[Click eStock] "Dongkuk Steel, Front Industry Demand Decline... Target Price Downgrade"

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Financial Investment stated that Dongkuk Steel expects to achieve lower performance levels from the third quarter onward due to decreased demand in major downstream industries such as construction and home appliances compared to the first half of the year. Accordingly, the investment opinion 'Buy' is maintained, but the target price has been lowered to 23,000 KRW.

Researcher Park Kwang-rae of Shinhan Financial Investment said, "The consolidated operating profit for the third quarter is forecasted to be 156.8 billion KRW, a 46.6% decrease compared to the second quarter."

Researcher Park explained, "Signals of reduced demand for long products are being detected in the construction industry, such as delays in sales and groundbreaking, and the decrease in home appliance demand due to increased outdoor activities is expected to negatively impact sales volume and spreads."

He particularly predicted, "In the third quarter, sales volume is expected to decline by 6.1% compared to the second quarter to 1.43 million tons due to the summer vacation season and heavy rains in August."

However, he evaluated positively that "the sale of shares in CSP (Brazil), DKSC, and United Logistics (China) preemptively blocked financial risks and decided on a strategy of selection and concentration on core competencies."

Meanwhile, Dongkuk Steel's second-quarter sales increased by 8.5% quarter-on-quarter to 2.31 trillion KRW, and operating profit rose by 42.7% to 293.7 billion KRW, with operating profit exceeding market expectations unlike sales.

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