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 : Moving past 4Q headwinds, 1Q steel spread expansion driven by provisional anti-dumping tariffs on Chinese/Japanese hot-rolled steel and price hikes for automotive/shipbuilding steel, alongside rising lithium utilization, is projected to drive earnings recovery in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a 12-month target price of 740,000 KRW (maintained), offering substantial upside from the current share price of 305,000 KRW.
- Key Valuation Multiples:
- 2025F: P/E 18.89x, P/B 0.43x, EV/EBITDA 6.67x, ROE 2.36%, DPS 10,000 KRW, BPS 710,491 KRW, EPS 16,144 KRW
- 2026F: P/E 9.58x, P/B 0.42x, EV/EBITDA 5.57x, ROE 4.53%, DPS 10,000 KRW, BPS 732,975 KRW, EPS 31,828 KRW
- Annual Financial Forecasts:
- 2025F: Revenue of 68.72T KRW, Operating Profit of 2.22T KRW, Pre-tax Profit of 1.50T KRW, Net Profit of 1.31T KRW (+23.49% YoY)
- 2026F: Revenue of 71.06T KRW, Operating Profit of 3.49T KRW, Pre-tax Profit of 2.94T KRW, Net Profit of 2.58T KRW (+97.15% YoY)
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Preview:
- Consolidated revenue is estimated at 16.4T KRW (-7.5% YoY, -4.6% QoQ) and operating profit at 404.3B KRW (+323.9% YoY, -36.7% QoQ), missing market consensus (523.1B KRW).
- Steel: Domestic softness and mill maintenance pushed sales volume down to 8.00M tons (-5.5% YoY, -3.0% QoQ). Input costs rose 10,000 KRW/ton QoQ on higher coking coal/ore spot prices and FX appreciation, while sluggish domestic demand kept carbon steel ASP flat, compressing spreads.
- Subsidiaries: Overseas steel units posted steady QoQ results. POSCO International operating profit is projected to drop significantly QoQ, and POSCO E&C risks wider operating losses depending on the scale of Shin-Ansan Line collapse accident cost recognitions.
- 1Q26 Earnings Outlook:
- Consolidated operating profit is projected to rebound to 621.0B KRW (+9.2% YoY, +53.6% QoQ).
- POSCO steel sales volume is expected to recover to 8.14M tons (-0.1% YoY, +1.8% QoQ).
- Despite rising input costs, steel spreads are expected to widen slightly on the back of provisional tariffs on Chinese and Japanese hot-rolled steel and price hikes for automotive and shipbuilding steel.
- Domestic subsidiaries, including POSCO International, are expected to see synchronized operating profit recovery.
- Medium-Term Catalysts: Domestic steel import restrictions, Chinese production controls, 2H fixed asset investment recovery in China, and battery materials earnings growth driven by lithium price rebounds and higher plant utilization rates.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial group absorbing transient 4Q earnings pressure—marked by mill maintenance, sluggish domestic demand, and construction-related accident provisions—while setting up a pronounced operational rebound in 1Q supported by trade defense actions (provisional tariffs) and automotive/shipbuilding contract price increases. This perspective prioritizes the structural recovery of steel roll margins under import trade protections and the operational ramp-up of battery materials assets over short-term quarterly earnings misses.
To verify whether this investment thesis continues to materialize, investors should monitor the realization of steel ASP hikes and spread expansion in 1Q following the provisional tariffs on imported hot-rolled steel, the stabilization of POSCO E&C and earnings recovery at POSCO International post-accident provisioning, and the trajectory of lithium spot prices alongside utilization scaling at battery materials facilities. 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.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
