Market: KOSPI (005490)
Brokerage : Hanwha Investment & Securities
Analyst : Jiwoo Kwon
Investment Rating : Buy (Maintained)
Target Price : 490,000 KRW (Maintained)
Core Momentum : Following the preemptive recognition of over 400B KRW in one-off charges in 4Q, a robust earnings turnaround is projected to gain momentum from 2Q, supported by 1H steel price increases and an annual lithium sales target of 55k tons.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained Buy rating with a target price of 490,000 KRW (maintained), offering a 34.6% upside potential from the current share price of 364,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 17.3x, P/B 0.5x, EV/EBITDA 5.9x, Dividend Yield 3.0%, ROE 2.8%, EPS 21,041 KRW
- 2027F: P/E 11.9x, P/B 0.5x, EV/EBITDA 5.2x, Dividend Yield 3.0%, ROE 4.0%, EPS 30,576 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 71.59T KRW, Operating Profit of 3.32T KRW, EBITDA of 8.16T KRW, Controlling Net Profit of 1.56T KRW, Net Debt of 18.49T KRW
- 2027F: Revenue of 74.02T KRW, Operating Profit of 4.50T KRW, EBITDA of 9.80T KRW, Controlling Net Profit of 2.26T KRW, Net Debt of 21.86T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review:
- Consolidated revenue recorded 16.8T KRW (-5.4% YoY) and operating profit stood at 13.0B KRW (-86.4% YoY), missing market consensus of 410.0B KRW.
- Steel (Standalone): Shipments fell ~6% QoQ due to Pohang hot-rolled facility maintenance and pre-anti-dumping inventory destocking by importers, elevating fixed-cost burdens. Positively, Chinese flat steel imports dropped by 300k tons QoQ.
- One-off Kitchen Sink (>400B KRW): Recognized ~132.0B KRW in severance/disposal costs for Zhangjiagang STS, ~190.0B KRW in construction stoppage losses at POSCO E&C, ~57.0B KRW in subsidiary restructuring at POSCO International, and ~40.0B KRW in inventory valuation losses at POSCO Future M.
- 2026 Turnaround Drivers:
- Steel: Profitability is set to recover immediately on 1H product price hikes and the closing of the Zhangjiagang sale in 1Q, which eliminates an annual loss drag of ~140.0B KRW.
- Lithium: Set a target sales volume of 55k tons (doubling YoY), with meaningful loss contraction expected as utilization ramps up.
- Infrastructure: POSCO E&C to turn profitable by removing annual loss factors of ~450.0B KRW post-kitchen sink, while POSCO International benefits from Senex expansion and palm plantation acquisitions.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial holding company that has proactively removed balance sheet uncertainties by expensing extensive one-off charges in 4Q, clearing the deck for a structural operational turnaround in 2026 driven by steel pricing normalization and lithium volume expansion. This perspective places greater significance on the elimination of structural loss-making assets (Zhangjiagang divestment and POSCO E&C provisioning) and the impending 2Q inflection point in steel and lithium shipments over transient 4Q earnings weakness.
To verify whether this investment thesis continues to materialize, investors should monitor the final closing of the Zhangjiagang plant divestment in 1Q alongside the pass-through of 1H steel price hikes, the quarterly ramp-up in utilization toward the 55k-ton annual lithium sales target, and the sustained turnaround to profitability at POSCO E&C following upfront provisioning. 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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