[Click eStock] POSCO Holdings, 1Q Dividend Income '20 Billion Won'

[Asia Economy Reporter Junho Hwang] Hana Financial Investment maintained the target price of POSCO Holdings, which recently transitioned to a holding company, at 430,000 KRW on the 26th, noting that although it only secured about 20 billion KRW in dividend income in the first quarter of this year, it demonstrated stronger profit resilience than market expectations.

Hana Financial Investment evaluated that POSCO Holdings achieved results in the first quarter of this year that met market expectations. POSCO Holdings recorded sales of 21.3 trillion KRW and operating profit of 2.3 trillion KRW, consistent with previous preliminary results. These figures represent increases of 32.8% and 45.5% year-on-year, respectively. Hana Financial Investment assessed that the operating profit exceeded market forecasts of 1.65 trillion KRW, marking an earnings surprise level performance.

However, the maintenance work on the Gwangyang No. 4 blast furnace at POSCO Holdings is expected to continue until mid-June. Accordingly, sales volume in the first quarter is 8.46 million tons, and the second quarter is also expected to fall short of exceeding 8.4 million tons. Due to the strong raw material prices, the input cost is projected to rise by about 50,000 KRW per ton. Nevertheless, supported by the strong global steel prices including Europe and the United States, aggressive price increase policies for major products are expected to raise the average selling price (ASP) by more than 50,000 KRW per ton.

Researcher Seongbong Park of Hana Financial Investment said, "The first quarter operating results proved that the profit resilience is higher than the market had anticipated," adding, "The current stock price is only at a PBR of 0.4 times (expected ROE of 12.1% this year), and the planned share buyback and cancellation within the year is expected to positively affect the stock price depending on its scale."

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