This year, construction stocks showed the steepest gains in the domestic stock market, but cement stocks—a representative backward linkage industry for construction—showed vastly different price movements depending on the individual stock. Analysts suggest that a "theme stock rally" formed as development catalysts and political issues attached themselves to certain stocks.
According to the Korea Exchange on the 16th, among KRX indices this year, the top performer was KRX Construction, which rose 121.72% compared to the beginning of the year. This is 34.01 percentage points higher than the second-place KRX Securities (87.71%). Nevertheless, the stock price movements of major cement stocks failed to keep pace with the construction sector's surge. Hanil Cement (300720) rose only 1.34% during the same period, while Asia Cement (183190) fell 0.42%.
Typically, when expectations for construction industry improvement grow, backward linkage industries that supply raw materials and supplies to construction sites move together. However, this construction stock rally was largely driven by nuclear power plant orders and expectations for overseas reconstruction, which is interpreted as why the warmth failed to spread to cement stocks overall, which are mired in domestic demand sluggishness. According to the Korea Cement Association, this year's expected cement shipment volume is around 36 million tons, the lowest figure since 1991 (37.11 million tons).
However, some stocks surged after being grouped as "theme stocks." Sungshin Cement (004980) closed at 12,330 won on this day, up 30.52% compared to the beginning of the year (9,370 won). As President Lee Jae-myung repeatedly expressed his intention to hold his retirement ceremony in Sejong, expectations for the commencement of construction on the presidential Sejong office site were highlighted, driving the stock up 29.91% on the 14th alone. Sungshin Cement owns a Bugang plant of approximately 99,000㎡ (30,000 pyeong) in Bugang-myeon, Sejong City.
Sampyo Cement (038500) surged 209.43% during the same period, from 5,300 won to 16,400 won. Recently, it has shown volatile swings based on external factors, including being mentioned as a stock related to Democratic Party of Korea Seoul mayoral candidate Jung Won-oh.
Market observers point out that investors should be cautious of volatility since trading has concentrated around specific events. Based on these figures, Sampyo Cement's price-to-earnings ratio (PER) is 43.39 times, higher than Hanil Cement (16.45 times) and Asia Cement (26.42 times). A financial investment industry official said, "Rather than the construction stock rally leading to expectations for improved performance across the entire cement sector, it's more that development issues and political themes attached to certain stocks, drawing short-term capital."
