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Photo = POSCO FutureM |
[Alpha Biz= Kim Sangjin] NH Investment & Securities stated on Friday that POSCO Future M will face headwinds this year due to a slowdown in the U.S. electric vehicle (EV) market, lowering its target price from 240,000 KRW to 180,000 KRW while maintaining a "Buy" rating.
NH Investment noted, “POSCO Future M is more influenced by the U.S. EV market than the European market. The expected termination of U.S. EV purchase tax credits in the second half of this year raises concerns about demand slowdown.”
The report also highlighted that key customers, GM and Stellantis, are likely to moderate the pace of their EV businesses. GM reportedly holds approximately 80,000 EVs in inventory, requiring adjustments, while Stellantis has postponed the launch of its electric pickup truck to 2026.
Additionally, the application of the Foreign Entities of Concern (FEOC) regulation, expected to limit Chinese-made anode material market entry, has been deferred until 2026. This delay suggests that improvements in POSCO Future M's anode material sales will take time.
Financial stability also emerged as a concern. NH Investment stated, “POSCO Future M’s debt-to-equity ratio reached 192% as of the end of Q3 last year. The company has recently issued perpetual bonds to manage its debt ratio. While perpetual bonds are classified as equity, they are effectively debt, indicating a need for financial structure improvements and adjustments to its mid-to-long-term expansion plans.”
NH Investment estimated that POSCO Future M recorded an operating loss of 47.9 billion KRW in Q4 2023, significantly below the current consensus estimate of a 4.7 billion KRW loss.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
