[Click eStock] "SeAH Besteel, Unprecedented Sales Slump Continues... Target Price Down"

[Asia Economy Reporter Eunmo Koo] Hi Investment & Securities has downgraded the target price of SeAH Besteel from 18,500 KRW to 17,500 KRW, citing unprecedented sluggish sales.

On the 7th, analyst Yoonsang Kim of Hi Investment & Securities diagnosed the situation as difficult due to the continued unprecedented decline in sales volume. Kim stated, "The inflow of Chinese special steel bars is decreasing, and with no significant changes in the operating rates of competitors' special steel bars, the slowdown in SeAH Besteel's sales volume indicates very weak demand in the downstream industries." He added, "Although the company is preparing countermeasures such as export drives to Europe and the US and the acquisition of Alconic Korea, a high-strength aluminum alloy company, overcoming the core business downturn will not be easy."

However, he expected a gradual improvement in performance. Kim estimated that SeAH Besteel's consolidated operating profit in the fourth quarter of last year turned positive to 2.4 billion KRW. The reasons for the turnaround to profit were the strong performance of its subsidiary SeAH Changwon Special Steel and the reduction of SeAH Besteel's deficit. Despite a slowdown in SeAH Changwon Special Steel's performance due to falling nickel prices in the first quarter of this year, the deficit is expected to narrow due to increased sales volume at SeAH Besteel.

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