[Alpha Biz= Kim Sangjin] Daishin Securities has adjusted its target price for POSCO Holdings from 470,000 KRW to 410,000 KRW, continuing a downward trend since its September 2023 target of 640,000 KRW.
The firm cited factors such as weaker operational and equity value estimates. It calculated a net asset value (NAV) of 33.9 trillion KRW for the company, factoring in operational and equity value of 42.8 trillion KRW (23.3 trillion KRW from steel, 6.4 trillion KRW from eco-friendly infrastructure, and 13.1 trillion KRW from eco-friendly materials) and year-end 2023 net debt of 8.9 trillion KRW. The NAV estimate also reflected a discounted valuation for the lithium business due to the ongoing EV demand slowdown ("EV chasm") and decreased equity values for subsidiaries like POSCO Future M and POSCO International.
Daishin noted challenges stemming from sluggish demand and delayed confirmation of China's policy directions, which have complicated price negotiations. Additionally, political uncertainties in late 2024 have caused a sharp rise in the KRW-USD exchange rate, prompting a downward adjustment in earnings expectations for the first half of 2025.
For Q4 2024, Daishin forecasts POSCO Holdings' consolidated revenue at 16.792 trillion KRW, falling short of the consensus estimate of 18.544 trillion KRW. Operating profit is expected at 473.5 billion KRW, also below the consensus forecast of 698 billion KRW.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
