Market: KOSPI (005490)
Brokerage : Shinhan Securities
Analyst : Gwang-rae Park, Seunghun Han
Investment Rating : BUY (Maintained)
Target Price : 400,000 KRW (Maintained)
Core Momentum : Favorable base effects following the removal of one-off construction charges, restored steel pricing power under extended anti-dumping duties, and narrowing lithium losses via higher utilization are projected to drive gradual earnings normalization in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a target price of 400,000 KRW (maintained), offering a 14.0% upside potential from the current share price of 351,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 14.8x, P/B 0.5x, EV/EBITDA 6.3x, Dividend Yield (DY) 2.8%, ROE 3.4%
- 2027F: P/E 11.7x, P/B 0.5x, EV/EBITDA 5.8x, Dividend Yield (DY) 2.8%, ROE 4.2%
- Annual Financial Forecasts:
- 2026F: Revenue of 72.03T KRW, Operating Profit of 3.24T KRW (+48.9% YoY), Controlling Net Profit of 1.92T KRW
- 2027F: Revenue of 74.72T KRW, Operating Profit of 3.83T KRW, Controlling Net Profit of 2.42T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Preview:
- Consolidated operating profit is projected at 359.2B KRW (-43.8% QoQ), missing market consensus of 459.7B KRW.
- Steel: Standalone operating profit estimated at 484.9B KRW (-17.1% QoQ). While ASP and spreads remain flat QoQ, shipments fell 4% due to planned maintenance at Pohang, reducing operating margin by 0.9%p on higher fixed costs.
- Non-Steel Subsidiaries: POSCO E&C is likely to record an operating loss exceeding 200.0B KRW due to ongoing investigations and work stoppages tied to the Shin-Ansan Line incident. Battery materials operating loss projected at 143.0B KRW on low operating rates and soft shipments despite recent lithium price rebounds.
- 2026 Normalization Catalysts:
- Subsidiary Base Effect: The elimination of accident-related costs and provisions at POSCO E&C alone will drive significant profit growth (against a 2025 operating loss base of -427.0B KRW).
- Core Steel: The extension of anti-dumping (AD) duties on Chinese/Japanese hot-rolled steel through June 2026 will restore domestic pricing power, aided by China’s steel export licensing scheme. POSCO standalone operating profit is projected to reach 2.2T KRW (+14.2% YoY, OPM +0.7%p).
- Lithium: Losses are expected to narrow as plant utilization rates ramp up.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated materials group moving past an earnings squeeze marked by construction-related provisions and low lithium utilization in 2025, and entering a progressive normalization phase backed by trade protection in steel and favorable base effects across non-steel subsidiaries. This perspective prioritizes the structural recovery of domestic steel pricing power under extended anti-dumping duties and the operational ramp-up of lithium assets over temporary 4Q maintenance downtime and construction provisioning.
To verify whether this investment thesis continues to materialize, investors should monitor whether the extension of anti-dumping duties translates into actual domestic steel price hikes and spread expansion, the absence of additional construction losses alongside POSCO E&C’s return to sustainable profitability, and the pace of quarterly loss contraction in battery materials driven by higher lithium plant utilization rates. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and regulatory filings.
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