Joseon and Construction Dual Wings 'Flutter'... HJ Jungong Industry Surpasses 7.4 Trillion Won in Order Backlog

Filling the Order Vaults of Two Major Business Divisions for Four Years

HJ Heavy Industries, rooted in Busan, has surpassed an order backlog of 7.4 trillion KRW.

Thanks to steady orders, the company is accelerating performance improvements, and additional orders are expected by the end of the year, signaling a positive outlook.

In the second half of the year, as labor and material costs?major components of construction costs?stabilize, the reversal of provisions is expected to improve operating results.

Above all, it is analyzed that the order backlog in the two major business divisions, construction and shipbuilding, remains robust, amounting to approximately 7.4 trillion KRW, equivalent to about four years of construction volume.

In the construction division, the company has secured about 5 trillion KRW worth of public construction projects, including the expansion of Incheon Airport Terminal 2, Shinbundang Line Gwanggyo~Homaesil construction, metropolitan area express train GTX-A construction, Korea Energy University campus construction, 500kV Singapyeong converter substation civil engineering, Gangwon electric supply facility power duct construction, Boryeong new complex Unit 1 construction, and Jangho Port maintenance project.

The performance in the redevelopment sector, strengthened by the housing business, is also noteworthy. This year alone, HJ Heavy Industries has secured orders worth about 600 billion KRW for projects such as Daejeon Samsung-dong redevelopment, Daegu Beomeo-dong redevelopment, Pohang Daejam-dong Haengbok Apartment reconstruction, Busan Yeonsan-dong redevelopment and Guseo 4 district reconstruction, Bucheon Yeokgok-dong redevelopment, and Jeju Segi 1st reconstruction, creating a 'Haemoro' sensation. The brand's prestige is also rapidly rising, according to the construction industry.

The shipbuilding division has secured orders worth about 2.4 trillion KRW, including 10 eco-friendly container ships of 5,500~9,000 TEU class and various special ships such as defense vessels, despite inflationary pressures.

Notably, the order backlog was around 1.4 trillion KRW at the end of 2021, surged to 2.2 trillion KRW last year, and has continued to increase slightly this year, maintaining an upward trend.

In the special ship sector, recognized for its competitive edge, the company has filled its order book by winning contracts for high-speed landing crafts, new high-speed patrol boats, Dokdo-class performance upgrade projects, JLOTS (Joint Logistics Over-the-Shore), and 3,000-ton class coast guard patrol vessels.

This is attributed to the focus on normalizing shipbuilding management and securing competitiveness after the largest shareholder changed in August 2021.

HJ Heavy Industries plans to put full effort into various order competitions, including the Navy’s high-speed patrol boat orders concentrated at year-end, special purpose vessels, eco-friendly container ships, and gas carriers, aiming for a successful outcome. Recently, the company succeeded in developing an 8,500 TEU carbon capture and storage container ship, preparing for market demand in the upcoming carbon-zero era.

Improvement in financial structure through asset sales is also notable. It is reported that about 200 billion KRW in cash was secured this year by selling the Incheon North Port site, considered a prime asset. In December last year, part of the land in Wonchang-dong was sold for 77 billion KRW.

The Dongseoul Terminal site and building, sold to Shinsegae Dongseoul PFV for 402.5 billion KRW, are also undergoing complex development. After finalizing a preliminary negotiation plan including public contribution facilities with the Seoul Metropolitan Government, HJ Heavy Industries aims to obtain building permits by the end of next year, start construction in 2025, and complete it by 2028.

An HJ Heavy Industries official said, “All members are united in their efforts to improve performance and enhance corporate value,” adding, “If the provision reversal effect, which was pre-reflected in the first half of this year, materializes, we expect a significant improvement in operating results and cash flow from next year.”