[Edaily Reporter Park Jung-Soo ] Independent research firm Aris analyzed on the 26th that SG CO., LTD.(255220)will see its earnings growth gain momentum starting in the second half of this year. It did not provide an investment recommendation or target price.
Aris analyst Lee Jae-mo stated, “SG CO., LTD. successfully returned to profitability in both operating profit and net income in the second quarter,” adding, “The company adopted a flexible, profitability-focused production volume management strategy—including adjusting some production and delivery schedules—to minimize the impact of soaring raw material prices on profitability, and achieved improved earnings in the second quarter through the price-indexed structure of government-procured asphalt concrete.”
He continued, “By signing a Multi-Supplier Agreement (MAS) worth 98.5 billion won, valid for two years from early this month through the end of July 2028, the company has secured a sales base for government-contracted asphalt to supply the government, local governments, and public institutions,” and “We operate nine asphalt production plants nationwide, including those of our affiliates, and have established a production system connecting the Seoul, Incheon, Gyeonggi, and Chungcheong regions,” he added.
SG CO., LTD. is proceeding with the acquisition of a new asphalt plant in northern Gyeonggi Province using funds from a rights offering. Once this new facility is added, it will strengthen supply capacity in northern Gyeonggi Province in conjunction with the existing Pocheon production facility, while simultaneously establishing a production and logistics network covering the entire Seoul metropolitan area.
Overseas, the company is expanding its business with a dual focus on entering new markets in Indonesia and participating in reconstruction projects in Ukraine. Based on its EcoSteel Asphalt technology—an eco-friendly, highly durable paving material commercialized in Korea—the company is pursuing entry into local road infrastructure markets.
In Indonesia, the company plans to establish a joint venture (JV) with POSCO INTERNATIONAL to build a local business foundation. SG CO., LTD. will be responsible for manufacturing technology, quality control, production, and construction, while POSCO INTERNATIONAL will handle business development utilizing its global network and the procurement of raw materials. The initial plan is to build the first plant on the island of Java, where POSCO’s steel mills are located, to source steel slag directly from the local market, with plans to expand the production base to the island of Sumatra in the future.
Researcher Lee explained, “Indonesia is undergoing large-scale road infrastructure investments, including the relocation of the capital to Nusantara, so there is a sufficient demand base in the medium to long term,” adding, “Regarding the Ukraine reconstruction project, we have secured an asphalt supply contract worth approximately 35.6 billion won for major regions such as Kyiv and Dnipro, and have already completed trial paving and demonstration tests.”
The analyst continued, “Starting in the second half of 2026, the Public Procurement Service’s MAS contracts will begin in earnest, and the performance of the acquired plant will be reflected in the consolidated financials, leading to expected improvements in both revenue and profitability.” He added, “Revenue is also expected to continue flowing from new business ventures, such as the supply of asphalt concrete to semiconductor fabs and the establishment of a joint venture in Indonesia.”