[Click e-Stock] "SG Nears Ascon Contract Execution as Russia-Ukraine Peace Talks Accelerate"

As the Russia-Ukraine war enters its fourth year and peace negotiations become more concrete, analysts suggest that SG is on the verge of executing its contract to supply asphalt concrete (ascon) to Ukraine.

Lee Chungheon, a researcher at ValueFinder, stated, "With peace talks between Russia and Ukraine accelerating, led by the United States, it is necessary to reassess companies that hold contracts ready for immediate execution after the war ends."

The Trump administration in the United States is pressuring Ukraine to accept a peace proposal, setting Christmas as the deadline. Earlier this month, a meeting took place in Moscow between a U.S. envoy and Russian President Vladimir Putin. On December 14-15, key leaders from the United States, Ukraine, and Europe gathered in Berlin to continue negotiations.

Last weekend, a delegation from the Trump administration held talks with a Russian delegation in Miami, followed by a meeting with the Ukrainian delegation the next day. While the Russian side is not considering a trilateral meeting, it stated that "the discussions are proceeding constructively," indicating that negotiations toward a ceasefire are steadily progressing.

Lee assessed, "The imminent end of the war will serve as a favorable momentum for the company, given that it already has a local subsidiary in Ukraine." SG plans to begin fulfilling its contract to supply approximately 35.5 billion won worth of ascon to Ukraine after the Russia-Ukraine ceasefire, having already completed all necessary procedures to enable immediate local production.

The domestic business environment is also favorable. Last year, regulations designating ascon as a small and medium-sized enterprise (SME) suitable industry were eased, allowing SG to re-enter the public procurement market and secure conditions to generate over 100 billion won in annual domestic sales. Researcher Lee explained, "Re-entering public procurement contracts has reestablished a stable domestic revenue base."

Overseas business expansion is also within reach. SG is conducting market research and preliminary preparations to participate in the construction of nine highways and national roads in Rajasthan, India, totaling 16,000 kilometers. Lee projected, "From next year, overseas business is likely to become fully visible," adding, "Securing overseas references centered on Ukraine and India will be a key driver of mid- to long-term growth."

SG is the leading ascon manufacturer in Korea, operating nine ascon plants nationwide, mainly in the Seoul metropolitan area, and possesses a stable supply capacity and construction network. By continuously acquiring ascon production subsidiaries and expanding its market share, the company’s performance stability and growth potential are expected to strengthen further.

SG is also expected to benefit from stricter environmental regulations. The company owns 'SGR+', a facility capable of removing more than 98% of class 1 carcinogenic and hazardous air pollutants generated during ascon production. Researcher Lee emphasized, "SGR+ is a facility expected to benefit directly from the revision of the Clean Air Conservation Act," and added, "As environmental regulations become stricter, the company's competitive advantage will become even more pronounced."