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[Asia Economy Reporter Gong Byung-sun] POSCO is engaged in a dispute over entering the top 10 in KOSPI market capitalization despite poor performance. Being recognized as a representative value stock and highlighted as a shareholder-friendly company through treasury stock cancellation acted as positive factors.

As of 9:38 a.m. on the 7th, POSCO surpassed KakaoBank during trading hours to rank 10th in KOSPI market capitalization (excluding preferred stocks). POSCO closed the previous day ranked 11th in market cap, but the difference with KakaoBank, which was ranked 10th, was only 60 billion KRW. A month ago, the market cap difference between the two was 6.1953 trillion KRW.

On April 29 last year, POSCO rose to 10th place in market capitalization for the first time in 1 year and 3 months but fell out of the top 10 within a month. Since then, due to the listings of KakaoBank and KakaoPay and the sharp rise of game stocks such as Krafton, POSCO’s market cap ranking plummeted to 14th on November 25 last year.

The outlook for POSCO’s performance is also predominantly negative. This is because the cost burden increased as raw material prices rose. Six securities firms (Samsung Securities, Yuanta Securities, Eugene Investment & Securities, Hana Financial Investment, Hyundai Motor Securities, BNK Investment & Securities) that issued forecasts related to POSCO this month all estimated that POSCO’s consolidated operating profit for Q4 last year would fall short of market consensus.

However, as value stocks gained attention, POSCO also attracted investors’ interest. After COVID-19, the price gap between growth stocks and value stocks was extreme, but it began to adjust this year. Recently, as growth stocks mainly declined in the U.S. stock market, KOSPI and KOSDAQ fell by 1.13% and 2.90%, respectively, the previous day. Kim Sung-no, a researcher at BNK Investment & Securities, explained, “The valuation of growth stocks has risen to the same level as the 2000 IT bubble, while value stocks are recovering to historically neutral levels.”

Stock price boosting measures also showed effects. On the 5th, POSCO announced it would cancel treasury stocks to enhance shareholder value. Additionally, although it decided on a physical division on the 10th of last month, unlike LG Chem and SK Innovation, it dismissed the possibility of raising funds through re-listing of subsidiaries. Hyunsoo Lee, a researcher at Yuanta Securities, said, “We cannot unconditionally trust the company’s intentions, but we should also be cautious about viewing it negatively based solely on other companies’ cases.”

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