[Click eStock] POSCO Inter, Poor Q4 Performance Last Year... Target Price Down

[Asia Economy Reporter Koh Hyung-kwang] Shinhan Financial Investment lowered the target price of POSCO International by 5% to 21,000 KRW on the 3rd, citing that the company's Q4 performance last year was weaker than expected.

Heo Min-ho, a researcher at Shinhan Financial Investment, explained, "The operating profit for Q4 last year was 97.7 billion KRW, falling short of the consensus of 123.4 billion KRW, due to large-scale provisions related to steel and chemical trading in the headquarters and overseas trading business."

Researcher Heo forecasted, "Operating profit for 2020 is expected to be 591 billion KRW," adding, "Gas field operating profit is estimated at 402.1 billion KRW (-9% compared to the previous year), trading at 147.3 billion KRW (+3%), and overseas subsidiaries at 45.5 billion KRW (+34%)."

He also stated, "The average daily gas sales volume this year is estimated to be 550 million CF (Cubic Feet), down 11% from the previous year due to a reduction in remaining volumes," and added, "Since 2021, the average daily sales volume is expected to return to 500 million CF, which is the supply contract volume."

Researcher Heo noted, "There are concerns such as the downward stabilization of oil prices this year, the return to normal gas sales volume levels in 2021, and the decrease in investment recovery amounts for gas fields after 2023," and assessed, "Results of the A3 block drilled in December last year will be announced in February to March, and if gas is discovered successfully, these concerns can be dispelled."

Furthermore, he mentioned, "Existing infrastructure such as offshore platforms and pipelines can be utilized," and added, "Competitiveness can be secured based on low investment amounts and short development periods."

This content was produced with the assistance of AI translation services.