[Click e-Stock] "SG Set to Accelerate Second-Half Growth... 98.5 Billion Won MAS Contract and Overseas Ventures Deliver Dual Boost"

There are projections that SG, a KOSDAQ-listed company, will begin to accelerate its performance growth in the second half of the year. This outlook is attributed to the company securing a public-sector asphalt concrete (ascon) supply contract worth 98.5 billion won, as well as expectations that the expansion of its production base in northern Gyeonggi Province and its overseas business results in Indonesia and Ukraine will be reflected sequentially.

Independent research firm ARIS stated on August 26 that it expects both SG’s revenue and profitability to improve from the second half of 2026.

Jae Mo Lee, a researcher at ARIS, explained, "SG achieved a turnaround in both operating profit and net income in the second quarter. To minimize the impact of surging raw material prices on profitability, the company adopted a flexible volume management strategy focused on profitability, such as adjusting certain production and delivery schedules. In addition, SG improved its second-quarter results by utilizing the price linkage structure in its public-sector ascon contracts."

The expansion of public-sector ascon supply is cited as a key variable for performance in the second half. At the beginning of August, SG signed a multiple award schedule (MAS) contract worth a total of 98.5 billion won with a two-year term, valid until the end of July 2028. Through this, the company secured a stable sales base for supplying ascon to government agencies, local governments, and public institutions.

SG is also pursuing production capacity expansion. Including affiliates, SG operates nine ascon production plants nationwide, establishing a production system that connects Seoul, Incheon, Gyeonggi, and the Chungcheong regions.

Additionally, SG is pushing to acquire a new ascon plant in northern Gyeonggi Province using funds from a paid-in capital increase. Once the new base is added, it is expected to strengthen supply capacity in northern Gyeonggi and enable the establishment of a production and logistics network covering the entire Seoul metropolitan area by connecting with the existing Pocheon production facility.

Its overseas business is also cited as a mid- to long-term growth driver. SG is expanding its business focus in Indonesia by entering a new market and participating in reconstruction projects in Ukraine.

In Indonesia, SG is seeking to establish a joint venture with POSCO International. In this partnership, SG will be responsible for the manufacturing technology, quality control, production, and construction of EcosTeelascon, an eco-friendly, highly durable pavement material, while POSCO International will handle business development and procurement of raw materials utilizing its global network.

Initially, SG plans to build its first plant on Java Island, where POSCO’s steel mills are located, and locally source steel slag there. The company plans to expand production bases to other locations such as Sumatra Island later on.

Researcher Lee noted, "Indonesia, including the relocation of the capital to Nusantara, is seeing major road infrastructure investments, providing a solid base for mid- to long-term demand."

In Ukraine's reconstruction business, supply performance is also becoming visible. SG has secured ascon supply contracts worth around 35.6 billion won for major regions such as Kyiv and Dnipro, and has completed test paving and demonstration tests.

Researcher Lee projected, "From the second half of 2026, the Public Procurement Service MAS contract will be in full swing, and the performance of the newly acquired plant will also be consolidated, so both revenue and profitability are expected to improve. New businesses, such as ascon supply to semiconductor factories (FAB) and the establishment of a joint venture in Indonesia, will also continue to generate sales."

As a result, SG is expected to see a greater pace of performance improvement in the second half, driven by its stable public-sector ascon business base, expansion of production sites, increasing ascon supply for semiconductor plants, and overseas infrastructure projects.

This content was produced with the assistance of AI translation services.