[Click eStock] "Hyundai Steel, Faster-than-Expected Profit Recovery Speed... Target Price Up 5.5%"

[Asia Economy Reporter Park Jihwan] Cape Investment & Securities maintained a 'Buy' rating on Hyundai Steel on the 18th, citing a faster-than-expected profit recovery pace, and raised the target price by 5.45% from the previous 55,000 KRW to 58,000 KRW.

Kim Misong, a Hyundai Steel analyst, stated, "The consolidated operating profit for the first quarter of this year is expected to be 180 billion KRW, exceeding market expectations by 50%." This is attributed to a better-than-expected improvement in the spread of flat products. The spread is expected to widen by 50,000 KRW compared to the previous quarter. While costs increased by 40,000 KRW, the price hike reached 90,000 KRW. Hyundai Steel raised cumulative prices in the first quarter by 250,000 KRW for hot-rolled steel, 180,000 KRW for cold-rolled steel, and 150,000 KRW for cold-rolled coated steel, respectively.

Performance improvement is expected to continue into the second quarter as well. This is because the price increases will be reflected following the completion of negotiations with automobile and shipbuilding companies. A retroactive price increase of around 100,000 KRW is anticipated.

Analyst Kim said, "As long products enter the peak season, sales volume will increase, allowing cost increases to be passed on to prices," adding, "For rebar, a production strategy responding to decreased demand from companies is effective, creating an environment conducive to price increases."

He added, "Hyundai Steel is restructuring its business portfolio, so although its scale may shrink, operating profit margins are expected to rise," and "Despite recent stock price gains, further upside is considered possible."

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