shareholders need to continue monitoring the potential for share dilution from convertible bond conversion. Small-scale open-market purchases by the largest shareholder have been confirmed, but these represent only a portion of ownership changes and do not guarantee earnings improvement.

What to watch next

November 2026
Third-quarter results are expected to be released, providing an opportunity to check whether the operating profit trend seen in Q1 and Q2 2026 continues and whether newly won contracts are being reflected in revenue.
End of December 2026
The PC construction contract at Seokmun National Industrial Complex Block B-6 is scheduled for completion, warranting a check on whether related revenue was reflected in second-half results as planned.
Ongoing from September 2026
Since conversion requests for the convertible bond issued in August 2025 became possible starting August 2026, ongoing monitoring of disclosures for actual conversion volume and resulting dilution is warranted.
Fourth quarter of 2026
It is worth checking for additional order disclosures or backlog changes relative to the KRW 122.7 billion figure reported as of May 2026, as well as progress on the strategy to expand the PC modular and environmental plant businesses.

Overall view

Nature & Environment faces structural challenges from revenue contraction that began in 2022 and consecutive operating losses in 2024 and 2025, but is showing signs of change with two consecutive quarters of operating profit in the first half of 2026.

While it carries a traditional weakness in policy-driven order constraints in the river maintenance business, it is attempting business restructuring through concrete order wins such as the Yongin Semiconductor Cluster and Seokmun National Industrial Complex projects in its PC modular and environmental plant segments, backed by an order backlog of KRW 122.7 billion.

The financial structure shows some positive signals such as an improved debt ratio, but operating cash flow was negative in most years, reflecting a continued gap between reported earnings and cash generation.

Overlapping capital structure changes in 2026—including the start of convertible bond conversion requests and the 10-for-1 share consolidation—warrant caution when interpreting per-share metrics.

Key points to watch going forward include third-quarter results, revenue recognition from the Seokmun industrial complex PC contract, and any additional order disclosures to see whether the operating profit trend persists.

As both bullish and bearish factors coexist, investment judgment should be left to readers based on a comprehensive review of confirmed facts and future disclosures.

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.