Hj Shipbuilding & Construction

HJ Shipbuilding & Construction runs a dual structure spanning shipbuilding and construction. According to its H1 2026 semiannual report, the first-half revenue mix was 53.38% shipbuilding, 45.97% construction and 0.65% other, a shift toward shipbuilding from a historically construction-led mix.

The shipbuilding division splits between merchant vessels such as eco-friendly container ships and LNG bunkering carriers, and naval or special-purpose vessels including landing craft, patrol boats and large transport ships.

Financial News reported in August 2026 that the company entered defense work with Korea's first domestically built patrol boat in 1972, has delivered some 1,300 naval and coast guard vessels, was designated Korea's first defense contractor in 1974, and independently built the large transport ships Dokdo and Marado.

That said, Chosun Biz reported in July 2026 that the Yeongdo yard in Busan spans roughly 260,000 square meters with a 300-meter dock, limiting annual merchant vessel capacity to about six or seven ships.

The construction division covers civil works, building and housing, and plant, anchored by public infrastructure such as airports, railways and roads plus urban redevelopment.

Contracts disclosed in 2026 span both arms, including two container ships for a European owner worth KRW 357.2bn, the Beomcheon 5 redevelopment project in Busan at KRW 349.7bn, and a Korea Land & Housing Corporation public housing project in Namyangju Wangsuk 2 at KRW 68.2bn.

The customer base spans the Korean navy and coast guard, public agencies, and European and Oceanian shipowners, which keeps single-market dependence relatively contained.

Ecoprime Marine Pacific is the largest shareholder with a 48.89% stake, and the company consolidates two subsidiaries including Incheon North Port Operation.

The earnings trajectory shows a clear directional turn.

From 2023 revenue of KRW 2,162.1bn with a KRW 108.8bn operating loss (-5.0% margin) and a KRW 114.0bn net loss attributable to owners, results flipped positive in 2024 with revenue of KRW 1,886.0bn and operating profit of KRW 7.2bn (0.4%), then expanded in 2025 to revenue of KRW 1,999.7bn, operating profit of KRW 67.1bn (3.4%) and net profit attributable to owners of KRW 51.4bn.

The quarterly path is even sharper.

From KRW 5.3bn operating profit and a KRW 6.6bn net loss in 2Q25, the company moved to KRW 5.8bn operating profit and KRW 3.9bn net profit in 3Q25, then KRW 50.5bn and KRW 48.6bn in 4Q25, followed by KRW 24.6bn operating profit on KRW 541.4bn revenue in 1Q26 and KRW 729.9bn revenue with KRW 64.9bn operating profit and KRW 62.5bn net profit in 2Q26.

The 2Q26 operating margin of roughly 8.9% stands far above the 3.4% full-year figure for 2025.

In August 2026 the company disclosed first-half revenue of KRW 1,271.3bn and operating profit of KRW 89.4bn, and said shipbuilding contributed KRW 678.6bn revenue with KRW 81.7bn operating profit while construction posted KRW 584.4bn revenue with KRW 7.8bn operating profit (Yonhap News and Ajunews, August 13, 2026).

In other words, nearly all profit came from shipbuilding while construction held a slim positive margin.

On the balance sheet, equity rose from KRW 343.4bn in 2024 to KRW 669.6bn in 2025 while liabilities fell from KRW 1,861.0bn to KRW 1,783.5bn, pulling the debt-to-equity ratio down from 541.9% to 266.4%; the Korea Economic Daily reported in October 2025 that a third-party share issue fully subscribed by the largest shareholder helped bolster capital.

Cash flow, however, has been less smooth than the P&L. Operating cash flow swung from an inflow of KRW 154.8bn in 2023 to an outflow of KRW 86.4bn in 2024 and back to a KRW 6.3bn inflow in 2025, lagging well behind the KRW 67.1bn of 2025 operating profit.

In 2022 the company also posted a KRW 50.2bn net loss attributable to owners despite KRW 6.6bn of operating profit, a reminder that non-operating costs have historically driven the bottom line.

Korea's shipbuilding industry is now booking high-priced orders as revenue, and the profitability gap between large and mid-sized yards is stark.

CEO Score Daily's August 20, 2026 tally of second-quarter results showed operating margins of 16.4% at HD Hyundai Heavy Industries, 13.5% at Hanwha Ocean and 10.1% at Samsung Heavy Industries.

HJ Shipbuilding & Construction's margin in the same quarter, roughly 8.9% based on reported figures, sits below that group, reflecting differences in vessel mix and yard scale.

Instead, the company is differentiating in mid-to-small naval repair work that larger yards hesitate to enter; SEN TV reported in March 2026 that MRO offers thinner margins than newbuilding but provides stable workload through long-term contracts.

Reports put the US Navy MRO market at roughly KRW 20tn a year, though Straight News noted in April 2026 that Korean yards' actual awards are concentrated in Seventh Fleet work based out of Japan and that US regulatory conditions remain a variable.

On the merchant side, tighter International Maritime Organization carbon rules have lifted demand for methanol and LNG-fueled vessels, while commoditized tanker and bulker segments are widely seen as ceded to lower-priced Chinese yards.

Construction is supported by public orders and redevelopment work but still faces raw material cost pressure, so the two divisions sit at different points in their respective cycles, a defining feature of this company's earnings profile.

Based on confirmed schedules and stated company plans, shipbuilding deliveries are the central driver ahead. Chosun Biz reported in July 2026 that after delivering four merchant vessels in 2025, the Yeongdo yard is expected to hand over five in 2026 and seven in 2027.

The two-ship container vessel contract disclosed in April includes an option for two additional units, and the company said in a press release that exercising the option would lift the total order value to about KRW 600bn.

On the defense and repair side, Financial News reported in August 2026 that the company won MRO work on the US Navy logistics support ship USNS Amelia Earhart in December 2025 and signed a Master Ship Repair Agreement in January 2026, securing eligibility to bid on US Navy vessel MRO for the next five years.

J Ocean Heavy Industries, a special-purpose vehicle established by largest shareholder Ecoprime Marine Pacific, signed an asset transfer and business cooperation agreement with HD Hyundai Heavy Industries for the Gunsan yard in June 2026 (Ajunews, June 26, 2026), and Chosun Biz reported it plans to complete the acquisition by year-end and begin shipbuilding after facility refurbishment early the following year.

The Gunsan yard spans roughly 1.8 million square meters with a 700-meter class dock, a 1,650-ton Goliath crane and 1.4 kilometers of quay, though Liberty Korea Post reported in August 2026 that initial operations will focus on large merchant vessel blocks and offshore wind structures.

For construction, the company said it will maintain selective, profitability-focused order taking while executing national projects such as the Shinbundang Line and GTX along with redevelopment work (Yonhap News, August 2026).

The three items to watch are therefore the durability of shipbuilding margins, how the Gunsan yard is linked to the listed entity, and additional US Navy repair volume.