[Click eStock] "SeAH Besteel Holdings, One-time Expense Concerns Need Resolution... Target Price Down"

Target Price Lowered from 25,000 KRW to 24,000 KRW

Shinhan Investment Corp. on the 20th lowered the target price for SeAH Besteel Holdings from 25,000 KRW to 24,000 KRW, citing the need to alleviate concerns about one-time expenses. The investment rating was maintained at 'Buy.'

Park Kwang-rae, a researcher at Shinhan Investment Corp., explained, "The target price was lowered to reflect changes in earnings estimates," adding, "While the proactive dividend policy aimed at enhancing shareholder value is positively evaluated, it is necessary to address market concerns regarding recurring one-time expenses each quarter."

SeAH Besteel Holdings posted an operating loss of 50 billion KRW in the fourth quarter of last year, turning to a deficit compared to the previous quarter. Researcher Park analyzed, "This significantly missed market expectations (25.4 billion KRW)," noting that "decreased demand in the automotive and industrial machinery sectors, declines in product and raw material prices leading to inventory valuation losses, and labor-related one-time expenses were the main causes of the poor performance."

Despite the weak performance, the stock price has not fallen significantly and has maintained a steady trend. Regarding this, Researcher Park stated, "The stock price reflects bets on earnings recovery in the first quarter of this year, high dividend appeal, and expectations for mid- to long-term new businesses," adding, "First-quarter earnings are expected to reach an operating profit of 28.1 billion KRW due to increased sales volume, improved spreads, and the base effect of one-time expenses."

He emphasized the need for meaningful performance in new businesses. Researcher Park said, "The sales proportion of new businesses currently falls below 10%, but related sales will begin to occur in earnest from 2027 and are expected to exceed 25% of total sales by 2030," explaining, "Achieving a price-to-book ratio (PBR) of 0.7 times requires prior achievement of meaningful results in new businesses."

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