[Click eStock] "SeAH Besteel Expected to Exceed Next Year's Revenue Consensus"

[Asia Economy Reporter Oh Ju-yeon] KB Securities expects SeAH Besteel's consolidated sales for next year to exceed market consensus. Accordingly, it maintained a 'Buy' investment rating and raised the target price from the previous 12,000 KRW to 13,000 KRW.

According to KB Securities on the 23rd, SeAH Besteel's consolidated sales for the fourth quarter of this year are projected to be 686 billion KRW, a 2% increase compared to the same period last year, and operating profit is expected to rise by 557% to 17.8 billion KRW.

It is estimated that the inventory of finished car vendor companies has been depleted, leading to a recovery in special steel billet sales to the 400,000-ton level (a 39% increase compared to the previous quarter).

Researcher Hong Seong-woo explained, "It takes about three months for the conditions in the upstream industries to pass through vendors and reach the special steel market. The automotive industry has shown a clear recovery trend since the second quarter, resolving related issues."

However, the cost burden has increased more than previously expected due to the sharp rise in steel scrap prices since December.

Expectations for a base effect are high next year. KB Securities forecasts SeAH Besteel's consolidated sales for next year to be 2.9546 trillion KRW and operating profit to be 76.1 billion KRW, representing increases of 17% and 167%, respectively, compared to the same period last year. The sales figure exceeds the market consensus of 2.732 trillion KRW.

This assumes special steel billet sales volume of 1.8 million tons and an average selling price (ASP) of 960,000 KRW per ton.

Researcher Hong predicted, "As the global economy gradually recovers from the COVID-19 pandemic, demand for special steel will increase." He added, "Although profitability has underperformed the KOSPI by nearly 50% since the beginning of the year, there remains about 20% upside potential compared to the recent closing price."

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