[Featured Stock] SW, Perfect for Hot Weather in Neom City K Modular ↑... Highlighted Collaboration with POSCO Modular Bricks

[Asia Economy Reporter Hyungsoo Park] ESW is showing strong performance. It appears that the stock price is influenced by the prospect that Samsung C&T will win a $4 billion (approximately 5.2 trillion KRW) housing project in Saudi Arabia's NEOM City in cooperation with POSCO. The modular construction method has become a core element of NEOM City due to the short construction period maintained regardless of the hot weather. There is also news that the government is promoting support measures for modular facilities to aid in the recovery and post-war reconstruction of Ukraine.

As of 11 a.m. on the 17th, ESW is trading at 4,440 KRW, up 21.48% from the previous day.

According to industry sources, following Crown Prince Mohammed bin Salman's visit to Korea, Samsung C&T and POSCO plan to pursue a Design & Build (D&B) contract related to the 'NEOM Beta Community' project with NEOM Company, which operates NEOM City. This is a residential complex development project to build 10,000 housing units in NEOM City using steel modular construction methods.

One economic newspaper reported that although the accommodation is intended for personnel related to the massive construction site, it strongly serves as a testbed for housing construction within 'The Line,' the core linear city of NEOM City. After assessing the efficiency and productivity of modular housing, it can be widely applied to actual housing construction within The Line. NEOM City, the world's largest smart city, covers a total area of 26,500 km², which is 44 times the size of Seoul.

Previously, ESW, a comprehensive building materials specialist company, joined hands with POSCO and others to pioneer the modular brick market with seismic design applied. In March this year, ESW signed a Memorandum of Understanding (MOU) with POSCO, POSCO Construction, and others for the joint development and commercialization of a slim brick rail system using 'PosMAC' steel through the technological development of a welding-free seismic-resistant substructure.

ESW explained that, based on multilateral technical cooperation, they succeeded in securing the seismic performance of the slim brick rail system. Last month, it was also proven to have 'seismic wave structural stability' in experiments conducted by the Korean Society of Earthquake Engineering.

As the competitiveness of modular construction methods is highlighted, the related market is rapidly growing domestically as well. According to the Korea Construction Policy Research Institute, the domestic modular construction market is expected to grow to a maximum of 2.22 trillion KRW by 2030 (assuming 2% growth in the construction market and 1% market share for modular construction). Considering that the domestic modular construction market size was 145.7 billion KRW last year, this forecasts more than a 15-fold growth over ten years.

The post-war reconstruction cost due to the damage from the Ukraine war alone is expected to reach 972 trillion KRW. Accordingly, the Ukrainian government requested housing construction support from Korea in July. The construction industry expects that necessary schools, emergency housing, hospitals, and other facilities can be supported through modular construction. By leveraging the advantages of modular construction, continuous cyclical use such as regional relocation or repurposing is possible, enhancing its effectiveness.