[Click eStock] "POSCO, Undervalued Stock Attractive... Attempting Rebound Next Month"

[Asia Economy Reporter Park Jihwan] Kiwoom Securities evaluated POSCO as having high valuation appeal with a 12-month forward PBR of 0.28 times and a dividend yield of about 7% based on last year, due to the recent sharp decline in its stock price, considering it a buying opportunity from a mid- to long-term perspective. While maintaining the investment opinion of 'Buy,' the target price was lowered by 19.23% from the previous 260,000 KRW to 210,000 KRW.

Researcher Lee Jonghyung of Kiwoom Securities stated, "The contraction in domestic and international steel demand due to the spread of COVID-19 is expected to intensify from the second quarter," adding, "China's steel prices and spot hot-rolled margins have also continued to weaken until March, making it inevitable for global steelmakers to experience poor earnings until the second quarter."

However, with the recent easing of the COVID-19 spread in China and the moderation of the decline in Chinese steel prices, a gradual recovery in earnings is expected from the third quarter.

Researcher Lee explained, "China, which was hit hardest by COVID-19, is expected to have a very sluggish GDP growth rate in the first quarter, but the spread of COVID-19 has been calming since the end of February, and with the government's active economic stimulus, growth recovery is expected from the second quarter."

He added, "Considering the historically high correlation between Chinese steel prices and GDP growth rates, Chinese steel prices are also expected to face upward pressure from the second quarter," and forecasted, "POSCO's stock price will likely attempt a full-fledged rebound around mid-April, when China's first-quarter GDP growth rate is confirmed."

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