[Click e-Stock] "POSCO INTERNATIONAL Expected to Benefit from Rising Oil Prices... Target Price Up"

Target Price Raised by 13.6% Compared to Previous Estimate

On March 23, IBK Investment & Securities announced that it has raised its target price for POSCO INTERNATIONAL from 88,000 won to 100,000 won, expecting the company to benefit from rising oil prices caused by the blockade of the Strait of Hormuz. The brokerage maintained its 'Buy' investment rating.

Lee Dongwook, an analyst at IBK Investment & Securities, explained, "POSCO INTERNATIONAL's energy division is structured to asymmetrically benefit from the recent surge in oil prices due to the blockade of the Strait of Hormuz. The recent oil price hike is immediately reflected in its Australian Senex asset and, with a time lag, in the Myanmar gas field. Additionally, the production increase effect is likely to further expand the improvement in the energy division's performance."

Approximately 40-50% of sales volume from the Myanmar gas field is linked to oil prices, but due to its lagging structure—where the sales price for the current year is determined based on the previous year's average oil price—the immediate impact this year is limited. Lee noted, "However, if the average oil price rises this year, the sales price next year could reflect this increase. The remaining 50-60% of sales volume, which is linked to the Consumer Price Index (CPI) and Producer Price Index (PPI), is expected to gradually contribute positively as a result of energy-driven inflation. On the other hand, about 30% of Senex's sales volume is supplied as feed gas to GLNG (Gladstone Liquefied Natural Gas) at oil price-linked prices, which means the current high oil price is reflected relatively quickly. The remaining 70% of Senex's domestic gas sales in Australia could also face indirect upward price pressure due to global LNG supply disruptions."

Additionally, Senex has completed a production expansion system that is three times larger than before, so gas output is expected to surge this year. The Myanmar gas field is also maintaining its medium-term production base through Phase 4 development, resulting in a situation where both price and volume are improving simultaneously. Lee added, "In particular, the Myanmar gas field directly supplies China via the Andaman Sea, and Senex is based on Australia's inland pipeline network, making both relatively less exposed to the physical supply disruption risks stemming from the Strait of Hormuz blockade, which is another positive factor."

He also suggested that a revaluation of POSCO INTERNATIONAL is warranted due to the supply gap in Qatar. Lee said, "The damage to LNG facilities, which has undermined about 17% of Qatar's total export capacity, signals not just a spike in spot prices but a fundamental restructuring of Asia's gas procurement system. This situation is viewed positively for POSCO INTERNATIONAL, which has a limited proportion of cargo routed through the Strait of Hormuz."

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