Hyundai E&C Business Trends and Guarantee Risk Monitoring — 2026-06-03

Major Business Shifts and Risk Signals

• Surpassing 8 Trillion Won in Urban Renewal Orders: Following the successful bid for Apgujeong Districts 3 and 5 on May 31, Hyundai E&C’s cumulative urban renewal order value for the year has exceeded 8 trillion won. This marks a significant lead over competitors like GS E&C (5 trillion won range) and Samsung C&T (3 trillion won range).

• Strengthening R&D Strategy with HMG Construction Technology Research Institute: On June 1, Hyundai E&C and Hyundai Engineering merged their technology research centers and future technology promotion divisions to launch the "HMG Construction Technology Research Institute," focusing on hydrogen, SMR, and smart construction technologies.

• Landslide Victory in Major Gangnam Reconstruction Bids: By securing both Apgujeong Districts 3 and 5, Hyundai E&C successfully completed its "Apgujeong Hyundai" brand town. Meanwhile, Samsung C&T confirmed its position as a major player in Gangnam by winning the Sinbanpo 19 and 25 projects.

• Concentration of Orders Among Major Builders in the Han River Belt: Large construction firms like Hyundai E&C are increasingly dominating reconstruction projects along the Han River, raising concerns that smaller firms may face business hardships due to dwindling opportunities.

1 sources

insight.co.kr

2·3구역에 이어 압구정 5구역까지 수주한 현대건설... ‘압구정 현대’ 브랜드타운 완성됐다

Guarantee Risks and Subcontractor Issues

• Ongoing Cost Settlement Disputes at the S-Oil Shaheen Project: Hyundai E&C is currently embroiled in conflicts with subcontractors over "over-investment" issues during the construction phase of the S-Oil Shaheen project. Disagreements between the prime contractor and subcontractors regarding construction cost adjustments remain unresolved.

• Profitability Deterioration due to High Cost Ratios: Major construction firms are seeing increased profitability struggles, with Hyundai E&C recording a cost ratio of 97.91% and Hyundai Engineering reaching 105.35%. This is largely attributed to structural issues, such as rising material and labor costs.

• High-Risk PF Guarantee Burden: Large builders, including Hyundai E&C, maintain PF guarantee levels exceeding their equity capital. Risks associated with pre-construction sites in non-residential sectors remain a potential burden. Korea Ratings assessed that "if business feasibility declines due to unfavorable external conditions or accumulated financial costs, risks involving PF contingent liabilities and uncollected construction payments could intensify."

1 sources

hankyung.com

대형건설사 한강벨트 줄수주…목표치 달성 청신호 | 한국경제

Market Analysis and Practical Insights

• Cementing Top Rank in Construction Capability Assessment for 7 Consecutive Years: After leading the industry last year with over 10 trillion won in orders, Hyundai E&C has already secured 7 trillion won this year from the Apgujeong 3 and 5 projects alone, successfully hitting its first-half target and maintaining a clear lead over competitors.

• Intensified Competition in Financing Terms for Urban Renewal Projects: While competitors offered aggressive financing terms and cash benefits, Hyundai E&C maintained its advantage through superior brand trust in the Gangnam area and proven construction capabilities. Resident preference remains heavily skewed toward Hyundai E&C.

Note for Practitioners: Given Hyundai E&C’s high cost ratio (97.91%) and PF guarantee burden, it is vital to clearly define construction cost settlement terms and secure payment schedules for new subcontracting agreements. As disputes in large-scale overseas projects like the Shaheen Project persist, strengthening dispute resolution mechanisms within contracts is highly recommended.