1. What’s Happening with Bumyang Construction?

Bumyang Construction reported a 56% YoY decline in revenue to 16.3 billion KRW in Q2 2025, coupled with a significant operating loss of 23 billion KRW. This is attributed to a combination of factors, including a sluggish construction market, weakened order-winning capabilities, rising costs, and increasing SG&A expenses. Most alarmingly, the company received a disclaimer of opinion from its auditor, indicating substantial doubt about its ability to continue as a going concern and significantly damaging investor confidence.

2. Why This Situation?

  • Disclaimer of Opinion: Raises serious questions about the company’s financial health and management transparency.
  • Impaired Investments in Affiliates: Accumulated losses from Bumyang K1 No. 7 Cheonan Dujeong Enterprise-type Rental Housing Consignment Management Real Estate Investment Company have weakened the company’s financial position.
  • Deteriorating Financial Health of Major Shareholder: The worsening financial condition of the largest shareholder, Plasco&B Co., Ltd., raises concerns about its ability to support Bumyang Construction.
  • Contingent Liabilities Related to PF Loans: PF loans and completion guarantees related to the Mapo-ro 1 District and Jeonong-dong officetel construction projects pose a potential burden on future cash flow.

3. What Should Investors Do?

Investing in Bumyang Construction is currently extremely risky. Until concrete information emerges regarding the reasons for the disclaimer of opinion and the possibility of business normalization, investment is strongly discouraged. Investors should carefully examine the reasons for the disclaimer, debt repayment plans related to PF loans, and capital increase plans.

4. Investor Action Plan

  • Refrain from Investing: Serious risk factors exist, including the disclaimer of opinion.
  • Gather Information: Carefully review the reasons for the disclaimer of opinion, plans for resolution, and plans for improving the financial structure.
  • Consult with Experts: Seek professional advice to analyze the risk factors before making any investment decisions.