Samsung C&T Construction Daily Risk Monitoring — 2026-05-31

1. Key Business Developments and Risk Signals

• Securing Shinbanpo 19/25 Reconstruction Rights: Samsung C&T has officially secured the contract for the integrated reconstruction of Shinbanpo 19 and 25 in Seocho-gu, Seoul, beating out POSCO E&C with a project value of 440 billion KRW. The selection was finalized at a general meeting held at the Seoul National University of Education's Cultural Center on May 30, 2026, and the project will proceed under the Raemian Ilucera brand, featuring 49-story towers.

• Financial Terms Based on Solid Credit: Leveraging the industry's highest credit rating (AA+), Samsung C&T differentiated its proposal by offering: a lowest-interest rate financing solution with no project cost limits, 100% LTV for relocation expenses, and zero HUG guarantee fees.

• Strengthening Trust with Guaranteed Completion: Shifting its project bidding strategy, Samsung C&T has decided to provide a "guaranteed completion" commitment upon request from the associations. This change in stance is seen as a clear expression of its dedication to construction quality and business risk management. (Reflecting the current strategy based on reports from two weeks ago.)

• Risk Signal: No major issues to report.

2. Guarantee and Subcontracting Management Issues

• Subcontracting Payments and Fair Trade Agreement: Samsung C&T, along with 19 other major construction companies, has signed a "Construction Industry Mutual Growth and Fair Trade Agreement" with the Korea Specialty Construction Association and the Fair Trade Commission. Key components include: timely payment of subcontracting fees, the abolition of withholding deposit practices, and the elimination of unfair special terms. A deal was also reached to expand the subcontracting price linkage system, with 134.3 billion KRW allocated for increases in material supply costs.

• Improvement in Guarantee Insurance Risks: Mandatory payment guarantees in prime/subcontracting transactions are being promoted. A new exception clause—waiving additional guarantees for remaining payments under 10 million KRW—was created to reduce the burden on small-scale partner firms. This is a positive signal for the normalization of the guarantee insurance market, particularly regarding advance payment bonds and performance bonds.

• Items for Verification: It is necessary to secure specific disclosures regarding Samsung C&T’s current status of subcontracting payments by site and the timeline for implementing the abolition of withholding deposits.

3. Strategic Analysis and Partnership Opportunities

• Business Opportunities: Participation from key partners in civil engineering, facilities, and electrical work is expected for the Shinbanpo 19/25 integrated reconstruction project. Given the 49-story height, there are recruitment opportunities for specialized contractors (stone work, waterproofing, plastering, etc.). Furthermore, the expansion of the subcontract price linkage system is expected to improve profitability for partner firms by reflecting fluctuations in raw material costs.

• Portfolio Changes vs. Competitors: While Hyundai E&C is pushing for the Apgujeong Apartment District Special Planning Area 5 project, Samsung C&T’s Shinbanpo win has solidified its expanded portfolio in Gangnam-area urban renewal projects. The company is securing a competitive edge by strengthening its share in the high-end market via the Raemian brand.

• Key Changes from Previous Day: Following the selection of the contractor for Shinbanpo 19/25 on May 30 and the officialization of the industry-wide mandatory payment guarantees and fair trade agreements on May 28, Samsung C&T’s new projects now benefit from a stronger foundation for subcontracting trust and guarantee insurance risk management.

Monitoring Conclusion: As Samsung C&T’s construction division maintains its new project momentum, it is simultaneously mitigating subcontracting risks and improving its guarantee insurance system through industry-wide fair trade agreements. Associations are encouraged to explore participation opportunities, while verifying the specific terms of subcontracting payments and the actual implementation of withholding deposit abolition before signing contracts.