After Five Months of "Responsible Management" Share Purchases,
Construction CEOs Achieve Both Justification and Practical Gains
Returns Reach Up to 137% in Just Five Months
Securities Industry: "Short-Term Adjustment Possible, But Construction Stocks Entering Upward Cycle"
The CEOs of Samsung C&T and Hyundai Engineering & Construction, two leading companies in Korea's construction industry, purchased shares in their own companies in February as part of their commitment to "responsible management." Now, five months later, they are enjoying returns of well over several dozen percent. As construction stocks hit bottom earlier this year and then rebounded, these executives, who bought at the low point, have managed to achieve both justification and practical gains.
Hanwoo Lee, CEO of Hyundai Engineering & Construction (left in the photo), and Secheol Oh, CEO of Samsung C&T Construction Division. Provided by each company.
According to the Korea Exchange on July 6, the closing price of Hyundai Engineering & Construction shares on July 4 was 71,300 won. Hanwoo Lee, CEO of Hyundai Engineering & Construction, purchased 2,000 shares of his company in February at an average price of 31,100 won per share. This translates into a return of 137%. The shares he bought for 60.2 million won have now grown to 142.6 million won, resulting in an unrealized gain of 82.4 million won.
Secheol Oh, CEO of Samsung C&T Construction Division, who also purchased company shares around the same time, is enjoying similarly strong returns. In February, he bought 2,000 shares at 118,350 won per share. Based on the current share price (162,500 won at the July 4 close), he has an unrealized gain of about 44,150 won per share, totaling 88.3 million won. This equates to a return of approximately 37.3%.
Before purchasing shares, both CEOs expressed confidence in their companies' performance improvement and mid- to long-term growth potential. A Samsung C&T representative stated, "The CEO and other key executives purchased company shares to enhance shareholder value and as part of responsible management." Hyundai Engineering & Construction also commented, "A full-fledged turnaround will begin this year." Last year, Hyundai Engineering & Construction recorded an operating loss of about 1.2 trillion won due to large-scale overseas losses, but this year, the company is aiming for a rebound in performance centered on new energy businesses.
The overall trend of construction stocks has also recovered rapidly. Since the beginning of this year, the construction industry index has risen by 56.34%, more than double the KOSPI's increase of 27.32% over the same period. By industry, construction ranks fourth in terms of growth rate, following machinery and equipment (77.03%), electricity and gas (74.80%), and securities (74.52%).
The securities industry expects a short-term adjustment following the new government loan regulations announced at the end of last month. Seungjun Kim and Minho Ha, analysts at Hana Securities, stated in a recent report, "We maintain our 'Overweight' rating on the construction sector, but in the short term, it is a time to wait and see." They added, "A full recovery in the housing market has not yet been confirmed, and there are concerns about weakened subscription demand due to recently implemented measures to strengthen household debt management, such as restrictions on loans for balances exceeding 600 million won."
However, in the mid- to long-term, they believe it is time for construction stocks to enter an upward cycle. They said, "The expansion of housing supply will begin in earnest from 2026, and earnings growth is expected from this year through 2029," adding, "Construction stocks are considered to have entered an upward cycle."
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