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[Alpha Biz=(Chicago) Reporter Paul Lee] Hyundai Motor Securities Co. said on the 3rd that POSCO Holdings Co. (005490) expects the global steel industry to recover from the second quarter, adding that its target price will remain at 664,000 won along with its "buy" investment opinion. The closing price of the previous day is 488,000 won.
Hyundai Motor Securities estimated POSCO Holdings' fourth-quarter sales and operating profit at 18.892 trillion won and 885 billion won, respectively. This is not up to market consensus.
"The reason why the performance is expected to be sluggish is that even though prices of iron ore and raw coal spots rose 10 percent and 23 percent in the fourth quarter, respectively, compared to the third quarter, the steel spread is believed to have declined due to sluggish steel demand and low-priced imports," said Hyundai Motor Securities Co.
Hyundai Motor Securities added, "As a result of wage negotiations, the increase in labor costs reflected in the fourth quarter is estimated to be KRW 130 billion."
"It is necessary to raise steel prices because the cost of input in the steel sector will rise in the first quarter of this year," Hyundai Motor Securities said. "Major steelmakers, including China's Bao Steel, have implemented price hikes in January, and the company is expected to increase gradually."
AlphaBIZ 폴 리(hoondork1977@alphabiz.co.kr)
