[Weekly HOT Stocks] POSCO, Foreigners Continue 'Buying' Despite Q2 Losses

Foreigners Net Bought 76.9 Billion KRW Worth Over Four Days from the 21st to 24th Following Earnings Announcements

[Asia Economy Reporter Kum Bo-ryeong] Despite POSCO recording a loss in the second quarter, foreigners appeared to be buying the stock throughout the week.

According to the Korea Exchange on the 25th, POSCO's closing price on the previous day was 194,000 KRW. It rose 4.02% from 186,500 KRW on the 17th, a week earlier.

POSCO announced on the 21st that its second-quarter performance showed separate sales of 5.8848 trillion KRW and an operating loss of 108.5 billion KRW. Sales decreased by 21.3% compared to the previous year, and operating profit turned to a loss. This is the first time since its founding in 1968 that POSCO has posted an operating loss on a separate basis for a quarterly performance. On a consolidated basis including subsidiaries, operating profit was 167.7 billion KRW, down 84.3% from the previous year.

Although the performance was poor, foreigners continued to buy POSCO. Between the 20th and 24th, POSCO ranked second among the top stocks purchased by foreigners, following Samsung Electronics. During this period, foreigners bought POSCO shares worth 79.4 billion KRW. In particular, from the 21st to the 24th, the four days after the earnings announcement, they net purchased shares worth 76.9 billion KRW.

The securities industry analyzes that POSCO is expected to improve in the second half after passing through the worst period. Baek Kwang-je, a researcher at Kyobo Securities, said, "The second-quarter performance was poor due to a combination of adverse factors such as a sharp decline in steel demand caused by the global spread of COVID-19, a drop in steel product prices, and a rise in iron ore prices," adding, "Although uncertainty about COVID-19 continues, with expanded domestic sales and strengthened operations in demand recovery regions such as China, the second quarter is expected to be the bottom, and performance recovery is possible from the third quarter onward."

Lee Jong-hyung, a researcher at Kiwoom Securities, also said, "The production volume of automobiles, a key demand sector, is recovering, and the Gwangyang No. 3 blast furnace, which had been shut down for maintenance since February, restarted operation on the 10th, so POSCO's crude steel production is expected to gradually recover in the second half after bottoming out in the second quarter," adding, "Chinese steel prices have begun to rise moderately from the second quarter along with economic recovery, and the company has been actively raising prices since July, focusing on exports and distribution. Therefore, the reduced steel margins are expected to gradually improve from the third quarter, and accordingly, quarterly performance is expected to start a turnaround from the second half after bottoming out in the second quarter."

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