POSCO Transforms into Eco-friendly and New Materials Group with Battery and Hydrogen Focus... Corporate Value Leap (Comprehensive)

POSCO Chemical 2nd Battery and POSCO M-Tech New Materials
Accelerating Investment Strategy to Discover Future and Eco-Friendly New Businesses
Market Cap May Fall Out of Top 10, Opportunity for Corporate Value Leap

Chairman Choi Jung-woo Emphasizes 2030 Mid-to-Long-Term Growth Strategy
Management Vision Expected to Be Detailed Next Month with Major Affiliate CEO Appointments

[Asia Economy Reporters Oh Hyung-gil and Jung Dong-hoon] Since its establishment in 1968, POSCO has established itself as the foundation of the domestic steel industry. On the 28th, POSCO successfully transitioned to a holding company system, shedding its label as merely a steel company. This marks another new change since its privatization in October 2000.

Going forward, the holding company, POSCO Holdings, will own the steel business company POSCO, which was spun off, along with the other affiliates. The holding company will be responsible for discovering future new businesses, managing group business and investments, and establishing group research and development (R&D) and ESG (environment, social, governance) strategies. Each affiliate plans to enhance competitiveness based on core businesses including steel, secondary battery materials, lithium and nickel, hydrogen, and energy. Chairman Choi Jeong-woo’s management innovation is expected to accelerate.

On June 9, 1973, at 7:30 a.m., after the first successful tapping at the No. 1 blast furnace of POSCO Pohang Steelworks, POSCO employees, including Honorary Chairman Park Tae-joon (center), are cheering and shouting "Banzai." Photo by POSCO

◆Beyond Steel... Fostering a Next-Generation Eco-Friendly New Materials Group= At the POSCO Group’s extraordinary general meeting of shareholders, the opposition from minority shareholders, which was seen as the biggest variable, turned into approval. This is interpreted as a result of Chairman Choi Jeong-woo’s successive shareholder return policies. Before the extraordinary meeting, he promised not to list the newly established steel business company (POSCO), and subsequently introduced shareholder-friendly policies such as treasury stock cancellation and dividend expansion.

After transitioning to a holding company, POSCO aims to focus on discovering future new businesses, managing business and investments, conducting R&D, and establishing ESG strategies. Chairman Choi’s blueprint is to raise the corporate value of existing business companies and prepare future growth engines.

Under POSCO, the business companies include listed companies such as POSCO Chemical (secondary batteries), POSCO M-TEC (new materials), and POSCO ICT (IoT, big data, artificial intelligence), as well as unlisted companies like POSCO Energy (renewable energy) and POSCO Mobility Solutions (electric vehicle drive motors and a subsidiary). Most of these are related to eco-friendly and future industries.

Currently, POSCO has established a system producing 114,000 tons annually of secondary battery materials including cathode and anode materials. Lithium and nickel have completed R&D and pilot production and are entering the pre-commercialization stage, with business results expected to become visible. In the hydrogen business, POSCO is strengthening its capabilities through joint projects with overseas companies and R&D cooperation with specialized institutions.

However, POSCO’s corporate value is currently undervalued. Although it was once ranked among the top five in market capitalization, it has recently been pushed out of the top 10 by companies in IT, bio, and secondary battery sectors such as Kakao, Naver, and Samsung Biologics.

At the shareholders’ meeting, Chairman Choi said, "Despite progress in new growth business areas and record-high performance, POSCO’s market capitalization is less than half of what it was in 2007, indicating undervaluation." He added, "If the perception that our business identity is an eco-friendly materials company spreads, efforts as a growth stock will be properly reflected in corporate value." POSCO is expected to secure investment liquidity through IPOs of unlisted companies and value enhancement of existing listed companies after the holding company transition.

Posco Chemical Sejong Plant producing secondary battery anode materials. Photo by Posco Chemical

◆Choi Jeong-woo: "A Choice for a 100-Year Company"= Since his inauguration in 2018, Chairman Choi has been preparing POSCO’s innovation from a leading domestic steel company to an eco-friendly materials development group by promoting a new business expansion strategy. He has expressed the idea that the holding company transition should be expedited so that companies in each field can strengthen their core expertise.

In this year’s New Year’s address, he emphasized, "The holding company will establish group growth strategies, develop future business portfolios, and discover new synergy opportunities from the perspective of the group and the entire market, realizing bigger and more solid growth at the group level."

He particularly stressed securing global-level competitiveness in the ‘2030 mid-to-long-term growth strategy’ for major business initiatives. The steel business will complete a low-carbon eco-friendly steelmaking foundation, and the secondary battery materials business plans to expand production capacity and secure world-class research capabilities. The hydrogen business aims to secure business capabilities early and create synergies linked with steel, power generation, and other group businesses.

POSCO Group is expected to concretize Chairman Choi’s management vision through CEO appointments at major affiliates next month. Since Chairman Choi’s inauguration in 2018, POSCO Group has conducted regular executive appointments, including CEOs, in mid-to-late December every year. However, this year, all affiliate presidents remain in their positions. CEOs who have achieved outstanding management performance or received favorable evaluations inside and outside the market are expected to be retained.

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