[Click eStock] "SeAH Steel, Expecting Improved Operating Performance in Second Half... Target Price Raised"

[Asia Economy Reporter Ji-hwan Park] Hana Financial Investment maintained its 'Buy' rating on SeAH Steel on the 20th, expecting favorable operating performance due to the recovery of steel pipe exports in the third quarter, and raised the target price by 15.46% from the previous 97,000 KRW to 112,000 KRW.

Seongbong Park, a researcher at Hana Financial Investment, stated, "SeAH Steel's operating profit in the third quarter is expected to increase by 122.3% year-on-year to 12.6 billion KRW," adding, "Despite sluggish domestic sales of steel pipes, steel pipe sales volume is expected to increase by 3.6% quarter-on-quarter due to the recovery of steel pipe exports driven by the rebound in international oil prices and the rise in manufacturing operating rates in major countries."

Most of the increase in raw material (hot-rolled) prices was successfully passed on to sales prices, maintaining the spread similar to the previous quarter, and operating profit is expected to significantly exceed the market consensus of 10.5 billion KRW.

Researcher Park explained, "The tariff rate on energy steel pipes for the U.S. market was imposed at an anti-dumping rate of 12.82% in 2014," and added, "Since then, the tariff rate has been adjusted annually through annual reviews. Last year, the tariff rate was raised to 16.73%, but in the fourth annual review in July this year, it was significantly lowered to 3.96%. This is expected to positively affect profitability through the recovery of SeAH Steel's U.S.-bound OCTG steel pipe exports or price increases from the fourth quarter."

Researcher Park said, "While favorable operating performance is expected in the second half, the positive effect of the tariff rate reduction for the U.S. market is also expected to be reflected from the fourth quarter," and added, "Additionally, a decision to expand thick-walled pipes for offshore wind power within the year is anticipated."

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