Termination of Construction Contract with Affiliate and Shift to Self-Development Expected to Increase Revenue and Profitability... Positive for Shareholder Value

Termination of the construction contract (KRW 140.8 billion) for the Gongneung Station area redevelopment project with affiliate HDC IPARK No.2 Trust Management REIT by mutual agreement.
The reason is to change the business model from lease to self-development; the company plans to purchase the land and proceed with its own sales project.
Consequently, instead of construction revenue, the company will recognize land sales and development profit, leading to higher revenue. Self-development is expected to yield higher margins than construction contracts.
The termination date is May 26, 2026, and no penalties or losses are incurred. Further financial impact will be disclosed later.
[AI Comprehensive Analysis]This termination is not a mere cancellation but a strategic shift to high-margin self-development, which is positive for long-term profitability and shareholder value. However, execution depends on land acquisition cost and market conditions.