SG

Business Overview

Founded in 2009 and listed on KOSDAQ in 2018, the company's businesses include manufacturing and selling asphalt concrete, road paving construction, and installing air-pollution reduction equipment for plants. It holds a proprietary patented material, 'Eco Steel Asphalt Concrete,' made from recycled steel slag; according to a 2026-08-13 report, the Korea Expressway Corporation plans to apply it preferentially on a 10.8km stretch including the Seohaean Expressway starting in October (introduced as offering roughly 5x the durability of regular asphalt concrete). In December 2023 the company established a Ukrainian local subsidiary, 'SG Ukraine,' and signed supply contracts with local asphalt concrete producers and steelmakers; the stock exhibits a thematic character tied to the progress of Russia-Ukraine ceasefire negotiations. As of 2026-08-19, a full ceasefire has not been concluded, and discussions remain at the stage of a partial air-war ceasefire proposal (source: research/macro.md, research/news.md). Domestically, the company signed a KRW 98.5 billion (SG standalone basis) Multiple Award Schedule contract for asphalt concrete with the Public Procurement Service in August 2026, and is also supplying asphalt concrete to the SK hynix Yongin Cluster and the Samsung Electronics Pyeongtaek Campus P5 plant (Asia Economy, 2026-07-16).

5-Year Financial Trend

The debt-to-equity ratio (total liabilities/total equity) peaked at 266.9% in 2023, then showed an improving trend to 168.3% in 2024, 119.6% in 2025, and 91.0% in H1 2026 (based on business and semi-annual reports, A). Total equity shrank to KRW 51.3 billion in 2023, then increased in every subsequent period, reaching KRW 108.1 billion in H1 2026 — the highest level among the periods examined.

Capital Increase & Ownership Structure

Before/After Capital Increase Comparison

Capital Increase Timeline

The ownership ratio of CEO Park Chang-ho and related parties stands at 17.80% as of the 2026-06-25 substantial-holding disclosure report, of which a significant portion (9,699,383 pledged shares) is pledged as collateral for stock-backed loans (combined loan amount for the couple: KRW 6.6456 billion). Past web-aggregated reference figures (32.23%, 49.7%, etc., reference date unclear) diverge significantly from the confirmed figure and were not adopted. In addition, conversion rights on the 19th convertible bonds (CB) were exercised three times between 2025-12 and 2026-02, resulting in 3,508,260 shares pending conversion; the exact remaining balance of CB and exchangeable bonds (EB) is unconfirmed.

Investor Flow Trends

[Caution] The investor flow figures below are estimates from secondary aggregation sites (alphasquare, comp.wisereport) not directly cross-checked against official KRX sources; reliability issues have been identified with some date labels, so these figures are provided for reference only.

From 2026-07-21 (ex-rights date) to 2026-08-14, a roughly three-week period, a pattern of sustained net selling by retail investors mirrored by offsetting net buying from foreign investors was observed (alphasquare secondary estimate). Over the same period, the short-selling balance ratio showed a continuous downward trend, from 1.25% (2026-07-20) to 0.42% (2026-08-13). The foreign ownership ratio is estimated at a very low approximately 2.3-2.4% (cross-referenced from comp.wisereport and alphasquare, reference date unclear). Confirmed KRX investor-type net buying/selling figures for 08-18 (the actual sharp-decline day), as well as cumulative 1-month and 3-month net buying figures, are unconfirmed.

Valuation

SG recorded a net loss for both full-year 2025 and H1 2026, making PER-based multiples uncalculable; the key calculable multiple is PBR (approx. 1.26x, based on H1 2026 total equity). EV/EBITDA cannot be calculated (unconfirmed) because detailed items such as depreciation and net borrowings are not available in the confirmed financial data. Once the new shares from the 2026-09-11 capital increase are paid in, total equity and shares outstanding will both change, requiring a recalculation of BPS and PBR.

Peer Comparison

Due to the localized nature of raw-material sourcing, asphalt concrete production and supply tend to be regionally concentrated, and research indicates SG is close to the first and only KOSDAQ-listed company operating asphalt concrete as its sole core business. Comparable listed companies are mostly large ready-mix concrete firms such as Eugene Corporation (annual revenue in the roughly KRW 4 trillion range) that operate asphalt concrete as one of several business segments, and in terms of revenue scale SG (in the roughly KRW 100 billion range annually) is markedly smaller. Eugene Corporation is profitable and has a PER (approx. 4.05-5.70x), while SG has no PER due to its net loss, limiting the meaningfulness of a direct comparison.

Macro Environment

Asphalt (bitumen), the core raw material for asphalt concrete, is a crude oil refining byproduct linked to international oil prices, and has reportedly surged in 2026 from KRW 634/kg to the KRW 800-1,000 range. The Public Procurement Service contract's price adjustment mechanism allows some cost pass-through, but the reporting lag has been cited as a factor behind weak Q1 2026 earnings. The 2026 total SOC budget expanded to KRW 27.7 trillion, but the detailed road-sector budget has declined for a 4th consecutive year, sending mixed signals about the foundation for government-procurement orders.

Key Risk Factors

• Profitability volatility In 5 of the 6 fiscal periods examined, operating margin was below 1% or negative, and the company swung back to a loss in H1 2026 with an operating loss of KRW 5.34867 billion (operating margin -16.73%).
• Raw material price volatility Rising international oil prices have driven a sharp increase in asphalt (bitumen) prices, pressuring the cost ratio, and there is a time lag before Public Procurement Service price adjustments take effect.
• Equity dilution The capital increase scheduled for payment on 2026-09-11 will raise total shares outstanding by approximately 37.42%, and conversion/exchange of remaining convertible bonds (CB) and exchangeable bonds (EB) represents an additional dilution factor (the exact CB/EB balance as of 2026-08-19 is unconfirmed).
• Administrative issue designation system Since 2026-07-01, a system has been in effect designating stocks as administrative issues if the closing price stays below KRW 1,000 for 30 consecutive trading days, and SG's 52-week low of KRW 1,035 is not far from that threshold.
• Overseas business uncertainty As of 2026-08-19, the Russia-Ukraine ceasefire negotiations have not been fully concluded, so revenue related to Ukraine reconstruction remains contingent and unrealized.
• Customer concentration The August 2026 Public Procurement Service contract (KRW 98.5 billion) is a single large contract equivalent to approximately 96% of 2025 consolidated revenue, indicating high reliance on government procurement orders.