[Click eStock] Daehan Steel, Undervalued Compared to Earnings... Target Price Set at 25,000 Won

[Asia Economy Reporter Hwang Yoon-joo] Hyundai Motor Securities on the 21st maintained a 'Buy' rating and set a target price of 25,000 KRW for Daehan Steel, stating that it remains undervalued compared to its earnings and return on equity (ROE).

Researcher Park Hyun-wook of Hyundai Motor Securities said, "It is expected to achieve solid performance in 2022."

Park explained, "The strong performance in the fourth quarter of last year was due to the increase in the average selling price of rebar despite rising costs of main raw materials such as steel scrap and energy, which kept the spread steady."

He added, "In the fourth quarter, domestic rebar demand slightly increased to 2.88 million tons compared to the previous quarter. Rebar demand this year is expected to rise slightly to 11.3 million tons from 11.1 million tons last year, so the price negotiation power of rebar companies is expected to remain strong in the first half."

Park predicted, "Despite the off-season, rebar prices increased due to rising prices of main and subsidiary raw materials. With the confirmation of rebar price increases and solid performance, the stock price is expected to trend upward."

However, he added, "There is a possibility that profitability may decline due to new entrants in the second half of the year."

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