[Asia Economy Reporter Hyungsoo Park] The stock price of Beomyang Geonyeong, a construction company based in Busan, has recently shown a steep upward trend. This appears to be influenced by President-elect Yoon Seok-yeol’s commitment to “actively resolve” various Busan issues, including the Busan Expo bid, the construction of Gadeok New Airport, and the relocation of the Korea Development Bank.
At 11:33 a.m. on the 17th, Beomyang Geonyeong was trading at 5,660 KRW, up 3.47% from the previous day. After plunging to 3,215 KRW during trading on the 10th, the stock price rebounded and has continued to rise, even hitting the daily price limit the day before.
Beomyang Geonyeong is engaged in civil engineering and construction businesses. Its subsidiaries operate in logistics warehouse leasing and modular housing manufacturing. Since its establishment in 1958, Beomyang Geonyeong has built a track record in various fields including basic road expansion civil engineering, residential land development, naval bases, power cable ducts, thermal power plant construction, and tunnels. Last year, the company recorded sales of 111.9 billion KRW and an operating profit of 3.1 billion KRW. Compared to the previous year, sales decreased by 22.5% and operating profit by 74.5%. The company explained that the decline in sales was due to delays in permits and construction starts caused by COVID-19.
Until a few years ago, the construction division had a relatively high proportion of government civil engineering projects, but it is now striving to diversify its orders. The company is working to establish local ties in various regions. It is actively securing orders not only in traditional reconstruction markets like Choryang in Busan but also in private construction and corporate rental housing markets in areas such as Gaebong in Seoul and Cheonan in Chungnam. Since December 2015, it has also actively participated in corporate rental housing and turnkey and alternative bidding projects under the Special Act on Private Rental Housing.
Through Beomyang Floy, the company also manufactures modular housing. Modular housing refers to a construction method where parts of the building are pre-manufactured in a factory and assembled on-site. According to McKinsey, modular construction can shorten construction time by 20-50% compared to traditional methods and reduce construction costs by 20%. It also reduces construction waste generated at the site.
According to the German Federal Statistical Office, out of 105,962 single-family houses (1-2 household homes) permitted in 2020, 23,545 were modular houses, recording a penetration rate of about 22%.
The largest shareholder of Beomyang Geonyeong is Plasco & B, holding 28.39% of the shares. The largest shareholder of Plasco & B is Kang Byung-joo, CEO of Beomyang Geonyeong. Kang, who holds 77.78% of Plasco & B shares, graduated from Seoul National University’s Business Administration department, passed the 37th Administrative Examination, worked at the National Tax Service, and entered the construction industry in the 2000s.
Meanwhile, on the 16th, Jang Je-won, chief of staff to the president-elect, said in a phone interview with the International Newspaper, “President-elect Yoon and Busan Mayor Park Hyung-jun held a meeting for about an hour at the Tongu-dong office,” adding, “They discussed overall Busan issues and the importance of regional balanced development.”
This is the first time President-elect Yoon has met with a metropolitan mayor. It is reported that Chief of Staff Jang played a role as a channel for this meeting and suggested to the president-elect that it would be good to meet Mayor Park to seek solutions for Busan’s issues.
Following confirmation of President-elect Yoon’s intentions, the Busan city government is reportedly organizing major Busan issues to be delivered to the transition committee. The city plans to submit plans related to the relocation of the 55th Supply Depot and the construction of Busan GTX, which need to be promoted in connection with the Expo bid, to the transition committee. Busan city will also request government support for the Urban Loop construction, a key pledge of Mayor Park, linked to the Expo. The Urban Loop, a high-speed urban transportation infrastructure, is a core facility for hosting the Expo. It is a facility that allows travel within 15 minutes over 41 km from Gadeok New Airport through the North Port, where the Expo will be held, to the East Busan Tourism Complex.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
