Market: KOSPI (005490)
Brokerage : Hanwha Investment & Securities
Analyst : Jiwoo Kwon
Investment Rating : Buy (Maintained)
Target Price : 490,000 KRW (Maintained)
Core Momentum : Robust defense from infrastructure affiliates, alongside 2Q steel price hike implementations and 2H revenue recognition from the SK On lithium contract via higher utilization, is projected to sustain full-year earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained Buy rating with a target price of 490,000 KRW (maintained), offering a 43.3% upside potential from the base share price of 342,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 17.3x, P/B 0.5x, EV/EBITDA 5.4x, Dividend Yield 3.2%, ROE 2.7%, EPS 19,738 KRW
- 2027F: P/E 12.6x, P/B 0.5x, EV/EBITDA 4.9배, Dividend Yield 3.2%, ROE 3.6%, EPS 27,155 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 70.38T KRW, Operating Profit of 3.11T KRW, EBITDA of 8.12T KRW, Controlling Net Profit of 1.53T KRW, Net Debt of 16.52T KRW
- 2027F: Revenue of 73.09T KRW, Operating Profit of 4.09T KRW, EBITDA of 9.64T KRW, Controlling Net Profit of 2.10T KRW, Net Debt of 19.74T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Preview:
- Consolidated revenue is estimated at 17.62T KRW and operating profit at 633.7B KRW (+11.6% YoY, OPM 3.6%), meeting market consensus (605.6B KRW).
- Steel: Standalone and group steel operating profit estimated at 352.8B KRW (contracting QoQ) due to prior-quarter raw material cost pressures and lagged price pass-through. ASP reflection from Feb–Mar price hikes will become visible in 2Q.
- Infrastructure: POSCO International profit growth (driven by palm oil M&A, Senex volume expansion, and oil-linked gas field gains), POSCO E&C returning to profit (growing over 200.0B KRW QoQ post-4Q losses), and the removal of Zhangjiagang losses supported consolidated earnings.
- Battery Materials: Operating loss projected at 23.6B KRW, narrowing significantly YoY and QoQ.
- Lithium Expansion & Commercial Progress:
- Operating rates continue to rise; SK On contract volumes are expected to be recognized as revenue starting in 2H, with additional global OEM contracts anticipated in 2Q.
- POSCO Argentina is expected to near annual BEP, while high spodumene input costs relative to lithium product prices remain a variable for PPLS margin normalization.
- Industry & Macro Drivers:
- China’s steel production curtailments have expanded into finished steel, with Jan–Feb Chinese exports declining 8.1% and majors like Baosteel attempting price hikes.
- Higher oil prices serve as an offset via POSCO International’s energy division despite input cost pressures on steel.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated group successfully cushioning transient 1Q steel cost lags through the operational rebound of POSCO E&C and structural profit growth at POSCO International, while steadily advancing battery materials toward profitability via rising lithium utilization and new supply contracts. This perspective places greater emphasis on the forthcoming 2Q steel price realizations, Chinese supply-side discipline, and 2H commercialization of SK On lithium volumes over short-term 1Q steel margin compression.
To verify whether this investment thesis continues to materialize, investors should monitor the realization of 2Q ASP gains from earlier steel price hikes, the commencement of 2H revenue recognition from the SK On lithium contract alongside potential new OEM supply agreements in 2Q, and the progress of POSCO Argentina toward annual breakeven (BEP). 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.
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