Xi S&D

Zi S&D operates a diversified business structure spanning three segments: Home Solution (HS), Housing, and Construction.

In the first quarter of 2026, the Construction division generated the largest share of revenue at KRW 169.5 billion (62.7 percent), followed by HS at KRW 69.8 billion (25.8 percent) and Housing at KRW 31.0 billion (11.5 percent).

The Construction division, operated through subsidiary Zi C&A, builds industrial facilities such as secondary-battery plants, petrochemical plants, semiconductor and display cleanrooms, and data centers, with LG Display and LG Chem among its key clients.

The Housing division develops projects under the 'Xi' brand licensed from parent GS E&C, using derivative names such as Xi Rune, Xi Ella, and Xi Biz Tower, and focuses on small- to mid-scale reconstruction, street-housing redevelopment, and self-developed projects rather than large-scale urban regeneration.

The HS division handles smart-home systems, the 'Sys Clein' ventilation air purifier, built-in appliance sales, and real-estate operation and management, providing a relatively stable earnings base.

GS E&C is the largest shareholder, holding a combined 39.4 percent stake across common and preferred shares, which underpins order stability and brand credibility tied to the group.

In August 2025 the company spun off its housing-management business, excluding senior-housing operation, into a new entity through a physical split and sold the entire stake, with proceeds earmarked for new business investment.

More recently, the company has expanded into senior residential and care services, opening a senior day-care center in Seoul's Gangseo district as part of its portfolio diversification efforts.

On an annual basis, revenue and margins peaked in 2022 at KRW 2.479 trillion in revenue and KRW 198.9 billion in operating profit (an 8.0 percent operating margin), before falling sharply to KRW 2.3746 trillion in revenue and KRW 126.6 billion in operating profit (5.3 percent) in 2023, and further to KRW 1.5782 trillion in revenue and just KRW 2.4 billion in operating profit (0.2 percent) in 2024.

In 2025, revenue contracted further to KRW 1.3876 trillion, yet operating profit rose to KRW 12.5 billion (0.9 percent), signaling a turn toward earnings recovery.

Owner's net income followed a similar path, falling from KRW 96.2 billion in 2022 to KRW 40.7 billion in 2023 and KRW 1.65 billion in 2024, before rebounding sharply to KRW 35.6 billion in 2025.

On a quarterly basis, the second quarter of 2025 saw revenue of KRW 337.0 billion alongside an operating loss of KRW 2.7 billion, while the third quarter showed a sharp improvement with revenue of KRW 403.0 billion, operating profit of KRW 28.4 billion, and owner's net income of KRW 30.9 billion.

The fourth quarter reverted to losses, however, with revenue of KRW 335.0 billion, an operating loss of KRW 2.5 billion, and an owner's net loss of KRW 1.2 billion, underscoring pronounced quarterly volatility.

In the first quarter of 2026, despite a 13.6 percent year-over-year revenue decline to KRW 270.3 billion, operating profit held positive at KRW 11.3 billion with owner's net income of KRW 6.1 billion, and the second quarter extended the positive trend with revenue of KRW 303.3 billion, operating profit of KRW 9.0 billion, and owner's net income of KRW 9.2 billion.

The core driver of this improvement has been a recovery in the Construction division's profitability; in the first quarter of 2026 the division posted operating profit of KRW 6.5 billion, a sharp turnaround from an operating loss of KRW 18.5 billion in the same period a year earlier.

In contrast, the Housing division continued to post an operating loss of KRW 2.4 billion in the first quarter of 2026, highlighting persistent divergence in performance across segments.

The domestic housing pre-sale market continues to show significant regional divergence, with elevated pre-sale risk persisting in provincial areas and officetel projects.

In a June 2026 report, Korea Investors Service noted that the housing division's earnings volatility could persist depending on pre-sale performance and cost ratios at ongoing project sites.

In contrast, the industrial plant and cleanroom market that underpins the Construction division has maintained a relatively solid order base, supported by investment demand tied to semiconductors, displays, secondary batteries, and data centers.

The company is leveraging its cleanroom design and construction capabilities to respond to growing data-center demand driven by AI industry growth, while also diversifying into eco-friendly plant construction.

Nonetheless, the Construction division's revenue and profit remain heavily dependent on LG Group's investment posture, creating an inherent risk of direct earnings impact should group-wide investment be scaled back.

In terms of competitive positioning, while the company faces constraints in track record and operating scale relative to large construction firms, it maintains distinct competitiveness in the small- to mid-scale housing and redevelopment market, underpinned by direct and indirect support from largest shareholder GS E&C and the recognition of the 'Xi' brand.

The company has been sequentially launching new pre-sales, including Sangju Xi Rune in March 2026, Gongdeok Xi Rune in May, and Geomam Station Xi Rune in June 2026, though Korea Investors Service noted in its June 2026 report that Sangju Xi Rune's relatively weak initial pre-sale rate pulled the overall pre-sale rate across ongoing projects down to roughly 70 percent as of end-March.

The same report assessed that Gongdeok Xi Rune carries limited pre-sale risk given its location and subscription competition ratio.

In Busan's Bumcheon-dong, the company plans a self-developed apartment project requiring more than KRW 200 billion in own capital beyond land cost, and the report flagged that this project's pre-sale performance could materially affect the company's overall financial structure going forward.

In July 2026 the company sold land in Seocho-dong, Seoul for KRW 140 billion, stating that the proceeds would be used to fund new and core business investment.

As of the sale, the company held cash, cash equivalents, and short-term financial assets that substantially exceeded its short- and long-term financial liabilities, leading to the interpretation that the sale was aimed at expanding investment capacity rather than shoring up liquidity.

A company representative stated that the senior residential and care business plans to expand its footprint across Seoul, building on operating experience gained at its Gangseo-gu day-care center.

Korea Investors Service projected that continued operating improvement in the HS and Construction divisions, along with expanded sales to key clients, would support a stable business structure and earnings base going forward.