[Click eStock] "Hyundai Steel, Target Price Maintained at 42,000 Won"

Daishin Securities maintained a buy rating and a target price of 42,000 KRW for Hyundai Steel on the 16th.

They forecast 1Q sales of 6.2 trillion KRW, operating profit of 105.8 billion KRW, and an operating margin of 1.7%, expecting these to be in line with consensus.

Quarterly sales volume is expected to be around 4.62 million tons. The spread (difference between selling price and raw material cost) margin is expected to expand to about 40,000 KRW/t for blast furnace steel and narrow to about 10,000 KRW/t for electric furnace steel. They anticipate a recovery trend compared to recurring profit excluding the one-time cost of 250 billion KRW in the previous quarter.

With steel raw material prices declining this year, the blast furnace spread margin in 2Q is expected to be favorable. They are awaiting the results of negotiations with real demand sectors such as automotive and shipbuilding.

Despite continued weak demand for long products due to sluggish construction starts, improvement in housing supply conditions in the second half is key. For steel pipes, North American OCTG (Oil Country Tubular Goods) prices have somewhat declined from their peak but demand remains steady.

Researcher Tae-hwan Lee of Daishin Securities said, "Low valuation at the start of the recovery phase is an advantage."

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