Market: KOSPI (005490)
Brokerage : Hana Securities
Analyst : Sung-bong Park, Seung-gyu Kim (RA)
Investment Rating : BUY (Maintained)
Target Price : 740,000 KRW (Maintained)
Core Momentum : Expanding steel import regulations, domestic price hikes, a sharp turnaround at POSCO E&C, and visible profitability at the Argentine lithium facility in 2Q signal the entry into a structural operational earnings recovery phase.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a 12-month target price of 740,000 KRW (maintained), offering significant upside from the current share price of 462,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 11.53x, P/B 0.62x, EV/EBITDA 6.36x, ROE 5.61%, DPS 11,000 KRW, BPS 748,115 KRW
- 2027F: P/E 11.86x, P/B 0.59x, EV/EBITDA 5.80x, ROE 5.21%, DPS 11,000 KRW, BPS 776,813 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 72.46T KRW, Operating Profit of 3.04T KRW, Pre-tax Profit of 3.24T KRW, Net Profit of 3.19T KRW (+395.77% YoY)
- 2027F: Revenue of 74.33T KRW, Operating Profit of 3.62T KRW, Pre-tax Profit of 3.13T KRW, Net Profit of 3.09T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Review:
- Consolidated revenue reached 17.9T KRW (+2.5% YoY, +6.1% QoQ) and operating profit stood at 707.0B KRW (+24.4% YoY, +5,474.2% QoQ), outperforming market consensus (588.6B KRW).
- Steel: Import regulations boosted POSCO sales volume to 8.29M tons (+1.7% YoY, +7.4% QoQ). While ASP remained flat QoQ, blast furnace raw material cost inflation (+40,000 KRW/ton) tightened spreads. Overseas steel units in India and Vietnam showed profit recovery.
- Subsidiaries & Lithium: Higher utilization at the Argentine lithium facility and inventory valuation gain reversals narrowed lithium losses significantly. POSCO E&C turned profitable following large 4Q25 losses, and POSCO International saw substantial profit expansion.
- 2Q26 Earnings Outlook:
- Consolidated operating profit is projected at 770.2B KRW (+26.9% YoY, +9.0% QoQ).
- Steel sales volume expected at 8.21M tons (+0.5% YoY, -0.9% QoQ). Additional blast furnace cost increases (~20,000 KRW/ton) are projected to be offset by contract ASP adjustments reflecting domestic hot-rolled price strength, keeping spreads stable QoQ.
- Lithium segment is projected to swing to operating profit in 2Q on higher utilization and rising prices, accompanied by broader domestic subsidiary earnings gains.
- Medium-to-Long Term Drivers: Stronger second-half earnings visibility supported by global trade protections and Asian steel price hikes, alongside structural profit contributions from mid-to-long term lithium capacity additions.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an enterprise navigating past the trough in core steel roll margins through trade protections and domestic price hikes, while simultaneously entering a structural earnings recovery driven by subsidiary base effects and the commercial profitability of its Argentine lithium operations. This perspective emphasizes the qualitative turnaround across major engineering and materials subsidiaries over short-term 1Q steel spread contraction.
To verify whether this investment thesis continues to materialize, investors should monitor the preservation of steel spreads through contract ASP adjustments against 2Q raw material inflation, the actual attainment of quarterly operating profitability in the lithium division in 2Q as utilization scales, and the sustainability of normalized profitability across key affiliates such as POSCO E&C. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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