The construction sector emerges from a long slump, securing new growth engines with data centers and overseas reconstruction projects.
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The domestic construction sector experienced a long slump over the past 3-4 years, but began to receive significant market attention in the latter half of last year. This increased interest is primarily driven by new momentum from nuclear power and overseas reconstruction projects. Investors expect these projects to usher the construction sector into a new growth phase.
Major domestic general construction companies possess sufficient technological capabilities for data center construction. Through their past experience in building oil and gas plants and power plants, these companies have acquired expertise in complex power and cooling system construction. Data centers strongly resemble plants, where power and cooling facilities are more critical than the architectural structure itself, making the existing capabilities of major domestic construction companies a significant advantage. Most data centers currently operating in Korea have also been constructed by domestic companies.
Currently, there are no gigawatt-scale data centers constructed in Korea, but 80-100MW scale data center projects are actively underway. Furthermore, several data centers have already been successfully completed and are in operation. Key examples include Naver's Chuncheon and Sejong data centers, and LG Uplus's Paju data center, all of which represent significant achievements proving the data center construction capabilities of domestic construction companies.
Xine (XD), a subsidiary of GS Engineering & Construction, has recently seen its stock price surge due to expectations surrounding its data center construction business. Xine (XD) is approximately 60% owned by Xine (XN), another subsidiary of GS Engineering & Construction, and is known for primarily handling projects for LG affiliates. Based on its past experience constructing data centers for LG affiliates, it is now garnering significant attention with the growth of the data center market. Indeed, Xine (XD)'s stock price surged from around 3,000 won in June to over 11,000 won currently.
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