Market: KOSPI (005490)
Brokerage : Mirae Asset Securities
Analyst : Kiryong Kim
Investment Rating : BUY (Maintained)
Target Price : 470,000 KRW (Lowered)
Core Momentum : Driven by earnings improvement across steel and battery materials, the valuation discount is expected to ease supported by mid-to-long term overseas capacity expansion, equity optimization, and shareholder return roadmaps unveiled at CEO Investor Day.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating, while lowering the target price by 24% from 620,000 KRW to 470,000 KRW to reflect lower listed subsidiary equity values (e.g., POSCO Future M) and net debt adjustments (49.9% upside from the base price of 313,500 KRW).
- Key Valuation Multiples:
- 2026F: P/E 16.1x, P/B 0.4x, Dividend Yield 3.2%, ROE 2.7%, Operating Margin 3.9%, EPS 19,442 KRW
- 2027F: P/E 12.1x, P/B 0.4x, Dividend Yield 3.8%, ROE 3.5%, Operating Margin 4.8%, EPS 25,993 KRW
- 2028F: P/E 12.4x, P/B 0.4x, Dividend Yield 4.5%, ROE 3.4%, Operating Margin 5.0%, EPS 25,372 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 72.00T KRW, Operating Profit of 2.825T KRW, Controlling Net Profit of 1.549T KRW
- 2027F: Revenue of 75.074T KRW, Operating Profit of 3.585T KRW, Controlling Net Profit of 2.060T KRW
- 2028F: Revenue of 77.643T KRW, Operating Profit of 3.920T KRW, Controlling Net Profit of 2.011T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Preview:
- Consolidated revenue is projected at 17.9T KRW (+2.2% YoY) and operating profit at 757.0B KRW (+24.7% YoY), beating consensus (709.7B KRW) by 7%.
- Steel: Standalone and overseas earnings expected to improve QoQ due to ASP hikes, seasonal volume recovery, KRW depreciation, and deconsolidation of Zhangjiagang, offsetting auxiliary material and freight cost inflation.
- Battery Materials: Profitability is set to turn around significantly YoY/QoQ driven by POSCO Future M profit recovery and higher utilization rates at POSCO Argentina.
- Strategic Growth Roadmap (CEO Investor Day):
- Steel: Expand overseas crude steel capacity from 9.3M tons in 2026 to 17.3M tons by 2033, centered on India, the U.S., and Indonesia.
- Lithium & Resources: Advance production capacity expansion based on a return to profitability and premium resource assets. Establish an integrated supply chain for rare earths (EV, robotics, AI data centers) covering mining, refining, and permanent magnet production via JVs/equity investments.
- Financial & Shareholder Return Strategy:
- Shareholder return ratio targeted at 35–40% of adjusted controlling net profit for FY26–28.
- Optimize listed subsidiary ownership down to ~50% by 2027 to narrow the holding company discount and target a P/B re-rating above 1.0x by 2028.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated resource and materials holding company that is cementing an operational earnings rebound through core steel pricing resilience and ramping battery materials assets, while actively dismantling holding company discounts via disciplined capital allocation and long-term global capacity expansion. Despite lowering the target price due to listed subsidiary equity fluctuations, this perspective maintains confidence in the company’s valuation recovery anchored by overseas crude steel scaling and formalized shareholder return guidelines.
To verify whether this investment thesis continues to materialize, investors should monitor the sustained profitability of battery materials driven by higher utilization at POSCO Argentina, the phased execution of the overseas crude steel capacity expansion roadmap (9.3M to 17.3M tons by 2033), and the concrete progress of subsidiary stake optimization (~50%) alongside the delivery of the FY26–28 shareholder return framework (35–40% payout). These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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