[Click eStock] POSCO Holdings, Waiting for Market Recovery

[Asia Economy Reporter Junho Hwang] Samsung Securities maintained the target price of POSCO Holdings at 370,000 KRW per share, stating that the profit decline would be limited due to China's steel production cuts in the second half of this year.

POSCO Holdings recorded consolidated sales of 23 trillion KRW in the second quarter of this year, an increase of 7.8% compared to the previous quarter. Operating profit achieved 2.1 trillion KRW, a decrease of 7.1% compared to the previous quarter.

Samsung Securities analyzed that although POSCO Holdings' operating profit barely met market expectations, considering the off-season effect of its non-steel subsidiary POSCO Energy, the actual performance can be interpreted as solid.

However, global steel prices have turned downward since May and have not yet recovered. Accordingly, POSCO Holdings' steel business is inevitably facing a reduction in spread compared to the previous quarter. Samsung Securities, following this trend, expects POSCO Holdings' consolidated operating profit for the third quarter of this year to be around 1.4 trillion KRW, which is 16.5% below the current consensus, assuming that the spread of its subsidiary POSCO shrinks by 63,000 KRW per ton compared to the previous quarter.

Researcher Jaeseung Baek of Samsung Securities stated, "Since Chinese steelmakers have been reducing production since June to cope with margin declines caused by price drops, attention is focused on the possibility that Chinese steel prices will bottom out and rebound around September, when the short-term seasonal peak begins."

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