[Click eStock] "SeAH Besteel Holdings, Profitability Turnaround... Target Price Maintained"

Rising Expectations for Mid-to-Long-Term Corporate Value Increase
Sales Volume Rises Due to Q2 Peak Season Effect
No Shareholder Return Setback Expected Despite Holding Company Change

On the 14th, Daishin Securities analyzed that the corporate value of SeAH Besteel Holdings is expected to rise due to factors such as a profitability turnaround and an increase in the proportion of sales from new businesses. They maintained a 'Buy' investment rating and a target price of 32,000 KRW. SeAH Besteel Holdings closed at 22,050 KRW on the previous trading day.

Researcher Lee Taehwan of Daishin Securities stated, "Sales volumes of special steel and STS steel have recovered from their lows, but the speed of profitability recovery was slower than initially expected at the beginning of the year." He added, "There is a possibility of downward revision in the expected annual profit level, but this can be offset by strong sales to the semiconductor sector, and the bottom-heavy upward trend is expected to continue." He further noted, "Due to the sluggish market conditions, the price-to-book ratio (PBR) is below 0.4 times, but based on the profitability turnaround and the rising proportion of new business sales (targeting 27% by 2030), there is high mid- to long-term expectation for corporate value growth."

SeAH Besteel Holdings serves as an intermediate holding company under SeAH Holdings. Its consolidated subsidiaries include SeAH Besteel (special steel), SeAH Changwon Special Steel (STS steel), and SeAH Aerospace & Defense Materials (aluminum alloy), among others. Besides traditional demand sectors such as automotive, machinery, construction, and bearings, it is expanding new growth value chains including ultra-clean semiconductors, wind power generation, CASK, and aerospace. The STS seamless steel pipe plant in Saudi Arabia is scheduled to be completed in 2025. The researcher commented, "This is a stock with high medium-term earnings growth potential," and explained, "The target price is based on the theoretical PBR calculated using the 2024 return on equity (ROE) and PBR-ROE method, discounted by 10%."

On the 10th, SeAH Besteel Holdings held a non-deal roadshow (NDR) targeting major domestic institutional investors. The first-quarter results showed consolidated sales of 953.1 billion KRW and operating profit of 21.3 billion KRW, in line with consensus estimates (market average forecasts). The researcher said, "Product sales have been recovering since the fourth quarter of 2023, which was the bottom," and added, "SeAH Besteel experienced a temporary increase in fixed costs per unit due to plant repairs causing a drop in operating rates, but Changwon Special Steel performed well thanks to the reversal of inventory valuation losses caused by rising raw material prices." He also analyzed that sales volume is expected to rise due to the high season effect in the second quarter, and following the holding company restructuring, a new shareholder return policy is expected to be announced, making it unlikely that the dividend policy will regress compared to before.

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