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 : The turnaround to profitability across domestic subsidiaries including POSCO E&C, combined with proactive steel price hikes backed by import trade barriers and long-term lithium capacity expansion, is expected to drive earnings improvement starting from 1Q.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: Maintained BUY rating with a 12-month target price of 740,000 KRW (maintained), providing substantial upside from the base price of 341,000 KRW.
- Key Valuation Multiples:
- 2026F: P/E 8.80x, P/B 0.46x, EV/EBITDA 6.45x, ROE 5.50%, DPS 10,000 KRW, BPS 748,275 KRW
- 2027F: P/E 9.23x, P/B 0.45x, EV/EBITDA 5.92x, ROE 5.02%, DPS 10,000 KRW, BPS 776,435 KRW
- Annual Financial Forecasts:
- 2026F: Revenue of 73.34T KRW, Operating Profit of 3.32T KRW, Pre-tax Profit of 3.18T KRW, Net Profit of 3.13T KRW (+386.25% YoY)
- 2027F: Revenue of 75.29T KRW, Operating Profit of 3.70T KRW, Pre-tax Profit of 3.02T KRW, Net Profit of 2.97T KRW
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Preview:
- Consolidated revenue is projected at 17.2T KRW (-1.4% YoY, +2.1% QoQ) and operating profit at 571.5B KRW (+0.5% YoY, +4,405.8% QoQ), slightly below market consensus (605.9B KRW).
- Steel: Shipment volume estimated at 8.01M tons (-1.7% YoY, +3.7% QoQ). Raw material cost inflation (+20,000 KRW/ton) outpaced carbon steel ASP increases (+7,000 KRW/ton) due to sluggish domestic demand, narrowing spreads. Overseas steel affiliates maintained steady performance QoQ.
- Domestic Subsidiaries: POSCO International and POSCO Future M are expected to post operating profit gains. Notably, POSCO E&C is projected to turn profitable after recording a 190.0B KRW operating loss in 4Q25.
- 2Q26 Earnings Outlook:
- Consolidated operating profit is projected to rebound sharply to 813.0B KRW (+33.9% YoY, +42.3% QoQ).
- Steel shipments estimated at 8.16M tons (-0.2% YoY, +1.9% QoQ). Additional raw material inflation (+20,000~30,000 KRW/ton) is expected to be absorbed by price hikes in products with heightened import protections (hot-rolled and heavy plate), keeping spreads stable.
- Synchronized earnings improvements expected from POSCO International, POSCO E&C, and lithium business subsidiaries.
- Medium-to-Long Term Drivers: Domestic steel trade regulations, 2H fixed asset investment recovery in China, and expanding long-term earnings contributions from lithium capacity scaling and price normalization.
📝 Editor’s Comment (Perspective)
The analyst views POSCO Holdings as an integrated industrial group absorbing transient 1Q steel spread compression through substantial base-effect turnarounds across domestic non-steel affiliates, while leveraging trade barriers to pass through price increases into a sequential profit recovery. This perspective prioritizes the realization of 2Q steel price hikes in regulated products and medium-to-long term lithium volume expansion over short-term raw material cost lags in 1Q.
To verify whether this investment thesis continues to materialize, investors should monitor the successful implementation of 2Q price hikes for hot-rolled and plate products to defend steel margins, the ongoing earnings stability of domestic subsidiaries like POSCO E&C following their return to profitability, and the operational progress and earnings contribution from lithium affiliates. 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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