[Click eStock] "POSCO Holdings, Stock Price Sluggish Despite Record-Breaking Earnings... Undervalued Appeal Highlighted"

[Asia Economy Reporter Kwon Jae-hee] Hyundai Motor Securities maintained a 'Buy' investment rating and a target price of 390,000 KRW for POSCO Holdings on the 3rd.

POSCO Holdings is expected to report Q2 earnings of 22.197 trillion KRW in sales, 2.007 trillion KRW in operating profit, and 2.277 trillion KRW in pre-tax profit. Although operating profit is down 9% year-on-year, it is slightly higher than the market consensus of 1.925 trillion KRW. Despite a significant rise in steel segment costs, the spread between selling price and cost in Q2 is estimated to be favorable due to demand-driven price increases. Unlike in the 2010s, demand-driven price hikes are now possible because China's price disruption is being resolved. Over the past decade, steel price increases were difficult due to China's low-price competition, even when demand was strong or costs rose, but these factors are now being alleviated.

In the non-steel segment, energy profits are expected to decline compared to the previous quarter, but trade and construction divisions are anticipated to show solid performance.

Hyundai Motor Securities analyst Park Hyun-wook stated, "Since the 2020s, China's steel oversupply has been resolved, and despite significantly improved profit levels compared to the past decade, the stock price is still discounted as in the 2010s. Furthermore, despite steel price increases in the first half of this year and historically high earnings, the stock price remains stagnant due to weak Chinese steel demand caused by pandemic lockdowns, highlighting its undervaluation appeal."

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