[Click eStock] "Hyundai Steel, Surprise Earnings Expected in Second Half"

[Asia Economy Reporter Ji-hwan Park] Hyundai Motor Securities maintained a 'Buy' investment rating and a target price of 77,000 KRW for Hyundai Steel on the 8th, expecting a surprise performance in the second half of the year.

Hyun-wook Park, a researcher at Hyundai Motor Securities, stated, "Strong performance in the second half and record-high results in the third quarter are expected," adding, "With the weakening influence of low-priced Chinese products and the recovery of domestic and international demand, steel companies' pricing power is strengthening. Currently, the price-to-book ratio (P/B) is around 0.4 times, showing undervaluation attractiveness relative to profitability."

He forecasted Hyundai Steel's third-quarter operating profit to reach 732.3 billion KRW, a 3,969% increase compared to the same period last year. Researcher Park said, "Despite the off-season, steady performance in the long products segment and price increases in shipbuilding plates are expected to boost the plate segment's results," and "In most regions except China, domestic prices will also rise in September."

He added, "Although input costs are expected to rise in the fourth quarter with a time lag, further price increases for plates are unlikely," but "the long products segment will support earnings, and separate operating profit is expected to remain at a historically high level of 680.8 billion KRW."

Researcher Park emphasized, "The possibility of production cuts in China in the second half is considered high, which is expected to contribute to supply-demand stability and improved investment sentiment." He further noted, "Unlike in the past, the impact of low-priced Chinese products in the domestic and international steel markets will diminish, expanding steel companies' pricing power," adding, "As a result, steel prices and earnings are expected to remain at high levels."

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