[Alpha Biz= Reporter Kim Minyoung] Daishin Securities maintained its target price of 520,000 won and a 'buy' rating for POSCO Holdings on the 25th. They anticipate that POSCO Holdings will navigate uncertain market conditions in the latter half of the year, but they expect potential undervaluation to be resolved through market communication.
Daishin Securities stated, "Taking into account operating and equity values totaling 52.7 trillion won and sequential net borrowings of 8.9 trillion won by the end of 2023, we estimate net asset value (NAV) at 43.8 trillion won." They further explained, "We have revised upward the valuation of POSCO International shares compared to previous estimates, while adjusting down the value of eco-friendly materials. This reflects the continued decline in prices of carbonate lithium and lithium hydroxide."
Regarding POSCO Holdings' second-quarter performance, Daishin Securities analyzed that sales are expected to decrease by 13.6% year-on-year to 17.4 trillion won, and operating profit to decline by 53.3% to 619.6 billion won. Their assessment suggests that operating profit may fall short of market expectations of 708 billion won.
Daishin Securities projected, "Subsidiary POSCO will likely see decreased production and sales volumes due to the rationalization of facilities in the 3rd production line (February to June), but operating profit is expected to grow by 20% quarter-on-quarter due to lower production costs leading to increased spreads." However, they noted a challenging outlook for overseas steel subsidiaries, with continued pressure from weak demand in China maintaining the break-even point level.
AlphaBIZ Kim Minyoung(kimmy@alphabiz.co.kr)
