South Korean Construction Stocks Plunge on Profit-Taking After Mega-Project Rally

According to Korea Exchange, Kumho E&C and Namhwa Construction shares plunged on July 24 as investors took profits following earlier gains tied to government mega-project announcements. Kumho E&C fell 8.94% to 10,290 Korean won, while Namhwa Construction dropped 8.46% to 4,980 won. Both had surged after South Korea announced plans for approximately 1,500 trillion won in corporate investment across three mega-projects: semiconductors, AI data centers, and Physical AI.

Kumho E&C hit its daily limit-up on July 1 following the announcement and reached 19,380 won on July 10, but subsequently reversed course. Securities analysts warned that theme-driven rallies carry significant downside risks, noting that regional construction firms may not necessarily secure contracts from the large-scale projects despite initial investor optimism.