[Click eStock] "POSCO International, Simultaneous Growth in Scale and Margin through Supply-Demand Improvement"

Hana Financial Investment "Target Price Raised to 25,000 Won"
Myanmar Situation Is a Negative Factor... "Profit Scale Expected to Recover After Future Investment Expenditure"

[Asia Economy Reporter Gong Byung-sun] As trade conditions improve due to deferred demand in steel and other sectors, an analysis suggests a positive outlook for POSCO International. Although the Myanmar situation poses a negative factor, it is expected to be resolved over time.

On the 6th, Hana Financial Investment raised the target price for POSCO International from 20,000 KRW to 25,000 KRW, maintaining a 'Buy' rating. Hana Financial Investment stated that they applied a price-to-book ratio (PBR) of 0.9 times to this year's book value per share (BPS) to determine the target price.

The rapid recovery in trade conditions is interpreted as having a positive impact on POSCO International. Despite cost pressures, deferred demand in steel and other sectors is quickly recovering, leading to simultaneous growth in both revenue and margins. POSCO International's sales for the first quarter of this year are expected to rise 10.1% year-on-year to 6.1 trillion KRW.

The energy infrastructure sector has faced a setback due to the Myanmar situation. Domestic instability in Myanmar is likely to cause a reduction in output at gas fields in the region. Although sales volume is maintained and sales prices are rising due to oil price recovery and inflation, the rate of investment cost recovery is declining. However, Yoo Jae-sun, a researcher at Hana Financial Investment, explained, "As investment expenditures begin in earnest going forward, the scale of profits is also expected to recover." Both the trading and investment corporations are recovering along with market conditions. The investment corporation is expected to show solid performance as palm oil prices rise, improving profits from Indonesian palm operations.

In the long term, improvements in new businesses such as increased sales of eco-friendly vehicle drive motor cores are positive factors. POSCO International possesses a value chain capable of supplying anode and cathode materials as well as key raw materials like lithium, nickel, and graphite. Researcher Yoo said, "This is a point to pay attention to as a business whose performance is improving in the long term."

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